Case ID: ohio-st_58/html/0194-01.html
Source: Caselaw Access Project
Author: {"author": "Spear, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Albright v. Meredith.
    
      Chattel mortgage — Conditional sale — Mortgage by vendee — Levy by original vendor subject to vendee's mortgage, when — Sections 791S-7S, Revised Statutes.
    
    1. In order to support a mortgage it is not necessary that the mortgagor shall be the absolute owner of the property mortgaged.
    2. One in possession of chattel property under a contract of conditional sale, who has paid a part of the purchase money, has acquired an interest in the property which may be mortgaged.
    3. A vendor of chattels by a conditional sale who has put the purchaser in possession and received a portion of the purchase money, may, upon default by the purchaser in subsequent payments, retake the goods by complying with the conditional sales act, section 7913-73, Revised Statutes, (S. & B.) as to tender of amount paid, etc. If, instead of such course, the vendor recovers judgment at law upon the unpaid installments of purchase money, and causes the goods to be seized in execution, such seizure will be regarded as an election to treat the property as belonging to the purchaser. And if, before levy, the purchaser has made a valid mortgage of the property to a third person, 3ueh mortgage will have precedence of the levy, and the mortgagee may maintain replevin for the goods against the officer holding the writ.
    (Decided March 22, 1898.)
    Error to the Circuit Court of Columbiana county.
    The action below was in replevin brought by George W. Meredith, defendant in error, against E. A. Albright, constable, plaintiff in error, before a justice of the peace, to recover possession of a cash register. Judgment was given for Meredith. On appeal, a like judgment was rendered by the court of common pleas, which was affirmed by the circuit court. A further statement of the case will be found in the opinion.
    
      A. H. Ola/rh, for plaintiff in error.
    
      ■ The question then is, in the main: Did the Cash Register Company lose its lien under its conditional sale contract by a failure to refile within the time allowed by law as against the chattel mortgage of the defendant in error? We think not. We assume, and claim, that the conditional sale contract, conditional as it was, to the effect that title was to remain in the seller and not to pass to the purchaser, there was as a matter of fact no title vested in Morrow that he could convey to Meredith by chattel mortgage or otherwise, and therefore it was not necessary for the Cash Register Company to refile its contract, and in this view we are sustained by the court of common pleas of Scioto county, a recent decision, in which this same National Cash Register Company was plaintiff and the Farmers National Bank, of Portsmouth, Ohio, was defendant. 31 Weekly Law Bulletin, 114.
    On sale of personal property, where right to receive payment before delivery is waived by vendor, and possession is given the vendee, and yet by express agreement, the title is to remain in the vendor until payment of price, such payment is strictly a condition precedent; and, until performance, the right of property is not vested in the vendee, and where it is agreed that title to chattels paid for in part only, the title shall not pass until full payment. The condition of payment is not waived by taking vendee’s notes for the price. Miller on Law and Conditional Sales, pages 60 and 61, and authorities there cited. 21 Am. and Eng. Encyclopedia, 636, et seq., and authorities cited.
    But it may be claimed that inasmuch as we sued Morrow for the balance due us, we have waived the conditions of our contract. We do not think so.
    • The fact that the seller sold goods, under an agreement that the title of the goods was to remain in him until full payment of the purchase price, sues for the balance unpaid, is not an election that the title shall vest at once in the buyer. 21 Am. and Eng. Encyclopedia, 638, citing 54 Hun. (N. Y.), 116; 55 Vt., 308.
    The National Register Company did not take possession of the cash register until after suit had been brought, judgment obtained and then only on execution being levied. It was rather a foreclosure of the vendor’s lien for the unpaid purchase money, and this was not taking possession of said cash register within the meaning of the act of May 4, 1885, which took effect July 1, 1885. Revised Statutes, 7913-72, 73. Sage v. Slentz, 23 Ohio St., 1; Sanders v. Rater <& Miller, 28 Ohio St., 630; Gall v. Seymour, 40 Ohio St., 670; Case Manufacturing Go. v. Garven, 45 Ohio St., 302, and cases; 46 Ohio St., 450.
    
      We contend that this was a conditional sale and that title to the property remained in the vendor until it was paid for. That filing of the contract was not only notice to the defendant in error, but the world, and in compliance with the statute, sections 7913-72.
    Por conditional sale, mortgage and notice. Case Mfg. Co. v. Garvin, 46 Ohio St., 289.
    It may be claimed, however, that the agreement between the Register Company and Morrow was in effect a chattel mortgage. This we deny, but suppose it was. We claim, and we think the facts show, that the defendant in error was not a tona fide purchaser; that is, he took his mortgage while the contract was still on file and therefore had notice of its existence. The fact that suit was brought for the balance due on the register would be actual notice to the defendant in error that the claim had not been paid. So that whatever rights he acquired, he acquired them with full knowledge of the prior rights of the National Cash Register Co. We think that the defendant in error did not act in good faith. 14 Ohio St., 488.
    An authority that sustains our contention in this case, is the case of the Huber Manufacturing Co. Y.Sweney et al., 57 Ohio St., 169; 7 Ohio St., 198; Day v. Mionsen, 14 Ohio St., 488.
    As to who may take advantage of an omission to file, etc., see Jones on Chattel Mortgages, sections 292 and 293, and authorities there cited.
    A chattel mortgage is valid without renewal as against a subsequent mortgage with actual notice. American Digest, 1894, pp. 656, par. 105. Reiderer v. Pfaff, (S. C.) 61 F., 872.
    A subsequent mortgagee, who becomes such before the expiration of the year from the filing of the first mortgage, cannot take advantage of the omission of the prior mortgagee to renew. Am. Dig., 1893, pp. 699, par. 100; Farmers & Mechanics-Bank v. Bank of Glen Elder, 26 Pac. Rep., 680 ; 46 Kan., 376; Hoioard v. Bank, 24 Pac. Neb., 983; 44 Kansas, 549; 50 Kansas, 420.
    A mortgage which has not been renewed does not become void if not refiled within the prescribed time as to one who purchased before the expiration, within which it should be refiled. Mix v. Wiswell, (Wis.) 54 N. W., 620.
    
      Walter B. Hill, for defendant in error.
    J. A. Morrow, Jr., having purchased the cash register on an executory contract and having paid part of the purchase price thereon, and having given. Ms promissory notes for the balance, had a mortgageable interest therein.
    It is not necessary that the mortgagor shall have the absolute and entire title to the property which is the subject-matter of his mortgage. A limited or special interest in property is sufficient to support a mortgage of it. Jones on Chattel Mortgages, section 114; citing’, 105 Mass., 225; 102 Mass., 445, 67 Me., 497.
    If one mortgages chattels to which he has no title, title afterwards acquired by him will inure to the mortgagee. Watkins v. Crenshaw, 1 Mo. App. Rep., 17; The American Lawyer, June, 1895, page 238; American Digest Annual, 1895, page 654, section 26; 59 Mo. App., 183, 1 Mo. App. Rep., 17.
    The National Cash Register Company lost its lien on the cash register as against creditors of Morrow by failing to refile with the township clerk within the thirty days prior to the 18th day of July, 1892, one year from the date of the original filing. 45 Ohio St., 625; Revised Statutes, 4155.
    By having the constable levy under execution upon the cash register with intention of selling, the National Cash Register Company waived and abandoned any and all interest they may otherwise have had a right to claim in the cash register by virtue of their conditional sale contract.
    Where the buyer of goods under a conditional sale gives notes for the price, and is put in possession, the title to pass when the notes are paid, the seller has the option, on default of the payment of the notes, to sue the buyer thereon for the contract price, or to retake the goods, and sue for breach of contract; and by retaking the goods he exercises his option, and the notes and mortgages given to secure them are cancelled. Earle v. Robinson, (Sup.) 33 N. Y. S., 606; Amer. Dig. Annual, 1895, page 4135, section 433; 12 Mise. Rep., 536; Seanor v. McLaughlin, (Pa. Sup.) 30 A. 717; Am. Dig’est Annual, 1895, page 4134; 165 Pa. St., 150; 35 W. N. C., 455.
    Where the plaintiff sold goods on condition that the title should not pass until such goods were paid for, and took notes for the price, its election to enforce payment of said notes was a bar to an action for the recovery of the goods. Parlin to Orendorff Go. v. Harrell, (Tex. Civ. App.) 27 S.W., 1084; Am. Digest, 1895, page 4135, sections 444-445.
    This action is between Albright as constable, and Meredith as mortgagee. The National Cash Register Company is not a party to the proceeding. G. W. Meredith had a valid mortgage upon the cash register.
    The Cash Register Company had not refiled its contract as required by statute, but had abandoned its claim to the cash register under its conditional sale contract. It recognized the cash register as the property of J. A. Morrow, Jr., and elected to recover under execution and levy, as on an ordinary debt.
   Spear, C. J.

The essential facts are as follows:

May 28, 1891, one J. A. Morrow, Jr., purchased a cash register from the National Cash Register Company for a consideration of $175, on a conditional sale contract, to be paid for by installments of $15 each, which were represented by promissory notes. July 18, following, a copy of the contract was duly filed in the office of the clerk of the township where Morrow resided, which contract remained on file.

December 10, 1891, Morrow duly executed and delivered to Meredith a valid chattel mortgage on the register, which was duly filed in the office of the township clerk on December 14, following.

June 11, 1892, the National Cash Register Company commenced an action before a justice of the peace, against Morrow, to recover on such of the notes as then remained unpaid. The contract and notes were attached to the bill of particulars, and made part of it, and on June 16, a judgment in its favor for $108, and costs, was rendered. August 29, following, an execution issued to Albright, constable. He thereupon levied the same upon the cash register, and took it into his possession and held it until it was taken from him by the replevin process broug-ht in the action below.

The chattel mortgage to Meredith was in full force at the time of the bringing of the action against Morrow by the company, and at the time judgment was taken, execution issued and levy made.

No tender was made by the company to Morrow of any part of the installments of the purchase money which he had paid.

The issue is between Albright, the constable, and Meredith, the mortgagee. It is, which was entitled to the possession of the cash register ? The one stands upon his levy of the execution; the other upon his mortgage. No question can now be made as to the validity of the mortgage, for the agreed facts show that it was valid. That is, it was valid provided Morrow had an interest in the register which could be the subject of mortgage. And this is not open to question, for he had paid a portion of the purchase money. This gave him an interest which he might mortgage. It is not necessary that the mortgagor shall have the entire title ; a limited, or special interest in property, is sufficient to support a mortgage of it. And that this interest is acquired by conditional sale does not alter the case. Jones on Chattel Mortgages, 114; Crompton v. Pratt, 105 Mass., 255; Day v. Bassett, 102 Mass., 445. This mortgage, therefore, was good as to all the world save the vendor, and good against it save only when it asserted its right in accordance with law.

Did the company assert its rights as vendor in accordance with law ? We think not. Its rights as vendor were subject to the statute regulating conditional sales. Section 7913-73, Revised Statutes (S. & B.). That act provides: “Section2. Whenever such property is sold * * * it shall be unlawful for the vendor to take possession of said property without tendering or refunding to the purchaser * * * the sum or sums of money so paid after deducting therefrom a reasonable compensation for the use .of such property, which shall in no case exceed fifty per cent, of the amount so paid,” etc., etc. If, therefore, the company desired to avail itself of its right to subject the register to the payment of the balance due from Morrow, a tender in compliance with the terms of the statute, was necessary, or, perhaps it could have resorted to a’ foreclosure in a court of competent jurisdiction. But, disregarding these methods, the company proceeded, by its judgment and execution, against Morrow’s interest in the register, and to seize it and take possession of it in direct violation of the terms of the statute. This proceeding was, in law, an election to treat the register as Morrow’s property, and placed the company in the attitude, as regards that article as well as liis other property, of a general creditor. The rights of such would necessarily be subject to any prior right acquired through the valid acts of Morrow. And, inasmuch as all the interest of Morrow was covered by his mortgage to Meredith, the latter had the right of possession while his mortgage remained unsatisfied. Thomason v. Lewis, 103 Ala., 429; Seanor v. McLaughlin, 165 Pa. State, 150; Bank v. Thomas, 69 Tex., 237.

There is no error in the judgments below, and they will be

Affirmed.