Court Opinion

ID: 9832847
Source: CourtListenerOpinion
Date Created: 2023-09-01 22:14:57.720126+00
Date Added: 2024-06-11T07:43:53.932772
License: Public Domain

ON REHEARING.
The appellant insists in his motion for rehearing that we were in error in the original opinion in holding, in effect, that the dismissal as to the defendants charged with having converted the mortgaged wheat amounted to a withdrawal of the allegation that the appellee’s debt *159was secured by a chattel mortgage lien upon such wheat. We are now inclined to believe that his contention in this respect is correct, and that the appellee’s petition, after such dismissal, should be held to show that its action was one for debt and foreclosure on both the wheat and the cattle, as against Webb, and for the value of the mortgaged cattle alleged to have been converted by appellant, as against him. But let it be so. This is a matter of no concern of appellant’s, as we understand the law. It can not be true, as contended in this motion, that he would not be liable until the wheat security was exhausted or proved to be worthless or converted, as alleged. Under the rule in this State, a mortgagee may maintain an action against one who wrongfully converts the mortgaged property, or a part thereof; and this, too, whether at the time he is entitled to the possession of the same, or not. The action is an equitable one, but the mortgagee has shown his damages when he establishes that the defendant has deprived him of his right to a foreclosure and sale of the security for the satisfaction of his debt, and is entitled to recover compensation of such party, measured by the amount of his.debt, if that be less than the value of the security lost. Boydston v. Morris, 71 Texas, 697, 10 S. W. Rep., 331; Zapp v. Johnson, 87 Texas, 641, 30 S. W. Rep., 861; Fouts v. Ayres, 11 Texas Civ. App., 338, 32 S. W. Rep., 435; McCown v. Kitchen, 52 S. W. Rep., 802; Focke v. Blum, 82 Texas, 436, 17 S. W. Rep., 770.
If appellant is correct in his contention that the pleadings and evidence should show that no sufficient security remains for the payment of appellee’s debt, it would also follow that allegation and proof of the insolvency of the debtor would be required. We know of no case in this State or elsewhere that would support either of these contentions. It can not lie in the mouth of the wrongdoer who has dissipated a portion of the mortgaged chattels to insist upon the mortgagee’s looking to other security or to the personal responsibility of his debtor. Where the mortgagee’s debt is, due, as here, he is entitled to his action to foreclose; and one who with notice has converted a portion of the property which he would be authorized to have sold in such action can not complain that he is required to respond in damages to the amount of the mortgagee’s debt, where it is less than the value of such converted property.
In Worthington v. Hanna, 23 Mich., 532, where the precise question arose upon demurrer to the declaration which failed to allege the insolvency of the mortgagors, and that the mortgagee had no other security, the Supreme Court of.that State say: “We do not think this objection well founded. It is based upon an idea that there is some substantial difference between the damage done to a mortgagee in possession and to a mortgagee out of possession by the seizure and conversion of the goods. It is not questioned that a mortgagee in possession may sue in trover, and recover for the conversion of the property, whether he has other security or not, and whether or not his debtor is solvent. We see no possible foundation for holding that possession or present right of possession should make any difference in regard to the quantum of damages, within the extent of the security. The doctrine alleged would be equivalent to holding that no person could have a legal right to complain of being deprived of a security unless he could show the insolvency of his debtor, or, in other words, that any wrong*160doer could, at his pleasure, compel the holder of a security against a solvent party to look only to the personal remedy and give up the security. This is too unreasonable a doctrine to be entertained.” In the much later case of Huellmantel v. Vinton, 70 N. W. Rep., 412, this question was again before the same court, and the same conclusion reached in the following language: “The logical result of the defendant’s last contention is that, in all cases of levy on a portion of the property covered by a chattel mortgage, the defendant in a suit brought by the mortgagee for conversion by levy and sale upon execution running against the mortgagor would be at liberty to defend on the ground that, while he levied upon and sold a part of the mortgaged property wrongfully, yet, as he had left sufficient to pay the plaintiff’s debt, the plaintiff had suffered no injury. In a case like the present he might defend upon the ground that the defendant had ample security under another instrument (e. g., a real estate mortgage), although this defense, if allowed, might subject the plaintiff to the annoyance, expense, and delay of foreclosure of such mortgage, to say nothing of its violation of the rule that the creditor may choose between securities, and avail himself first of one or the other, at his option.” In Jones on Chattel Mortgages, sec. 448, in discussing the rights of a mortgagee under such circumstances, it is said: “He is not obliged to look to the personal responsibility of his debtor, or to show his insolvency, before recovering of the wrongdoer. Neither is he required to first look to any other security he may hold.” The Supreme Court of Alabama has said: “In such a case it is no answer to the complaint, as contended for here, that there was other property in the mortgage besides that converted by the defendant to which plaintiff might resort. His security being upon the entire property mortgaged, and the mortgage debt remaining unsatisfied, forbade any one, with knowledge of the incumbrance, to interfere with and dispose of any portion of it, without causing damage to the plaintiff, to the extent of such unlawful disposition.” First National Bank v. Sproull, 16 South. Rep., 879. See, also, Case v. Campbell, 13 Pac., Rep., 324; Conwell v. Jeger, 51 N. E. Rep., 733.
Our holding in this respect in no wise conflicts with the decisions of this court in Mack, Stadler & Co. v. Mittenthal, 36 S. W. Rep., 790; Canfield v. Moore, 16 Texas Civ. App., 472, 41 S. W. Rep., 718; and Groos v. Bank, 72 S. W. Rep., 402. In the first case, to the petition in which a general demurrer was sustained, the plaintiff failed to show that he was damaged, in this: that the mortgage under which he claimed a lien was for the benefit of a number of creditors whose claims were required by its terms to be paid prior to that of the plaintiff and the petition failed to show that in any event the contingency would ever arise by which he would have a lien upon the property converted for the payment of his debt. It is not the case of a perfect lien, but merely a possible one.' In the second case the mortgagors discharged their debt in full to the mortgagee prior to the institution of the suit by one of the mortgagors as assignee of the mortgagee against the defendant for a conversion of a portion of the mortgaged property. Of course, in such case, the debt being paid, the mortgagee had no interest in the property formerly covered by the mortgage, nor any cause of action whatever against one who had previously converted it, which he could enforce *161himself or assign to another. The ease last cited has little or no bearing upon the question, since it was an action by a plaintiff seeking to recover upon the ground of having been in possession at the time of conversion, and the question here under consideration was not there decided.
The motion for rehearing is in all respects overruled.

Overruled.

Writ of error refused.