Willows v. Rosenstien

• Citation: 5 Idaho 305,48 P. 1067
• Parties: WILLOWS v. ROSENSTIEN
• Decision Date: 17 May 1897
• Court: United States State Supreme Court of Idaho

48 P. 1067

5 Idaho 305

WILLOWS v. ROSENSTIEN

Supreme Court of Idaho

May 17, 1897

CHATTEL MORTGAGE-AGREEMENT TO CONTINUE MORTGAGE AS SECURITY AFTER FULLY PAID-SECTION 3351 OF THE REVISED STATUTES CONSTRUED.-The plaintiff gave to defendant a chattel mortgage to secure an indebtedness of some $341. Subsequently plaintiff and his copartner becoming indebted to defendant they jointly executed to the defendant a chattel mortgage upon property belonging to the firm for the sum of $1,215, in which was included the amount of said first mortgage of $341. The mortgage for $1,215 was subsequently paid in full. By an agreement between plaintiff and defendant the latter was however, to hold said first mortgage as security for an individual indebtedness existing and to arise from future advances to be made by defendant to plaintiff. Such agreement is contrary to the provisions of section 3351 of Revised Statutes of Idaho. Evidence reviewed and found to support the verdict.

(Syllabus by the court.)

APPEAL from District Court, Latah County.

Affirmed, with costs.

Sweet &amp Steele, for Appellant.

Respondent Willows, on August 11, 1894, executed his promissory note to the appellant Rosenstien for $ 341.97, due one day after date, and on the same day executed a chattel mortgage upon the crop of wheat to be grown in 1895 upon certain real estate described therein. On or about the tenth day of October, 1895, Rosenstien took possession under the mortgage of a portion of the wheat, for the reason, as he claims, it was not being properly cared for, and that his security was becoming worthless. The defendant Rosenstien sets up by way of separate answer the fact that he held a mortgage upon the grain which was unpaid. The plaintiff Willows admits the execution of the mortgage, and also admits that sixty-two dollars was due thereon. The verdict and the judgment in this cause should be vacated, for the reason that upon the pleadings and upon the testimony the action of trover will not lie. Defendant Rosenstien held a mortgage upon the grain which was unsatisfied. This is admitted both in the pleadings and by the plaintiff Willows. Willows admits there was $ 201.99 due on this mortgage, and he had delivered $ 140 worth of grain to Rosenstien prior to the time the wheat was taken possession of. There being an account due and unpaid upon the mortgage and note there could be no conversion by the mortgagee. (Heyland v. Badger, 35 Cal. 404.) Section 4523 of the Statutes of Idaho provides in substance that a mortgage of real property shall not be deemed a conveyance, whatever its terms, so as to enable the mortgagee to recover possession without foreclosure. This section applies only to real estate mortgages. (Fogarty v. Sawyer, 17 Cal. 592.) A mortgagor cannot maintain trover against the mortgagee after default in the conditions of the mortgage. (Jones on Chattel Mortgages, secs. 435, 437.) A mortgagee cannot be charged with wrongful conversion upon taking possession after default any more than he could after an alleged conversion where he was put into possession by the mortgagor. (Jones on Chattel Mortgages, secs. 702, 703.) Rosenstien had the right after condition broken to take possession of the property covered by the mortgage. The instrument in question provides, in substance, that if default shall be made in the payment of the money, or said first party does not take proper care of the property, or if said second party shall at any time deem himself insecure, it shall be lawful for said second party, or his agent, to take said property wherever it may be found and sell or dispose of the same. (First Nat. Bank v. Wilbur, 16 Colo. 316, 26 P. 777; Jones v. Annis, 47 Kan. 478, 28 P. 156.) The property was being destroyed and his security was becoming worthless. (Huebner v. Koebke, 42 Wis. 319; Cline v. Libbey, 46 Wis. 123, 32 Am. Rep. 700, 49 N.W. 832; Botsford v. Murphy, 47 Mich. 536, 537, 11 N.W. 375, 376; Werner v. Bergman, 28 Kan. 60, 42 Am. Rep. 1521.) Having a mortgage upon the grain for $ 341.97, and having expended $ 133 for threshing the grain, and paid for heading and other work thirty-eight dollars, he took possession of the grain to prevent his security from being lost, and hauled it to the nearest warehouse at his own expense, stored it as wheat received from Willows, and there it remained without sale or any realization of assets. He never used the wheat for any purpose. His only purpose in hauling the grain in was to prevent it being damaged. The foregoing facts are practically uncontradicted, and we insist that they do not constitute conversion, and that therefore the evidence does not sustain the verdict and judgment as is alleged in specification of error. (Jones v. Annis, 47 Kan. 478, 28 P. 156; Jones on Chattel Mortgages, secs. 429-431, 702; Byrnes v. Hatch, 77 Cal. 244, 19 P. 482.) The next error we call attention to is in the instruction with reference to the payment of the $ 341.97 note which the mortgage was given to secure. By this instruction the court states that if the $ 341.97 was included in the new note for $ 1,215 given by Willows and Hedrick, and if the $ 1,215 note had been paid, that the mortgagee had no lien. In the pleadings it is admitted by Willows that the mortgage was held to secure a balance of sixty dollars due from Willows to Rosenstien which arose out of an indebtedness in addition to the note. Admitting that the $ 341.97 note was included in the $ 1,215 note, it would not be payment. (Edwards on Bills and Notes, 3d ed., sec. 752.)

S. S. Denning and Forney, Smith & Moore, for Respondent.

In order for contradictory instructions to be ground for reversal, the exception thereto must be upon the ground that they are contradictory. (Black v. City of Lewiston, 2 Idaho 276, 13 P. 80; Yoakum v. Mattasch, 26 S.W. 129 (131); Sierra Union Water & Min. Co. v. Baker, 70 Cal. 572, 8 P. 305, 11 P. 654.) There must be grounds stated in the exception to the oral charge of the court or they will be disregarded. (Cases supra, on same point; Jones v. Osgood, 6 N.Y. 233; 2 Ency. of Pl. & Pr., p. 948, cases.) The proposition that a chattel mortgage passes title and right to possession to the mortgagee as at common law, the statutes of Idaho however, have expressly provided that a mortgage transfers no title, notwithstanding an agreement to the contrary. The lien of a mortgage is special, etc. (Idaho Rev. Stats., sec. 3352.) Contracts of mortgage are subject to the provisions of title 12, chapter 1 of the Revised Statutes of Idaho. (Idaho Rev. Stats., sec. 3330.) A mortgage is a lien. (Idaho Rev. Stats., sec. 3355.) Notwithstanding an agreement to the contrary, a lien, or contract for a lien, transfers no title to the property subject to the lien. (Idaho Rev. Stats., sec. 3333.) In the event the mortgagee of chattels takes possession thereof under the mortgage, but does not sell, he is liable to the mortgagor as for a conversion. (Howery v. Hoover, 97 Iowa 581, 66 N.W. 772; Miller v. McElwain, 52 Kan. 91, 34 P. 396.) We further contend that under the laws of those states in which the chattel mortgage is only security, and does not transfer the title, as in Idaho that the mortgagor of chattels is the legal and equitable owner thereof, both before and after a default, and is entitled to the possession thereof, and that this right to the thing, and ownership of the thing, remains in the mortgagor until after he has been foreclosed thereof in the manner provided by statute. (Sanford v. Duluth etc. Elevator Co., 2 N. Dak. 6, 48 N.W. 434; Everett v. Buchanan, 2 Dak. 249, 6 N.W. 439, 8 N.W. 31.) The note of August 11, 1894, by Willows to Rosenstien, was not given for a debt of Willows, but for a debt of the firm of Willows & Hedrick. It was afterward included in the $ 652 note given by the firm; and was again put into and formed part of the $ 1,215 note executed by the firm. The said last note was thereafter paid, thus paying the $ 341.97 note. (Everett v. Buchanan, 2 Dak. 249, 6 N.W. 439, 8 N.W. 31; Hartman v. Ringgenberg, 119 Ind. 72, 21 N.E. 465; Idaho Rev. Stats., sec. 3332.)

HUSTON, J. Sullivan, C. J., and Quarles, J., concur.

OPINION

HUSTON, J.

This is an appeal from judgment and from order denying motion for a new trial. On August 11, 1894, the plaintiff and one Hedrick, then being partners, engaged in farming in Nez Perces county, state of Idaho were indebted to the defendant in the sum of $ 341.97. To secure said indebtedness, the plaintiff executed and delivered to the defendant on said date his individual note for said sum; and also, as security for the payment of said note and the interest thereon, executed and delivered to said defendant a chattel mortgage upon the crop of wheat to be sown and grown during the season of 1895 upon a tract of land then in the possession and occupancy of said plaintiff in said Nez Perces county, and which was at the time the individual property of said plaintiff. In the spring of 1895, plaintiff and his said partner, Hedrick, having secured a lease of certain lands upon the Nez Perces Indian reservation with intent to crop the same for that season, and desiring the pecuniary aid of defendant in carrying out such arrangement, on the 6th of March, 1895, jointly executed and delivered to the defendant their note for the sum of $ 652.03, in which sum was included the said sum of $ 341.97, for which plaintiff had theretofore, on the...