Mason City Production Cr. Ass'n v. Sig Ellingson & Co.
| Decision Date | 30 June 1939 |
| Docket Number | No. 32151.,32151. |
| Citation | 205 Minn. 537,286 N.W. 713 |
| Court | Minnesota Supreme Court |
| Parties | MASON CITY PRODUCTION CREDIT ASS'N v. SIG ELLINGSON & CO. |
Appeal from District Court, Dakota County; W. A. Schultz, Judge.
Action by the Mason City Production Credit Association against Sig Ellingson & Co. to recover for the conversion of twenty-one steers. From a judgment in favor of the plaintiff, the defendant appeals.
Judgment affirmed.
Myers & Snerly, of Chicago, Ill., and Wilson & Blethen, of Mankato, for appellant.
Joseph F. Cowern, of St. Paul, and W. A. Westfall, of Mason City, Iowa (Robert L. Chesire, of Omaha, Neb., of counsel), for respondent.
There is no dispute as to the facts. Plaintiff is a corporation engaged in Iowa in the business of loaning money to farmers and stock raisers on chattel mortgage security. Defendant is a Minnesota corporation doing business as a live stock commission merchant or market agency at the stockyards of South St. Paul. This action is to recover for the conversion of 21 steers. These steers were shipped on trucks by M. O. McCoy, from his farm in Winnebago county, Iowa, to defendant at the Union Stockyards, South St. Paul, and there sold by it November 17, 1936. Plaintiff bases its right to recover as holder of a chattel mortgage, duly given by Mr. M. O. McCoy and wife, August 24, 1936, upon these steers and other stock and property to secure a promissory note by the mortgagors to plaintiff for $5,387.95, which mortgage was duly filed for record August 25, 1936, at 9:30 o'clock A.M. in the office of the recorder in and for Winnebago county, Iowa, and is now there on file. Upon stipulated facts and uncontradicted testimony, the court made findings in favor of plaintiff. Defendant appeals from the judgment awarding plaintiff $1,002.90.
The real question presented by the appeal is whether defendant, a registered commission sales or market agency under the Packers and Stockyards Act of Congress, 7 U.S.C.A. §§ 181-229, is liable in conversion for the sale of these mortgaged steers, shipped from Iowa to South St. Paul, this state. Defendant had no actual knowledge of the mortgage. It sold and accounted to McCoy, the mortgagor and shipper of the steers, for the proceeds of the sale.
In the brief defendant questions the validity of the mortgage in that the proof does not identify these steers as covered thereby. We think there is no merit in the point. It was stipulated that on November 16, 1936, McCoy shipped from his place and farm in Winnebago county, Iowa, 21 steers, by truck to St. Paul Union Stockyards, South St. Paul, this state, which were received by defendant and there sold by it the next day. The chattel mortgage sold, conveyed and mortgaged the personal property described and kept on S. ½ of N. E. ¼ and N.W. ¼ of N.E. ¼ of section 21 and N.W. ¼ of N.W. ¼ and S. ½ of N.W. ¼ of Sec. 22 in Tp. 98, R. 25 of Winnebago county, there being 113 steers enumerated, "together with all increase and increase of increase of said property, and all additions to or substitutions therefor, and all other personal property which the mortgagor now owns or may acquire during the life of this mortgage", etc. According to the law of Iowa, a chattel mortgage attaches to after-acquired property. Hence, plaintiff had a lien on these steers whether they were on the farm when the mortgage was made and filed for record or they were acquired and placed on the farm by the mortgagor thereafter. They were shipped from the farm by McCoy on November 16, 1936. We need only cite Lowden Savings Bank v. Zeller, 196 Iowa 1205, 194 N.W. 966, where earlier Iowa cases are cited. The case of Central State Bank & Trust Co. v. J. P. Squires & Co., Iowa, 280 N.W. 594, cited by plaintiff, is not in point for after-acquired property of the sort involved in the suit was there not mortgaged.
By Keenan v. Stimson, 32 Minn. 377, 20 N.W. 364, the law was long ago settled in this state, that a chattel mortgage duly made and recorded in accordance with the laws of Iowa is constructive notice of the rights of the mortgagee in the chattels mortgaged when brought into this state and here sold. The rule therein laid down was expressly approved in Silver v. McDonald, 172 Minn. 458, 215 N.W. 844. The fact that the legal title of the chattel is transferred by a mortgage executed in this state to the mortgagee, and only a lien is given the mortgagee on the chattel by a mortgage executed thereon in the state of Iowa, does not affect the decision herein, as we see it. In Smith & Co. v. McLean, 24 Iowa, 322, it was held that a chattel mortgage executed and filed for record, in Kansas, where the mortgagor lived and the mortgaged property was located, was constructive notice to all the world so that though the property mortgaged was afterwards removed to Iowa and sold to one who had no actual notice of the mortgage, the mortgagee could there replevy the same. That is, the rights of the mortgagee as fixed under the law of Kansas attached to the property though found in the hands of an innocent bona fide purchaser in Iowa; and that the courts of Iowa would enforce such rights. The doctrine of Smith & Co. v. McLean is still the law in Iowa, and authorizes a mortgagee to sue in conversion those who deal with the mortgaged property in disregard of his lien. Capital Loan Co. v. Keeling, 219 Iowa, 969, 259 N.W. 194. In First Nat. Bank of Ellsworth v. Ripley, 204 Iowa, 590, 215 N.W. 647, a chattel mortgage duly executed and filed in this state on property here owned was adjudged superior to one executed and filed after the property was removed by the mortgagor to Iowa. The statute of Iowa (§ 10020 of the Code) provides that after the due filing of a chattel mortgage with the recorder it "shall be deemed complete as to third persons, and have the same effect as though it had been accompanied by the actual delivery of the property sold or mortgaged." Our statute (2 Mason Minn.St.1927, § 8348) as to the effect of properly filing the mortgage, is: "Every such instrument so filed shall be notice to all persons of the existence and terms thereof." Close v. Hodges, 44 Minn. 204, 46 N.W. 335; Hogan v. Atlantic Elevator Co., 66 Minn. 344, 69 N.W. 1. This mortgage contained a covenant that the mortgagors would not remove any of the property mortgaged from the premises described or sell or dispose of any part thereof without written consent of the holder of the mortgage. The statute and decisions of Iowa and this state are in substantial accord that due filing of a chattel mortgage is notice to all the world of its existence and terms. The decisions of these two states are also in agreement that the holder of such mortgage, so filed where made, may in the courts of either state have his remedy against any one who has dealt with the mortgaged property in disregard or defiance of such holder's rights therein. That this practice is based on comity and not on any statute ought not to lessen its binding force, considering that it has been established law in both this and our neighboring state for over half a century.
The secretary and treasurer of plaintiff testified that there was still due and unpaid on the promissory note secured by this chattel mortgage the sum of $2975.55 and interest. The note was produced by the witness and received in evidence without objection. We consider futile the attempt to challenge as unsupported the finding "that plaintiff has at all times been, and now is, the owner of said note and chattel mortgage."
The chief effort of defendant on this appeal is to establish that it "being a federal public utility, licensed by the federal government to act as such and required to conduct its business in accordance with the federal law, the question of its liability is to be determined by the federal law, and not by the laws of the state of Iowa or the state of Minnesota." In short, the contention is that by the Packers and Stockyards Act, 42 Stat. 159, 7 U.S. C.A. §§ 181-229, Congress took over the...
To continue reading
Request your trial