Case ID: wis_23/html/0532-01.html
Source: Caselaw Access Project
Author: {"author": "DixoN, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Swift vs. Hall.
    
      Chattel Mortgage: Temporary absence from files — Attachment of goods.
    
    Where the holder of a chattel mortgage sent a person to the town clerk’s office to see if it was on file, and the agent, misunderstanding his instructions, withdrew the mortgage and took it to his principal, who with due diligence caused it to he re-filed, the lien thereof remained as against one who, with knowledge of the facts, attached the property while the mortgage was absent from the files.
    APPEAL from tbe Circuit Court for Book County.
    Tbe plaintiff Swift bad a chattel mortgage, given by one Page, and on tbe 18th of February, 1867, asked one Head to file it in tbe town clerk’s office. Head read it, and filed it tbe next day at 10 a. m. About noon of tbe same day, Swift sent bis son to tbe clerk’s office to see if the mortgage was on file, telling him if it was not on file to get it from Head and file it; and tbe son, misunderstanding bis instructions, told tbe clerk that bis father wanted tbe mortgage, and brought it back with him. Swift told bis son-that be bad done wrong in taking tbe mortgage away; that be wished it to remain in tbe clerk’s office. He afterward handed tbe mortgage to a Mr. Coon, who had to pass by tbe clerk’s office, and who promised to'file it. The time when tbe mortgage was banded to Coon is left in some uncertainty by tbe evidence. Tbe plaintiff testified that be thought he handed the mortgage to Head on the 19th, to be filed; that he thought the 19th was Friday, and that he sent his son the next day to the clerk’s office, and that on the next Monday he handed the mortgage to Ooon to be filed. [The 19th came in fact on Tuesday]. The clerk’s office was about two and a half miles from the residence of Swift. On the 25th, Head sued out an attachment against Page, and on the same day the defendant Hall, as deputy sheriff, levied on the property covered by the mortgage. At the time of the levy of the attachment, Page told Head and Hall that he had given a mortgage to Swift upon the property in question. Swift was also' present, and forbade their taking the property, telling them his mortgage was on file, and they replied that it was not. Head had just previously called at the clerk’s office and requested to see the mortgage, and the clerk had told him that it was not on file; that Swift or his son had taken it. The next day Swift saw Coon, and ascertained from him that he had forgotten to leave the mortgage at the clerk’s office, and caused it to be filed at six o’clock that afternoon. On the 2Yth of March, Swift withdrew the mortgage from the clerk’s office (to show it to his lawyers, as he testified), and returned it again the afternoon of the next day. On the 3d of April, the property covered by the mortgage was sold under the attachment execution. For the taking and conversion of the property of Hall, this action was brought.
    The court instructed the jury as follows:
    “ There are but two questions of fact for ypur consideration. First, Did the plaintiff direct his son to withdraw the mortgage from the town clerk’s office ? If he did, I think the defendant must have a verdict. If he did not, then, .secondly: Did he use reasonable diligence to return it to the clerk’s office ? If he did not use such diligence, then, although you find that he did not direct his son to take it from the office, still the defendant must have a verdict. But if the plaintiff did not direct bis son to take tbe mortgage from tbe office, and if, when he learned that his son bad taken it therefrom, be used reasonable diligence to return it thereto, then tbe plaintiff must have a verdict. Reasonable diligence is such as a man of ordinary caution and prudence usually exercises in tbe management of bis own affairs.” Tbe defendant asked instructions to tbe effect: 1st. That if tbe mortgage was withdrawn from the town clerk’s office without tbe plaintiff’s authority, its absence from tbe flies at tbe time of tbe service of tbe attachment (it still being in existence), invalidated it as against tbe attaching creditor. 2d. That if tbe plaintiff learned on tbe 19th of February that tbe mortgage bad been withdrawn from tbe files, be was bound to use reasonable diligence to replace it, and was bound to have replaced it tbe next day. 3d. That if tbe plaintiff withdrew tbe mortgage from tbe clerk’s office on tbe 26th of March, and kept it /until next day, such withdrawal and keeping made it invalid as against tbe attaching creditor. These instructions were refused. Terdict and judgment for tbe plaintiff, and tbe defendant appealed.
    
      Isaac Rogers, for appellant:
    1. To file a chattel mortgage is not only to deposit it with tbe town clerk, but to leave it there. 13 Barb. 326. Knowledge that such a mortgage exists and is unpaid, does not preclude a creditor from availing himself of tbe objection that it has not been duly filed. 25 Barb. 484; 12 id. 661; 20 Wis. 398; 3 id. 221. As to tbe effect of withdrawing and re-filing, see 12 Barb. 530. 2. If such a mortgage' is withdrawn from tbe files without authority, and a third person in the meantime secures a lien on tbe mortgaged property, tbe sole remedy of tbe mortgagee is against tbe person who divested him of bis prior lien by tbe wrongful withdrawal. When tbe attaching creditor learned from tbe clerk that Swift had no mortgage on file, bis inquiries were at an end, and it is immaterial that Swift's son bad no authority to withdraw tbe mortgage. If the law were otherwise, the creditor would be bound to seek the mortgagee and inquire of him whether or not the mortgage had been withdrawn by his authority. 3. Swift’s son believed that his father wanted the mortgage brought home, and therefore took it from the files. Third persons had a right to regard him as his father’s agent in that transaction. His act was within the scope of his employment. 4. When Swift found that his son had withdrawn the mortgage, he should have re-filed it that day or the next. He made Coon his agent to re-file it, and is responsible for his agent’s negligence. 34 Barb. 249; 17 N. Y. 362; 7 id. 493. 5. On the 27th of March, while the defendant was in possession of the property by virtue of the execution, the plaintiff voluntarily withdrew the mortgage from the files, and did not return it till afternoon of the next day. During this withdrawal the lien of the execution rose into a first lien, if it was not such before.
    
      Conger <& Sloan, for respondent.
   DixoN, C. J.

Was the son who was sent to the clerk’s office acting as the agent of the plaintiff, or within the scope of his authority, when he took the mortgage from the files ? If he was, then his act was the act of the plaintiff, and the mortgage must be deemed to have been off the files with the plaintiff’s assent. In that case the doctrine of Single v. Phelps, 20 Wis. 398, would seem to govern, and the plaintiff could not recover. On the other hand, if the son was not acting as the agent of his father, nor within the scope of his authority, his act in taking the mortgage was merely wrongful, and the father was no more bound by it than if the mortgage had been taken by a total stranger. In this case the rule of Woodruff v. Phillip, 10 Mich. 500, would be applicable, and the plaintiff would not lose his lien, especially as against a creditor of the mortgagor, or purchaser from him, who took the mortgaged property with full knowledge of the existence of the mortgage. The mortgage bad been delivered by tbe plaintiff to Mr. Head to be by the latter deposited in the town cleric’s office. The son was sent to the cleric’s office to ascertain whether it had been so deposited by Mr. Head, and if not, he was to go to Mr. Head, and get it and put it on file. When he came to the office, he found that the mortgage had been filed according to his father’s directions, and there his agency ceased.' He had no authority, nor semblance of authority, for talcing the mortgage from the office; and when he did so, though acting, no doubt, upon the belief that his father wished to have the mortgage taken home, he nevertheless committed a wrong, as much as if his business at the office had had no connection whatever with the mortgage. It was an act not authorized by the plaintiff, and done in violation of the law both by the son who received and the clerk who delivered the mortgage; and the question is, whether the plaintiff must suffer in consequence of it. On this question we fully agree with the Michigan court in saying, that a party is not to be deprived of his rights in this way. It is indeed a very plain proposition, that a person cannot lose his title to property by the unlawful act of another, done without his knowledge, and to which he has never given his assent. And particularly is this so, where the opposing claimant acquired his interest well knowing of the title which he thus seeks to subvert. The Michigan case was that of a purchaser from the mortgagor, who bought and paid for the property in good faith, supposing that there was no mortgage on file. He inquired at the clerk’s office, and was informed by the clerk that the mortgage had been withdrawn. A memorandum to the same effect in a book kept in the office, was likewise shown to him. It turned out that the clerk was mistaken, and that the mortgage had been returned, and was then on file. In the suit between the purchaser and the mortgagee, for the property, it was held that the title of the mortgagee must prevail, for the reason that tbe entry by tbe clerk in tbe boob, and bis statement to tbe purchaser tbat tbe mortgage was not on file, were unauthorized acts, by wbicb tbe rights of tbe mortgagee could not be affected. The rights of tbe mortgagee were secure so long as tbe mortgage was actually on file. Tbe purchaser was bound to search tbe files, and acertain from them whether it was there or not. In that case tbe mortgage bad been withdrawn by the mortgagee himself. It was observed by tbe court, tbat if tbe purchaser bad called to see tbe mortgage when it was out of tbe office, or if tbe mortgagee bad given bis assent to tbe memorandum wbicb misled tbe purchaser, a different question, possibly requiring a different decision, would have been presented, upon wbicb tbe court declined to express an opinion. And in tbe present ease, if tbe defendant bad not been familiar with tbe transaction, tbe recent making and filing of tbe mortgage, or if, being ignorant of tbe manner in which it was withdrawn from tbe office, which it appears he was not, be bad called at tbe office and learned tbat it was not on file, and then bad attached tbe property, very different questions, requiring, it may be, a different decision, would have been presented; but of these it is unnecessary now to speak. It is enough tbat we are satisfied tbat tbe questions of fact, both as to the mode in wbicb tbe mortgage was withdrawn and the diligence used by the plaintiff in returning it, were fairly submitted to the jury, and tbat tbe jury must have found tbat it was withdrawn without tbe plaintiff’s assent, and tbat be was guilty of no laches in causing it to be returned to tbe files. As observed by tbe learned judge to tbe jury, these seem to have been tbe real questions at issue; and as they were fairly submitted, it follows tbat there was no error in refusing tbe instructions asked by tbe defendant, for wbicb thé verdict ought to be disturbed.

- By the Court. — Judgment affirmed.