Case ID: ohio-st_83/html/0378-01.html
Source: Caselaw Access Project
Author: {"author": "Shauck, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Green v. Bass et al.
    
      Owner of senior chattel mortgage — By recovering judgment on note — Does not waive priority of his lien, when.
    
    The owner of a senior chattel mortgage does not, by recovering a judgment on the note which it secures and causing execution to be levied on the chattels mortgaged, waive the priority of his lien. (Frost v. Shaw, 3 Ohio St., 270, approved and followed.)
    (No. 11540
    Decided March 7, 1911.)
    Error to the Circuit Court of .Cuyahoga county.
    A sufficient statement of the facts will be found in the opinion.
    
      Mr. Alexander H. Martin,. for plaintiff in error.
    A suit may be brought upon a judgment, but not upon the former cause of action, whilst the judgment remains in force. Brigel v. Creed, 65 Ohio St., 44; United States v. Leffer, 11 Pet., 100; Brown’s Legal Maxims, 330.
    A chattel mortgage is something more than a mere security. It is a conditional sale of chattels, and operates to transfer the legal title to the mortgagee, to be defeated only on a full - performance of the condition. Upon breach of the condition the mortgagee may take possession of the prop7 erty, and so far as the legal rights of the parties are concerned, he may' thereafter treat it as his own. Jones on Chattel Mortgages (5 ed.), Sec. 1; 5 Am. & Eng. Ency. Law (2 ed.), 947; Robinson v. Fitch, 26 Ohio St., 659; State v. Lacy, 18 C. C., 379.
    
      We claim that the proceedings had by the defendant in error, The Cleveland & Sandusky Brewing Co., in taking judgment on its note and levying execution placed it in the attitude of a general creditor toward Bass, toward .these specific chattels, and all his property. Albright v. Meredith, 58 Ohio St., 194.
    When The Cleveland & Sandusky Brewing Co., having the right to insist upon its priority under its mortgage, originally, saw fit to ignore its mortgage and its acknowledged remedies thereunder, and to proceed at law by judgment and execution, it thereby released its priority and stepped down to the level of a general creditor and we insist that as such it and its assignee, The Standard Brewing Co., must be and are in their rights in said chattels subject to the priority of plaintiff in error’s valid mortgage.
    The great weight of authority is in accord with the doctrine of the above cited Ohio cases.
    Where a chattel mortgage transfers the legal title to the mortgagee, an. attachment by him of the property covered by the mortgage ipso facto constitutes a waiver of the mortgage. 7 Cyc., 55; Cox v. Harris, 62 Am. St. Rep., 187; Jones on Chattel Mortgages (5 ed.), Sec. 565; Pingrey on Chattel Mortgages, Sec. 808; Dix v. Smith, 9 Okla., 124, 50 L. R. A., 714; Thomason v. Lewis, 103 Ala., 429; 28 Am. & Eng. Ency. Law (1 ed.), 555.
    Such attachment is, in itself, a waiver of the claim under the mortgage. The liens respectively created by mortgage and by attachment on the same property are essentially different, and can not co-exist. Evans v. Warren, 122 Mass., 304.
    A mortgagee holding a mortgage upon personal property securing various claims, brought an action upon some of the claims secured by the mortgage, attached the mortgaged property, secured judgment, and satisfied his execution out of the property attached. It was held that he had waived his mortgage as against subsequent attaching creditors, who were held entitled to the proceeds of the property after the execution of the mortgagee was satisfied. Haynes v. Sanborn, 45 N. H., 429.
    The Cleveland & Sandusky Brewing Co. was, therefore, bound by its deliberate election, notwithstanding its efforts to undo the same. 6 Am. & Eng. Ency. Law (1 ed.), 250; Cincinnati v. Emerson, 57 Ohio St., 132.
    The Standard Brewing Co., as assignee of The Cleveland & Sandusky Brewing Co., takes simply what rights its assignor had, and no more. Robinson v. Fitch, 26 Ohio St., 659.
    
      Messrs. Sanders, Kline & Sanders and Messrs. Higley & Maurer, for defendants in error.
    We claim that the mortgage of The Cleveland & Sandusky Brewing Co. held by assignment by The Standard Brewing Co. is a valid, existing chattel mortgage, is the first and best lien on the chattels it covers, and was not waived by the action of The Cleveland & Sandusky Brewing Co., our predecessors in title, in taking judgment on the note and levying.
    
      The taking of the judgment by The Cleveland & Sandusky Brewing Co. was not a merger of its mortgage. Railway Co. v. Reid, 6 Dec., 273, 4 N. R., 127.
    A change from a simple contract debt to a personal judgment against the mortgagor does not release a mortgagee. 7 Cyc., 67.
    A mortgagee does not lose his right to the mortgaged property by obtaining judgment on the mortgage note and then seizing it on execution. The property is pledged as security for the debt and is not taken as a liquidation" of it, and a judgment, while it may be a merger of the note so that no other action can be maintained on it, will not extinguish the security; that remains as security for the debt, no. matter what form it takes, until the debt itself is extinguished. Herman on Chattel Mortgages, Sec. 207; Pingrey on Chattel Mortgages, Sec. 936; 2 Cobbey on Chattel Mortgages, Sec. 947; 6 Lawson’s Rights and Remedies, Sec. 3072.
    The note and the mortgage are entirely separate and distinct, and actions may be taken on either one or both concurrently without being a bar to the other. A judgment merges the note or debt secured by the mortgage, but does not extinguish the debt. The mortgaged property will be liable, it seems, to execution thereon, although exempt from execution generally. 1 Field’s Law Briefs, 674.
    A mortgagee may choose his remedy, or, if he wishes, make use of all his remedies concurrently. He may proceed concurrently with actions on note and mortgage. 5 Am. & Eng. Ency. Law (2 ed.), 999; Burtis v. Bradford, 122 Mass., 131.
    
      A mortgagor, by reducing his claim to judgment, does not waive his security. Jones on Chattel Mortgages, Sec. 758; Juchter v. Boehm, 63 Ga., 71.
    A mortgage is a specific lien, and a judgment is a general lien. Both may be consistently pursued until the debt is satisfied. 27 Cyc., 1164, 1274, 1277; Satterwhite v. Kennedy, 3 Strob. (S. Car.), 457.
    The Cleveland & Sandusky Brewing Co., the predecessor in title of this defendant, The Standard Brewing Co., did not release its priority of mortgage by taking judgment on note and levying execution, did not conclusively elect to abandon its mortgage and did not waive its mortgage lien.
    The mortgagee does not waive his lien by suing and recovering judgment on the note or bond secured, or attaching the property of the mortgagor, in' action on the mortgage debt. Priest v. Wheelock, 58 Ill., 114; Cannon v. McDaniel, 46 Tex., 303; Roberts v. Lawrence, 16 Ill. App., 453; Lanahan v. Lawton, 50 N. J. Eq., 276; Pettibone v. Stevens, 15 Conn., 19; Bank v. Brown, 112 Ind., 474.
    Rendition of judgment on note no bar to, the action for foreclosure. Holmes v. Hinkle, 63 Ind., 518; Dick v. Wilson, 19 Ind., 190; Jenkinson v. Ewing, 17 Ind., 505; Fisher v. Fisher, 98 Mass., 303.
    The commencement of a suit upon a promissory note does not extinguish the lien of a chattel mortgage held as a collateral to the note. Thurber v. Jewett, 3 Mich., 295; Butler v. Miller, 1 N. Y., 498.
    
      Recovery of personal judgment against the defendant does not amount to satisfaction and does not extinguish the lien. Osborne v. Connor, 4 Kans. App., 609; Frost v. Shaw, 3 Ohio St., 270.
    Recovery or judgment by a mortgagee upon a chattel mortgage not collateral to the mortgage, without satisfaction thereof, will not prevent him from bringing an action of replevin for the mortgaged property. Bateman v. Railroad Co., 96 Mich., 441; Lorch v. Aultman & Co., 75 Ind., 162.
    The pending of a suit at law upon the mortgage debt is not defense to a suit to foreclose the mortgage unless made so by statute. Williamson v. Champlin, 1 Clarke (N. Y.), 19; Tappan v. Evans, 11 N. H., 311; Guest v. Byington, 14 Ia., 30.
   Shauck, J.

The controversy between the parties concerns the. priority of the liens of chattel mortgages respectively held by the plaintiff in error and the principal defendant in error. The mortgage of the defendant in error is prior in date. It is admitted that both mortgages have been perpetuated by refiling, and that the amounts of the debts which they respectively secure are correctly stated in the pleadings of the parties.

The judgment of the circuit court which we are asked to reverse awards priority to the brewing company, the principal defendant in error; and the holder of the senior mortgage. Counsel for the plaintiff in error challenges the correctness of that conclusion because of the fact, which is also admitted of record, that after both mortgages had become absolute, and after the plaintiff had instituted suit for foreclosure, joining as a defendant a prior owner of the senior mortgage, and after such prior owner had answered, it brought an independent action upon the note which its mortgage secured, recovered judgment and caused an execution to be issued and levied upon the property-covered by the mortgages. Later it abandoned its levy and assigned its mortgage to the defendant. It may be assumed without discussion that the defendant, being a purchaser pendente lite, took the position of its assignor. That the assignor, by the suit and levy, waived the lien of the mortgage, or at least its priority, is the claim of plaintiffs counsel, and the conclusion is said to result from the doctrine of merger. That the note became merged in the judgment which was a higher form of the same debt is clear enough upon both principle and authority. But it is not made to appear how it could affect the lien of the mortgage, which, according to the established view in this state, is only a security for the debt. Why should not that which was a security before the recovery of judgment be a security after it? Plaintiff did not, in any way, change his position in consequence of the recovery of that judgment, nor was he, in any way, affected by it. No reason appears why the case should not be governed by the general rule that a security continues until the discharge of the obligation. If the doctrine of merger could be said to be applicable to a case of this character, it would still be true that even with respect to the union of a lesser and greater estate in the same property and in the same person, the estates will not be regarded as merging if equitable considerations require them to be regarded as separate. But in view of our own decisions, an extended discussion of the subject is not necessary. In Frost v. Shaw et al., 3 Ohio St., 271, the precise question was decided in accordance with the view taken in the circuit court. That case was later cited with approval in Colwell v. Carper, 15 Ohio St., 279.

Judgment affirmed.

Spear, C. J., Davis, Price, Johnson and Donahue, concur.