Case ID: ohio-st_40/html/0569-01.html
Source: Caselaw Access Project
Author: {"author": "McCauley, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Houk v. Condon.
    H. held a chattel mortgage from P. on a quantity of growing wheat. The mortgage was not filed with the clerk of the township where P. resided, S. and others, judgment creditors of P., caused executions to be levied upon the wheat, knowing that H. had a chattel mortgage thereon. The sheriff who held the wheat under his levies, after it was harvested and threshed, agreed with C. to sell it to him, to be paid for in cash on delivery; and afterward delivered it to C. in pursuance of his agreement. The sale by the sheriff was made with the consent and at the request of the execution creditors; but without an order from the court or a judge thereof to sell at private sale, and, on the day of delivery, before C. had paid for the wheat, H. seized it in replevin under a provision in his mortgage.
    
      Held: 1. That the lien created by the'levies was superior to the lien of the mortgage.
    2. That the delivery of the wheat to C. by the sheriff under his agreement to sell was not an abandonment of the levies.
    Error to the District Court of Pike County.
    On the 21st day of May, 1879, one H. 'C. Plyly, a resident of Twin township, in Ross county, gave to Houk, the plaintiff in error, a chattel mortgage on a crop of growing wheat on a farm in Jackson township in Pike county, to secure the sum of about $800. The mortgagee filed his mortgage with the clerk of Jackson township, Pike county, the township in which the wheat was. The defendant in error, on the 21st day of Ma3r, 1879, caused executions, issued upon judgments in their favor against Plyly, to be levied upon the growing wheat. The executions, by direction of the parties for whom they were issued, were returned by the sheriff after the levy to await the harvesting and threshing of the wheat before a sale should be made by the sheriff. After the levies, on •the 16th day of June, 1879, Houk, the mortgagee, filed his mortgage with the clerk of Twin township, Ross county, the township in which the mortgagor resided at the time the mortgage was given and when it was so filed. On the 23d day of June,* 1879, the execution creditors caused vendii to be issued to the sheriff, and he thereupon advertised the wheat for sale on the 12th day of July thereafter. On the 3d day of July, at the request of the execution creditors, the sheriff sold the wheat, about one thousand bushels, to the defendant Condon at private sale, for the full market price of wheat at the time and place of sale, to be paid for by Condon in cash on delivery, and thereupon delivered the wheat to Condon. The sale was so made by the sheriff without an order of court, or of a judge thereof to sell at private sale., and on the day it was so delivered to Condon and before he had paid for the wheat, Houk took it in replevin under a provision in his mortgage.
    When the execution creditors levied upon the wheat they had knowledge of the chattel mortgage from Plyly to Houk.
    
      John W. Washburn and Alfred Tapie, for plaintiff in error.'
    I. Did the levy of the executions give the sheriff and execution creditors a prior right to the mortgaged property over the mortgagee, Philip Houk?
    I. On the questions involved in this proposition the following cases are cited: Paine, Kendall f Co. et al. v. Mason et al., 7 Ohio St., 199; Minor v. Smith et al., 13 Id., 79; Pay v. Munson et al., 14 Id., 488 — see page 492; Murphy v. Swadener, 33 Id., 85 — see page 94.
    II. No title passed to Condon by the transactions of the sheriff and execution creditors; if any title passed it was encumbered with the mortgage of Houk, which was filed June 16th, and before the delivery to Condon of the wheat. Code, § 430; Rev. Stat., 5387.
    No private sale could be made except under the provisions of the above section. No notice was given Plyly. No order of the court was'obtained. No appraisement was ordered or had. The execution creditors took the law in their own hands without the intervention of a court or jury. Perry on Trusts, Yol. I., § 225, 2d ed.
    The sheriff, at the request of the execution creditors, undertook to sell at private sale, without the consent of the debtor Plyly, on an order of the court or a judge thereof so to do. There was an abandonment of the proceedings under the executions by the execution creditors and the sheriff as shown by the “agreed state of facts,” and the sheriff’s return relinquished the levies. The wheat was sold by an agreement between the execution creditors, thus turning the sheriff into a tradesman or merchant, and by proceedings which were wholly unknown to the law. Webb v. Anspaugh, Bro. ¿- Co., 3 Ohio St., 527.
    
      If the sheriff had collected the money for the wheat from Condon and not applied it on these executions, could he have been amerced ? Webb v. Ampaugh; Bro. Oo., 3 Ohio St.,. 523; Langdonv. Summers, Adm¡, 10Td;, 78.
    The levy was abandoned.
    A levy may be-abandoned .or vacated by the direct act of the plaintiff or of the officer executing the writ; or, indirectly by their not continuing the acts necessary to keep it in force. Freeman on'Ex., § 271.
    The.sheriff, when acting outside of the scope of his official authority and under, the direction of the execution creditors, cannot make a return upon his.writs — showing he still held the property- after it had been lost to him by his illegal act, coupled with the act of the execution creditors — which has any legal effect against, this plaintiff’s rights. If defendants have any rights in the property it is subject to plaintiff’s mortgage. Oarty v. Fenstemalcer, 14 Ohio St., 457; Morgan Oo. v. Spangler et al,, and Morgan $ Oo. v. Branson et al., 20 Id,, 38.
    . Wm. IL Safforep for defendant in error.
    The mortgage of plaintiff in error, at the time, of the levy, was- not filed with the clerk of the township in which the mortgagor resided. It was therefore absolutely void as against the execution, creditors. Rev. Stat., 4150-4151; Wilson v. Leslie, 20 Ohio,- 161 — 166; Kilbourn et al. v. Fox's Fx'rs,: 29 Ohio St., 278-; Hanes v.. Tiffany, 25 Id., 549.
    A mortgage must be recorded in strict- conformity with the statutory'requirements, in order to . be . of any validity against creditors, Herman on Chat. Mort., 162; McOlintio v. Platt, 22. Wis., ,561..
    The rights of subsequent creditors against, defective or unrecorded mortgages will be protected, .as well when the. claim under- such- instruments is asserted in a court of equity,- as in a court of- law.- Sixth. Ward-.B.uilding Ass. v. Willson, 41 Ind., 506.
    An actual notice to a creditor of an unrecorded .mortgage, of. the personal property of his debtor, does not-debar him, from taking such property by attachment or execution. Herman on Chattel Mortgages, 395; Farmers' L. I Oo. y. Hendrickson, 25 Bab., 484; Frost v. Beekman, 1 John. Ch., 288., 300; Work v. Harper, 24 Miss., 517.
    Did the assent of the execution creditors to the sale by the sheriff to Condon, at private sale, have the effect, in law, to release the levies ?
    It was done in good faith, and such agreement of sale was fairly made, for a higher price than the ruling market price, in favor of the judgment creditor, who alone could complain, and the proceeds were to be applied in satisfaction of the judgments.
    An execution is defined to be the end and the fruit of the law. In Ohio it becomes a lien on chattel property when levied. When levied, by virtue thereof, the goods levied upon, and the possession thereof, pass to the sheriff for the satisfaction of the debt. While in his hands he holds the property in trust for the benefit of the creditor. This lien can only be divested by a satisfaction of the judgment, or an abandonment of the property levied upon. Its only object is to realize the money from a sale of property. If this can be better effected by a private sale; if a higher price is obtained and no objection by the judgment debtor; if the sale was to his interest as well as the interest of the judgment creditors; if the sheriff in good faith strove to realize the largest amount for the property, for the benefit of all the parties in interest; if his only object in levying was to make the money to satisfy the executions, how can it be said, that‘by the sale of the wheat his levies were abandoned ? Langdon v. Summers, 10 Ohio St., 86.
   McCauley, J.

This case requires the determination of two questions: Did the levy of the executions create a lien on the wheat prior to the lien of the chattel mortgage of plaintiff in error ? And second, did the sheriff, by the sale of the wheat at private sale, lose or abandon his levy on it?

The wheat was levied upon on May 21st. At that time the mortgage to Houk was on file in the township in which the property was. The statute, section 4151, required the mortgage to be on. file' in the township in which the mortgagor resided. This section of the statute provides that unless the mortgage shall be filed in the township in which the mortgagor resides, it shall be void as against the creditors of the mortgagor, subsequent purchasers and mortgagees in good faith. Under this provision, the mortgage not being on file with the clerk of the township where the mortgagor resided, it was void as to creditors. It has been held in Paine et al. v. Mason, 7 Ohio St., 199, that a subsequent mortgagee taking a mortgage with .actual notice and knowledge of a prior mortgage is not a mortgagee in good faith; and this case has been followed in two or three other cases. But the rule applicable to a mortgagee in good faith, is not,applicable to a general creditor. A mortgagee, may give credit solely upon the faith of the mortgage security, which, if taken in good faith, is valid. The lien created by it arises from the acts of the parties, while the lien Of a levy arises by operation of law. No question of good faith has anything to do with it.

The levy, therefore, being prior to the filing of the.mortgage in the proper township to create a valid lien on the wheat, is superior to it.

As to the sale of the wheat by the sheriff, there is nothing in the acts of the sheriff to indicate an intention to abandon the levies. He agreed to sell the wheat at private sale for cash on delivery; and before he received payment, for the wheat, it was taken in replevin by Houk, the mortgagee. A levy will not be lost except by some positive act showing an intention or willingness to part with the control of the property levied on, or for a neglect to enforce it for so long- a time as to indicate that it .has been purposely’ abandoned. Nothing of this kind occurred in this ease. While the attempt to sell the wheat at private sale was’’ irregular, it does not indicate a purpose on the part of the ‘ sheriff, or of those for whom he was acting, to abandon theJ property 'as 'a means of satisfying -the claims under’ which' it was held. The contrary, however, appears. The sheriff sold the wheat at the request of the execution creditors, and for the purpose of paying their claims. The debtor, Plyly, the owner of the wheat, made no question that the sale was irregular. The mortgagee can get no advantage from the irregular sale, unless the irregularity went so far as to show a purpose to abandon the levy, or a degree of neglect to enforce it, inconsistent with a purpose to rely upon it, which, as already stated, does not appear.

Judgment affirmed.