Case ID: wis_78/html/0213-01.html
Source: Caselaw Access Project
Author: {"author": "LyoN, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ullman, Appellant, vs. Duncan, Respondent.
    
      November 10
    
    
      November 25, 1890.
    
    
      Chattel mortgages: Effect of failure to renew: Estates of decedents: Lien of creditors. t
    
    1. The only effect of a failure to file the affidavit of renewal required by sec. 2815, R. S., is to render a chattel mortgage invalid as against subsequent purchasers or mortgagees in good faith, or creditors who thereafter acquire liens upon the property.
    2. Partners gave a chattel mortgage, which was duly filed. Afterwards one of them sold his interest in the property to the other, tailing a second mortgage to secure the purchase money. The second mortgagee died within two years after the filing of the first mortgage. After the expiration of such two years, the first mortgagee having failed to file an affidavit of renewal, the administrator of the second mortgagee took possession of the property. Creditors of the second mortgagee had filed their claims against his estate, some before the expiration of the said two years, and others thereafter. Held, that the first mortgagee was entitled to recover the property, subject only to the right of the administrator or of the surviving partner to redeem. The creditors of the second mortgagee acquired no lien on the property.
    . APPEAL from the Circuit Court for Ashland County.
    This is an action brought to recover three horses, of the value of $300, alleged to be unlawfully detained by defendant from the plaintiff. The facts were stipulated substantially as follows:
    On May 18,1887, the firm of Gorton & Dodge, then being the owners of the horses in controversy, executed a chattel mortgage on them to the plaintiff. The mortgage was duly filed in the proper office on the 23d of the same month. Subsequently, Dodge sold his interest in the horses to his partner, Gorton, and received from Gorton a chattel mortgage on them to secure the purchase money. Dodge died in 1888, and the defendant was .duly appointed administrator of his estate, and qualified as such. The plaintiff neglected to renew the mortgage by filing in the proper office the affidavit to renew the same, required by sec. 2315, R. S. On May 25, 1889, the defendant took possession of the horses, claiming the right to do so as administrator of the estate of Dodge. He was still acting as administrator when this action was commenced. At that time a considerable number of creditors, holding claims against the estate of Dodge, had filed their claims with the administrator, some of which were filed within two years after the fifing of plaintiff’s mortgage, and others thereafter. Due demand of the property was made by the plaintiff of the defendant before the action was commenced, and delivery thereof refused.
    On the above facts, the court directed the jury to render a verdict for the defendant, which they accordingly did. A motion for a new trial was denied, and judgment for tbe defendant entered pursuant to tbe verdict. Tbe plaintiff appeals from tbe judgment.
    Eor tbe appellant there was a brief by J. J. Miles, and oral argument by I G. Sloan.
    
    They argued, among other things, that if tbe creditors of Dodge, or tbe defendant, bad a lien on tbe property, their rights became vested on tbe death of Dodge. Jones, Chat. Mortg. (2d ed.), sec. 240. At tbe tbne of bis death tbe plaintiff’s mortgage was a valid security, and if the defendant’s and creditors’ rights vested then, the plaintiff’s failure to file tbe affidavit could not defeat bis title. E. S. sec. 2315; Newman v. Tymeson, 12 Wis. 448; Case v. Jewett, 13 id. 498; Lowe v. Wing, 56 id. 31. If tbe plaintiff’s title Avas valid as against Dodge it Avas good against the administrator. Jones, Chat. Mortg. (2d ed.), secs. 239-241, 245.
    Eor tbe respondent there Avas a brief by Lamoreux de Gleason, and oral argument by O. A. Lamoreux.
    
    They contended, inter alia, that tbe creditors of Dodge were not affected by tbe plaintiff’s mortgage after the expiration of tbe tAvo years from the filing thereof, and .from that date tbe same Avas absolutely void as against them, although as against Dodge it would have been vabd. E. S. sec. 2315; Kilbourne v. Fay, 29 Ohio St. 264.
   LyoN, J.

Tbe mortgage executed by Gorton to Dodge covered only the equity of redemption in tbe horses. Tbe legal title thereto Avas in plaintiff by virtue of bis mortgage, and continued in him, as against bis mortgagor, Gor-ton, and tbe defendant as administrator of tbe estate of Dodge, although no affidavit for a renewal of tbe plaintiff’s mortgage Aims filed. Defendant took possession of tbe horses as administrator of Dodge, after tbe time for renewing tbe mortgage bad expired. We cannot understand bow tbe defendant obtained any better right to tbe property than Dodge would have obtained had he lived and taken possession thereof at the same time. In either case, such possession would have been taken under Gorton’s mortgage to Dodge, and would have been subject to plaintiff’s legal title, whether he renewed his mortgage or not. If defendant gets a better title to the horses than Dodge would have obtained under the circumstances supposed, it is because there are existing creditors of the estate of Dodge, whom, it is said, the defendant represents. No creditor of Dodge’s estate has any specific lien upon the horses in the hands of defendant, and no such creditor is here asserting any claim to them. The only claimant here is defendant, and his claim must necessarily rest exclusively upon Gorton’s mortgage to his intestate, which we have seen is subordinate to plaintiff’s legal title under his mortgage.

This court had occasion in Manson v. Phoenix Ins. Co. 64 Wis. 26, to construe sec. 2314, R. S., which provides for filing chattel mortgages, and to determine the consequences of a failure to file them. It was there held that the only effect of the failure to duly file the mortgages was to render them invalid as against purchasers or mortgagees in good faith, or creditors who had obtained liens upon the insured property by attachment or levy upon execution.” That was a contest between a chattel mortgagee of insured property and creditors of the party insured, the loss, if any, being payable to such mortgagee as his interest might appear. As a matter of course, the same rule applies to a failure to renew a mortgage under sec. 2315. We think tbis case comes fairly within the rule of Manson v. Phoenix Ins. Co.

The accuracy of the proposition that the creditors of Dodge’s estate have no lien upon the horses becomes more clear when it is considered that Gorton has the undoubted right to redeem them by paying defendant whatever may be due on his mortgage to Dodge. Also the creditors of Gorton may, by appropriate proceedings, assert the same right. This right is entirely inconsistent with the idea that the creditors of Dodge’s estate have any lien upon the horses.

Moreover, the creditors of Dodge’s estate can have no hen upon the property unless it vested at Dodge’s death. But he died within two years after the filing of plaintiff’s mortgage, at which time it was valid as against them. The creditors are, therefore, in the position of a creditor who seizes mortgaged property on attachment or execution before the time to renew the mortgage has expired, and the time afterwards expires without renewal. This court has held several times that the mortgage ceases to be valid only as against creditors of the mortgagor who acquire a hen upon the property after the time expires to renew the mortgage. The cases which so hold are collated and reaffirmed in the opinion by Mr. Justice Orton in Lowe v. Wing, 56 Wis. 31.

Our conclusion is that the plaintiff is entitled to recover the horses, notwithstanding he failed to renew the mortgage under which he claims them, subject only to the right, either of Gorton or of defendant as administrator of Dodge’s estate, to redeem them from plaintiff’s mortgage by paying the debt it was given to secure.

By the Gowrt.— The judgment of the circuit court is reversed, and the cause will be remanded for a new trial.