Mahoney v. Citizens' Nat. Bank of Salmon

• Decision Date: 16 November 1928
• Docket Number: 5004
• Citation: 271 P. 935,47 Idaho 24
• Court: Idaho Supreme Court
• Parties: ALICE MAHONEY, Respondent, v. CITIZEN'S NATIONAL BANK OF SALMON, IDAHO, Appellant

271 P. 935

47 Idaho 24

ALICE MAHONEY, Respondent, v. CITIZEN'S NATIONAL BANK OF SALMON, IDAHO, Appellant

No. 5004

Supreme Court of Idaho

November 16, 1928

BAILMENTS-LEASE OF LIVESTOCK - DIVISION OF INCREASE - CHATTEL MORTGAGE-SUFFICIENCY - CONFUSION OF GOODS-VALUE-CONVERSION-MEASURE OF DAMAGES.

1. A term lease of livestock providing for their return to owner and a division of the increase between the parties thereto is a bailment.

2. Under lease of livestock providing for their return to owner and equal division of the increase between parties, lessor and lessee became tenants in common of the increase, share and share alike, and of each head thereof.

3. Under lease of livestock providing for their return to owner and division of the increase between parties, lessee's share interest in increase was subject to mortgage, and mortgage would carry part allotted to him in any subsequent partition.

4. Where chattel mortgage covered interest of lessee of livestock in the 1920-21 increase, but said increase were so intermingled with that of 1922, as to be incapable of identification, the mortgage lien, under DOCTrine of confusion, attached to lessee's interest in the whole increase.

5. Holder of chattel mortgage on interest of lessee of livestock in the increase of such livestock was entitled to maintain trover as to lessee's share of increase, where such share was severable from the lot.

6. Where, in action by chattel mortgagee of livestock lessee's interest in increase of cattle against subsequent chattel mortgagee for conversion, it was stipulated without objection or reservation that defendant sold cattle for specified sum per head, such stipulation was sufficient to fix value of property at time of conversion only purpose of stipulation being to show such value.

7. Chattel mortgage covering all of livestock lessee's entire title and interest in the increase for 1920-21, under lease providing for return of livestock to owner and equal division of increase between parties, held sufficient as to description, since mortgage did not describe particular part of larger number, but described undivided interest in the entire lot of cattle of certain brand.

8. Rule that chattel mortgage on part of larger number of stock which does not separate or distinguish stock mortgaged is void for uncertainty as to third persons does not apply to claimants with actual notice that property is covered by mortgage.

9. In action by chattel mortgagee of livestock lessee's interest in the increase of cattle against subsequent chattel mortgagee for conversion, plaintiff's measure of damages was limited to value of chattel mortgagor's interest in cattle converted at time of conversion, and not by amount of chattel mortgage debt.

APPEAL from the District Court of the Sixth Judicial District, for Lemhi County. Hon. Ralph W. Adair, Judge.

Action to foreclose a chattel mortgage and for conversion. Judgment for plaintiff. Modified and affirmed.

Judgment affirmed. Costs of the appeal awarded to appellant. Petition for rehearing denied.

E. H Casterlin, for Appellant.

A mortgage of part of a larger number of stock which does not separate or distinguish the stock mortgaged, is void for uncertainty, particularly as to third persons. (Sigel-Campion etc. Co. v. Holly, 44 Colo. 580, 101 P. 68; Jacobsen v. Christiansen, 18 Utah 149, 55 P 562; South Omaha Nat. Bank v. McGillin (Neb.), 108 N.W. 257; Clark v. Vorhees, 36 Kan. 144, 12 P. 529; 11 C. J. 463, note 71; First National Bank v. Hart, 137 Wash. 110, 241 P. 675.)

The measure of damages in conversion is the value of the property at the time of the taking with interest. (Cornwall v. Mix, 3 Idaho 687, 34 P. 893; Sebree v. Smith, 2 Idaho 357, 16 P. 915; Unfried v. Libert, 20 Idaho 708, 119 P. 885; Allsopp v. Joshua Hendy Mach. Works, 5 Cal.App. 228, 90 P. 39, stating the common-law rule; Cox v. McLaughlin, 78 Cal. 60, 9 Am. St. 164, 18 P. 100, stating the rule of increase or decrease in value after conversion; 24 Cal. Jur. 1059, note 13.)

Verdict for more than nominal damages will be reversed if there be no evidence of value, or the evidence too indefinite, uncertain or weak to sustain judgment. (SigelCampion Live Stock Co. v. Holly, supra.)

L. E. Glennon, for Respondent.

One of the propositions urged here, is that the mortgage in question is void and for that reason the bank is not liable for conversion. As to what property may be the subject of a chattel mortgage, C. S., sec. 6373, provides:

"Chattel mortgages may be made upon all property, goods, and chattels, not defined by statute to be real estate. . . ."

In the case of Dover Lumber Co. v. Case, 31 Idaho 276, 170 P. 108, it is held that a valid mortgage may be given upon property to be thereafter acquired, and property having potential existence may be mortgaged. (State Bank of Ramona v. Clelland, 38 Cal.App. 138, 175 P. 649; Arques v. Wasson, 51 Cal. 620, 21 Am. St. 718; Wilkerson v. Thorp, 128 Cal. 221, 60 P. 679.)

The term "increase" of livestock has a well-settled meaning, and is a term understood by laymen generally and by those dealing in livestock, particularly. (Alferitz v. Borgwardt, 126 Cal. 201, 58 P. 460.)

It is contended that the mortgage is invalid because there was no segregation of the interest of the mortgagor. While it may be true that under certain circumstances, a court would refuse to enforce such a mortgage to the detriment of the interest of third parties, the conditions which would justify the application of such a rule are entirely absent in this case. The failure to make a segregation or divide the property does not, of itself, affect the validity of the mortgage lien. (Interstate Galloway Cattle Co. v. McLain, 42 Kan. 680, 22 P. 728; Elliott v. Long, 77 Tex. 467, 14 S.W. 145.)

The case of Eade v. First National Bank of Condon, 117 Ore. 47, 43 A. L. R. 374, 242 P. 833, is a case involving almost the identical situation, found in the present case, wherein the court said:

"The act of the bank in selling the mortgaged property in disregard of plaintiff's superior liens, constituted conversion, and it is immaterial whether in doing so it acted in good faith. Its alleged wrong did not consist in undertaking to foreclose its mortgage, but in failing to apply the proceeds of the sale to plaintiffs' superior liens. Bower's Law on Conversion, section 128, tersely states the rule thus:

"'A junior mortgagee is liable to trover to the senior mortgagee if he take the property from the latter and sell it without regard to his rights.'"

HARTSON, District Judge. Wm. E. Lee, C. J., and Givens and Taylor, JJ., concur.

OPINION

HARTSON, District Judge.

--The respondent, plaintiff below, filed complaint against Ray Mahoney, Jane Hammond, Citizen's National Bank and Southeastern Idaho Livestock Company to foreclose a chattel mortgage on cattle. The mortgage was given respondent in October, 1921, by Ray Mahoney, to secure a note for $ 1,000. Some time after suit began, a supplemental complaint was filed alleging that about the time of commencement of the action, or subsequently, the exact time being to her unknown, the Citizen's National Bank (hereinafter called the Bank) converted the mortgaged cattle, and praying judgment for their return or the value to the extent of the debt. Respondent dismissed as to all except the Bank. The action was tried with jury and submitted by both parties on the theory of conversion. The court submitted four interrogatories, and a general verdict; the latter was for respondent in the sum of $ 1,575.66, being the sum of the debt, interest and attorney's fees. The interrogatories were all answered in respondent's favor. The Bank appeals from the judgment.

It appears that in September, 1920, Mahoney and one Craig "leased" from Hammond certain cattle and other property. Lessees were to have one-half the increase. All increase were branded 'H.' The original cattle were branded quarter circle 'H.' In February, 1921, Mahoney purchased Craig's interest. In March, he gave respondent the note, and in October the chattel mortgage. This covered all his right, title and interest in the increase for 1920-21. In July, 1922, Mahoney and Hammond agreed in writing whereby the latter purchased all the former's interests under the lease, including the increase, and all the cattle, including 244 head of 'H' brands, were turned back to her. The agreement expressly provided that Hammond would pay respondent's claim evidenced by the note and mortgage, and would assume all Mahoney's obligations thereunder. There is evidence that respondent knew of this agreement and assented thereto, but it does not appear that she relinquished her mortgage lien. She did not cancel or release it of record, and the jury found that she neither expressly nor impliedly consented to such release, nor accepted in lieu thereof the personal obligation of Hammond. When the cattle were delivered to the latter, she paid respondent accrued interest on the note, but failed to pay the mortgage debt.

After the return of the cattle to Hammond, she sold the steers from the 1921 crop, and the proceeds went to appellant Bank. From time to time while the cattle were in Mahoney's possession, and after their return to Hammond, the latter borrowed sums from the Bank, and gave as security chattel mortgages covering quarter circle 'H' brand cattle and any other cattle owned by her, but 'H' brands were not expressly included. At least as early as when Mahoney relinquished his lease the Bank knew of respondent's mortgage, and in March, 1925, when it seized all Hammond's cattle under its mortgage, it was informed that respondent held a mortgage on the 'H' brands and was advised not to bother them. But it failed to desist and took the cattle,...