195 N.W. 564 | N.D. | 1923
This is an action in claim and delivery wherein the plaintiff seeks to recover the possession of certain property, for the purpose of the foreclosure of a chattel mortgage thereon, Avhich chattel mortgage, it is claimed, was executed by Bex Theatre Company and Goo. Y. Halliday, and contains the usual provisions of immediate possession, power of sale, etc., on default. The complaint further alleges default in payment of the debt secured, the maturity of the debt, election to declare it all due and payable, demand upon the defendants for the possession of the property and their refusal to deliver. An affidavit in claim and delivery was made, the proper undertaking given, and the property taken by the sheriff thereunder. Service of process was made upon the defendants, Bex Theatre Company, a corporation, and F. O. Hellstrom, who answer separately. The company denies it gave the plaintiff a mortgage upon the property described in the complaint; denies the plaintiff has any special property therein; alleges the ownership of the property and the right to the possession thereof in itself; and claims the plaintiff wrongfully converted the. property described in the complaint to its damage in the sum of $12,000. It then sets up a counterclaim, alleging that said
To get the proper perspective it is necessary to state some of the facts, shown by the record. In December 1919, Geo. V. Halliday, one of the defendants, formed a partnership with one Geo. D. Maun for the purpose of engaging in the theatre business. The partnership had no furniture, equipment, or fixtures for this business but made arrangements to get money from the plaintiff to buy'what was necessary. The business was not established, however, and, later, the partnership was dissolved. Halliday then formed a co-partnership with one Mildred Hellstrom, afterwards known as Mildred Snow, under the trade name of Hex Theatre Company, Limited. Prior to this time, however, and after the dissolution of the partnership with Mr. Mann, the defendant F. O. Hellstrom and the defendant Halliday entered into business arrangements with the plaintiff in’ order to get money to purchase the necessary fixtures and equipment. Notes aggregating $3,000 were given to the plaintiff by these two defendants, signed by each, thus, Ilex Theatre Co. Geo. V. Halliday Mgr., F. O. Hellstrom, and as security for the repayment of this sum defendant Hellstrom gave a second mortgage on some land in Minnesota and the defendant Halliday gave the mortgage in question, signing it George V. Halliday, manager Rex Theatre Company. The mortgage was given on the property described in the complaint, though the property was not yet purchased. The amount of money borrowed, $3,000, was placed to the credit of Rex
Defendants attack the mortgage held by the plaintiff. The property, when taken, belonged to Eex Theatre Company, a corporation, whether they got their title by gift or purchase; but a mortgagor may create a lien on property not yet acquired, and tbis is tbe situation in this ease. True, when tbe mortgage was executed tbo mortgagor, Eex Theatre Company, Limited, did not own tbe property, but bought it witb the proceeds of the loan secured by the mortgage, and such mortgage is good. Section 6106 of the Compiled Laws 1913 makes provision for just such a condition. The property was purchased by the copartnership of Halliday and Mildred Hellstrom Snow, and whether Mrs. Snow knew of the execution of the mortgage, in the first place, or afterwards ratified the act is immaterial. The mortgage was
Defendants say the plaintiff did not prove demand and demand is a prerequisite to the maintenance of the action. Demand is not necessary when the defendants claim the property and the right to possession. This is what the answers do. On the trial of the case the defendants contest the ease on the merits, basing defense on title in themselves and claiming right of possession as incident thereto. In such case demand is unnecessary. Latta v. Tutton, 122 Cal. 279, 68 Am. St. Rep. 30, 54 Pac. 844; Breitenwischer v. Clough, 111 Mich. 6, 66 Am. St. Rep. 372, 69 N. W. 88.
Defendants allege error on the part of the trial court because they wore prevented from proving their counterclaims. They allege the. sheriff took property not covered by the mortgage, and that the taking of the property injured their business. This is an action to obtain possession of certain specific property. If the sheriff took property other than the property described in the mortgage that cause of action may be determined in another suit. There is no claim the plaintiff directed him to take property other than the property described in the mortgage, and this is the property the sheriff should take. Taking this property may have prevented defendants from carrying on their business; but this can not be helped if the plaintiff had a right to the possession. The issue is — Is the plaintiff entitled to the possession of the property described in the complaint? Claim and delivery proceedings as a provisional remedy to get possession in advance of trial are merely ancillary. The right to counterclaim depends on statute. The alleged counterclaim is not in contract nor does it arise out of the contract set forth in the complaint. It is not “connected with the subject matter of the action.” If the finding was that defendants were entitled to the return of the property then under the rule of McCarty v. Kepreta, 24 N. D. 395, 48 L.R.A.(N.S.) 65, 139 N. W. 992, Ann. Cas. 1915A, 834, counterclaim might lie. But counterclaim for damages in taking possession of property to which the plaintiff is entitled cannot be maintained; and the sheriff was not directed to take any other property. The judgment is merely that plaintiff is entitled to the possession of certain property, describing said property,
Defendants’ specifications of error number seventy-seven. They deal with the introduction of evidence; the proposed amendment; the counterclaim; and instructions. The trial court kept strictly to the issue involved — is the plaintiff entitled to the possession of the property described in the complaint? Hence its rulings and instructions regarding demand, counterclaim, and nonexecution of the mortgage by fhe corporation were in point. We have examined them carefully and see no error that is prejudicial to the interests of the defendants. As is usual in the trial of cases many facts are undisputed and many more are conceded. The whole ease turned on the proposition — did the plaintiff have a mortgage on the property described? That was the only issue of importance. We find no prejudicial error shown. The judgment of the lower court is affirmed.