20 Colo. App. 317 | Colo. Ct. App. | 1904
On the 2d da,y of February, 1900, The Lobach Hardware Company executed its chattel mortgage to John M. Wilson to secure the payment to him of its promissory note for $155, made the same day, and due three months from its date. The mortgage was duly recorded on the following day. On the 3d day of April, 1900, the sheriff, Robert J. Jones, seized certain of the .articles enumerated in the mortgage, by virtue of a writ of execution issued on a judgment recovered on that day against the hardware company. Wilson brought this action to recover the property from the sheriff. In his complaint, he alleged himself, to be its owner, and entitled to its immediate possession, in virtue of his mortgage.
The defendant answered that the mortgage contained a provision that until default made by the mortgagor in the performance of the conditions, of the mortgage, it should be lawful for it to retain the possession of the mortgaged goods and chattels and use and enjoy the same; and that the effect of this provision was to render the mortgage void as against creditors, of whom the execution plaintiff was one. This appeal is from a judgment rendered in the cause against the plaintiff.
The-mortgage embraced a number of articles, each of which was specifically designated in the instrument. There were counters, showcases, tools used in the carrying on of the mortgagor’s business, and certain stoves and heaters, each of which was described by the name and number which it bore.
The contention for the defendant is that the provision of the mortgage authorizing the mortgagor until default in the performance of its conditions to retain possession, and have the use and enjoyment of the property, rendered the instrument void as to creditors. A mortgage of a stock of merchandise, by the terms of which an unrestricted right is reserved in the mortgagee to retain, use and enjoy the mortgaged property, is so void. The business of a merchant is to sell the articles composing his stock as they are called for. He holds the stock for no other purpose; and it may be said generally that sales from the stock constitute the only use and enjoyment compatible with the business —Wilson v. Voight, 9 Colo. 614; Estes v. Bank, 15 Colo. App. 526.
This mortgage, however, in terms, made the sale by the mortgagor of any part of the mortgaged property a breach of the conditions of the mortgage, so .that the parties could not have intended the permission to use and enjoy until a violation of those conditions as an authority to sell. In Estes v. Bank, supra, we had occasion to consider the effect'of a prohibitory clause similar to this, upon the general permission to use and enjoy a stock of goods, and held that it controlled.
But it is only in case of a mortgage of the stock as an entirety that the permission to use and enjoy
The judgment will be reversed.
Reversed.