6 Colo. App. 181 | Colo. Ct. App. | 1895
delivered the opinion of the court.
We regard the judgment as fundamentally erroneous. The difficulty experienced in the interpretation of the mortgage given to the company is very plain. If the instrument be so construed as to-operate as a mortgage on the stock then owned and held by Mitchell, it would necessarily be invalid under our statute respecting chattel mortgages. By a long series of decisions in both the appellate courts, such instruments, if they purport to cover stocks of goods of any description, and likewise reserve to the mortgagor the power of sale, are fraudulent and void as against creditors or Iona fide purchasers for value. This law is too well settled to require discussion. Two or three very ingenious arguments are advanced by the respective parties to support their dif
It cannot be legitimately contended that the security might, under some other circumstances than those disclosed by the record, attach to the stock of goods before the maturity of the note. The argument based on the provision of the mortgage which permits the holder to take possession when he regards his security as jeopardized or on levy of an attach
Having reached this conclusion, the solution of this matter is a very simple one. When Stanley took his mortgage, he had absolute and specific notice of the outstanding security held by the Coal & Coke Company. It had matured when he received his mortgage, on the 6th of February, and the fact that it was not recorded does not affect its validity, nor deprive the company of the preferential rights which they enjoyed on the elder security. We attach no importance whatever to the conversation between Stanley and Mitchell about the company’s mortgage, and the uncertainty of the information, according to Stanley’s version, of his talk with Mitchell. It is sufficient that his security contained a specific exception of the mortgage to The Citizens’ Coal & Coke Company. This was enough to put him on inquiry and charge him with notice of all the information which he could have procured if he had sought knowledge of the paper. He must be taken to have had notice of its contents, of what ■it covered, and of the rights of the company thereunder. The case is clearly brought, by all the matters appearing in its borders, within the decisions of this court in two cases. Harbison v. Tufts, 1 Colo. App. 140; Cassidy et al. v. Harrelson, 1 Colo. App. 458.
There is another matter which must be called to the attention of the parties, in the event of a future prosecution of this litigation. This concerns the judgment which was rendered. Stanley’s total claim was §208, and yet he got judgment for §275. This he could not do, for even though he had the right to recover the value of the property by reason of the conversion by the company, his right would be limited
There was some attempt at the close of the trial to introduce testimony of a conversation which occurred between Mitchell and the notary, or possibly between Mitchell, the notary and a representative of the company, respecting what was intended to be covered by the security. This testimony was properly excluded. Such evidence is not admissible. No evidence to contradict the terms of a mortgage can be introduced. While parol testimony may be offered to identify the articles embraced, or to interpret the meaning and extent of the terms employed, it is a generally recognized principle that this evidence. must be-consistent with the description. The offer as made was not brought within the exception to the rule, and it was properly excluded.
What has been said disposes of all necessary matters, and the judgment must be reversed.
Reversed.