Court Opinion

ID: 6946921
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:26:42.989987+00
Date Added: 2024-06-11T16:07:56.950884
License: Public Domain

The Opinion of the Court was delivered by Purple, J.*  The defendants in error on the 20th January? 1841, brought an action of replevin against the plaintiff in the Cook county Circuit Court for one bay horse, and one two horse wagon. The plaintiff in error, Rhines, who was the defendant below, pleaded that he did not take and detain the property as charged in the declaration, and gave notice, that under the plea he would give in evidence that he was a constable holding an execution in favor of one Charles Walker, against one Merrit Warner; that the property belonged to Warner, and that he took the same by virtue of said execution. From the bill of exceptions in the case, it appears that Warner being indebted to the defendants in error, on the 9th day of March, A. D. 1840, mortgaged to them certain personal property consisting of horses, wagons, &c. The mortgage was conditioned to be void upon the payment of three hundred dollars at the expiration of six months, and contained a stipulation that the property should remain in the possession of the mortgagor until the expiration of said time. It is further shown that the property in controversy in this suit, was no part of the property described in the mortgage; that Warner purchased the horse of Jacob B. Crist, in the spring of 1840, after the execution of the mortgage, and the wagon of John Davlin of Chicago, in May or June, 1840; that Warner exchanged this horse and wagon, (as he stated,) for a certain horse and wagon mentioned in his mortgage to defendants, and that he sold those he received in exchange on. his own account, and that it was agreed verbally between him and the defendants, that this property was in the same manner as that for which it had been exchanged, to be subject to the mortgage. The mortgage was read in evidence, the plaintiffs’ counsel objecting and excepting to the same. The plaintiffs below also read in evidence the record of a replevin suit, commenced in the Ogle county Circuit Court, on the 28th day of August, A. D. 1840, in which the defendants in error were plaintiffs, and one Lyman Reed defendant; by the proceedings in which it appears that Reed had before that time levied on the same property by virtue of an execution which he held as a constable of said county against the said Warner, and that the same suit was still pending and undetermined in said Court. To the admission of this evidence the plaintiffs here also objected and excepted. At the request of the counsel for the plaintiffs below, the Court instructed the jury: “That if they should believe, from the evidence, that the horse and wagon in question were taken in execution by Reed, a constable of Ogle county, of this State, and were replevied by the plaintiff prior to the defendant’s levy, and the said replevin suit was pending in the Ogle Circuit Court at the time the defendant made his levy in Cook county, that such levy by the defendant was not legal, and they ought to find the issues for the plaintiff.” The defendant below excepted to the said instruction. The Court was then requested to instruct the jury on the part of the defendant below: “That if the jury believe, from the evidence, that the property remained in possession of Warner after the expiration of the time specified in the mortgage, it is fraudulent and void against a judgment creditor.” “If the jury believe, from the evidence, that the execution of the mortgage and the bringing the suit in Ogle county was all a part of one fraudulent transaction, to cover upWdrner’s property and keep it from his creditors, the title never passed to Phelps, and the defendant is entitled to recover.” The last instruction was refused, the first given modified as follows: “That if the jury believe that Warner retained possession of the property in a manner inconsistent with the mortgage, by continuing in possession after six months had expired, it was only primafacie evidence of fraud, but subject to explanation by the plaintiff; that such retaining possession did not render the mortgage fraudulent per se, but prima facie evidence only of fraud, and subject to explanation by the plaintiff.” To the refusal of the Court to give the last instruction, as asked, and also to the modification of the first instruction, the defendant .below excepted. A verdict was found for the plaintiffs below. The defendant then moved for a new trial, which was overruled, and judgment rendered on the verdict; and said defendant excepted to the opinion of the Court. The several rulings and decisions of the Court are now assigned for error. Three questions seem naturally to be presented by this record: 1st. Whether the defendants in this case acquired any title to the property in question by virtue of their mortgage? 2d. Whether the pendency of the action of replevin in Ogle county placed the property beyond the reach of an execution against Warner until that action was determined? and 3d. Whether the Court gave a proper construction to the law relative to sales and mortgages of personal property. Upon the first point, it is contended by the defendants’ counsel, and numerous authorities are cited to sustain the doctrine, that in the case of a mortgage of personal property, when the mortgage is delivered, the legal title to the property passes to the mortgagee; and that, having so passed, the mortgagee may sell the property himself, or appoint the mortgagor or any other person his agent to make such sale, and in exchange to take other property, which the mortgagee can hold in substitution of the former, subject to the conditions and defeasance in the mortgage. I know of no principle upon which this doctrine can be sustained. A mortgage of personal property is in the nature of a pledge and conditional sale, to become absolute, and vest the thing mortgaged without redemption, upon condition broken, in the mortgagee. Until a forfeiture has thus accrued, the mortgagee has only a lien upon the pledge for the security of his claim against the mortgagor, and would be liable in damages if he were to Sell the same or otherwise convert it to his own use. This liability being alone to the mortgagor, doubtless by his consent, he might dispose of any portion of the mortgaged property, or, the mortgagor might do the same with his (the mortgagee’s) permission. But that the thing taken in exchange for the mortgaged property can, by the verbal agreement of the parties, become substituted for, and stand-in the place of that which had been included in the mortgage, is an absurdity. The elementary principle of the law which prohibits any and every contract from being partly in writing under seal, and partly in parol, forbids it. Under this view of the law, about the correctness of which there cannot be a doubt, the defendants had no title to the property in controversy in this suit by virtue of their mortgage; consequently, the same was improperly admitted in evidence to the jury. As to the second point, we are of opinion that in the decision of the Court in admitting the record of the replevin suit in Ogle county there was no error. If that action had been commenced in good faith, and under an honest conviction that the plaintiff in the same was the owner of, or had the right to the possession of the property, the law would not permit a subsequent execution against the same defendant, Warner, pending the litigation, to remove the property from the possession of such plaintiff, and thereby put it beyond his power to return the property if a return should be awarded,-according to the conditions of his replevin bond executed to the sheriff at the commencement of the suit, unless it could be shown that Warner had acquired some title to the same subsequent to the commencement of said suit. The case of Hogan v. Lucas, 10 Peters, 400, cited by the defendants’ counsel, is decisive of this question. Where personal property is taken in execution, and claimed on a replevin by a third person, although delivered to him upon the execution of the writ, it is so far still considered in the custody of the law, that it cannot be taken from the possession of the plaintiff in replevin, during the pendency of such suit, by any writ or execution against the the party as whose property it had previously been seized; unless he had acquired some new title to it subsequent to the original levy; or unless it manifestly appeared that such suit had been instituted with the fraudulent design, to cover up the property and defraud the creditors of the defendant in execution. With regard to the third point, we are clearly of opinion that the Circuit Court was mistaken in the law as applicable to such cases. In many of the States the decisions upon this question have been conflicting. In this Court, however, the question has been distinctly settled, and we believe upon reason, and the most approved authorities. In the case of Thornton v. Davenport, 1 Scam. 296, the rule is held to be, that all conveyances of goods and chattels where the possession is permitted to remain with the vendor, are fraudulent per se, and void as to creditors and purchasers, unless the retaining of the possession be consistent with the deed; and that an absolute sale of personal property, where the possession remains with the vendor, is void as to creditors and purchasers, though authorized by the terms of the bill of sale. Apply these principles to the present case, and it will be seen, that whether the plaintiff below was entitled to claim the property under his mortgage, or by exchange or purchase in some other manner, it was error in the Court to refuse the instructions called for by the counsel for the plaintiff, more especially so, as there was some evidence that the property remained or was repeatedly in the possession of Warner, after the expiration of the six months mentioned in the mortgage as the time for which he was to retain it. If the defendants claimed it by virtue of the parol agreement made subsequent to the execution of the mortgage, then, as we have before seen, if they permitted it to remain in Warner’s possession, the contract would be considered fraudulent and void as to the creditors of Warner. In either event, there was evidence from which the jury might possibly have inferred that there was fraud in the whole transaction, including the mortgage, the subsequent arrangement about the exchange of property, and the institution of the suit in Ogle county; and however slight the circumstances may be, we cannot tell what influence they may have had, if under the instructions, the jury had been permitted to consider them. The judgment of the Circuit Courtis reversed with costs, and the cause remanded with directions to that Court to award a venire de novo.   Justices Thomas and Denning did not sit in this case.