Court Opinion

ID: 8024653
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:32:54.88476+00
Date Added: 2024-06-11T16:36:47.145750
License: Public Domain

MR. JUSTICE FREEBOURN
(specially concurring) :
*428I concur in the result reached for the following reasons.
McNaught brought this action to foreclose a chattel mortgage, which was given by Butts on his half interest in the National Bar, its equipment and its liquor and beer licenses, to secure a loan of $5,000 made by McNaught to Butts.
Plaintiff’s evidence shows the following facts. This chattel mortgage bound Butts, alone, and was secondary to a conditional bill of sale held by Selfridge, whereby he sold the National Bar to the McCahans. Mrs. McCahan sold her one-half interest in the National Bar, fixtures and liquor and beer licenses, to Butts on April 20, 1948. Butts died July 15, 1948. The National Bar and fixtures were destroyed by fire on August 5, 1948, the liquor and beer licenses standing in the names of McCahan and Butts being saved. Of $26,104.60 insurance money paid to cover fire loss, Selfridge received $19,587.60, as due him under his conditional bill of sale.
.The first account, plaintiff’s exhibit 10, of E. H. Haddow, administrator of the estate of Homer P. Butts, deceased, dated March 21, 1949, shows that among the claims presented was a “Note bearing 6% interest in Favor of Joseph E. McNaught, dated April 18, 1948. $5,000.00.” This is the note evidencing the loan of $5,000 from McNaught to Butts and secured by the chattel mortgage.
The first account of Haddow contains McCahan’s “accounting of surviving partner. ’ ’ This account showed the reception of the insurance money, its disposition, and showed the balance left, after paying Selfridge his $19,587.60, was used to pay off partnership debts and one-half of what remained, $1,719.02, went to Butts’ estate.
McNaught made objection to the account of McCahan dated April 12, 1949, principally on the ground that “among the assets of said co-partnership there were at the time of death of said Homer P. Butts, and there are at the present time * * * one retail beer license * * * one retail liquor license * * * ” and asked “that the surviving partner [McCahan] be required to sell and dispose of said retail beer and liquor licenses * * * ’ ’.
*429The district court by order dated June 1, 1949, ordered MeCahan to ‘ ‘ account to said administrator for said licenses, ’ ’ and ordered their sale by order “dated the 24th day of April, 1950.”
MeCahan’s “final account of surviving partner” and “return of sale” shows that MeCahan, on June 12, 1950, after notice of sale of such liquor and beer licenses was published in the Great Falls Tribune and the Kali spell Daily Inter Lake, sold Butts’ one-half interest in said licenses at public sale for $2,000 and that Butts’ estate received its share of such $2,000.
McNaught having requested the sale of such beer and liquor licenses must be held to have consented to such sale, and therefore, any lien which he may have had on such licenses, by virtue of such chattel mortgage, was waived and extinguished.
In Luther v. Lee, 62 Mont. 174, 204 Pac. 365, 366, this court said: “Where the mortgagee expressly or impliedly consents to a sale of mortgaged property of the mortgagor, he thereby waives his lien # * See U. S. Nat. Bank v. Great Western Sugar Co., 60 Mont. 342, 199 Pac. 245; Swords v. Occident Elevator Co., 72 Mont. 189, 232 Pac. 189. The lien of a chattel mortgage is extinguished where the mortgagee consents to the sale of the mortgaged property. 10 Am. Jur., Chattel Mortgages, sec. 221, page 860.
Plaintiff’s evidence failed to support the allegations of his amended complaint, dated July 10, 1951, which charged that MeCahan “wrongfully and unlawfully converted” the fire insurance money amounting to $26,104.60 “to his own use and benefit. ’ ’
When Butts died on July 15, 1948, the partnership between him and MeCahan ended, R. C. M. 1947, sec. 63-901, providing “death * * * of a general partner dissolves the partnership * * # > >
When the fire of August 5, 1948, destroyed the property (the National Bar), except the licenses, which was security for McNaught ’s chattel mortgage, McNaught’s lien on such property was lost. R. C. M. 1947, sec. 52-101, provides that a “mortgage is a contract by which specific property is hpyothecated for the performance of an act, without the necessity of a change of pos*430session”, while “a lien may be lost by operation of law, such as by the destruction of the property on which it exists * * 53 C. J. S., Liens, sec. 17, page 862.
“In the absence of any express agreement upon the subject, the lien created by a mortgage is limited to the property Avhich is described in the mortgage * * * .” Demers v. Graham, 36 Mont. 402, 93 Pac. 268, 269, 14 L. R. A., N. S., 431, 122 Am. St. Rep. 384, quoting from Shoobert v. DeMotta, 112 Cal. 215, 44 Pac. 487, 53 Am. St. Rep. 207. See 10 Am. Jur., Chattel Mortgages, sec. 137, page 804.
Since McCahan was not a party to McNaught’s mortgage on the National Bar, and since the Stockman’s Bar was not purchased with any of Butts’ money, the Stockman’s Bar and fixtures could not be subjected to McNaught’s mortgage.
Plaintiff’s action lay against the Butts’ estate and he realized that when he filed claim with its administrator, as shown by plaintiff’s exhibit 10 for the $5,000 loaned Butts, with interest.
Under the evidence the motion for a non-suit made by defendant at the close of plaintiff’s ease should have been granted.