Court Opinion

ID: 7106199
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:21:14.465872+00
Date Added: 2024-06-11T16:13:34.851825
License: Public Domain

Rothrock, J.
I. The matter of account involved in the controversy consisted of claimed balances due upon accounts of the plaintiff against the defendant. The *701court instructed the jury that there was no evidence authorizing a recovery of the interest claimed. It is insisted that this instruction was erroneous. An examination of the evidence satisfies us that the instruction of the court as to this item of the claim was correct.
II. It appears from the evidence that the plaintiff is a wholesale lumber dealer, and that the defendant was for several years a retail dealer in that line at Lehigh, in Webster county, and that he made the principal part of his purchases of lumber from the plaintiff on credit. He did not make prompt payments for his purchases, and at times his indebtedness to the plaintiff amounted to considerable sums. On the eleventh day of June, 1891, the defendant executed to plaintiff the four promissory notes upon which the suit is founded. The aggregate amount of the notes was one thousand, three hundred and sixty-eight dollars. The first of said notes was made payable in thirty days, the next on the ninth day of September, the next on the ninth day of October, and the last on the eighth day of November, in the same year. The mortgage given to secure the payment of the notes was executed on the same day. The property mortgaged consisted of all of defendant’s stock of lumber, and his books of account, and the accounts contained in said books, and all notes taken in settlement of said accounts. The mortgage was recorded on the twelfth day of June, and on the next day it was placed in the hands of the sheriff of Webster county for foreclosure. The said sheriff took possession of the property, and sold the same at public sale, as provided in the mortgage. The sale under the mortgage was made on the third day of July, 1891, before any of the notes became due. It is claimed by counsel for the appellee that there was no authority given in the mortgage to foreclose the same *702before it became due, and the court instructed the jury on this question as follows:
“It is conceded on the trial that on tbe eleventh day of June, 1891, defendant gave plaintiff his four promissory notes sued upon, which said notes were made payable at various dates in the future, from July 11 to November 8, 1891, and that, to secure the payment of said notes, defendant then and there made and delivered to plaintiff a chattel mortgage upon certain personal property, rights, and credits. It is also conceded that immediately or very soon after the giving of said mortgage, plaintiff proceeded to take possession of said property described therein, and to offer the same for sale, and did in fact make public sale of said property on the third day of July, 1891. Upon these admitted facts you are instructed that, under the terms of the mortgage given by the defendant, plaintiff had the right to take possession of the mortgaged property at any time he chose so to do, and no damages can be assessed against him in this action for such taking. He did not, however, have any legal right to sell said property before the debt secured thereby became due, and by such sale he became and is liable to account to defendant for the fair and reasonable value of the property so sold, without regard to the amount for which the sale was made.”
That part of the mortgage which provides for its foreclosure is as follows: “And I, the said W. W. ■Gray, do hereby covenant and agree with the said C. W. Robinson that in case of default made in payment of the above mentioned promissory notes, or any part thereof, either principal or interest, and all taxes ■assessed against said property before any part thereof becomes delinquent, or in case of my attempting to dispose of, or remove from said county of Webster, the aforesaid goods, and chattels, or any part thereof, or *703■whenever the said mortgagee or his assigns shall choose so to do, then, and in that case, it shall be lawful for the said mortgagee or his assigns, by himself, or agent, or any officer, to take immediate possession of said goods and chattels wherever found, the possession of these presents being sufficient authority therefor, and to sell the same at public or private sale, or so much thereof as shall be sufficient to pay the amount due or to become due, as the case may be, with all interest and taxes, costs, charges, expenses, and attorney’s fees pertaining to the taking, keeping, advertising, and selling said property and the collection of this debt.” The instructions above quoted were evidently given in reliance upon the case of Bank v. Taylor, 67 Iowa, 572. The language employed in the mortgage which was construed in that case was somewhat similar to the provisions of the mortgage in the case at bar. It was held in that case, because the mortgage provided “that in case of failure to pay the amount due hereon at maturity, or whenever the holder hereof may deem himself insecure, then he may take said property by virtue of this mortgage, and sell the same at public auction, * * * and the proceeds'of said sale to be applied on said note,” that “this provision, standing alone, would doubtless empower both the seizure and sale of the property before the maturity of the debt, if the holder considered himself insecure.” But it was further held that said clause in the mortgage should be construed with another condition of the instrument, which was as follows: “That, if this note and mortgage shall be paid on or before the maturity thereof, then this mortgage to be void,” and the conclusion was reached that under the stipulation of the mortgage in that case the mortgagee had the right to take possession of the property before the debt became due, but that, if he considered himself insecure, he had not the right to sell the same to pay the debt *704before the debt became due. It will be seen, from an examination of that part of the mortgage in the case at bar, that the provisions thereof are not the same as those in the cited case. In this case it is provided that the mortgagee may take possession of the mortgaged property whenever he “shall choose so to do.” It may be conceded that this right or option to take possession of the property is not materially different from the mortgage in the cited case, which was an option to the mortgagee to take possession when “he may deem himself insecure.” In both cases there is an absolute right to take possession of the property under the stipulations named. But in the case at bar there is the further provision that, after seizing the property, the mortgagee may “sell the same at public or private sale, or so much thereof as shall be sufficient to pay the amount due or to become due, as the case may be.” How could it be possible to make a sale of the property, and pay the amount to become due, unless the sale was made before the amount becomes due? The authority given to sell as plainly provides that a sale may be had before the amount becomes due as if it had been so stated in exact language. There is no room for construction, as in the case of Bank of Carroll v. Taylor, 67 Iowa, 472.
In the case of Wells v. Chapman, 59 Iowa, 658, where the provisions of the mortgage as to the right to take possession of the property and sell the same were, in substance, like the mortgage in the case at bar, it was said that “under this stipulation the mortgagee had the right, whenever he should ‘choose so to do’ to take possession of the property, and foreclose the mortgage, whether the debt was due or not.” It may be conceded that in that case the mortgagee did not take possession of the property, and sell it before the debt became due; but his right to do so was fairly involved in the question determined. In Richardson v. *705Coffman, 87 Iowa, 121, this court followed the rule announced in the case of Wells v. Chapman, supra. In the case of Richardson v. Coffman, it appears that the mortgagee took possession of the property, and sold it, before the debt secured by the mortgage became due. Whatever may be thought now of the eorectness of the rule in the case of Bank of Carroll v. Taylor, it appears to us very plain that it ought not to be applied in construing a mortgage which plainly provided, not only for possession, but for a sale, of the property, before the maturity of the debt. The consequences of holding that there may be possession, but no sale, are apparent. If the mortgage in such case be upon live stock, and the debt has a long time to run before maturity, such a procedure would be ruinous to the security, and a loss to both parties.
We discover no other error in the case. For the ' error above pointed out, the judgment of the district court is REVERSED.