Court Opinion

ID: 9581163
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:12:09.610167+00
Date Added: 2024-06-11T13:36:45.048689
License: Public Domain

SUTIN, Judge (dissenting). I respectfully dissent. Plaintiff filed a complaint in replevin and recovered possession of personal property located on premises owned by defendant pursuant to the replevin statute. Section 22-17-1 et seq., N.M.S.A.1953 (Vol. 5). Defendant, by way of an affirmative defense, denied that his detention of the property was wrongful, and asked return of the property or a judgment for the amount of his landlord’s lien. The “First Affirmative Defense” was not designated as a counterclaim. It was not so treated at trial. At the conclusion of the trial, the court found that on October 1, 1965, defendant as lessor entered into a written lease agreement with Phillips and Kight, d/b/a New Mexico Millworks, a co-partnership, for a term of eight years. The lease commenced on November 1, 1965, and expired October 31, 1973. On April 1, 1967, Phillips incorporated the business and it was thereafter known as New Mexico Mill-works, Inc. This corporation occupied and used the premises covered by the lease and paid all rentals to September 1, 1971. This corporation, at the time of trial, was a defunct corporation, having no corporate assets and no known officers nor board of directors. During the existence of the corporation, Rex Murdock advanced monies for operating capital and obtained a security agreement and financing statement to secure an indebtedness in the amount of $293,060.27. It was dated September 17, 1970. This security agreement, together with financing statement, dated March 9, 1971, were filed of record. On or before December 16, 1971, the debtor, New Mexico Millworks, Inc., notified Rex Murdock of its inability to pay its indebtedness and its decision to deliver possession of all collateral, including inventory and accounts receivable to Rex Murdock. On December 17, 1971, Rex Murdock gave notice to defendant by certified mail of a private sale pursuant to the Uniform Commercial Code. On December 23, 1971, defendant wrote New Mexico Millworks, Inc. and Rex Murdock that defendant claimed a landlord’s lien on the property owned by New Mexico Millworks, Inc. The private sale was held on January 6, 1972, at which time Rex Murdock bid on and purchased all of the inventory and assets of New Mexico Millworks, Inc. After the private sale, Rex Murdock transferred title to all of the inventory and assets to plaintiff, Chessport Millworks, Inc., in which Murdock was the sole stockholder. After January 6, 1972, plaintiff continued to occupy the premises covered by the lease until January 21, 1972. There was not sufficient evidence to establish an adoption or assumption of the lease by Rex Murdock or plaintiff.. On January 21, 1972, defendant locked up the premises. At that time there was certain lumber and other building materials together with a 1967 model Chevrolet truck and van trailer owned by the plaintiff; that defendant wrongfully detained property and goods owned by plaintiff. On January 26, 1972, defendant, by certified mail, mailed notice of lien that unless an indebtedness claimed by defendant to be owing from New Mexico Millworks, Inc. was paid within ten days, the property held by defendant would be sold pursuant to § 61-3-12, N.M.S.A.1953 Compilation. No claim of landlord’s lien was made as to property owned by Rex Murdock or plaintiff, and that Rex Murdock’s security agreement was superior to defendant’s landlord’s lien, and that Murdock and plaintiff obtained good and valid title to all of the assets theretofore owned by New Mexico Millworks, Inc. pursuant to the private sale. The court concluded that the property was wrongfully detained by defendant and plaintiff should prevail in its replevin action. At the outset, it should be noted that “the New Mexico replevin statutes, in so far as they provide for a prejudgment taking of property without notice and hearing, are unconstitutional.” Montoya v. Blackhurst, 84 N.M. 91, 500 P.2d 176 (1972). Plaintiff called this matter to the attention of the trial court, but defendant waived his right to question the unconstitutionality of the procedure undertaken in this case. “It is well settled in New Mexico that the appellate court will not substitute its judgment for that of the trial court in weighing the evidence. If the trial court’s findings are supported by substantial evidence, they must be affirmed. Cave v. Cave, 81 N.M. 797, 474 P.2d 480 (1970). Substantial evidence means such relevant evidence as a reasonable mind might find adequate to support a conclusion. Cave v. Cave, supra.” Tome Land & Improvement Co. v. Silva, 83 N.M. 549, 552, 494 P.2d 962, 965 (1972). The only issue on this appeal is whether there was sufficient substantial evidence to support the plaintiff’s replevin action. A. There was sufficient substantial evidence to support plaintiff’s action in replevin. Section 22-17-1, N.M.S.A.1953 (Vol. 5) provides: Any person having a right to the immediate possession of any goods or chattels, wrongfully taken or wrongfully detained, may bring an action of replevin for the recovery thereof and for damages sustained by reason of the unjust caption or detention thereof. “Replevin, under this statute, is a possessory action. The primary object of which is plaintiff’s right to the immediate possession of the property and, secondarily the recovery of damages by the plaintiff for the unjust caption, or detention thereof.” Johnson v. Terry, 48 N.M. 253, 256, 149 P.2d 795, (1944). Two issues of fact arise: (1) Did plaintiff have the right to immediate possession? (2) Were the goods and chattels wrongfully detained? (1) Plaintiff had the right to immediate possession. The trial court found that Rex Murdock and plaintiff did not adopt or assume the original lease executed between defendant and the partnership in 1965; that after the sale on January 6, 1972, plaintiff was the owner of the lumber and building materials formerly owned by the tenant, but the 1967 model Chevrolet truck and van trailer owned by plaintiff was free of any association with the tenant under the original lease. It is apparent that plaintiff had the right to immediate possession of its truck and trailer because these items were free of any alleged lien held by the defendant. The defendant had no remedy against plaintiff. Baldwin Piano Co. v. George H. Wade & Co., 30 N.M. 285, 232 P. 523 (1924). With reference to the lumber and building materials, the record shows that prior to January 21, 1972, defendant gave plaintiff permission to take material out of the yard without specifying what could be taken. A reasonable inference can be drawn, that consent was given to remove all the materials. The plaintiff then removed a great deal of material. On January 24, 1972, while Murdock and employees were on the premises loading material, defendant told Murdock he could not take any more and to get out. Murdock and his employees left the premises. Defendant locked up the premises. On giving consent to removal, defendant’s lien became void, § 61-3-7, N.M.S.A. 1953 (Repl.Vol. 8, pt. 1), and the defendant became a general creditor. His lien was lost. Wolcott v. Ashenfelter, 5 N.M. 442, 23 P. 780, 8 L.R.A. 691 (1890). Plaintiff had the right to immediate possession of the lumber, building materials and the truck and trailer. (2) The goods and chattels were wrongfully detained by defendant. What rights does a landlord have by reason of his statutory lien? Section 61 — 3— 11, N.M.S.A.1953 (Repl.Vol. 9, pt. 1) reads as follows: In order to enforce any lien under this act (61-3-1 to 61-3-13) the procedure shall be the same as in case of the foreclosure of a chattel mortgage if suit be filed in court. The lien claimant when the property subject to the lien is under his control or in his possession may, after the debt for which the lien is claimed becomes due and payable, serve the person or persons against whom the lien is sought to be enforced with a written notice or forward to the last known address of such person, by registered mail, a written statement, setting forth an itemized statement of the amount of the indebtedness, and if the same be not paid within ten [10] days after the service of said notice the property may be advertised by posting or publication as hereinafter provided, and sold to satisfy the indebtedness. [Emphasis added]. Under this statute, defendant had two methods of procedure: (1) by filing suit against the lessee. Gathman v. First American Indian Land, Inc., 74 N.M. 729, 398 P.2d 57 (1965). The defendant did not do this. (2) Serve notice of lien when the landlord has control or possession of the property. The evidence is undisputed that, before the defendant forcibly evicted plaintiff from the premises and locked plaintiff out, defendant did not have control or possession of the property in the leased premises. Two days after locking plaintiff out, defendant mailed plaintiff a notice of lien. The above statute does not give a landlord the right or power to forcibly take possession of the property in order to enforce his lien, “absent a showing of any right in addition to the mere fact of the existence of an unpaid lien.” Bell v. Dennis, 43 N.M. 350, 93 P.2d 1003 (1939); Mathieu v. Roberts, 31 N.M. 469, 247 P. 1066 (1926); Ross v. Overton, 29 N.M. 651, 226 P. 162 (1924). When a landlord forcibly takes possession of the property without first demanding the rent due and claiming the landlord’s lien, his acts are all illegal and amount to a naked and continuing trespass upon the property of the plaintiff. Ross v. Overton, supra. The defendant wrongfully detained the property of the plaintiff. B. Priority of liens was not an issue in this case. The trial court did find that Murdock’s security agreement was superior to defendant’s landlord’s lien because defendant did not claim a landlord’s lien against the property owned by Murdock or the plaintiff. This finding is not based upon the question of priority. It results from the pleadings and the court conference before trial began. Defendant termed his answer as admissions and denials and “First Affirmative Defense.” It was not designated as a counterclaim to foreclose the landlord’s lien. Rule 21-1-1 (8) (c), N.M.S.A.1953 (Repl.Vol. 4) provides in part: When a party has mistakenly designated a defense as a counterclaim or a counterclaim as a defense, the court on terms, if justice so requires, shall treat the pleading as if there had been a proper designation. At the court conference, plaintiff stated that it did not file an answer to the “First Affirmative Defense” because it was couched in terms of an affirmative defense. “We are not prepared today, to present any evidence or to defend, if it is considered to be a counterclaim We wouldn’t stipulate to treating the first affirmative defense as a counterclaim.” The Court: Well, I don’t think it is necessary to treat them as a counterclaim, if he is successful against your replevin action, then he gets his property back, and you fail to survive your case. The defendant did not assert that its “First Affirmative Defense” was a counterclaim, and he did not request the court to treat the pleading as a counterclaim. It is obvious that this was a replevin action only. Defendant did not make any claim of a landlord’s lien against the property owned by Murdock or the plaintiff. Priority of liens was not an issue in this case. The only question pertinent is whether defendant’s landlord’s lien defeated plaintiff’s claim in replevin. In my opinion, it did not. Judgment for the plaintiff should be affirmed. The majority holding otherwise, I dissent.