Largilliere Co. v. McConkie

• Decision Date: 31 October 1922
• Citation: 210 P. 207,36 Idaho 229
• Parties: LARGILLIERE COMPANY, a Copartnership, Appellant, v. PERRY A. MCCONKIE, Sheriff of Caribou County, Idaho, and the SECURITY STATE BANK, a Corporation, Respondents
• Court: Idaho Supreme Court

210 P. 207

36 Idaho 229

LARGILLIERE COMPANY, a Copartnership, Appellant, v. PERRY A. MCCONKIE, Sheriff of Caribou County, Idaho, and the SECURITY STATE BANK, a Corporation, Respondents

Supreme Court of Idaho

October 31, 1922

FOREIGN CORPORATION-WHEN NOT PROHIBITED FROM DOING BUSINESS IN THE STATE-CHATTEL MORTGAGE-FORECLOSURE-RIGHTS OF SUBSEQUENT ATTACHING CREDITORS.

1. Where a foreign corporation takes a note at its banking house in another state, which note is secured by a chattel mortgage upon personal property in this state, and the entire transaction takes place at the banking house of the foreign corporation outside of the state, which is the place fixed for the payment of the note, a foreclosure of the mortgaged property within this state is not doing business in the state of Idaho within the meaning of art. 11, sec. 10, of the constitution, and C. S., sec. 4772.

2. Where the holder of a chattel mortgage has secured possession of the mortgaged property and holds such possession for the purpose of foreclosure under C. S., sec. 6380 et seq. through the sheriff, and the mortgage is valid as between the parties to it, a subsequent attaching creditor cannot defeat the foreclosure proceedings because of an insufficient affidavit or by reason of the mortgage not having been recorded in that county.

APPEAL from the District Court of the Fifth Judicial District, for Caribou County. Hon. B. S. Varian, Judge.

Action to restrain the sale of personal property under foreclosure of mortgage. From judgment for defendants, plaintiff appeals. Affirmed.

Judgment affirmed, with costs to respondent.

R. J Dygert, for Appellant.

The affidavit in foreclosure of chattel mortgage should contain an allegation that demand has been made for peaceable possession. (Tappin v. McCabe, 27 Idaho 402, 149 P 460.)

The granting of a loan by a foreign corporation and the taking as security of a note and mortgage on property within the state is doing business within the state. (Chattanooga etc. Assn. v. Denson, 189 U.S. 408, 23 S.Ct. 630, 47 L.Ed. 870.)

If a transaction is in part purely local and in part interstate commerce in its nature, and these elements are separable one from the other, the statute relating to foreign corporations is applicable (Imperial Curtain Co. v. Jacob, 163 Mich. 72, 127 N.W. 772; Haughton Elevator Co. v. Detroit Candy Co., 156 Mich. 25, 120 N.W. 18), and this is true even though the contract was entered into outside the state. (Fort Worth Glass Co. v. S. R. Smythe Co. (Tex. Civ.), 128 S.W. 1136.)

W. H. Witty, for Respondents.

An allegation upon information and belief with reference to a public record is wholly insufficient. (Vadney v. State Board, 19 Idaho 203, 112 P. 1046; Works Bros. v. Kinney, 7 Idaho 460, 63 P. 596; First Nat. Bank v. Watt, 7 Idaho 510, 64 P. 223; Price v. Grice, 10 Idaho 443, 79 P. 387.)

The mortgaged property having been taken possession of in this case prior to the date upon which the writ of attachment was placed in the hands of the sheriff, the mortgage lien will be held good as against any right of the attaching creditors. (Martin v. Holloway, 16 Idaho 513, 102 P. 3.)

The attaching creditor knew of the existence of the mortgage of the Security State Bank prior to instituting his suit and the issuance of the attachment upon which they rely.

"Actual notice is as effectual as constructive notice by record as against subsequent purchasers, and an attaching creditor stands in no better position." (Jones on Chattel Mortgages, sec. 317.)

If the statute is complied with the affidavit itself could not contain the fact that demand was made, because the statute requires the making of the affidavit prior to the demand, and after demand is refused it requires the same affidavit to be placed in the hands of the sheriff. (C. S., sec. 6380.)

LEE, J. McCarthy and Dunn, JJ., concur.

OPINION

LEE, J.

Plaintiff and appellant Largilliere Company, a copartnership, brought an action in the probate court and caused an attachment to be levied upon 1,000 head of sheep then in Caribou county, Idaho, belonging to Joseph Brun, defendant in that action, who had prior to this time given to one of the respondents herein, the Security State Bank, a Utah corporation, whose principal place of business was at Ogden, in that state, his promissory note, which note was also secured by a chattel mortgage upon these same sheep. At the time the attachment was levied, the respondent bank had commenced foreclosure proceedings under C. S., sec. 6380 et seq., and the sheriff was in possession of the sheep and was proceeding to foreclose under respondent bank's said mortgage.

Appellant commenced this action against respondent McConkie, as sheriff, and said banking corporation, to restrain the sale of the sheep under the foreclosure proceedings. In its complaint, appellant alleges that it had commenced an action against Brun, and had caused to be levied against these sheep a writ of attachment: it is alleged upon information and belief that the Security State Bank was a noncomplying foreign corporation, doing business in the state of Idaho, and that the mortgage which respondent bank was seeking to foreclose had never been recorded in said Caribou county, and positively alleged that the affidavit of foreclosure recited that the mortgage had been executed in 1917 upon sheep located in Idaho, and again upon information and belief alleged that the respondent bank had neglected to make any peaceful demand for possession of the sheep prior to placing the affidavit in foreclosure in the hands of the sheriff, although the mortgagor Joseph Brun was then in Caribou county. It is further alleged that the respondent sheriff had these sheep in his possession at the time appellant's attachment was levied upon them. Appellant prayed that the court adjudge respondent bank to have no interest in said sheep, that it direct the sheriff to sell the same and satisfy appellant's judgment obtained in his action against the mortgagor Brun, that its attachment lien be declared prior to the respondent bank's mortgage lien, and that the sheriff be restrained from selling the sheep...