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Argument for Appellants.
The main questions in this case are (1) whether the provision in $ 2805 of the Compiled Laws of Utah, which declares that a mortgage of personal property, made in good faith in the manner provided by law and recorded, shall be valid against creditors and subsequent purchasers from the time it
chasers and mortgagees, from the time it is so fled for record until the maturity of the entire debt or obligation, for the security of which the same was given, and for a period of ninety days thereafter; Provided the entire time shall not exceed one year.
SEC. 2809. An action for the foreclosure of a mortgage on personal property, or the enf rcement of any lien thereon, of whatever nature, may be commenced, conducted, and concluded in the same manner as provided by law for the foreclosure of a mortgage or lien on real property and without the right of redemption.
Sec. 2837. Every sale made by a vendor of goods or chattels in his possession, or under his control, and every assignment of goods and chattels, unless the same be accompanied by a delivery within a reasonable time, and be followed by an actual and continued change of the possession of the things sold or assigned, shall be conclusive evidence of fraud against the creditors of the vendor, or assignor, or subsequent purchasers in good faith. The word “ creditors” as used in this section shall be construed to include all persons who shall be creditors of the vendor or assignor at any time while such goods and chattels shall remain in his possession or under his control.
SEC. 3206. In an action affecting the title, or the right of possession of real property, the plaintiff at the time of filing the complaint, and the defendant at the time of filing his answer, when aifirmative relief is claimed in such answer, or at any time afterwards, may file for record, with the recorder of the county in which the property, or some part thereof, is situated, a notice of the pendency of the action, containing the names of the parties, the object of the action, or defence, and a description of the property in that county affected thereby. From the time of filing such notice for record only shall a purchaser or encumbrancer of the property affected thereby, be deemed to have constructive notice of the pendency of the action, and only of its pendency against parties designated by their real names.
SEC. 3460. There can be but one action for the recovery of any debt, or the enforcement of any right, secured by mortgage upon real estate or personal property, which action must be in accordance with the provisions of this chapter. In such action the court may, by its judgment, direct a sale of the encumbered property, or so much thereof as may be necessary, and the application of the proceeds of the sale to the payment of the costs of the court and the expenses of the sale and the amount due to the plaintiff'; and sales of real estate under judgments of foreclosure of mortgages and liens are not subject to redemption as in case of sales under execution.
Argument for Appellants.
is filed for record until the maturity of the debt secured by it and for ninety days thereafter, means that it shall not be valid after the expiration of the ninety days when possession of the property is not taken by the mortgagee; and, (2) whether, assuming that such is its meaning, the pendency of a suit to foreclose the mortgage, and the filing of a lis pendens therein will nevertheless prevent the termination of the lien, as between the mortgagor and his creditors.
Section 2805 is in substance and legal effect a statutory provision that, in the absence of possession taken by the mortgagee, the lien terminates at the expiration of the ninety days.
Section 2837 renders an assignment like the present void as against creditors, except as protected by $ 2805.
Putting these two sections together, we have an express statute, totally free from ambiguity and clearly mandatory in its requirements, enacting that no sale or assignment of chattels, whether made by a chattel mortgage executed, acknowledged and recorded, as provided in the mortgage statute, or otherwise, when unaccompanied by delivery of possession to the vendee or assignee, shall ever be otherwise than absolutely void after the expiration of ninety days from the maturity of the debt secured by the mortgage. This proposition does not seem to have been disputed below, but, on the contrary, was admitted by the court.
In order to escape from the termination of the lien by the operation of the statute, the appellee resorts to “interpretation” and “construction.” But the rule applied by the courts to such statutes is, that they are to be construed strictly, and that no statute is to be construed as altering the common law further than its words import. Shaw v. Railroad Co., 101 U. S. 557, 565.
In Hamilton v. Russell, 1 Cranch, 309, this court held that an absolute bill of sale of goods was fraudulent as to creditors unless possession accompanies and follows the deed; that the want of possession was not merely evidence of fraud, but was a circumstance per se which made the transaction fraudulent in point of law. In cases of absolute deeds of assignment,
Argument for Appellants.
that case has been followed in a multitude of cases since: as in Moore v. Ringgold, 3 Cranch C. C. 434; Travers v. Ramsay, 3 Cranch C. C. 354; Meeker v. Wilson, 1 Gallison, 419, 423, and cases cited in note; Bank of Leavenworth v. Hunt, 11 Wall. 391, 395. But where the deed provides for retention of possession by the assignor or vendor, the rule has been held to be that such retention of possession is simply evidence of fraud, and is not conclusive. Conard v. Atlantic Insurance Co., 1 Pet. 386; De Wolf v. Harris, 4 Mason, 515; United States v. Hooe, 3 Cranch, 73; Brooks v. Marbury, 11 Wheat. 78; Warner v. Norton, 20 How. 448, 456; People's Savings Bank v. Bates, 120 U. S. 556, and cases cited.
These and numerous other decisions by this and other courts are not always reconcilable as to some points; but all agree, in substance, that the statute of Elizabeth, and statutes like said section 2837 of the Compiled Laws of Utah, are really in affirmance of the principles of the common law, and are within the rule which this court states in Shaw v. Railroad Co., supra.
And it may be said to be a general rule that where possession of personal property is allowed to remain in the mortgagor after condition broken, it is a fraud as against persons subsequently dealing with him. Gassner v. Patterson, 23 California, 299; Porter v. Parmley, 52 N. Y. 185; Porter v. Dement, 35 Illinois, 479; Chenyworth v. Daily, 7 Indiana, 284; Divver v. McLaughlin, 2 Wendell, 696; S. C. 20 Am. Dec. 655; Meyer v. Gorham, 5 California, 322; Cook v. Hager, 3 Colorado, 386; Crane v. Chandler, 5 Colorado, 21; McDowell V. Stewart, 83 Illinois, 538.
In the following cases it was held that the mortgagee must take possession, within a reasonable time after default in payment of the debt secured by the mortgage; and that when possession remains with the mortgagor until default under a provision to that effect in the deed, if the possession be not then taken, the mortgage, after such default, is regarded as fraudulent: Leaman v. Eager, 16 Ohio St. 209; Hanford v. Obrecht, 49 Illinois, 146; Wylder v. Crane, 53 Illinois, 490: Lemen v. Robinson, 59 Illinois, 115; Burnham v. Muller, 61
Argument for Appellants,
Illinois, 453; Barbour v. White, 37 Illinois, 164; Arnold v. Stock, 81 Illinois, 407; Dunlap v. Epler, 88 Illinois, 82; Chapin v. Whitsett, 3 Colorado, 315.
Although these authorities might be indefinitely increased, going to the point that statutes tolerating chattel mortgages, where a change of possession does not occur, are strictly construed and never extended beyond the letter of the statute; yet we refrain from further citation because, in the case at bar, it is the effect of the statute itself that renders the lien void after the expiration of ninety days from the maturity of the mortgage debt; and we are not, therefore, here dependent upon any general principles of law in maintaining the expiration of the lien at the end of ninety days.
These authorities negative the proposition relied upon by appellee that, because the appellant had actual notice of the mortgage, such notice avoids the effect of the levy and sale.
It is settled law that actual knowledge of the existence of an imperfect or an unrecorded chattel mortgage does not prevent a valid levy, by or on behalf of the party having such knowledge. Travis v. Bishop, 13 Met. 304; Shapleigh v. Wentworth, 13 Met. 358; Bingham v. Jordan, 1 Allen, 373; S. C. 79 Am. Dec. 748; Porter v. Dement, 35 Illinois, 478; Sage v. Browning, 51 Illinois, 217; Forest v. Tinkham, 29 Illinois, 141; Gregg v. Sanford, 24 Illinois, 17; S. C. 76 Am. Dec. 719; Henderson v. Morgan, 26 Illinois, 431; Sheldon v. Conner, 48 Maine, 584; Rich v. Roberts, 48 Maine, 548; Bevans v. Bolton, 31 Missouri, 437; Bryson v. Penix, 18 Missouri, 13; Harvey v. Crane, 2 Bissell, 496; Heryford v. Davis, 102 U. S. 235; Harkness v. Russell, 118 U. S. 663, 680.
But it is contended that though taken by itself, section 2805 would render a chattel mortgage invalid after the expiration of the ninety days, yet, that the commencement of a suit to foreclose it has the effect to prolong the duration of the mortgage lien up
to the close of the suit. To this we answer: 1. That this is in effect to add to the statute a condition which is not only not in it, but is, in legal effect, expressly prohibited by it, namely, a condition which says that the statute shall be so read that the said lien, which the statute termi
Argument for Appellants.
nates at the end of ninety days, shall continue indefinitely after the expiration of the said ninety days, provided suit to fureclose is commenced within the ninety days. This addition is simply legislation, and is not interpretation.
2. The lis pendens accomplished by the commencement of the foreclosure suit is, at most, only a notice to, and an obligation upon, appellant, as purchaşer pendente lite, which binds him to abide by whatever rights such suit shall finally adjudge to the complainant therein, as being held by him in the subject matter of the suit so pending when the purchase was made. Warren County v. Marcy, 97 U. S. 96. It does not change or add to the character or duration of the lien created by the chattel mortgage. It simply brings into court the question, what is the duration of the chattel-mortgage lien, as that duration is defined by the statute?
The result, therefore, is this : that since the mortgagee did not take possession within the ninety days, he did not perform the indispensable condition under which he could continue the existence of his mortgage lien after the expiration of the ninety days. He had a perfect right to commence his foreclosure suit; and had he taken possession within the ninety days, and before the levy, his lis pendens would have been conclusive against appellant. But he did no such thing as take possession. Therefore, his lis pendens has accomplished nothing for him in the way of excusing his taking possession of the property. And the question is left for the decision of this court whether such taking possession is, indeed, by the statute made to be a condition precedent to the continuance of the mortgage lien after ninety days.
That, therefore, presents to this court the question whether the commencement of the suit is, by the statute, made to be a substitute for that change of possession to the mortgagee which sections 2837 and 2805 require, in express terms, in order to a lien being continued beyond the said ninety days?
That it is the visible and overt act of actual change of possession from mortgagor to mortgagee — from vendor to vendee, or from assignor to assignee - which the statutes of frauds of all the States, and of Elizabeth, make to be essential