Court Opinion

ID: 6587341
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:50:02.626568+00
Date Added: 2024-06-11T15:57:31.842070
License: Public Domain

CoNaway, Justice,
dissenting.
Upon tbe first bearing of this cause in tbe court I felt compelled to dissent from tbe decision of my brethren upon tbe bench, and stated in brief some reasons for such dissent. I hoped that on further consideration we might be able to harmonize our views. In this hope I have been disappointed; and it now becomes necessary that I develop my views as completely as time and opportunity permit. Differing radically from my associates it will be necessary that I discuss their views freely. At the same time I shall certainly do so with much deference and respect, as they are the views of the majority of the court, and settle the law of the case.
The charging part of the petition in this ease appears in full in the opinion of the court on the first hearing, supra.
It is quite apparent from an inspection of. the petition, *251and will be abundantly apparent from a review of the authorities cited by the learned counsel for plaintiff in error, that the primary theory upon which they brought this action is that the lien of the mortgage of plaintiff in error follows and attaches to the proceeds of the sale of the mortgaged chattels in defendant’s hands, and that this action is in the nature of a suit in equity for the enforcement of a lien or trust. Thus counsel say in their first brief: “The case for the plaintiff presents a very simple proposition. The parties were not favored with an opinion upon the question by the court below, and it is therefore difficult to do more in this brief than to present a most general statement of the position of the plaintiff.
“Two propositions are involved.
“I. That the plaintiff’s mortgage was and continued to be a lien upon the property up to the time of sale prior and paramount to the lien of the defendant.
“2. Upon the sale of the property these liens attached in the same order of priority to the proceeds.”
Upon this question counsel have not yet succeeded in getting a judicial opinion. It would seem that the court does not sustain the second of the above propositions, as the petition is sustained as stating a cause of action for the conversion of plaintiff’s property, without mentioning this proposition of plaintiff made in defining his position and explaining his cause of action.
In a later brief counsel for plaintiff in error say:
“It is of no consequence to the plaintiff, and ought not to be to the defendant, and, therefore, not to the court, which is concerned only with justice, whether the plaintiff’s remedy is for a conversion of the property, or for a conversion of the proceeds, for money had-and received or for an accounting under a constructive trust.”
As to this it must be said that it makes a very material difference in the facts necessary to be alleged and proven whether the cause of action is the conversion of plaintiff’s property or the conversion of a fund charged with a lien or trust, or money had and received to plaintiff’s use on a fictitious con*252tract, or money in defendant’s possession which he ought in equity and good conscience to pay over to plaintiff. It is not necessary to plaintiff’s cause of action, as in the nature of a suit in equity for the enforcement of a lien or trust against the proceeds of mortgaged chattels in favor of the mortgagee, that plaintiff should allege or prove that he had title to or right of possession of the mortgaged chattels at the time of the alleged sale, and he has ,not so alleged. A mortgage in equity conveys no title and confers no right of possession to the mortgagee. Allegations of title and right of possession would be inconsistent with the plaintiff’s cause of action as defined in his original brief, and intended to be stated in his petition. But such allegations are necessary in the statement of a cause of action for the conversion of property, and which the court says is the cause of action actually stated in the petition, and the' court supplies them by implication.
It is not necessary to plaintiff’s cause of action as for the enforcement of a lien or trust that he should state or prove the condition of the mortgage in question or a breach of that condition; and he has not so stated. Such allegations would have made his equities all the stronger, and it is to be presumed he would have made them if they are true. He cannot be accused of falsehood if they are false. It is necessary to a cause of action for the conversion of mortgaged chattels to state the condition of the mortgage and a breach of that condition when these facts are relied on as conferring title and right of possession, and the court has supplied such allegations by implication.
It is not material to plaintiff’s cause of action as for the enforcement of a lien or trust against the proceeds of the alleged sale of the mortgaged chattels that plaintiff should allege or prove that the sale itself was wrongful or fraudulent, or made without his knowledge or consent, and he has not so alleged. Such allegations would have made his equities all the stronger, and it is to be presumed he would have made them if they are true. He cannot be accused of falsehood if they are false. But such allegations are quite material to a cause of ac*253tion for the conversion of the property, and the court supplies these by implication.
It is not material to plaintiff’s cause of action for the enforcement of a lien or trust that he should allege or prove that the request for or instigation of the sale of the mortgaged chattels was wrongful or fraudulent. Such allegation would have made his equities all the stronger under the petition, and it is to be presumed he would have made it if it is true. He cannot be accused of falsehood if it is false. Such allegation is material to his cause of action as for a conversion of the property and the court supplies it by implication.
In stating his cause of action as for a conversion of a fund charged with a lien or trust plaintiff alleges that defendant fraudulently collected and retains the proceeds of the alleged sale of the .mortgaged chattels, and alleges a demand for and a refusal to pay plaintiff’s claim. If defendant is liable for a conversion of the property it makes no difference in his liability whether he received any of the proceeds of the sale of it or not.
It has also been urged that defendant, under the allegations of this petition, may be liable neither for the conversion of a fund charged with a lien or trust, nor for a conversion of the mortgaged property, but really liable for money had and received to plaintiff’s use, or for money in his possession which in equity and good conscience he ought to pay to plaintiff.
In this conflict of views I approach the task of endeavoring to determine for myself which is the better view with much diffidence. And this diffidence is intensified by an oppressive consciousness of the impracticability of discussing the numerous important questions involved in a single opinion of reasonable length. If I could consider the petition sufficient in any point of view I might confine my discussion to that particular view as the court has done. But regarding the petition insufficient in any view of it, it is necessary to discuss them all.
■ In Wisconsin the courts will not do this. On general de*254murrer they first determine what cause of action the petition is designed to state, and then whether it states facts sufficient to constitute such cause of action. If it do not the demurrer will be sustained. (Supervisors v. Denner, 30 Wis., 624; Pierce v. Carey, 37 Wis., 232.) The general demurrer under our code is for the reason that the petition does not state facts sufficient to constitute a cause of action. It would seem that if the petition state facts sufficient to constitute any cause of action it is not subject to demurrer on this ground, and that if it states facts sufficient to constitute a cause of action it must be presumed that it was designed to state that particular cause of action.
It is probably as well to consider first the primary proposition of counsel for plaintiff in error that the mortgage liens follow the proceeds of the sale of the mortgaged chattels.
How far short counsel come of establishing this proposition as a general rule of law for mortgaged chattels sold and transferred by mortgagors in possession will be apparent from a short statement of the nature of the eases cited as establishing the rule.
Gibson v. Worden, 14 Wall., 244, is a case of property lawfully converted into money by an assignee in bankruptcy, the money taking the place of the property.
Olcott v. Bymun, 17 Wall., 44, is a case of deed of trust of realty to secure the payment of a sum of money in three installments. When default was made in the payment of the first installment the mortgaged realty was sold in execution of the power of sale in the trust deed. Held, that the trustee should not, after paying the first installment, pay the surplus left to the mortgagor, but should hold it for the payment of the other two installments
Platt v. Bright, 31 N. J. Eq., 86, is a case where mortgaged realty was converted into money by condemnation proceedings, the money taking the place of the property.
Gumble v. Stolte, 59 Ind., 446, same as last.
Ball Adm'r v. Green, 90 Ind., 75, is a case of a mortgage by an heir of his inheritance. The land was sold by the administrator to pay the debts of the decedent. Held, that sur*255plus proceeds in tbe bands of tlie 'administrator should not be paid to the heir in full, but should be charged with the lien of the mortgage.
It will be observed that these are all cases of the lawful conversion of property into money by lawful authority, to the exclusion and destruction of the mortgage lien upon the property. The money was lawfully substituted for the property.
In the case of Executors of Ashe v. Executors of Livingston, 2 Bay (S. C.), 80, it was held that a judgment lien was inferior to the lien of a prior unrecorded mortgage of realty, according to the principles announced in the case of Hicks v. Frank, decided at the present term. Evidently the registration laws of South Carolina did not protect judgment liens on real estate, against unregistered mortgages or secret sales. No such decision could ever have been made in case of a chattel mortgage, which was void at common law unless accompanied by delivery of the goods to the mortgagee, until the registration laws were passed avoiding the necessity of delivery.
Brown v. Stewart, 1 Md. Chancery, 87, was a case where mortgaged chattels had been sold out of the State by the mortgagor, and the proceeds deposited by him in a bank in his own name. Held, that the mortgage lien would be enforced against the identical money received for the mortgaged chattels, but not against other money deposited by the mortgagor in the same bank.
Other cases, cited are still more widely different from the ease made by the petition.
It is not a general rule of the law that a mortgagee may enforce his lien against the proceeds of a sale of mortgaged chattels by the mortgagor in possession, when such proceeds are in the hands of third persons. It is not necessary that a creditor in accepting payment by his debtor, or that a vendor in accepting the purchase price of property, sold by him, should inquire and ascertain where and how the debtor or vendee acquired the money paid, on pain of being held liable as a conversioner, or as trustee of a constructive trust, if .the money was the proceeds of a sale of mortgaged chattels. The *256reverse of this is the rule. And plaintiff has not brought himself -within any recognized exception.
So far I have been considering the action as for the enforcement of a lien or trust, an action in its nature purely equitable. If the court had found it necessary to consider this phase of 'the ease, and to construe the alleged chattel mortgage in so doing, it would have been compelled to hold to the doctrine of equity as distinguished from the law, and to announce, with all judicial solemnity and authority, that the title to the mortgaged chattels is in the mortgagor. But the court considers the petition as stating a cause of action in the nature of the common law action, of trover for the conversion of property, or for trespass or money had and received to plaintiffs use, or something of the nature of a common law action as distinguished from a suit in equity, and holds, with equal judicial solemnity and authority, that the title to the mortgaged chattels is in the mortgagee. And in so holding the court is sustained by abundant authority.
It is true that some courts have recently shown a disposition to do away with this technical doctrine of the common law as distinguished from equity, and to hold that a chattel mortgage in law is just what it has long been in equity, and what it practically is in business, a security by way of lien, and not a conveyance of title, the beneficial title remaining in the mortgagor.
When the courts reach the advanced position to which they are evidently tending there will be an end to the action for the conversion of mortgaged chattels. The law of chattel mortgages is now undergoing a process of development, progress and reform, similar to what has already been effected in the law of mortgages of real estate. That the courts, under the reformed procedure of the codes, would free themselves from much of the inconsistency-in the principles of law and equity, as distinguished from each other, was evidently expected by able commentators. Jones, in his work on chattel mortgages, adheres quite strictly to the legal view. But he says at Section 12: “In many States all distinction between law and equity has been abolished by statute, so that *257equitable principles’are applied in proceedings '\vbicb are in form actions at law.”
It evidently had not occurred to this author that a court in construing a chattel mortgage in an action in the nature of a suit in equity would hold the title to be in the mortgagor, and that the same court, in an action in the nature of an action at law between the same parties, would hold the same chattel mortgage to vest the title in the mortgagee. Herman goes much further in .the direction of reform than does Jones. Some courts have already freed themselves from this particular inconsistency by adopting the equity doctrine of chattel mortgages in all eases. As the court says in the case at bar, the great weight of authority is against them. So in 1737, when Lord Hardwicke first held that a mortgage of real estate in equity was but a lien, every authority was against him. But his decision was recognized from that time forward as correct.
But the work of reforming the common law is now more legislative and less judicial than formerly; and I will consider this case, as the court does, from the common law standpoint.
The Wisconsin courts require a pleader to reveal the cause of action which he brings suit on, and will consider no other on demurrer. I do not go to that extent, though there is much reason in the rule. It would seem not to be too much to expect of a plaintiff when he commences an action, that he should know what his cause of action is, and that his attorney should inform the opposite party and the court what it is by the pleading. But let it be admitted that it is proper, or rather permissible, for a plaintiff to. allege in his petition a mass of facts, some tending to establish one cause of action and some another, or a number of others, and leave it for the court to determine for him which is his proper cause of action, if he has any.' When his case has reached a court o'f last resort, and is sent back to the trial court for further proceedings, it is certainly time that the question of what the cause of action is should be determined. This point has now been reached, and, as I understand the position of the court, it has *258found that the petition states facts which constitute two causes of action. They arise, however, from transactions connected with the same subject of action/and that there are two causes of action is important only because allegations and proof sufficient to sustain one of them may not be sufficient to sustain the other. Lest I be not strictly accurate in stating the position of the court, I will do so in its own language. The court says: “Not only are facts alleged which show a tortious conversion of plaintiff's property right in the sheep, by means of a wrongful sale thereof at the request and'instigation of defendant, but it is further alleged that the defendant fraudulently and for the purpose of hindering, delaying and defrauding the-creditors of the mortgagors, and especially the plaintiff, collected and retained the proceeds of that sale, to wit: the sum of twenty thousand dollars. There can be no doubt that the interest of the plaintiff in the property sold was the balance due him upon the indebtedness secured by his mortgage. It is further alleged that after' defendant received these proceeds, plaintiff demanded of him the balance and was refused. Under these facts I can come to no other conclusion than that they show a condition of affairs in which it appears that the defendant has money of the plaintiff which in equity and good conscience he ought to pay over to plaintiff.”
To sustain an action for conversion of plaintiff’s-property it is necessary to allege and prove title in the plaintiff, coupled with possession or a present right of possession. This may not be necessary to the -cause of action for -money which defendant ought in equity and good conscience to pay- over to plaintiff. This cause of action might arise from the sale of the property considered merely as destroying, plaintiff’s mortgage lien, on the' equitable view that the mortgage was only a lien and not a conveyance of title to the mortgagee.- ■
First, as to the conversion:
Neither title, possession nor right-of-possession- is expressly alleged in the petition. Allegations of-title and right of possession are supplied by implication; Upon this branch of the subject the court says:
“In Section 1 of Jones'on Chattel--Mortgages,' n-chattel' *259“mortgage is there defined, ‘A formal mortgage of personal “ ‘property is a conditional sale of it as security for the pay- “ ‘ment of a debt or the performance of some other obligation. “ ‘The condition is that the sale shall be void upon the per- “ ‘formance of the condition named/ No particular, form of' “words is necessary to a chattel mortgage if the foregoing “elements appear. The petition alleges that on October 6th, “1884, the mortgagors by their mortgage of that date conveyed to the plaintiff the sheep described to secure the pay“ment of two notes, one payable July 6, 1885, the other payable July 6, 1886. . It is further alleged that of the indebtedness so secured something over $6,000.00 thereof is still “due and unpaid. Now it is clear from the allegations of “these facts that the execution and delivery of an instrument “of sale is alleged, it is also clear that the condition of the sale “to wit: to secure the payment of a particular specified indebtedness is alleged upon the performance of which the instru“ment should become void, and it is just as clear that a breach “of that condition has occurred, because it is certain that the “debt has not been fully paid. Now, when did that default “occur? Certainly not later than the maturity of the last “note, to wit: July 6, 1886. It seems to me that there can “be no possible doubt about the matter, and that no other “conclusion can be arrived at than that a default in the condition of the mortgage had occurred long before the illegal “sale of the sheep, and that being so. it cannot be doubted “that under these facts the plaintiff had at least a special “property right in the sheep, coupled with a present right to “the possession thereof, and under such circumstances a “wrongful sale of the sheep was a tortious conversion thereof “as against the plaintiff.”
I concur with the court in calling the mortgage an instrument of sale. All the property in the mortgaged sheep which plaintiff had was what was sold to him by the mortgagors by virtue of their mortgage on October 6, 1884. All the property sold by the mortgagors at the instigation and request of defendant, on the 20th day of May, 1889, was what was “theretofore unsold.” It is not “all of said sheep” simply, *260but all of said sbeep theretofore unsold. Not only does the petition fail to allege that any property of plaintiff was sold, but it expressly shows that no property of the plaintiff was sold.
It may be said that the reference intended by the pleader in using the words “theretofore unsold” was to a prior alleged sale, by consent of the mortgagee, of a portion of the sheep originally mortgaged. This is evidently true. The petition was evidently drawn upon the equitable theory that a mortgage is not a sale, but is a lien and conveys no title or right of possession. And the petition can be construed as stating or attempting to state a cause of action in conversion only by construing it entirely apart from the evident design of the pleader; and when so construed the allegations destroy each other. The mortgage must be considered as a sale and not ia sale at the same time and for the same purpose — the purpose of sustaining the petition. If the mortgage was not a sale but merely a lien plaintiff had no property to be converted. If the mortgage was a sale whatever was sold by it was not included in a subsequent sale of property “theretofore unsold.” This single consideration I must regard as conclusive against the theory of conversion; conclusive against the fiction of money had and received, by defendant to plaintiff’s use; conclusive against the possession of defendant of money which in equity and good conscience he ought to pay to plaintiff. The only possible cause of action not concluded is the impairment of plaintiff’s security by the destruction of the mortgaged property or a portion of it, its removal beyond the operation of the mortgage, or the selling in parcels rendering it more difficult for plaintiff to follow with his mortgage lien. No such showing is made or attempted. This is all that I think necessary to say upon the question of the sufficiency of this petition. But I dissent additionally from the views of the court upon two important branches of the law; the law of pleading and the law of chattel mortgages. These are both in an unsettled and formative state, and what the court says now may have an important effect in shaping the law for the future.
*261Tbe petition is logically and skillfully drawn to meet the requirements of plaintiff’s primary theory of the case that defendant was holding a fund charged with a lien or trust. It appears to be an exceedingly ingenious attempt to make out a cause of action from meager facts, upon a theory of the law which the court does not discuss. In any other point of Yiew the petition must appear as the work of a blundering tyro in the law, not from bad pleading, but from applying the pleading to a purpose foreign to the design of the pleader.
As to possession, so far as appears from the petition, plaintiff may have taken possession of the sheep in question immediately upon the execution of his mortgage, or at any time afterward, and may have possession yet. The court cites a ease to the effect that a sale of personal property implies delivery. However true this may be under other circumstances it is absolutely erroneous as to sales-of mortgaged chattels by either mortgagor or mortgagee. Either or both may sell their respective interests without regard to possession. If plaintiff has had possession and his possession has not been interfered with his property has not been wrongfully converted.
I believe I have not seen a more insidious fallacy advanced under the reformed system of code procedure than the idea that a petition may show a cause of action, without revealing what that cause of action is, or that a court should proceed to the trial of a cause without knowing what cause of action the plaintiff will endeavor to establish; whether his cause of action is in tort or contract, legal or equitable; in this ease whether he will endeavor to establish his right to damages for a conversion of his property, or for the impairment of a security, or his right to an accounting under a constructive trust. The evil of such a course is 'forcibly illustrated in this case. In consequence of the jumbling of legal and equitable ideas and language, a mortgage of chattels is held to be a sale of a property which may be the subject of conversion, and at the same time it is held that this same property remained unsold. This method of pleading is essentially vicious. It does not state any cause of action complete. It attempts to *262make a nondescript canse of action from parts of several canses.
In implication upon implication' to sustain this petition I think the court goes beyond all precedent. Pomeroy, it seems to me, states the rule of liberal construction in favor of pleadings as strongly as any. The word “intendment,” as used by him in the passage cited by the court, is not synonymous with “supposition.” It may be supposed, from a fact alleged, that anotherfaet exists, and such supposition may be reasonable or probable. But inference by intendment is something more than guesswork. What is to be inferred by reasonable intendment from an allegation is something intended by it; something that must be true if the allegation is true. Something implied in the allegation. Pomeroy’s use of the word “in-tendment” appears from his criticism of the New York case of Schofield v. Whitelegge, Pomeroy’s Remedies and Remedial Rights, note at page 596. The complaint alleged that defendant had become possessed of and wrongfully detained from the plaintiff a piano of the value of four hundred dollars. There was an answer which denied the possession of any property belonging to the plaintiff, denied the wrongful taking, and denied the plaintiff’s ownership. The complaint was dismissed at the trial on the ground that it stated no cause of action because it did not show that plaintiff had either a general or special property in the chattel, or the right of possession. Pomeroy’s criticism is, in substance, that the wrongful detention alleged implies a jiroperty and a right of possession in plaintiff, because the detention could not otherwise be wrongful, a case of necessary intendment or implication.
In Marie v. Garrison, 83 N. Y., 15, an allegation of a. refusal to exchange certain stocks was held to imply a tender of the stocks to be given in exchange for them, because without such tender no exchange could have been effected.
In Saulsbury v. Alexander, 50 Mo., 142, the petition alleged that the defendant sued plaintiff for work done and cash lent, “the particulars of which appear from the following account,” giving the account, and concluding with a statement of the balance due, and prayer for judgment. Defendant answered *263setting up that tbe work bad been negligently done,-and that he had already paid more than its value. Plaintiff had judgment, and defendant moved in arrest of judgment on the ground that no cause of action was alleged. This motion was overruled. The court says: “When we say that a judgment should be arrested if the petition fails to show a cause of action we speak of substantial and not of formal omissions. The latter are supplied by intendment, and will be presumed, after verdict, to have been proved.”
These eases are among those that go furthest in the direction of a liberal construction in favor of pleadings. I will now give a few tending in the opposite direction.
Garner v. McCullough, 48 Mo., 318, was an action for an invasion of plaintiff’s possession or right of possession. The petition alleged that the plaintiff in virtue of a contract with one Evans, was entitled to the exclusive possession of certain premises, and that after the execution of the Evans contract, the defendant, with knowledge of the plaintiff’s right, purchased the premises and forcibly took possession of them and excluded the plaintiff. The defendant answered and put in issue the facts alleged. Who Evans was, his connection with the land, and the nature of plaintiff’s contract with him were not set up. At the trial, on motion of defendant, plaintiff’s evidence was excluded on the ground that the facts alleged, if proved, would not warrant a recovery. The supreme court affirmed the judgment.
State ex rel. v. White, 88 Ind., 587, was an action against a sheriff for failing to levy an execution, the petition alleging that he negligently permitted the execution defendant fraudulently to take his goods and chattels out of the State of Indiana, and beyond the reach of said execution. This was held fatally defective on demurrer as not stating that the goods and chattels were ever in the sheriff’s bailiwick.
In Wright v. McCormick, 67 N. C., 27, the supreme court of North Carolina uses the following language: “It is a rule of construction of which no pleader has a right to complain that uncertainties and ambiguities in his pleadings shall be taken in the sense most unfavorable to him,- for he has at all *264times the power and it is his duty to make them plain. And-as if the uncertainty occurs by accident or oversight, he can cure it by amendment when it is pointed out, a failure to amend shows that the uncertainty is of purpose, and designed to mislead his adversary; and no party can be allowed to profit by such an artifice.”
I will not attempt to harmonize the cases on pleading. Some courts hold that the common law rule that the allegations of a pleading are to be strictly construed against the pleader and taken in the sense most unfavorable to him, is abrogated by the provision of the code that pleadings shall be liberally construed with a view to substantial justice between the parties. Other courts enforce the common law rule and find it not inconsistent with the liberal construction required by the codes.
I will not attempt to decide which view is the correct one. The general language used by some of the courts in adopting one rule, to the exclusion of the other, or in holding them both in force and not in conflict, is of little practical assistance in the solution of questions of pleading. Courts differ widely as to what a liberal construction requires as applied to the language of a pleading. I am willing to go as far as the farthest, as I understand the cases, in the way of liberal construction, and, from this standpoint, I repeat, that I think the court has gone beyond all precedent in supplying important and material allegations by intendment or implication in order to sustain the petition in this case. Such allegations should not be supplied because they are probable. They should be found intended by or implied in the allegations made. They should be not only probably true but necessarily true, taking the allegations to be construed as true. Where two inconsistent inferences may reasonably be made from the allegations of a pleading, we can not say that either one is intended by or implied in it. Neither one can be taken as true.
Our code provides that the allegations of a pleading shall be liberally construed with a view to substantial justice between the parties. I do not object to the most liberal con*265struction of this rule by any of the authors so liberally quoted by the court. But-the general language of the commentators leads to about the same diversity of opinion in its application to particular cases as does the general rule of the statute. It is only by a consideration of the facts of particular cases to which the rule has been applied that we can arrive at the real views of the different courts as to the application of the rule. The code provides that the petition must contain a statement of the facts which constitute the cause of action in ordinary and concise language, and makes it ground of demurrer that the petition does not state facts sufficient to constitute a cause of action. If the petition in the case at bar stated as a fact that the plaintiff was entitled to the possession of the property in question when he commenced his action, evidentiary facts tending to show the truth of this allegation might be proved without being alleged. But the right of possession is not 'alleged in ordinary and concise language, or in any language. And it is not implied in any allegation that is made. The court implies it from the further implication that the condition of the mortgage has been broken, and this implication of condition broken is founded upon the further implication that the condition of the mortgage is that certain notes, given to secure the payment of the indebtedness which the mortgage was given to further secure, should be paid at maturity. And the implied right of possession rests upon the yet further implication or assumption that the terms of the mortgage are such as to vest in the mortgagee the right of possession on breach of the condition. This last is mere assumption or supposition. A mortgage of personal property, just as formal as that described by Jones in the quotation in the opinion of the court, is that provided for by our statute containing a power of sale. This power of sale may be vested in the “mortgagee or any other person.” Bev. Stat. Wyo., See. 80. The right of possession may not vest in the mortgagee by virtue of the mortgage at any time or under any circumstances. The right on default and forfeiture to seize, advertise, and sell the mortgaged property may be vested in “any other person.” The assumption that the .term of the mortgage extended to no *266later date than the maturity of the note having the longest time to run is a gratuitous assumption. There is better ground in the-.petition for the contrary assumption. It is alleged that the mortgage was executed and filed for record ■on the 6th day of October, 1884, and was duly recorded, and that it was in full force, and effect at the filing of the petition on the 19th day of December, 1889. A chattel mortgage ceases to be valid as to'-creditors of-the mortgagor two months after the expiration of the term-for which it is given unless the record be renewed by affidavit.. There is no allegation of such renewal. This is a material and substantial fact in plaintiff’s cause of action, and it is to be presumed would have been alleged if true.- The .natural presumption would seem to be that the term of-the mortgage extended at least to October 19, 1889. This is a case in which two conflicting assumptions may be made from the same allegation. - In such case neither can be-properly called an intendment or implication of such allegation.
The mortgage vests the legal title in. the mortgagee. His right of possession depends upon the terms of the mortgage. •Plaintiff does not reveal- the terms of his mortgage in his petition. -He does not claim the right of possession. I see no reason why it should be forced upon him.
The.assumption that the term of .plaintiff’s mortgage could not be longer than till the maturity of the later note -is supposed to be strengthened hy Maxwell’s form for the foreclosure of- chattel mortgages. .The form given is for an action on note- and mortgage. It gives a copy of the note to secure which the mortgage was given, but no copy of the condition of the .mortgage. In forms given by the same author for actions-on covenant the-covenants are required to be copied, and in several forms for--the foreclosure of mortgages -of real estate the condition of the mortgage is copied. The omission in the present instance-is evidently a mistake. But the mortgage in- the .case at bar is not alleged .to have been given to secure the payment of the notes. In foreclosing chattel mortgages by petition in- court no allegation or proof of right of possession in the mortgagee is necessary. In the. action for the *267conversion of personal property such allegation and proof is necessary.
Since both court and counsel rely on Maxwell’s forms as authority, I will give bis form for the action for conversion of chattels. It is in the following words:
“First. The plaintiff alleges that on the.day of .the plaintiff was the owner and in possession (if not in possession entitled to the immediate possession) of the following described goods and chattels (describe them) of the value of $.
“Second. On the day aforesaid the defendant obtained possession of said goods and chattels and wrongfully and unlawfully converted the same to his own use to the damage of plaintiff in the sum of $.... (Add prayer.)” The citation of Maxwell’s forms as sustaining the‘petition as for conversion is not a fortunate citation.
The court says that, under the circumstances, “a wrongful sale of the sheep was a tortious conversion as against the plaintiff.”
I must say that among all the numerous cases cited by counsel and court I do not find one that goes to the extent of holding that a sale of mortgaged chattels by the mortgagor in possession is, of itself, a conversion as against the mortgagee. To be a conversion all the commentators on chattel mortgages state that the sale must be in exclusion, defiance or denial of the rights of the mortgagee. The mere fact of sale by the mortgagor does not import such exclusion, defiance or denial. What I now propose to show is that no case cited holds that it does. A very few cases contain unguarded expressions, purely dicta, which, taken alone, might be so understood. But taken in connection with the facts to which they were applied, they do not indicate such a view of the law.
The case of Coles v. Clark, 3 Cush., 399, was a sale of mortgaged jewelry at auction and delivery by auctioneer, followed by a demand upon the vendor and his refusal to account for the jewelry, leaving no question as to the denial of plaintiff’s right.
*268The case of Ashmead v. Kellogg, 23 Conn., 70, was an action against the mortgagor of a schooner, who had sold the “entire interest of said vessel” for $14,000.00, which he retained to his own use. And the vessel was sold, as the court says, “as unincumbered.” Besides the only purpose for which a schooner.would be valuable or would be sold or purchased would be for use in navigation, which would of itself indicate in the vendor a denial of, or intention to defeat and exclude, the mortgagee’s lien.
The case of Spraights v. Hawley, 39 N. Y., 441, was mortgaged jewelry sent from Syracuse to New York City and sold there.
The case of Bank v. Meyer (Ark.) 20 S. W. Rep., 406, is expressly stated by the court to have been a sale in exclusion ■or defiance of the mortgagee’s right. One reason for this is apparent from the fact that it was a sale of cotton to a dealer, in effect the cotton was placed upon the market.
Brown v. Campbell Co., 44 Kan., 237, was a case of mortgaged chattels sent to another county and sold.
White v. Phelps, 12 N. H., 282, was a sale of a mortgaged horse and demand made for the horse of a second purchaser, and refusal to produce or account for the horse.
Henderson v. Foy, 11 South., was mortgaged cotton placed in a warehouse and there sold by the mortgagor — evidently a placing of the cotton on the market in defiance of the mortgagee’s right.
Millar v. Allen, 10 R. I., 44, is a case decided upon a mortgage which was held by the court to give the mortgagee the right of possession on demand. Demand was made. The court held, very properly, that it was no excuse that the mortgagor had placed it out of his power to deliver the property on demand by remortgaging it and giving possession to the second mortgagee.
These are the principal eases cited as showing that a sale such as is alleged in the case at bar constitute a conversion. It will be observed that in every case something appears in addition to the mere fact of sale to indicate the exclusion, defiance or denial of the mortgagee’s right. In no case does *269it rest upon tire mere fact of sale. And when the courts or commentators mean that a sale is made of mortgaged property as unincumbered, or in exclusion, defiance or denial of a mortgagee’s interest, they say so. They do not leave it to he inferred. There is greater reason for a pleader to do so in stating his cause of action. In the case at bar it is the gist of the action as for a conversion. It would materially strengthen the plaintiff’s cause in any view. And it is to he presumed if such were the fact he would have stated it. He cannot he accused of falsehood if the sale was actually made in the recorder’s office, upon an examination of the mortgage record hy all parties concerned or taking part in the sale or-purchase, with the mortgage record open before them, read and understood hy all, and fully and correctly explained by the mortgagors. But this was unnecessary. The record notice was equivalent to this in the absence of any fraudulent acts or representations preventing an examination of the record. I cannot concur with the court in ignoring the constructive notice of the record imparted by the allegation that the mortgage was in full force and effect. It was certainly sufficient to charge all persons participating in the sale and. purchase with knowledge of the mortgage and its contents, and to strengthen the presumption of good faith which attaches to all business transactions, and to negative all suspicion of fraud. Fraud is odious and is not to be presumed. The sale of this property is not alleged to have been fraudulent. Ho aot of the mortgagors is alleged to have been fraudulent.
The courts and text writers, when they speak of a sale of mortgaged chattels, without adding as unincumbered, or in exclusion, defiance or denial of the right of the mortgagee or something equivalent, speak of such sale as subject to the mortgage of course. They do not presume fraud, hut the contrary. Jones adheres strictly to the common law as distinguished from the equity view of chattel mortgages. He says at section 454: “Before forfeiture the mortgagor may sell the mortgaged property, subject, of course, to the payment of the mortgage debt. The purchaser takes all the interest the mortgagor had. Such purchaser may again, be*270fore default, sell and deliver the prbperty'with the like-effect, and the remedy of the .mortgagee upon the maturity of the debt is to follow the property and recover-of .the last, purchaser.”
It is hardly necessary to remark that this remedy would not be affected by the character of the sale whether in attempted exclusion of the rights of the'mortgagee or mot, unless the property were moved, separated, destroyed, or in' some manner injured. '
Jones proceeds:
“Although the' mortgage empowers' the mortgagee to take possession of the mortgaged property at any time in case he deems himself unsafe; the mortgagor has' full-authority to sell the property so long as there has been no default and no demand of possession under the safety clause. Until such time a sale by the mortgagor does not amount to a conversion on his part, nor does the purchase amount to a conversion on the part of the purchaser.”
So courts and commentators generally in speaking of a sale of mortgaged chattels speak of it as a sale subject to the-mortgage of course. When they mean more -than this they express-such meaning. If the -petition in the case' at bar-means more it should 'express such meaning.
Jones'says at section 461: “The'mere fact that-mortgaged property was sold by a junior mortgagee'for-its'full value, in the exercise of his legal right to foreclose his mortgage- and sell his' interest in the property, is not sufficient to malee- such sale' hostile to the prior rights of the mortgagee; especially if it appear that the-property was not sold in-parcels-and. was-not scattered or dissipated.' Such a-rule is not.inconsistent with the right of the prior mortgagee-to-enforce his-, lien, although it may indicate that the.'pur chaser'intends to .contest it.”
In the cáse at bar-the court holds, the'defendant accountable for .the-sale effected by .-the mortgagors of-the property theretofore unsold, when he-would "not have been-accountable if he had himself seized > and sold the-entire property for-'full-value. “Fraus-est odiosa et non prsesumanda.” - " .
*271I feel that I have indulged in a discussion of the law of pleading and of chattel mortgages in points hearing hut remotely upon the decision of this case and not necessary to the decision. The law upon these subjects is in an. unsettled and formative state. The opinion of the court has a tendency to settle the law in this State. I could not consent; by silence upon these'important points, to appear to concur in views of the law in which I do not concur. ■
This action as' an action for an accounting under a Constructive trust must fail: the proposition upon which it-is founded that in case of a sale of mortgaged- chattels by the mortgagor the lien follows the proceeds into the hands • of third persons to whom they have been paid by the mortgagors not being correct as a general proposition, and the case made by the petition not being exceptional.
The several other causes' of- action,- which this- petition is supposed to have concealed about it, are all legal in their nature as distinguished from equitable. They are all founded upon the idea that plaintiff by virtue of- his mortgage from Lawrence & McGibbon, acquired as by purchase a property interest in certain sheep and that his property interest in the sheep was afterwards re-sold-by-Lawrence & McGibbon at the Request and instigation of the defendant. -This is expressly negatived by the.petition itself which only alleges a-sale of what was theretofore unsold. This settles the question of a conversion of plaintiff is ■ property. This settles the.-question of the fiction of money had and received by defendant to plaintiff’s use. This settles the question of money in defendant’s possession which in equity and good conscience he ought to pay over to plaintiff unless for an impairment of plaintiff’s security. To sustain any of-these causes of action we-must not only supply essential'allegations by'construction; we-must not only disregard the express language of the petition, but we must positively presume the; commission ■ of• a fraud and a felony.- • ■
There remains to consider only a' possible cause' of action for the impairment of plaintiff’s security, and-no impairment is in any manner alleged or shown. '
*272The court says of the petition that it sets forth an actionable wrong on the part of the defendant for which he should answer, and that it would be a travesty upon justice to say that plaintiff should go out of court without redress, or without even calling upon defendant to answer these allegations. With all deference I must say that it seems clear that the allegations of the petition show no actionable wrong, and that they do not call for an answer. As to the matter of going out of court it is better for the plaintiff to go out of court now than after trial.
I am of the opinion that the judgment of the district court should be affirmed.