12 Colo. 322 | Colo. | 1888
Lead Opinion
This is, in its essential features, an action for an accounting and redemption under a chattel mortgage. The appellee, Philip W. James, and'one Edward H. Cadwell, as equal copartners under the firm name of Cadwell & James, were engaged in and carrying on the drug business at two different establishments in the city of Denver; - and on the 9th day of January, 1884, borrowed of the appellant, Hannah Metzler, the sum of $2,700, which they engaged to pay back in one year, in twelve equal monthly instalments, with interest at three per cent, per month, with the privilege of paying the entire loan at any time within the year, on condition, however, that if they exercised such privilege they should pay a certain bonus.
To secure the payment of said loan, they at the time thereof executed and delivered to the appellant two bills of sale, absolute in form, of the contents of said establishments, including the furniture and fixtures as well as the stock of goods in each store; one of the bills of sale covering the contents of one, and the other of the
Some time between the 4th and 10th of February, 1884, the appellant took possession of these stores, and has since continued in such possession, and conducted the business, selling and disposing of the goods, and replenishing the stocks with new supplies from time to time, as she deemed advisable or expedient; having taken in her husband, Joseph Metzler, as a partner, shortly after the execution sale herein mentioned. The appellant claims that it was a part of the agreement that she might thus sell the goods and replenish the stocks, and the appellee denies the same. At all events, the appellant put up new signs, and conducted the business to all intents and appearances the same as though Cadwell & James no longer had any interest therein, and they were excluded from all control thereof. Cadwell was employed part of the time by appellant as a clerk, but allowed no control. On the 17th of July, 1884, after this suit was begun, the appellant and her husband sold the contents of one of the stores en masse to Hall & Miller, without notice to the mortgagors, for the sum of $2,800, except a few of the goods which were transferred to the other store. This action was begun on the 11th of April, 1884. Cadwell refused to join as plaintiff therein, and was made a party defendant. He interposed no defense, and his default was duly entered.
The case was referred to a referee,' who made a report therein, which was set aside, and it was thereupon re-referred to the same referee, and to his second report exceptions were taken by both parties, some of which were sustained and the others overruled. The court
The testimony, is quite voluminous. Much contention arose over the fact as to whether the written defeasance signed by appellant, some time after the bills of sale were given, expressed the agreement of the parties, and as to what such agreement was in fact. Whether the appellant was to have immediate possession or not until default was made in payment was disputed, and whether, the mortgagors had agreed that new supplies might be added to the stock by the mortgagee was also controverted, as likewise the question of value. No evidence was introduced showing the amount derived by the mortgagee from sales of the mortgaged goods, and no list or invoice of the mortgaged property remaining on hand was furnished or produced in evidence, and no evidence given showing what mortgaged goods still remained on hand unsold, except that relating to the furniture and fixtures in one of the stores.
The court found that the written defeasance given in evidence did not express the understanding or agreement of the parties; that the mortgagors had not agreed that the stock should be replenished; and that the mortgagee had exceeded her power in so doing. The court also found that the mortgagee had failed and omitted to produce such testimony as by law she was required to do; that she had rendered no account in the premises as required; and that she had so dealt with and managed the mortgaged property as to render herself properly chargeable with the reasonable value thereof; and, after alio wing-many credits to the mortgagee besides the mortgage debt and interest, the court rendered a judgment in favor of appellee for $4,585.41, and also that, in case a delivery of the furniture and fixtures still on hand could not be
Four propositions are presented and argued by counsel for appellant, either one of which, it is claimed, is fatal to the judgment. These propositions are as follows: First, that, by the plaintiff’s own showing, the contract upon which he relies is fraudulent in law, and wholly vicious; second, that by the execution sale the plaintiff’s equity of redemption in the chattels was lost; third, that if, upon the facts proven and admitted, the plaintiff was entitled to any relief, the judgment is variant from and inconsistent with the case made by the complaint, and must be reversed for that reason; fourth, that the amount allowed to the plaintiff as damages is excessive.
The first proposition is based upon the allegation in the complaint that, by the terms of the agreement between the mortgagors and mortgagee, the mortgagors were “to retain possession of said goods and chattels, and were allowed to sell and dispose of the same in the regular order of trade.” It is said that this averment in the complaint, “ like all other averments and admissions of a party of record in a pending suit, is conclusive upon the appellee in this controversy.” This objection was not made in the court below, and cannot be raised here for the .first time. Besides, it is inconsistent with-the defense made. The answer admits that the contract entered into between the parties was a mortgage, and sets up a defeasance different in its terms from that alleged in the complaint. No one will dispute that a chattel mortgage is a lawful contract. Having thus admitted that the transaction was a lawful one, the appellant cannot now be permitted to assert the contrary.
The maintenance of the second proposition depends upon whether an equity of redemption in personalty is subject to levy and sale under an execution. It is not subject thereto at common law. It was set up as a de
As to the third proposition, we agree with counsel that this is an equitable action, and that the usual course in an action to redeem is to ascertain the amount due upon
Viewing the action in this light, it is said that the court had no power or authority to fix a price upon the mortgaged goods, and require the appellant to take the same at such price. This is true in an action for redemption, as applied to mortgaged property remaining on hand, and capable of ascertainment and identification. Bragelman v. Dave, 69 N. Y. 70. But where, as in this case, the property consists of merchandise stocks, to which new supplies have been added by the mortgagee, and the new goods intermingled with the old, thus rendering their identification impracticable and perhaps impossible, and it is not shown what goods are still on hand, the principle here invoked is not applicable. No list or invoice of such articles or portion of the old goods still remaining unsold was furnished in proof. It was the duty of the appellant, or at least such burden rested upon her, if she wished to avoid being' charged with their value, to furnish such proof. She having failed to do this, the court pursued the only course left open for it to pursue under the evidence, so far as we are enabled to discover. A decree of redemption must have something definite on which to operate. Again, no separate account was rendered of the amount realized by the appellant from the mortgaged goods sold, and the court was left without the necessary proof to determine how the mortgage indebtedness stood — whether it was paid or not.
The fourth proposition argued by counsel is likewise untenable. The fact that Oadwell refused to join as a plaintiff in the action, and was therefore made a defendant, does not change either the nature or scope of the action. Cadwell had the right and the opportunity to ask for protection, but kept his mouth closed, said nothing, and allowed a default to be entered against him. What rights he may have we are not called upon to decide. We simply leave him where he has voluntarily placed himself. The appellant, cannot be subjected to any claim at his hands, for the entire matter, as between her and the mortgagors, has been adjudicated in this action. The law does not permit the splitting of a demand. It does not “tolerate a division of a joint right of action into several actions. The whole cause of action must be determined in one, and thus avoid a multiplicity of suits.” Nightingale v. Scannell, 6 Cal. 507. (This citation, together with the reason on which it is based, was withdrawn on the rehearing.)
The chief difficulty in this case arose from the fact that the parties did' not complete their agreement in writing when the loan was made and contracted. If this had been done, all the trouble and expense which ensued might, perhaps, have been averted. The appellant set up and relied in the suit upon an agreement or defeasance under which she claimed the right to sell the mortgaged goods at retail, to add new supplies thereto as occasion might re
If no such agreement existed, then the rights of the-parties were very plain and simple. A mortgagee in possession, after forfeiture, is possessed of the absolute legal title (Jones, Chat. Mortg. § 699); and, as a general rule, the mortgagor has no other interest than the equitable right to redeem. Id. § 683. Ho action of a legal nature, nor other adequate remedy than that adopted, was available to the appellee. He was obliged to pursue it or none. At least, no other remedy has been suggested or pointed out by counsel for appellant, and none suggests itself to us. Where a mortgagee has sold a part of the property, and the mortgagor is entitled to redeem, the mortgagee is liable to account for the value of the property sold. Jones,- Chat. Mortg. § 702, and authorities there cited. A mortgagee in possession is a constructive trustee while the equity of redemption exists. 1 Perry, Trusts, § 243. An equity of redemption in personalty may be foreclosed by a decree of court or by a sale of the mortgaged property at public auction, upon reasonable notice to the mortgagor. Jones, Chat. Mortg. §§ 673, 707, 708, and authorities cited. The rights of the parties in this case are pretty thoroughly elucidated by the authorities hereinbefore cited, as well as by the following: Boyd v. Beaudin, 54 Wis. 193; Stoddard v. Denison, 38 How. Pr. 296; Blodgett v. Blodgett, 48 Vt. 32.
The court below allowed to the appellant credits aggregating $943.25, for clerk hire and other expenses, including rents, incurred by her in running said stores, for the period intervening between the time she went into
We discover no error in the record of which the appellant may complain, and are of the opinion that the judgment should be affirmed.
Rising, O. I concur.
Stallcup, C. I dissent.
For the reasons assigned in the foregoing opinion the judgment of the superior court is affirmed.
Affirmed.
Rehearing
ON REHEARING.
In the opinion announced in this case it is held that the execution sale under the Lyster judgment was irregular and void, and that the damages awarded to appellee should be permitted to stand.
It is insisted, upon the rehearing allowed, that these rulings are not correct. Upon a careful reconsideration of the questions involved, giving due consideration to the suggestions of counsel, we must adhere to- the conclusions reached. The facts are stated in the opinion of the court, and the language of the opinion should be consid
We are referred to sections 1835 and 1883, General Statutes of 1883, and to the fourth subdivision of section 101, and to section 106 of the code, in support of this claim. Section 1835, and many other sections of the same chapter, relating to judgments and executions, were taken from the laws of the state of Illinois, and had received a construction by the courts of that state before their adoption by the territory of Colorado. It is there held that the equity of redemption of a mortgagor in chattels is not subject to an execution at law where the possession of the chattels has been transferred to the mortgagee. Prior v. White, 12 Ill. 261. And it is also held there that “the mortgagor of a chattel, having the right of possession for a definite period, has an interest which may be sold by the execution.” Merritt v. Niles, 25 Ill. 282. These decisions are based upon the statute, and recognize the distinction between equitable and legal interests in personal property. To the same effect are Palmer v. Forbes, 23 Ill. 301; Pike v. Colvin, 67 Ill. 227. Section 1883, referred to, has no reference to personal property.
But it is claimed that the provisions of section 1567 are all in the interests of and for the protection of the garnishee, and that, being for his benefit, he may waive all proceedings thereunder and consent to a seizure and sale of the mortgaged goods (in a case involving a mortgage), that such sale will pass the equity of redemption to the- purchaser, and that the mortgagor may not complain. We cannot consent to the proposition that one can be deprived of his rights or property in a manner not authorized by law, and have no right to complain of the unlawful act of deprivation. It is held that a garnishee, in the absence of a provision in the statute under which the garnishment proceeding is instituted authorizing the same, may not even waive the service of the summons so as to render the judgment binding upon the defendant in the execution. 2 Wade, Attachm. § 361. The institution of such a proceeding is for the benefit of the plaintiff in the execution. The answer of the garnishee
The judgment rendered in favor of James is for the full value of the mortgaged goods as found by the court. It is objected that, as Oadwell was an equal partner with James, the latter should have been permitted to recover only one-half, and that the damages are therefore excessive. We fail to see how the appellant is interested so as to raise this objection. Oadwell does not make the complaint, and he is the person mostly interested. It is said, however, that his refusal to join in the suit, the fact that he was made a party defendant, and his subsequent default operate as a waiver or release of his interest in favor of appellant. But this claim, we think, is not well founded. Oadwell was a necessary party, being jointly interested with the plaintiff in the subject-matter of the suit, and in the relief demanded. His refusal to join in the suit did not operate as an assignment of his interest to the appellant, nor could his subsequent silence have any such effect. The statutory provision under which he was made a defendant had no such object in view. The law has a more tender regard for property rights than to confiscate them upon any such ground, or for any such reason; and no one can be deprived of such rights without his consent, except by due process of law.
It is also said that, inasmuch as the judgment does
We refrained in our former' opinion from any expression upon the question of Oadwell’s present rights, for the reason that we deemed it unnecessary in the decision of the case, and for the further reason that it might appear like deciding something not before us; but, upon a reconsideration of the matter, we deem it advisable to add these views as a further reason in support of the conclusion reached.
The California case cited in our former opinion, being a case at law, is perhaps not wholly applicable, and we therefore withdraw the same, together with the reason upon which it is based.
We adhere to the conclusion reached in our former opinion.
For the reasons assigned in the foregoing opinion the judgment heretofore, on March 16, A. D. 1888, entered herein, shall be and stand as the judgment of the court on rehearing.
Affirmed.