163 N.E. 659 | Ill. | 1928
Lead Opinion
This case comes to this court upon a writ ofcertiorari to review a judgment of the Appellate Court for the Third District affirming a judgment of the county court of Fulton county in favor of defendant in error, the Peoples State Bank of Astoria, in a trial of the right of property in certain goods and chattels originally belonging to Nixon Keeley, which were levied upon under an execution issued upon a judgment in favor of defendant in error against Nixon Keeley, the title being claimed by plaintiff in error, the Southern Surety Company, under a chattel mortgage given by Nixon Keeley to plaintiff in error.
Nixon Keeley entered into a contract with the village of Astoria to install a system of waterworks. They applied to plaintiff in error for a bond to guarantee the faithful performance of the contract. The application for the bond provided that in consideration of the execution of the bond by the Southern Surety Company, Nixon Keeley covenanted and agreed that upon their failure to comply with the contract the surety company might take such steps *364 as it deemed necessary to secure the performance of the contract, and all damage and expense which the surety company might sustain should be paid by Nixon Keeley, "and for the better protection of said company, and as collateral security hereof and for all claims of said surety against the undersigned, we, the undersigned, [Nixon and Keeley,] do by these presents, as of the date hereof, hereby assign, transfer and convey to the said company all the right, title and interest of the undersigned in and to all the tools, plant, equipment and materials, of every nature and description, that we may now or hereafter have upon said work, or in, on or about the site thereof, including as well materials purchased for or chargeable to said contract, which may be in process of construction, in storage elsewhere, or in transportation to said site," together with all payments, funds, moneys or property due or to become due to the undersigned under the contract. The president or vice-president of the surety company was appointed as attorney for Nixon Keeley, with authority to sign the name of Nixon Keeley to any voucher, check, release, bill of sale, satisfaction or paper necessary or desired to carry into effect the purposes of the assignment, and to enter upon and take possession of said personal property, and enforce, use and employ such possession.
The bond was executed by plaintiff in error on February 25, 1924, and Nixon Keeley began work under their contract. They opened an account with defendant in error, and in August, 1924, overdrew their account. On September 12, 1924, they executed a note to defendant in error for the amount of the overdraft. They defaulted on their contract and plaintiff in error was notified of the default. On September 12, 1924, plaintiff in error filed for record in Fulton county the application of Nixon Keeley for the bond, and it claims that on October 2, 1924, it took possession of the property covered by the agreement. On March 4, 1925, defendant in error obtained a judgment upon its *365 note for $1037.38, and an execution was issued and levied upon the property. Plaintiff in error served notice of the trial of the right of property in the county court, as provided by statute. The trial was before the court without a jury. Several propositions of law and fact were submitted to the court and some were held and others refused. The eighth proposition refused was that plaintiff in error took possession of the property on October 2, 1924. Defendant in error sought to maintain its levy on the ground that the chattel mortgage was not acknowledged and recorded, as provided by statute, and that it was in violation of the Bulk Sales act. The court rendered judgment in favor of defendant in error. An appeal was prosecuted to the Appellate Court, where the judgment was affirmed.
Defendant in error insists that the instrument in question was not a chattel mortgage; that it was a conditional transfer of the absolute title, and was void because there was no compliance with the Bulk Sales act; that plaintiff in error had no rights under the instrument as a chattel mortgage because it was not acknowledged or recorded, as provided by statute; that plaintiff in error did not take possession of the property.
If the instrument was a chattel mortgage the Bulk Sales act had no application. (Talty v. Schoenholz,
Whether the instrument was a chattel mortgage or was a conditional transfer of the absolute title must be determined from the language used in the instrument and from the facts in evidence which are not in dispute. The bond executed by plaintiff in error was for $82,950. The application recited that for the better protection of plaintiff in error and as collateral security, Nixon Keeley assigned, transferred and conveyed all right, title and interest to the property; that upon a default of the contract plaintiff in error had a right to take possession of the property, and its president or vice- president was authorized to sell the same and to carry into effect the assignment. The conveyance was for the better protection of plaintiff in error and was collateral security for the bond. The obligation secured was the liability on the bond. The liability on the bond would accrue, if at all, within the time within which the contract was to be completed, which was September 1, 1924. The conditions of the instrument would be broken, if at all, within seven months of the date of the instrument, The amount of the liability was limited to the amount of the bond. Possession was to remain in defendant in error until a default occurred. If a default occurred plaintiff in error had the right to possession, with the power to sell, use or convey. A bill of sale given as security to provide means of payment has been held to be a chattel mortgage. (Whittemore v. Fisher,
Section I of the Chattel Mortgage act provides that no mortgage shall be valid, as against the rights of any third person, unless possession shall be delivered to and remain with the mortgagee or the mortgage shall be recorded as therein provided. If this instrument was a chattel mortgage and plaintiff in error took possession of the property before any right of lien attached, its title under the mortgage was good against everybody, although the mortgage was neither acknowledged nor recorded as provided by statute. (Springer v. Lipsis,
The defendant in error insists that the mortgage did not describe the property with sufficient definiteness to pass title; that there is no evidence that any of the property claimed by plaintiff in error was in existence or was owned by Nixon Keeley at the time the instrument was executed, and for that reason no title passed. The instrument *369
described the property as all tools, plant, equipment and material, of every nature and description, which Nixon Keeley may now or hereafter have upon said work or in or about the site thereof, including, as well, materials purchased for and chargeable to said contract, which may be in process of construction, in storage elsewhere, or in transportation to said site. It covered property in existence at the time it was executed and after-acquired. A description of personal property is sufficient which identifies the property covered by the mortgage. A description is sufficient if possession of the property embraced in the mortgage has been taken by the mortgagee. A description which will enable a third person to identify the property, aided by inquiry which the instrument suggests, is sufficient. (Pike v. Colvin,
The judgment will be reversed and the cause will be remanded to the Appellate Court for the Third District for further proceedings in accordance with the views herein expressed.
Addendum
The foregoing opinion reported by Mr. Commissioner Partlow is hereby adopted as the opinion of the court, and judgment is entered in accordance therewith.
Reversed and remanded. *370