116 N.W. 84 | N.D. | 1908
Action for damages for an alleged wrongful conversion of personal property. The complaint alleges that the plaintiff gave the defendant a chattel mortgage on personal prop.erty to secure a debt of $341.30 evidenced by a promissory note due April 1, 1904; that the defendant wrongfully took possession of said property on March 11, 1905, and sold the same at a pre
The grounds urged in favor of the demurrer are (1) that the lien of the mortgage had been extinguished by the invalid foreclosure, and in consequence thereof no counterclaim is sustainable; (2) that the answer does not state a cause of. action arising out of the contract or transaction set' forth in the complaint as the foundation of plaintiff’s claim, or connected with the subject of the action, as required by subdivision 1, section 6860, Rev. Code 1905, relating to counterclaims; (3) that the insolvency of the plaintiff is not alleged. We are unable to agree with either of these contentions. They do not represent the correct theory under which parties who are guilty of conversion of property on which they had valid liens are permitted to offset such liens against damages caused by conversion. These liens are allowed as offsets in mitigation of damages merely. ¡They are not deemed to be counterclaims within the meaning of said section 6860, and the right to -plead the liens for this purpose is in no way dependent upon said' section. Since the revision of 1895 the right to offset liens in this manner is statutory. Section 6145, Rev. Codes 1905, provides: “Tlhe sale of any property on which there is a lien in satisfaction of the claim secured thereby, or, in case of personal property its wrongful conversion by the person holding the lien extinguishes the lien thereon; provided, however, that in an action for the -conversion of personal property the defendant may show in mitigation of damages the amount due on any lien to which the plaintiff’s rights were subject, and which was held or paid
The order is reversed, and the cause remanded for further proceedings.