Secord v. Northwestern Tire Co.
| Decision Date | 06 June 1924 |
| Docket Number | 23,999 |
| Parties | ALFRED A. SECORD v. NORTHWESTERN TIRE COMPANY |
| Court | Minnesota Supreme Court |
Action in conversion in the district court for Hennepin county to recover possession of certain property or $1,479.55, the value thereof. The case was tried before Montgomery, J., who made findings and ordered judgment in favor of defendant. From the judgment entered pursuant to the order for judgment plaintiff appealed. Affirmed.
Chattel mortgage constructively fraudulent.
A chattel mortgage of a stock of merchandise contemplating the retention of possession by the mortgagor and a sale at retail, the mortgagor agreeing that "at least the amount of the wholesale price of that which is sold" shall be applied on the mortgage debt, is constructively fraudulent.
Constant Larson and A. T. Larson, for appellant.
Joss Ohman, Fryberger & Parker, for respondent.
Action in conversion. There were findings for the defendant. The plaintiff appeals from the judgment.
On November 27, 1920, Anton Broms and others mortgaged the property, of which conversion is claimed, to the plaintiff. Afterwards Broms and his associates sold to the defendant. The defendant took possession. There was a default in the mortgage. The plaintiff demanded possession. It was refused. If the mortgage was valid as against the defendant the plaintiff was entitled to possession and there was a conversion; otherwise there was not.
Broms and his associates at the time of the execution of the mortgage were doing business in Alexandria, and the property mortgaged was a part of their stock of merchandise selling at retail. The mortgage contained this provision:
"It is expressly understood by all parties concerned that as any of the above stock is sold at least the amount of the wholesale price of that which is sold is to be deposited as payment on the attached notes."
Also this provision:
"So long as the conditions of this mortgage are fulfilled, the undersigned [mortgagors] shall remain in peaceful possession of said property, agreeing in consideration thereof to keep such property in as good condition as it now is without expense to the mortgagee."
Only the findings and conclusions and judgment are before us. A mortgage of a stock of merchandise permitting the mortgagor to remain in possession and sell at retail and retain the proceeds of the sale without applying the proceeds...
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