132 P. 718 | Or. | 1913
Lead Opinion
delivered the opinion of the court.
Plaintiff contends that the chattel mortgage in question is void, and never became a lien upon the horses, for the reason that it was given without the knowledge or consent of the mortgagee and was never delivered. Defendant McCreary claims that the purchase of the horses was a wrongful conversion of his property. It is conceded that the indorsement of the notes would have carried with them the mortgage if the latter had been delivered. No assignment of the mortgage was ever recorded in Grrant County. Plaintiff claims to be an innocent purchaser of the horses.
It will doubtless shorten this discussion to note that the original action was not brought upon the notes and mortgage, and that defendant’s claim is not founded upon the same, strictly speaking, but is a claim for damages for the conversion of the personal property described in the mortgage. Briefly stated, this controversy is between the assignee of the mortgage and the purchaser of the mortgaged property.
At the time the bank purchased the horses of Officer, McPherson had repudiated the transaction relating to the notes and mortgage. The horses were principally
1. It is contended on behalf of the bank that the complaint in the action for the conversion was defective in not alleging that, at the time of the conversion, McCreary had title and the right of immediate possession, or that he was at that time in the actual possession of the horses, and that the bank wrongfully deprived him thereof, citing 38 Cyc. 2068; Harrington v. Stromberg-Mullins Co., 29 Mont. 157 (74 Pac. 413); Johnson v. Oregon Steam Nav. Co., 8 Or. 35; Harvey v. Lidvall, 48 Or. 558, 560 (87 Pac. 895); and other authorities. Substantially all the facts contained in the pleadings in the original action at law are set forth in the complaint, answer and reply in this suit, and the testimony in regard thereto has been taken. The propriety of determining the rights of the respective parties in this suit is not urged, and we do not understand that it is controverted on the part of the defendant McCreary. Jones, Chattel Mortgages (5 ed.), Section 510, states the rule thus: “A-right of action for an injury to the property or to the mortgagee’s right does not pass by his assignment of the mortgage. Thus, an assignee cannot sue for a conversion of property which has taken place before the execution of the assignment. The assignment passes all the mortgagee’s right to the property, but does not pass his right to sue for a conversion of the property, or for injuries to it, while he was the legal owner of it.” To the same effect, see 27 Cyc. 1299; 7 Cyc. 60; Bowers v.
2, 3. Plaintiff seeks to have the chattel mortgage annulled and canceled of record, in order that the title given by it to the several parties to whom it has sold horses may not be disturbed, and that its ownership of the horses may not be interfered with. In so far as the Officers are concerned, should any question arise as to the notes or mortgage, the latter should not be canceled. We therefore consider it proper in this case to determine the rights only of plaintiff and defendant McCreary in the premises.
The delivery and acceptance of the mortgage are essential to its validity. Without these there is no mortgage, but only an attempt at one, or a proposition to make one. It is true, however, that although there may be no valid delivery of a mortgage at the time of its execution, a subsequent delivery will avail against those who have not in the meantime acquired rights to the property or interest in it. But it is otherwise as to a creditor of the mortgagor who has acquired an interest in the property during such time: 1 Jones, Chattel Mortgage's (5 ed.), § 104.- In this case Officer signed the mortgage on the horses and proposed to give it to McPherson. Until the mortgage was accepted by McPherson it was not a mortgage or lien on the property. McPherson repudiated the whole transaction and notified the bank that the same was not authorized or contemplated by him, and said in his letter: “I do not know Mr. Officer and certainly do not care to carry his paper.” This was an express refusal to accept the mortgage, and it was communicated
4. “Acceptance” is defined by Mr. Anderson in his dictionary as follows: “A receiving — with approval, or conformable to the purpose of a tender or offer.” The mortgage was signed by Officer without the knowledge or consent of McPherson, the mortgagee, and when the latter refused to ratify the transaction there was no mortgage. As was said by Mr. Justice Thayer in Shirley v. Burch, 16 Or. 83, at page 92 (18 Pac. 351, at page 356, 8 Am. St. Rep. 273), in speaking of the essentials of a mortgage: “One person cannot make a contract with another without the knowledge and consent of the.latter; it must be a mutual agreement between the contracting parties. A contract in form, with a person who is a stranger to it, stands upon the same footing as an assumed contract with a fictitious person. It would lack the essential elements of a contract — the meeting of the minds of the parties.”
5. A delivery of a mortgage is not complete without an acceptance by the mortgagee, which is essential to make a mortgage a valid instrument: 6 Cyc. 1009. The fact that the mortgage was recorded does not constitute a delivery and acceptance where there was none in fact. It is admitted that the mortgage was recorded without the knowledge or consent of the mortgagee. The recording, therefore, would not amount to a delivery. Jones', Chattel Mortgages (5 ed.), Section 106, states the rule as follows: “The delivery of a mortgage to the recorder, or the filing it in the proper office by the mortgagor, is not in itself such a
6. Where a creditor once refuses to accept a mortgage, he cannot afterward accept it without the debtor’s consent: 1 Jones, Mortgages' (6 ed.), § 85. In other words, when the proposition to mortgage is rejected, the entire matter is dead and cannot be revived without a new proposition, a new agreement, a new meeting of the minds.
7. We are referring solely to the mortgage without reference to the notes. When McCreary took an assignment of the mortgage in question, he was attempting to obtain a certain interest in or lien upon personal property. A valid mortgage is a conditional sale, and when an assignment of such mortgage is made, it can be no more than that. The plaintiff , advanced $4,600 to the agent of McPherson to pay for the horses,- and the money was distributed to the various sellers. The hank acted in good faith. After McPherson had refused to honor the draft for the money so advanced, and after he had refused to accept the mortgage, the bank had the right to buy the horses in order to reimburse itself for the money advanced. This was done long before any claim of interest therein was made by the defendant McCreary. The equities of the case are with plaintiff.
The decree of the lower court will therefore he affirmed, except as to' any question that may arise in regard to the mortgage as between plaintiff and Dean Officer; plaintiff to recover costs.
Affirmed : Rehearing Denied.
Rehearing
On Petition for Rehearing.
(134 Pac. 1180.)
delivered the opinion of the court.
In the former opinion (132 Pac. 718) the number of horses described in the chattel mortgage was stated to be 120 head, more or less. This should be corrected to read 310 head, more or less. After an examination of the petition for rehearing, we adhere to our former opinion in other respects.
The petition is denied.
Affirmed: Rehearing Denied.
