192 Wis. 548 | Wis. | 1927
The single question presented is whether the holder of a chattel mortgage waives his lien under the mortgage when he consents that the mortgagor or his agent may sell the mortgaged property under an agreement that the proceeds of the sale be applied upon the debt secured by the chattel mortgage. This question has not been determined in Wisconsin. Its determination is not affected by the provisions of sec. 241.14 of the Statutes, because neither by the terms of the chattel mortgage nor by the conduct of the parties were the three automobiles covered by the chattel mortgage treated as a stock of goods.
Both upon principle and upon authority the court is satisfied that it must be held that, as against the defendant who purchased in good faith without knowledge of the existence
“The rule of law is settled that where a mortgagee of chattels authorizes the mortgagor to sell the property described in the mortgage, and the sale is accordingly made, the mortgagee has thereby waived his lien.” Warrick v. Rasmussen, 112 Neb. 299, 301, 199 N. W. 544, 545; Singer v. Farmers State Bank, 166 Minn. 327, 207 N. W. 631, 632; Peterson v. St. Anthony & D. E. Co. 9 N. Dak. 55, 56, 81 N. W. 59, 60; Hoyt v. Clemans, 167 Iowa, 330, 149 N. W. 442, L. R. A. 1915 C, 166, 170; Carr v. Brawley, 34 Okla. 500, 125 Pac. 1131, 43 L. R. A. n. s. 302, 305, and cases cited in note.
“The. consent of the mortgagee that the mortgagor may sell the mortgaged property, given upon the agreement of the mortgagor that he will apply the proceeds of such sale on the mortgage debt, amounts to a substitution of the personal promise of the mortgagor in lieu of the mortgaged security.” Minneapolis T. M. Co. v. Calhoun, 37 S. Dak. 542, 159 N. W. 127; Ramsey v. California P. Corp. 51 Cal. App. 517, 201 Pac. 481, 486; Calkins v. Stevens, 49 N. Dak. 768, 193 N. W. 733.
By the Court. — Judgment affirmed.
