Court Opinion

ID: 7060492
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:20:17.517484+00
Date Added: 2024-06-11T16:12:09.197295
License: Public Domain

On Petition for a Rehearing.
Reinhard, J.
Counsel for appellants, in his brief upon the motion for a rehearing, insists that we were wrong in our supposition that the judgment in replevin before the justice was rendered on default. It is due to counsel to say that the record does show an appearance and a trial, but it remains true that no answer was filed and no issue tendered respecting the appellee’s mortgage.
The statute put in the general denial for the defendants, but this raised no issue as to any priority of claims between the mortgagees as to their respective mortgages.
If we understood the appellants’ contention, it is that' because the defense of property in a stranger may be made under the general denial, and as the statute interposed such denial for the defendants, the conclusive presumption is that the parties litigated their several rights in the replevin suit, and as the judgment there was for *483the junior mortgagee, the appellee’s senior mortgage became merged in the judgment. This doctrine is radically unsound. Granting all the force and effect now claimed for the general denial upon the former trial, it by no means follows that a senior mortgage constitutes property in a stranger in the sense that the mortgagor can thereby defeat the claim of a junior mortgagee to the possession. If such were the law, the mortgagor could always keep the property as against any junior mortgagee. But it is a well known rule, that such junior mortgagee may always maintain replevin against the mortgagor and any person other than a senior mortgagee for any taking of the property which is in conflict with his rights as junior mortgagee. Newman v. Tyneson, 13 Wis. 172; Treat v. Gilmore, 49 Me. 34; Gardner’s Admr. v. Morrison, 12 Ala. 547.
It can not be true that if there is more than one mortgage on a chattel the mortgagor may defeat an action for possession by the junior mortgagee by setting up property in a stranger, and then simply proving in support thereof that there is an older mortgage outstanding.
Under the old form of the writ of replevin, the plea of property in a stranger was always necessarily accompanied by a traverse of. plaintiff’s right to possession. Wells Replev., 689.
Something more, therefore, than property in a stranger was necessary to defeat the action of the plaintiff. To do this, it must be shown not only that a stranger was the owner or entitled to the possession, but that the plaintiff had no title or right of possession in himself. As between the junior mortgagee, the plaintiff in the replevin suit, and the mortgagor, the former was entitled to the possession, and this was the only issue raised, or that could have been raised, by the parties to the record. The parties were powerless to raise issues that could not *484have been, raised in the condition of the record. The appellee could not have raised such an issue in the name of the mortgagor.
It could have done so only by being made a party to the proceedings before the justice. The judgment concludes the appellee, only to the extent that the issue upon which it sought to declare the appellee estopped was involved or might properly have been raised in the original action.
If the judgment in replevin is binding upon the appellee, therefore, the utmost that can be claimed is that the appellee is estopped to deny the validity of the junior mortgage, or the right of the Koehrings to recover thereon, as between them and the mortgagor.
The replevin suit did not determine the rights of the appellee to recover on its own mortgage, for that mortgage was not and, under the issues, could not have been involved in that trial. No case has been cited in which the doctrine of res adjudícala has been carried to the extent here contended for, and we are not disposed to so extend it, unless the law compels us to do so.
Nor do we see how the appellants would be in any better position if they had been allowed to show some arrangement by which the appellee defended the replevin suit for the mortgagor.
The appellants got the benefit of all that transpired in that suit, and their case would be no stronger had they been permitted to make the proof offered. They were not harmed by the ruling of the court, even if a technical error was committed.
It is further contended that the evidence fails to show a conversion, and that, therefore, there should have been no recovery without proof of a previous demand.
One of the appellants testified that they had put up the property for sale under their mortgage, and that at *485such sale they themselves had become the purchasers, and that thereafter they had again disposed of the property by sale. The appellants contend that this was no proof of a conversion, but under the authorities we must hold that it was.
Filed October 18, 1893.
We think the counsel for appellants will agree with us that if there was evidence of a conversion no demand was necessary. Cox v. Albert, 78 Ind. 241.
The contention that the appellee was bound to prove that it pursued the property after sale and showed its location and status at the time this action was commenced, can not prevail. Conceding that appellants had the right to put up the mortgaged property for sale under their mortgage, and to purchase it at such sale, it does not follow that, by reason thereof, they purchased anything more than the equity of redemption of the mortgagor. The property was still subject to the lien, and the purchaser at such sale took it with the encumbrance still upon it, and he could not thus dispose of it and convert the proceeds to his own use, without incurring the liability of paying the claim represented by appellee’s mortgage.
In other words, the sale by the appellants, after their purchase at the replevin sale, was a conversion of the property, and rendered them liable in trover for its value, without a previous demand. Duke v. Strickland, 43 Ind. 494; McFadden v. Hopkins, 81 Ind. 459; Ross v. Menefee, 125 Ind. 432.
Other questions urged have been gone over in the original opinion, and we need not discuss them further’ than to say that we have again carefully examined this case, and while in the former opinion there may have been some expressions, as to the facts, not strictly borne out by the record, we see nothing that will warrant a different conclusion.
Petition overruled.