Case Name: Marlet, Respondent, vs. Hinman, Appellant
Court: Wisconsin Supreme Court
Jurisdiction: Wisconsin
Decision Date: 1890-05-20
Citations: 77 Wis. 136
Docket Number: 
Parties: Marlet, Respondent, vs. Hinman, Appellant.
Judges: 
Reporter: Wisconsin Reports
Volume: 77
Pages: 136–142

Head Matter:
Marlet, Respondent, vs. Hinman, Appellant.
May 3
May 20, 1890.
Chattel mortgages: Filing: Loss from files: Innocent purchaser.
1. It was stipulated that the mortgagor, at the request of the mortgagee, delivered a chattel mortgage to the proper town clerk, “who took the same into his possession and filed it as of that day,” making the entries required by subd. 10, sec. 832, R. S. Held, that the mortgage was duly filed, within the meaning of sec. 2314, R. S.
2. A chattel mortgage which has been duly filed is valid as against a subsequent bona fide purchaser of the property, although prior to his purchase the mortgage has disappeared from the files through the negligence or misconduct of the town clerk.
APPEAL from the Circuit Court for St. Groix County.
The following statement of the case was prepared by Mr. Justice Cassoday :
This is an action of replevin .brought by the plaintiff, as chattel mortgagee, to recover the possession of a pair of steers. The facts are undisputed, and to the effect that October 22, 1887, John F. Brewer and wife, in the absence of the plaintiff but at his request, executed a chattel mortgage on the steers in question to the plaintiff, to secure the sum of $61.67; that said Brewer, at the plaintiff’s request, thereupon took the said mortgage to the proper town clerk’s office, and handed the same to said town clerk, who took the same into his possession, and filed it as of that day, making the following entry in his indexed Book of Chattel Mortgages, to wit: “ John E. Brewer to John Mwrlet, October 21, 1887. $61.67. Dated October 22, 1887; due October 22, 1888.” November 1, 1887, said Brewer sold and delivered said steers to one Blakely for a full and valuable consideration, who then and there purchased the same in good faith and without notice of the existence of said mortgage, and upon the representations of said Brewer that the same were free and clear of all liens, and that there was no chattel mortgage thereon. The next day said Blakely, having heard that there was a chattel mortgage on the steers, given by Brewer, at once went to said town clerk’s office, and in connection with the son of said clerk made a thorough and diligent search among the files and papers of said office and all the chattel mortgage files therein, but no such mortgage or copy thereof could be found in said office. None such, nor any copy thereof, was on file in said office, and neither said mortgage nor any copy thereof has since been on file in said office. November 30,1887, said Blakely, for a full and valuable consideration, sold and delivered said steers to one Pettit, who bought the same in good faith, and without any notice of the existence of any such mortgage, and relying upon the representations of said Blakely at the time of sale that there was no mortgage upon said steers. Thereupon said Pettit heard there was a chattel mortgage on the steers, and at once went to said town clerk’s office, and was then and there informed by said clerk that there was no such mortgage nor any copy thereof on file in his office. December 15, 1887, said Pettit, for a full and valuable consideration, sold said steers to the defendant, who then and there purchased the same in good faith, and without any notice of the existence of any such mortgage, and relying upon information given him by said Pettit, at the time of such purchase, to the effect that the steers were free from any and all mortgage liens, and that he had been informed by the said town clerk that there was no mortgage thereon on file in his office.
Said mortgage was never taken from said files or town clerk’s office by the plaintiff, or with his knowledge or consent, and he did not know that the same had been taken therefrom until after the defendant had so purchased said steers. During the time mentioned the said Blakely and Pettit were each and both financially irresponsible and insolvent. Before the commencement of this action the plaintiff demanded said steers of the defendant, who refused to give them up. Them value at the time of such demand was $60.™ The debt on which said mortgage was given has never been paid nor satisfied. The books in the town clerk’s office do not show that the mortgage was ever canceled. The mortgage filed therein was the original and not a copy.
Upon the trial of the action a jury was waived, and the facts in the case, substantially as stated, were stipulated by the parties; and the court thereupon found the facts as stated in said stipulation, and, as conclusions of law, that the plaintiff should have judgment for the return of the steers, or for the value thereof in case a return could not be bad, witb six cents damages for tbe detention thereof, witb costs. From tbe judgment entered accordingly upon said findings in favor of tbe plaintiff, tbe defendant appeals.
Tbe cause was submitted for tbe appellant on tbe brief of JR. JET. Start, and for tbe respondent on that of J. B. Mathews.
To tbe point that after a mortgage bas been permanently removed from tbe town clerk’s office it is no longer effectual to bold tbe property as against one wbo purchases it in good faith, for a valuable consideration, and witb notice that there is no mortgage against it in tbe clerk’s office, counsel for tbe appellant cited Sternberger v. McSwem, 14 S. C. 36; Woodruff v. Phillvps, 10 Micb. 500; Swift v. Mall, 23 Wis. 532; Wa/rd v. Watson, 24 Neb. 592.

Opinion:
Cassoday, J.
" No mortgage of personal property shall be valid against any other person than tbe parties thereto unless tbe possession of tbe mortgaged property be delivered to and retained by tbe mortgagee, or unless tbe mortgage or a copy thereof be filed as provided in tbe nest section, except when otherwise directed in these statutes." Sec. 2313, R. S. Tbe exceptions referred to have no application here. Tbe next section thus mentioned provides that " every mortgage of personal property, or a copy thereof, may be filed in tbe office of tbe clerk of tbe town . . . where tbe mortgagor resides. . . . Such clerk shall indorse on such mortgage or copy tbe time of receiving tbe same, and keep tbe same in bis office for tbe inspection of all persons. Such clerk shall also-make tbe entries as required in subdivision 10 in section 832. Mortgages so filed shall be as valid and binding upon all persons as if tbe property thereby mortgaged bad been, immediately upon tbe execution of such mortgage, delivered, to, and tbe possession thereof retained by, the mortgagee." Sec. 2314, R. S. The entries which sec. 832 thus requires the town clerk to make were " to file, when presented, all chattel mortgages and affidavits relating thereto, and to enter at the time of filing, in a book properly ruled and kept therefor, the names of all the parties, arranging mortgagors alphabetically, the date of each mortgage, and the date of filing the same and of each affidavit relating thereto." Subd. 10.
Was the mortgage in question " filed," within the meaning of the statutes quoted? It will appear from the foregoing statement that the " entries " which the town clerk was thus required to make in his index book were in fact made by him at the time the mortgage was delivered to and left with him. This court has gone so far as to hold, however, that the requirement of such entries to be made is merely directory, and not essential to the validity of such filing. Smith v. Waggoner, 50 Wis. 155. The statutes cited make it the duty of the clerk " to file " the mortgage or copy when presented, and to " indorse " thereon " the time of receiving the same." In the case cited, it is said by Mr. Justice OetoN, that " these provisions are easily understood, and make the filing of the mortgage and the indorsement thereof the principal things to be done as affecting the validity of the mortgage, and notice to all persons interested." 50 Wis. 160. In legal contemplation, the filing of the mortgage was complete when delivered to, received by, and left with the town clerk for that purpose. Ibid.; Gorham v. Summers, 25 Minn. 81; People v. Bristol, 35 Mich. 28; Keating v. Retan, 45 N. W. Rep. 141. The requirement of sec. 832, R. S., quoted, making it the duty of the town clerk " to file " such mortgage when presented, is nothing more than to receive the same and make the indorsement thereon required by sec. 2314, quoted. The stipulation to the effect that when the mortgage was handed to the town clerk, he " took the same into his possession, and filed it as of that day," clearly means that he took the mortgage into his official custody, and indorsed thereon " the time of receiving the same," within the meaning of the section last cited. True, it was so delivered to the town clerk by the mortgagor, but, since he did so at the request and as the agent of the plaintiff, though in his absence, the filing was just as effectual as though such delivery had been made by the mortgagee himself. Sargeant v. Solberg, 22 Wis. 136; Harrington v. Brittan, 23 Wis. 541. But the mere fact that the mortgagor was the agent of the mortgagee in thus filing the mortgage, gave him no implied authority to conceal the same in the office of the town clerk, and much less to remove the same from the files or the office. Case v. Jewett, 13 Wis. 498. In the case at bar there is no evidence of any such conceahnent or removal by the mortgagor. There is nothing in the record accounting or attempting to account for the absence of the mortgage from the files or the office. It does appear, however, that it was not taken therefrom by the plaintiff nor with his knowledge or consent, and that he did not know that the same had been taken therefrom until after the purchase of the steers by the defendant. It follows from what has been said that the mortgage was duly filed.
The mortgage being " so filed," the statute quoted expressly declares that it " shall be as valid and binding upon all persons as if the property thereby mortgaged had been, immediately upon the execution of such mortgage, delivered to, and the possession thereof retained by, the mortgagee." Sec. 2314. The question recurs whether the plaintiff is to be deprived of these statutory provisions in his favor, without any fault, negligence, or privity of his own, and solely by reason of the negligence or misconduct of the clerk. " It is the settled law of this state that the mortgagee of chattels has the legal title to the property before the debt is due, and that he may take immediate possession thereof, unless by express stipulation the mortgagor is permitted to retain possession." Hill v. Merriman, 12 Wis. 486. Snob right of the mortgagee was fully protected, by such filing of the mortgage, even as against subsequent purchasers for value in good faith. The possession of personal property is at most only prima facie evidence of title. A Iona fide purchaser of such property from one in possession cannot hold the same as against the true owner. Had the mortgage in question remained on file, and the mortgagor had removed to some other town, or even some other state, and there, during the life of the mortgage, sold the steers to a ibona fide purchaser, yet there is plenty of authority for holding that such purchaser would not thereby have acquired title to the same as against the mortgagee. Kanaga v. Taylor, 7 Ohio St. 134, 70 Am. Dec. 62, and numerous authorities cited in the note; Keenan v. Stimson, 32 Minn. 377; Norris v. Sowles, 57 Vt. 360. The loss in such supposed case would, under these authorities, fall upon the purchaser. Here there is much stronger reason for holding that it should fall upon the defendant as such purchaser, since he has his remedy against the clerk, by reason of whose misconduct or negligence the loss has been sustained. Secs. 830, 985, R. S.
By the Oov/rt.— The judgment of the circuit court is affirmed.