Watson v. Mead

98 Mich. 330 | Mich. | 1894

Hooker, J.

The plaintiff brought replevin against the defendants, who are husband and wife, for the recovery of a large number of chattels, which he claimed by virtue of a chattel mortgage executed by George Mead, one of the defendants. The wife did not sign it. Included in the mortgage were some horses, cows, and sheep.

The defendants attack the validity of the mortgage on several grounds, — among others (1) that it was made with intent to hinder, delay, and defraud creditors; (2) that it included exempt property, requiring the wife’s signature.

The mortgage named several persons as mortgagees, among them this plaintiff, and was given for an amount sufficient to cover their several and respective claims, notes being executed for each claim. The plaintiff had four such notes, — one for $32, a second for $186.19, one for $340, and another for $500. The plaintiff testified that Mead did not owe him the amount of the $500 note, and that he did not know why it was included.- Mead’s version was that there was some talk that one McNaughton, a creditor of Mead, “ was coming up to skin him,” and that this mortgage was then made; that at first they did not talk of its being-given for more than the amount due Watson, but they changed their minds, and gave it for the amount mentioned; that Mead said, “If I give it for that, I want your note back;” but he (Watson) said: “No; that wouldn’t be proper. We will take your note for $500, and I will give you a receipt; that will — If I accommodate you, and let you have some money, that will accommodate me.” This was done. The mortgage was filed, and after the expiration of a year, no ‘affidavit of renewal having been filed, McNaughton levied an execution upon four horses mentioned in the mortgage, and sold them upon execution sale to Mrs. Mead, who paid for them by giving McNaughton a mortgage upon them. Mrs. Mead now claims the right to attack the mortgage for fraud.

It is elementary that a mortgage made with the collusive intent to hinder, delay, and defraud creditors may be treated as void by the creditor, who may levy upon and sell the property, and the purchaser may raise the question upon the trial, if the goods are replevied. No question seems to have been raised over the regularity of the judgment, execution, or sale. Mrs. Mead could attack the mortgage for fraud to the extent of the property purchased by her at the execution sale.

Again, How. Stat. § 6196, provides:

“Every such mortgage shall cease to be valid as against the creditors of the person making the same, or subsequent purchasers or mortgagees in good faith, after the expiration of one year from the filing of the same, or a copy thereof, unless, within thirty days next preceding the expiration of the year, the mortgagee, his agent or attorney, •shall make and annex to the instrument or copy on file as aforesaid an affidavit, setting forth the interest which the mortgagee has, by virtue of said mortgage, in the property therein mentioned; upon which affidavit the township or •city clerk shall indorse the time when the same was filed: Provided, that such affidavit, being made and filed before any purchase of such mortgaged property shall be made or other mortgage received or lien obtained thereon in good faith, shall be as valid to continue in effect such mortgage as if the same were made and filed within the period as above provided.”

It is contended that under this statute the mortgage had ceased to be valid as against McNaughton. See Cooper v. Brock, 41 Mich. 488; Briggs v. Mette, 42 Id. 12. But these cases seem to have been overruled. See Brown v. Brabb, 67 Mich. 17; Littauer v. Houck, 92 Id. 162; First National Bank v. Guntermann, 94 Id. 125; Wade v. Strachan, 71 Id. 459.

The trial court refused to submit the question of fraud to the jury. He also excluded the question asked 'the plaintiff upon cross-examination: “Did you know, at that time, that he was owing McNaughton?” This, was error. The answer should have been taken, and the question of fraud should have been submitted.

Counsel for defendants assert that the mortgage was void for another reason, viz., that it included exempt property. We cannot hold that the mortgage was wholly void for that reason. Doubtless, it was void to the extent of the exempt property. If , the wife . had replevied, she would thereby have made her selection. The mortgagee having replevied, there should be no difficulty in taking a verdict that would distinguish the exempt property, if the animals claimed as exempt were described in the testimony. As to the remainder of the property other than that purchased, and that exempt under the provision requiring her signature to the mortgage, she cannot attack the mortgage upon either ground; nor can her husband, who is not at liberty to set up his own fraud to defeat his mortgage.

Defendants further contend that, inasmuch as the mortgage was not due, the plaintiff was not entitled to the possession of the property, and therefore cannot maintain replevin.

The first assignment of error alleged is that the court admitted the chattel mortgage in evidence. This is based upon the ground that the mortgage is made to several mortgagees, and that one alone could not replevy. Na authorities are cited by counsel for the defendants in support of this contention, and there seems to be no reason why one of several mortgagees may not proceed to collect his debt by foreclosure, or to protect himself by seizing the property if in danger of destruction or loss, without ■joining others as plaintiffs without their consent, which he would have no right to do. His possession would be subject to the rights of the other mortgagees, but the mortgagor could not complain. Herm. Chat. Mortg. § 143; Burnett v. Pratt, 22 Pick. 556; Gilson v. Gilson, 2 Allen, 115; Lyon v. Ballentine, 63 Mich. 97. The mortgage was admissible.

The plaintiff bases his right to replevy upon the claim that the defendant George Mead had sold 250 bushels of wheat, and the lambs born subsequent to the time that the mortgage was made, and the wool sheared from the sheep, and applied the moneys obtained from such sales to his own use, instead of to the payment of the mortgage. This right to sell the mortgaged property was based upon a writing giving him authority to do so, provided that he applied the money received to the payment of the mortgage. If he sold property covered by the mortgage contrary to the conditions of the mortgage and accompanying license, the right to take possession inured to the plaintiff, by the express terms of the mortgage. As the wheat was covered by the mortgage, the misapplication of the money received from it authorized the plaintiff to bring his action. This being so, we need not consider the effect of the sale by defendant of the wool and lambs, or the effect of the execution sale, upon plaintiffs right to possession.

There are other assignments of error, which need not be discussed. We will only add that defendants* theory upon the subject of damages for the detention of property during the pendency of the action is erroneous. A notice accompanied the plea, under which defendants sought to recover damages for the loss of their farm. They claimed that by being deprived of their implements they could not put in any crops; hence they received no money, and could not make payments due on the farm, and they were, in consequence, compelled to deliver up possession, and surrender their contract of purchase, and, to quote, “ lost everything they had on earth.** Without attempting to lay down a rule, we mention this subject to prevent a possible error upon another trial.

The judgment must be reversed, and a new trial ordered.

The. other Justices concurred.