132 Me. 139 | Me. | 1933
This is an action on a demand note given the Consolidated Rendering Co. by the defendant, George E. Stewart, and secured by a chattel mortgage on two horses. The defendant, F. A. Farwell, is involved only as an accommodation signer of the note. The issue presented is as to the amount for which judgment should be entered. The case is reported on an agreed statement of facts.
The mortgage, as originally written, in addition to the usual provisions, included an agreement that, on default of any condition, it should be lawful for the mortgagee to take possession of
It is agreed, in the stipulations accompanying the report, that the sale of the horses netted $150 which should be credited upon the note if the sale was legal. The alternative agreement is that, if the sale is held to be void, judgment should be for $180, which is the amount of the note.
The defendants contend that the agreement in this mortgage, under which the Rendering Company sold the horses, must be construed as a release or surrender of the mortgagor’s right of redemption, which the law will not allow under the rule that a mortgagor can not change the character of his mortgage to that of an absolute conveyance, or release or surrender his right of redemption by any agreement, however explicit or forceful, made at the. same time or as a part of the mortgage transaction. Greenlaw v. Savings Bank, 106 Me., 205; Reed v. Reed, 75 Me., 264, 272; Peugh v. Davis, 96 U. S., 332. This rule, while ordinarily applied to mortgages of real estate, is now held to bar any agreement made contemporaneously with a chattel mortgage which clogs the mortgagor’s right of redemption. Jones on Chattel Mortgages (Bow. Ed.), Sec. 682; 5 R. C. L., 472; Editor’s Note, 24 A. L. R., 822 et seq; Landers v. George, 49 Ind., 309; Graves v. Negy, 114 Kan., 373; Hart v. Burton, 30 Ky., 322; Desseau v. Holmes, 187 Mass., 486; Clark v. Henry, 2 Cow. (N. Y.), 324; Plumiera v. Bricka, 140 N. Y. S., 171; Hughes v. Harlam, 156 N. Y., 427; McKnight v. Gordon, 13 S. C. Eq., 222, 230; Luckett v. Townsend, 3 Texas, 119, 131.
We are of opinion, however, that the defendants have misconceived the true intendment and legal effect of this provision in the mortgage. As we interpret the instrument, the parties, by their contract, superadded to the bill of sale and defeasance clause of the ordinary chattel mortgage a power of sale enabling the mort
The redemption of mortgages, both of real and personal property, is regulated by statute in this state and special provisions are made for the redemption from sales under a power. A mortgagor of real estate, or those claiming under him, may redeem the mortgaged premises from a sale under a power contained in a mortgage, or in a separate instrument executed at or about the same
We can not accede to the argument on the briefs for the defendants that the statutory method of foreclosure of chattel mortgages is exclusive and bars a sale by the mortgagee under a power. Until Section 30 of Chapter 125 of the Revised Statutes of 1841 was enacted, the mortgagor of personal property had no right of redemption at law and, if he failed to perform the conditions of his mortgage, the mortgagee acquired an absolute title to the chattel. Cutts v. York Manufacturing Co., 18 Me., 190; Flanders v. Barstow, 18 Me., 357. By the Act of 1841, a right of redemption for sixty days after breach of condition was given, “unless the property shall have been sold, in the meantime, in pursuance of the contract between the parties or on execution for the debt of the mortgagor.” Under that statute, unless the mortgage itself imposed conditions to be complied with, no foreclosure proceedings were required and the title of the mortgagee became absolute if the mortgage was not redeemed within the statutory period. Winchester v. Ball, 54 Me., 558. No change in this law appears in its reenactment in the Revised Statutes of 1857. In Chapter 23 of the Public Laws of 1861, a method of foreclosure of chattel mortgages was provided, certain requisites as to notice and record were prescribed, and a forfeiture of the right of redemption was ordered if the conditions of the mortgage were not performed within sixty days after the record of the notice of foreclosure. The mortgagor’s right of redemption was again expressly limited, however, to a time before the property is sold “by virtue of a contract between the parties
The right to sell mortgaged chattels by virtue of a contract between the parties, and this, as already pointed out, includes a sale under a power, therefore, still exists in this state. Instead of abrogating and excluding the exercise of this right, the Legislature has expressly recognized it and made it superior to the mortgagor’s right of redemption. The cases of Titcomb v. McAllister, 77 Me., 353, and Ramsdell v. Tewksbury, 73 Me., 197, cited by the defendants, do not hold to the contrary. In the former, neither the validity nor effect of a power of sale in a chattel mortgage is involved, nor is it there held that the method of foreclosure prescribed by the statute is exclusive. The latter case, in so far as it deals with foreclosure, comments, by way of dictum only, on the acquisition of title by the mortgagee. The case, as reported, indicates that no consideration was given to a power of sale superadded to the mortgage.
No question is raised as to the sufficiency of the power of sale here given, nor as to the manner of its exercise, and we must assume that both are sufficient in the eyes of the law. The defenses which have been pressed can not be sustained. According to the stipulation of the parties, judgment should be rendered for the plaintiff for $30, and that entry is made.
Judgment for the plaintiff for $30.