Ex parte Logan, 64 So. 570

64 So. 570 | Ala. | 1914

MAYFIELD, J.

The questions presented for decision are as follows:

Does the mortgagee of a chattel estop himself from maintaining an action of detinue to recover the mortgaged property by levying an attachment or execution upon the property as the property of the mortgagor?

If not estopped, does such levy amount to a waiver of the right or title of the mortgagee?

If the mere levy does not work an estoppel or waiver, is a claim suit, instituted after the levy, between the mortgagee and a third party, which results in favor of the third party, res judicata, in a detinue suit by the mortgagee against the mortgagor, as to the same property?

The trial court and the Court of Appeals answerered each of the questions in the negative, and the defendant mortgagor seeks certiorari to have reviewed the judgment and decision of the Court of Appeals as to-these questions.

The exact questions are new in this court, so far as our investigation goes. They have been decided by other courts, however; but the trouble is they have been decided differently in the several courts. The questions, or some of them, have been answered in the affirmative by the Supreme Courts of Massachusetts and of Arkansas and other states, and in the negative by the Supreme Courts of Illinois, Indiana, Kansas, Iowa. North Dakota, and other states.

The rule of law is thus stated by the Supreme Court of Massachusetts: “A party holding personal property by virtue of a mortgage or pledge may waive his claim under such mortgage or pledge, and attach the property in a suit to recover the debt for which the mortgage or pledge was given. — Buck v. Ingersoll, 11 Metc. [Mass.] 226, 282. Such attachment is, in itself, a waiver of the claim under the mortgage. The liens respectively created by mortgage and by attachment on the same property are essentially different, and cannot coexist. They affect very differently, also, the rights of third persons. A stranger may attach personal property subject to the incumbrance of a prior lien by attachment, with no responsibility for such prior lien; if the lien is by mortgage, he must pay the amount secured by such mortgage, before his attachment is effectual. We have no need to discuss the question whether the same rule shall apply to an attachment of the equity of redemption of personal property to secure the payment of the mortgage debt as applies to the equity of redemption of real property, for, in this commonwealth; the equity of redemption of personal property is not attachable.” — Evans v. Warren, et al., 122 Mass. 304.

The Arkansas court thus states the rule, citing a number of authorities: “The levy of the attachment amounted to an assertion by appellants that the property was subject to seizure and sale under the attachment. But, as this could not be true if the lien of the mortgage still existed, the levy of the attachment was the same as a denial on the part of appellants that the mortgage lien existed, and was in effect a waiver on their part of the lien created by the mortgage.' In other-words, having sued out an attachment, levied it upon the property in question, and prosecuted the attachment suit to judgment, they must be held to have waived rights which were inconsistent with such a course of procedure. The mortgage lien, being inconsistent with such attachment, was thereby waived, and appellants have nothing upon which to base their action of replevin.” — Cox v. Harris, 64 Ark. 215, 41 S. W. 426, 62 Am. St. Rep. 187, 188.

The Indiana and Illinois courts criticised the rules declared by the Massachusetts and Arkansas courts as being technical and artificial, and declined to follow. See Byram v. Stout, 127 Ind. 195, 26 N. E. 687; Barchard v. Kohn, 157 Ill. 579, 41 N. E. 902, 29 L. R. A 803. In the latter casé it is said: “The main case which holds, that an attachment of the mortgaged property by the mortgagee for the mortgage debt is a waiver of his lien under the mortgage is Evans v. Warren 122 Mass. 303. The decision in that case was placed upon the ground substantially that the liens created by mortgage and by attachment upon the same property are essentially different, and cannot coexist, for the reason that under the Massachusetts statutes the equity of redemption of personal property is not subject to attachment, and hence, if the mortgagee.causes an attachment to issue against the mortgaged property, it is a waiver of the mortgage lien. The cases which hold that the attachment operated as a waiver of the plaintiff’s rights under the mortgage do so upon the general grounds that a person cannot avail himself of inconsistent remedies in relation to the same matter, and, having chosen and carried into effect one remedy, he cannot resort to a different one, involving a repudiation of the grounds upon which the first one was based; that the suit bn the mortgage and the attachment suit were inconsistent, because the one proceeds upon the ground that the mortgagee is the owner of the property, and the other upon the ground that the mortgagor thereof is owner; that, when the debt matured, the mortgagee had the right to take the property under the mortgage, he having the legal title, subject only to a right of redemption; and that, by bringing the attachment suit, he elects to treat the property as the property of the debtor, and cannot, by seeking to enforce his mortgage, assert an ownership and right of possession in himself antedating the attachment. The reasoning in Evans v. Warren, supra, was held to be unsatisfactory, and its doctrine was repudiated in Byram v. Stout, 127 Ind. 195 [26 N. E. 687]. In the latter case the mortgagee in a chattel mortgage brought an action to foreclose it, and a junior mortgagee set up as a defense that the complainant had previously brought suit upon the evidences of debt secured by his mortgage, and had therein issued a writ of attachment, and levied it upon the mortgaged property, and had thereby released his mortgage lien; but the court held that the attachment was not a Avaiver of the mortgage lien, and did not estop the mortgagee from claiming under his mortgage, basing its decision mainly upon the ground that in Indiana the mortgagee in a chattel mortgage is a mere lienholder. —Jones, Mortg. § 55. In support of the conclusion that the mortgagee of personal property is a mere lien-holder, Indiana decisions are there referred to holding that personal property under mortgage may be levied upon and sold by execution subject to the mortgage lien.”

The Massachusetts doctrine is thus criticised by an annotator of the case of Dix v. Smith, 9 Okl. 124, 60 Pac. 303, 50 L. R. A. 714: “The decision in the-principal case, while the logical result of the view taken of the nature and effect of a chattel mortgage, and of the construction placed upon the statute governing attachments, rests upon strictly technical grounds. To render applicable the theory of the case, that the lien of a chattel mortgage and the lien of an attachment are inconsistent, and cannot coexist, since the first imports legal title in the mortgagee, and the second legal title in the mortgagor, not only- the common-law doctrine that a chattel mortgage operates to transfer the legal title, to the mortgagee, but also the common-law rule that a mere equitable right, such as the equity of re: demption remaining in the mortgagor, is not subject to levy, must have been left undisturbed, both by stature and judicial decision. Even in a jurisdiction where the doctrine that the legal title is in the mortgagee has not been abandoned, there is no necessary inconsistency between the lien of a chattel mortgage and the lien of an attachment, though asserted by the same person, if, either by statute or judicial decision, the equity of redemption in the mortgagor is made subject to attachment. While the statute involved in the principal case affords the means of reaching 'by attachment property that has been mortgaged, the opinion emphasizes the fact that the statute contemplates the payment and discharge of the mortgage before the lien of the attachment can attach, so that the statute does not impair either of the doctrines of the common law referred to. The theory and decision of the principal case have the support of Evans v. Warren, 122 Mass. 303, which is substantially like it, except that there the attachment, which was subsequently dissolved, was issued for the debt secured by the mortgage. The court took the view that the liens were essentially different, and could not coexist, pointing out that the legal title was in. the mortgagee, and that the equity of redemption in personal property was not attachable.”

Whatever might be the correct doctrine in this state but for our statutes, our statutes certainly change the law from that declared by the Supreme Courts of Massachusetts and Arkansas. Section 4091 of our Code expressly makes the equity of redemption in either land or personal property, subject to levy and sale under execution. This being true, the doctrine of estoppel or waiver cannot apply to or result from the levy of an execution, by the mortgagee, upon the mortgaged chattels

It is true that this court, in the case of Fuller v. Eames, 108 Ala. 464, 19 South. 366, held that, where there was a conditional sale of chattels, the vendor retaining title until the purchase price was paid, and the vendor attached the property as that of the vendee, he was thereby estopped from bringing an action of detinue to recover the same property,. thereby claiming that it was the vendor’s, and not the vendee’s. In that case this court said: “In this attachment proceeding, the plaintiff unequivocally recognized the property as defendant’s, and sought to subject it in a manner wholly inconsistent with the retention of the title in himself when he sold the property to defendant. He thereby waived any title he might have had to the property, and could not afterwards institute this suit ■ maintainable only on the theory of title in himself. — Thomason v. Lewis, 103 Ala. 426 [15 South. 830]; Montgomery Iron Works v. Smith, 98 Ala. 644 [13 South. 525] ; Lehman, Durr & Co. v. Van Winkle, 92 Ala. [8 South. 870]; Tanner v. Hale, 89 Ala. 628 [7 South. 187].”

In that case, as is pointed out, the two remedies were inconsistent, and not concurrent, and, the vendor having elected to attach the property as that of the defendant, and to hold him liable for the purchase price, he would not be allowed to have the property and also to have the purchase price.

In the case at bar,-as to mortgaged chattels, the statute changes the rule, if it would not otherwise be different. The equity of redemption in chattels being subject to levy and sale under execution, the levy, of course, was not a claim inconsistent with that of the mortgagee’s title, and, for this reason, the pleas setting up estoppel, election, or waiver, on account of this levy, were no defense to the action of detinue; hence no error intervened in the trial court or in the Court of Appeals as to the rulings on demurrer to these pleas.

The claim suit was a contest between the mortgagee and a third party. In this suit the issue was, by virtue of the statute, whether the property was that of the defendant, the mortgagor, and whether it was subject to the process. The title to the property as between the mortgagee and the mortgagor was not therefore put in issue, nor decided, so far as the pleas show, and therefore the result of that claim suit was not shown to be res judicata of the detinue suit between the mortgagee and the mortgagor.

In this state the mortgagee has three remedies against the mortgagor, either of which he is at liberty to pursue, or he may pursue any two or all concurrently: He may bring an action at law to recover the debt, an appropriate action to recover possession of the property, and may foreclose the mortgage, and sell the property. But, if he pursue one or more, each suit must be tried and determined on the principles applicable and prevailing in the forum in which the particular remedy is sought.

The questions were treated fully by the Court of Appeals in an able opinion by Walker, T. J., in which we entirely concur, and, but for the fact that the question is one of first impression in this court, it might well-be disposed of by our merely adopting the opinion of the Court of Appeals.

The writ of certiorari is therefore denied.

Certiorari denied.

Anderson, C. J., and Sayre, Somerville, de Graffenried, and Gardner, JJ., concur. McClellan, J., thinks the writ of certiorari prayed for should be denied for the reasons and upon the considerations set forth in the opinion of the Court of Appeals.