Court Opinion

ID: 5168530
Source: CourtListenerOpinion
Date Created: 2022-01-02 04:50:51.628182+00
Date Added: 2024-06-11T08:25:58.439798
License: Public Domain

QUARLES, J.
(After Stating the Facts.) — It is conceded by the appellants that the judgment, in so far as it dismissed the action against the attaching creditors Simmons Hardware *513Company and Standard Oil Company, and A. J. Jackson, sheriff, was proper. This eliminates from the consideration of this ease all questions as to the validity of the mortgages in question as against attaching creditors, and brings us to the question of the rights of the mortgagees as among themselves. No question of purchase without notice arises. It is conclusively shown-by the record that the defendants and interveners holding mortgages on the mortgaged chattels in question took their mortgages with actual notice of the existence of the mortgage of plaintiffs, and with the express understanding that their mortgages were subject to the mortgage of the plaintiffs. A mortgagee who takes a mortgage on property which is already mortgaged with actual notice of such mortgage, and agrees that his lien shall be subject to such former mortgage, takes subject to such former mortgage, although the latter may not have been filed of record in the county recorder’s office of the county in which the mortgaged property is situated, as required by statute, at the time of the execution and filing of the latter mortgage. It is contended by the junior mortgagees that the mortgage to the plaintiffs is void, for the reason that it was understood between the mortgagor and plaintiffs, at the time the mortgage was given, that the mortgagor should buy new goods out of the proceeds of sales of the mortgaged chattels, and might pay old debts out of same. If this contention was sustained by the evidence, it would result that the mortgage was intended to enable the mortgagor to continue business, and hold its creditors off, thus delaying them. A mortgage given with such intent or for such purpose would be void under our statutes. We have carefully examined the evidence and the entire record, which is very voluminous, and do not think the evidence sufficient to sustain this contention. Neither of the officers or agents of the plaintiffs were present when the mortgage was executed. It was drafted in Utah, by the attorney for the plaintiffs, and sent to the mortgagor, for execution, through the mails. There is some evidence — unsatisfactory, however — showing that agents, not only of plaintiffs, but of the junior mortgagees, knew that some of the proceeds of the sales were being applied to pur*514chasing new goods to replenish the stock. As to this condition, no complaint appears to have been made by any oí the mortgagees, all of whom knew, or had the means of ascertaining, what was being done with the proceeds of the sales of the mortgaged chattels by-the mortgagor; and neither of them is in any better position than the others. The junior mortgages are, in substance and effect, the same, as to the terms and conditions, as that of the plaintiff’s. This being true, and each of them having been taken with actual notice of plaintiffs’ mortgage, and expressly subject thereto, neither of the junior mortgagees are in position to question the validity of the mortgage of plaintiffs. All of them being on the same footing, they must stand or fall together. Conceding that each of the mortgages in question here is void as against attaching creditors or Iona fide purchasers without notice, yet as between the parties to these mortgages, and as among the different mortgagees here, each of the mortgages in question are valid, the priority of one over another depending alone upon the time of the execution and delivery of the mortgages, respectively. The priority in this case, as shown by the record, is as follows: 1. Mortgage of the plaintiffs; 2. That of defendants Marshall Field & Co.; 3. That of California Powder Works; 4. That of Henry King & Co., Thatcher Milling & Elevator Company and Siegel Clothing Company; 5. That of T. S. Merchant. Hnder the facts of this case, the junior mortgagees, and each of them, are estopped from questioning the validity of the mortgage to the plaintiffs.
The plaintiffs must account in this action for what was paid on their mortgage debt by the mortgagor, and also for the proceeds of sales made by plaintiffs under their mortgage, whether for eash or on credit, from which the actual and reasonable expenses of making such sales shall be deducted. And judgment foreclosing plaintiffs’ mortgage must be made and entered, and the proceeds of sale of the mortgaged property, less the expenses of making the sale, either by said private sales or under the judgment of foreclosure, shall be applied on the mortgage debts aforesaid in the priority above named. The judgment is affirmed as to the defendants *515Simmons Hardware Company, Standard Oil Company, and A. J. Jackson, and is reversed as to all of the other parties, and the cause remanded.to the district court for further proceedings consistent with the views herein expressed. Inasmuch as the transcript in this case is not made up, arranged, and printed in the manner required by the rules of this court, the same not being arranged in chronological order, and containing the title of the cause a number of times, numerous affidavits of verification, and the stenographic minutes of the court reporter, the cost of procuring and printing said transcript will not be allowed to the appellants, but appellants are allowed all other costs of appeal.
(March 3, 1899.)
Huston, C. J., concurs.
Sullivan, J., owing to sickness, was unable to sit at the hearing, and took no part in the decision.