Marquam v. Sengfelder

• Decision Date: 04 April 1893
• Citation: 32 P. 676,24 Or. 2
• Parties: MARQUAM v. SENGFELDER et al.
• Court: Oregon Supreme Court

32 P. 676

24 Or. 2

MARQUAM v. SENGFELDER et al.

Supreme Court of Oregon

April 4, 1893

Appeal from circuit court, Multnomah county; George H. Burnett Judge.

Suit by P.A. Marquam against Charles Sengfelder, Wilson Thompson F.C. Barnes, and others. From the decree, defendants Thompson and Barnes separately appeal. Modified.

The other facts fully appear in the following statement by MOORE J.:

This is a suit to establish and foreclose a lien on certain personal property for the payment of rent. The material facts are as follows: That on November 10, 1891, the plaintiff entered into a written contract with the defendant Sengfelder, under their hands and seals, whereby he leased to the latter stores numbered 125 and 127, on Morrison street, in the Marquam block, Portland, Or., to be used as a restaurant and confectionery store, for the term of three years, at a monthly rental of $250 for the first year, $300 for the second, and $400 for the third, payable in advance. Said lease contained the following clause: "All personal property, including furniture and household goods of every description, to be at all times liable for rent of said premises. In case of violation of any of the provisions of this lease by the lessee the lessor may terminate this lease and hold any property found thereon for any arrears of rent or damages." This lease was not filed or recorded, and neither the subsequent mortgagee nor attaching creditors of Sengfelder had any notice or knowledge thereof On December 3 1891, the lessee went into possession of the demised premises, paid the installments of rent to January 31, 1892, and operated a restaurant and confectionery store there until February 17, 1892. That on January 22, 1892, Sengfelder was indebted to the Portland National Bank, of Portland, Or., in the sum of $1,700, and on that day he executed and delivered to said bank a promissory note for the amount, which was signed by himself, Mary A. Sengfelder, his wife, and Wilson Thompson, his stepfather-in-law. That on said 17th day of February, 1892, the bank assigned said note to Thompson, before the maturity thereof, and took a note for said amount in lieu thereof, signed by Wilson Thompson only. That Sengfelder, on the same day, executed and delivered to Thompson his note, payable on demand, for the amount due the bank, and other indebtedness to Thompson, amounting in all to $1,910.40, and, to secure the payment of the same, he executed and delivered to Thompson a chattel mortgage upon all the personal property in said stores, particularly describing the same. This mortgage was duly filed on the day of its execution, and, about two hours after such filing, Thompson demanded payment of said note, and in default thereof took possession of said goods and chattels. After Thompson had taken possession of the goods, the defendant Barnes commenced an action against Sengfelder, in a justice's court of Multnomah county, to recover the sum of $134, and at the same time caused a writ of attachment to be issued and delivered to a deputy sheriff for execution, and on the same day, between 10 and 11 o'clock in the evening, that officer appointed a person to take charge of the restaurant, and on the next day took possession of said goods and chattels, and thereafter other creditors levied writs of attachment upon the same property. That, after the officer had executed Barnes' writ, Thompson consented that the help which had been employed by Sengfelder might take some of the attached property in payment of the amount due them from the latter. That some of the goods were removed from the store rooms for that purpose, but were returned by the officer. That on February 2, 1892, plaintiff commenced this suit for the rent then due, and a receiver was duly appointed, who, by order of the court, took possession of and sold the furniture and household goods for $1,300, the wines and liquors for $120, and the groceries and canned goods for $43.75, which several amounts were deposited in court. Separate answers were filed by Sengfelder, Thompson, and Barnes, but the other attaching creditors made default. After the issues were completed, Sanderson Reed was appointed referee, who took and reported the testimony, together with his findings of fact and conclusions of law thereon. This report was in the main confirmed by the court, which decreed that plaintiff's lease created a lien upon said personal property, and upon the fund arising from the sale thereof; that the fund be applied--First, to the payment of plaintiff's claim and costs; second, to the claim of the defendant Thompson; and, third, to that of the defendant Barnes,--from which Thompson and Barnes each appeal, and contend that plaintiff had no lien upon said goods, or upon the fund, while Barnes also contends that Thompson's mortgage was fraudulent, and made to hinder and delay the creditors of Sengfelder.

W.M. Cake, for appellant Wilson Thompson.

Frank V. Drake, for appellant F.C. Barnes.

U.S. Grant Marquam, for respondent.

MOORE, J., (after stating the facts.)

The respondent contends that the clause of the lease above quoted created a lien upon all the personal property on the leased premises, which in equity should be treated as a chattel mortgage. The said clause does not create a chattel mortgage because the title to the property was not transferred; nor does it create a pledge, because possession thereof was not delivered. It was formerly held in this state that a chattel mortgage only created a lien upon personal property. Chapman v. State, 5 Or. 435; Knowles v. Herbert, 11 Or. 240, 4 P. 126. But in Threshing-Machine Co. v. Campbell, 14 Or. 465, 13 P. 324, this court, by Thayer, J., in our judgment, announced the correct doctrine, and held that a chattel mortgage created more than a lien, and that the mortgagee, after condition broken, has a right to the thing, which he may maintain in an action, in the nature of replevin, to recover it, if, upon demand, delivery thereof be denied. In a clause of a written agreement which provided that in case of default the parties were authorized "to take immediate possession of all goods, wares, and merchandise, lumber and shingles, and the personal property, now in our possession and belonging to us," it was held that it was nothing but a naked power, not coupled with any interest, and could not operate to give any right to the property itself until reduced to possession. Holmes v. Hall, 8 Mich. 66. In a stipulation of a lease which provided that "all goods, wares, and merchandise, household furniture, fixtures, or other property which are or shall be placed on said premises, shall be liable, and this lease shall hereby constitute a lien or mortgage on said property to secure the rent due, or to grow due on this lease," the court held that it did not create a mortgage. Dalton v. Laudahn, 27 Mich. 529. In a covenant of a lease which contained the following: ...