Sorrells v. Sigel-Campion Live Stock Com'n Co.

• Decision Date: 09 November 1914
• Docket Number: 4027
• Parties: SORRELLS v. SIGEL-CAMPION LIVE STOCK COMMISSION CO.
• Court: Colorado Court of Appeals

148 P. 279

27 Colo.App. 154

SORRELLS v. SIGEL-CAMPION LIVE STOCK COMMISSION CO.

No. 4027

Court of Appeals of Colorado

November 9, 1914

Rehearing Denied May 10, 1915

Error to District Court, Weld County; Neil F. Graham, Judge.

Action by the Sigel-Campion Live Stock Commission Company, a corporation, against Charles Sorrells. Judgment for plaintiff, and defendant brings error. Reversed.

John T Jacobs, of Greeley, for plaintiff in error.

Goudy & Twitchell and J.H. Burkhardt, all of Denver, for defendant in error.

HURLBUT J.

This action was begun November 4, 1909, by defendant in error (plaintiff below). The complaint contains three causes of action: First, replevin to recover possession of 310 head of lambs included within a mortgage upon 1,103 of such animals second, to recover $1,400 for value of wool clipped from the sheep during the life of the mortgage and before breach of the covenants thereof; third, to recover $1,400 for injury and damage done to the lambs by such clipping.

The answer admits the mortgage, possession by defendant Sorrells, of the lambs, and his refusal to surrender the same upon demand of plaintiff, but defends the action under a claim that he had an agistor's lien, in the sum of $950 upon the lambs replevined, superior to the lien of the mortgage. The answer also alleges that defendant received into his custody, from the owner, Davis, something over 2,000 sheep, to be taken care of and fed by him under the terms of a contract dated October 28, 1908, entered into between himself and Davis; that defendant foreclosed the agistor's lien and realized from the sale of the lambs the sum of $600, which he applied upon said indebtedness of $950, leaving a balance still due him of $350; that said plaintiff company, before execution and delivery of the mortgage, had full knowledge of all the circumstances surrounding the delivery of the sheep to him, and the care and feeding of the same. The answer further alleges as a defense that the plaintiff company took from defendant's possession all of the 2,000 sheep aforesaid, except the 310 lambs replevined, and sold the same for more than enough to pay the entire mortgage indebtedness from Davis; but that, instead of applying it to the liquidation of such indebtedness, it applied a large portion of such proceeds first to the liquidation of an open account of $3,200 or $3,400 existing at the time from Davis to the mortgagee company, which left an insufficient amount from the sum received upon sale of the sheep to pay the mortgage indebtedness. The answer also admits that Davis clipped the wool and sold it to defendant, as charged in the complaint, but claims he purchased the same from said Davis for the agreed price of $1,390, and applied that amount upon an indebtedness of $2,000 then existing from Davis to himself. The case was tried to the court without a jury, and the court rendered judgment in favor of plaintiff for the possession of the lambs, or for their value, $1,071, in case of nondelivery; also for $1,103 damages for conversion of the wool.

This case has been ably prosecuted and defended by the attorneys for the respective parties, and we have given it careful consideration. There is but little controversy as to the facts. It appears to be conceded by counsel for both parties that the disposition of three sharply defined issues is sufficient to determine this appeal:

First. Under our statute, does a chattel mortgage upon sheep, including in terms their "increase," include the wool clipped therefrom in proper season, within the life of the mortgage, and before default, when no mention is made therein of such wool?

Second. Did the relations between Davis and Sorrells warrant an agistor's lien in favor of the latter, under our statute?

Third. If Sorrells was entitled to an agistor's lien, did he waive such lien by his subsequent statements and acts, made and done at or about the time he solicited Mr. Campion, manager for defendant company, to guarantee the future costs and expenses of feeding the lambs then in his (Sorrells') possession?

We will discuss the issues in the order named and refer to facts which appear to be established by the evidence as we proceed.

First. Did the chattel mortgage include the wool thereafter clipped? At common law all personal property subject to absolute sale could be mortgaged, and it is a general rule of law that a chattel mortgage fastens a lien only upon the specific property therein described. The statutes of California and some other states (not including Colorado) render a chattel mortgage void as to personal property other than that specifically designated by the statute. Section 515, Revised Statutes 1908 of Colorado, provides among other things that:

"Every mortgage of live stock may cover and bind the increase of such live stock, or any part thereof, thereafter to be born, as may be provided therein," etc.

The chattel mortgage in the case at bar was given upon the following described property:

"All the following described live stock, cattle, and increase thereof and personal property, viz.: *** Eleven hundred three (1,103) head of good Idaho lambs, average weight about 72 pounds, being the identical sheep purchased from B.F. Saunders at Cheyenne, Wyo., February 20, 1909. *** Said sheep are at present located in feed lots situated on the Teller's and Sorells' ranch, located about three miles east of the town of Windsor, Weld county, Colo.," etc.

A construction of the word "increase," found in the mortgage, seems necessary. It has been repeatedly construed by text-writers and appellate courts in various jurisdictions, and the almost unanimous conclusion reached is that the term "increase," when used in chattel mortgages upon sheep and other live stock, refers exclusively to the progeny or young of such animals, and does not include wool grown on sheep, milk taken from cows, etc., during the life of the mortgage and before foreclosure, or before breach of the mortgage covenants, and particularly so when the possession remains in the mortgagor under the terms thereof. We find no text-writer, and but one case, holding to the contrary, viz., Alferitz v. Ingalls (C.C.) 83 F. 964 (decided December, 1897), in which an oral opinion was delivered by the trial judge. He held that the term "increase," in a chattel mortgage of sheep, included the wool grown on the sheep within the life of the mortgage and before default. That case involved the construction of a chattel mortgage executed in California. It appears to stand alone, and is in direct conflict with the modern decisions of that state. The mortgage there contained the clause "eight thousand sheep and the increase thereof." A few excerpts from the cases next hereinafter mentioned will be sufficient to show that other courts are not in harmony with this federal decision in its construction of the word "increase."

The case of Alferitz v. Borgwardt, 126 Cal. 201, 58 P. 460 (decided September, 1899), judicially interprets and defines the meaning and effect of the term "increase" when used in mortgages of live stock. The mortgage there expressly mentioned a drove of sheep and their increase. That case directly involved the right of a mortgagor to clip and sell the wool grown on the sheep after execution of the mortgage and before foreclosure. The mortgagee sued to recover the value of such wool. The court said in part:

"Section 2955 of the Civil Code, so far as material here, reads as follows: 'Mortgages may be made upon the following personal property, and none other: *** 16. Neat cattle, horses, mules, swine, sheep, goats, and the increase thereof.' ***

"In addition to the fact that the presumption is against the right to mortgage personal property, and permission so to do must be clearly found in the statute, it must be admitted that the word 'increase,' although variously used, has acquired a special meaning when applied to domestic animals. So applied, unless expressly qualified in the context, it invariably means the young of such animals. Counsel has not found, and I venture to say cannot find, in legal literature or elsewhere (save, perhaps, in the mortgages of this class, and in Alferitz v. Ingalls [C.C.] 83 F. 964), an instance where the unqualified use of the word, as applied to such animals, included anything more or meant anything other than the offspring, progeny, or young of such animals. *** When we speak of the increase of a herd of cattle or a flock of sheep, we refer to growth of the herd or flock by addition of new members. *** The wool does not increase the flock of sheep." In Stringfellow v. Sorrells, 82 Tex. 277, 18 S.W. 689, the court defined the meaning of the word "increase," when applied to live stock, using in part the following language:

"As applied to live stock belonging to the wife, 'the increase' of such property (ever since the decision of the Supreme Court in Howard v. York, 20 Tex. 670) has been invariably recognized in the reported cases to denote the progeny of the original stock or their descendants. This construction comports with the etymology of the term, and accords with the universal understanding."

To the same effect, Cox v. Beck et al. (C.C.) 83 F. 269, post.

The mortgage in the case at bar specifically mentioned the "increase," but not the wool, and we are satisfied, from the authorities cited, as well as upon reason, that the word "increase," as there used, did not extend the lien of the mortgage to the wool grown on the sheep subsequent to its execution, when clipped and sold by the mortgagor while the sheep were in his possession and before breach of any of the mortgage covenants.

There are two lines of authority as to the effect of a chattel mortgage upon the title of the...