Court Opinion

ID: 3990944
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:50:53.952788+00
Date Added: 2024-06-11T07:44:24.168523
License: Public Domain

The appellant gave the respondent a demand promissory note and secured it by an installment chattel mortgage. Desiring to remove the chattels from the county, the appellant consulted the respondent about the matter. The respondent loaned him fifty dollars with which to move, and they agreed upon the terms of a new installment chattel mortgage which was to be executed. The respondent prepared the new mortgage but never presented it to the appellant for execution.
During the absence of the appellant occasioned by the moving of some of his other property out of the county, the respondent began foreclosure proceedings of his chattel mortgage by notice and sale, and incident thereto caused the sheriff, as his agent, to take possession of the chattels.
It is immaterial, so far as the law of this case is concerned, whether the negotiations for new chattel mortgage constituted an oral modification of the existing one or not, for the reason that the existing chattel mortgage, as well as the one contemplated, provided for installment payments. In any event, neither were delinquent or due. The chattels had not been removed from the county and the respondent did not feel himself insecure or attempt to invoke the insecurity clause of the mortgage. He acted upon the theory that he had a right under the mortgage to foreclose at any time because the promissory note was a demand note. He did not make a demand on the note nor begin an action thereon.
The respondent's position is clearly stated in its brief. I quote:
"The ultimate conclusion to be drawn from the record in this case is that Simonson did nothing prior to the commencement of the foreclosure proceeding which amounted to depriving Walker of the mortgaged property. Because Walker's note to Simonson was a demand note payable at the bank, Simonson had the right at all times to institute foreclosure proceeding. This right did not depend upon the *Page 623 
insecurity clause in the mortgage, but rather upon the fact that the obligation was presently due and unpaid. It follows, therefore, that Simonson could not be guilty of conversion by commencing the foreclosure proceeding, Walker himself sold and disposed of the mortgaged property and caused the proceeds of the sale to be applied to the mortgage indebtedness and the expenses of foreclosure. In view of these facts, it clearly appears from the record, that there can be no basis for Walker's contention that Simonson is guilty of conversion."
In another place, the respondent states in its brief:
"From these it clearly appears that the basis of Simonson's right to foreclosure is the promissory note which was payable on demand at the Yakima Branch of the Seattle-First National Bank."
Upon the appellant's return, he learned of the respondent's possession of the chattels and demanded the same. Respondent refused him possession of them. This constituted conversion, unless, of course, respondent had a right to foreclose its mortgage. The majority opinion confirms its right so to do. I quote:
"The note was payable on demand at a specified place; therefore, respondent had the legal right to proceed as it did, and this without making previous demand for payment upon appellant, who was maker of the note."
I cannot agree that it is the law that a mortgage can be foreclosed in violation of its terms. I am unaware of any case that permitted it. It is true that, where a demand promissory note is secured by an installment chattel mortgage, action may be brought at any time on the note. The terms of the installment mortgage, though not in default, will not constitute a defense to the action on the demand note. But that certainly does not mean that the demand note makes the mortgage itself due and actionable. In the action on the demand note, the plaintiff is relegated to his provisional remedies and may not claim a lien, as such, free from the provisions of the exemption statutes. Lien rights may be secured, if the mortgagee desires them, by proceedings on the mortgage and the foreclosure must be governed by its terms. Can it be doubted that an action to foreclose *Page 624 
an installment mortgage, in default, would lie even though given as security for a time note not yet due?
Courts do not make contracts and will not prevent the parties from making their own by arbitrarily refusing to give effect to their clear intention. There is no legal inconsistency that makes it impossible for parties, in one transaction, to provide for alternative courses of action. They can agree upon any kind of a promissory note they choose and, in an action thereon, are controlled by its terms. At the same time they can agree upon a lien and fix the terms thereof and, in an action to foreclose, its terms likewise govern. When the parties have expressed a clear intention so to do, what right has a court to say that they are not permitted to do so, or to say that their intention is different from that which was clearly expressed? The respondent had no right to foreclose the mortgage. I quote again from the majority opinion:
"The record is clear that appellant mortgagor, advised by competent counsel and fully apprised of his rights, sold and personally delivered the mortgaged property to Bemis."
As of the time the sheriff took possession of the chattels, there was either a conversion or there was not a conversion, depending upon whether the demand feature of the note is controlling in an action on the installment mortgage. If there was a conversion, the question of whether or not some subsequent act of the appellant aborted it, is not before this court for the conclusive reason that waiver or estoppel were not pleaded and are therefore unavailable as defenses to the respondent. Furthermore, if either waiver or estoppel were an issue in the case (which they are not), the issue would be for the jury to decide, unless, of course, we are prepared to hold that it was established as a matter of law. In view of the fact that everything the appellant did was, in the contemplation of both parties, subject to the dominion of the respondent over the chattels; that the respondent never released or intended to release the chattels, conditionally or otherwise, to the appellant; and that respondent received the entire selling price, it would have been a jury question, if it had been in the case. I do not think a conversion is *Page 625 
waived as a matter of law because an owner, faced with a forced sale, takes an interest in the selling price of the chattels in order to escape a deficiency judgment when his acts are subject to the possessory rights claimed by the mortgagee.
The judgment should be reversed and the cause remanded for trial.
BLAKE, ROBINSON, and JEFFERS, JJ., concur with MALLERY, J.