Cotton v. Marsh

By {he Court, Crawford, J. The first question to be disposed of in this case is, whether the chattel mortgage given by the witness Gates, to the defendants in error, was sufficient in the law to vest in them any interest in the mortgaged goods, which could .enable them to maintain the present action. On the 9th day of January, 1852, Gates being indebted to Marsh and Frear, in order to secure the payment, of that indebtedness, executed a mortgage of certain goods, wares and merchandize then in his (Gates’) possession, in favor of the said Marsh and Frear, and their agent, a Mr. Croes, having caused the mortgage to be filed in the office of the town cleric, took possession of the goods, and directed Gates the mortgagor, to take charge of them — “to go on and sell as usual, and make remittances to Marsh and Frear.” The third s-ction of chapter thirty-eight of the Revised Statutes of this State, provides for the filing of mortgages of personal property in the office of the clerk of the town in which the mortgagor resides, &a., and declares that when so filed the mortgage shall be as valid as if it had been re,corded in the office of the register of deeds. Section nine of chapter seventy-six of the Revised Statutes (which is a portion of what is commonly termed “the statute of frauds,”) is in the following words: “ .No mortgage of personal property hereafter made, shall be valid against any other persons than the parties thereto, unless possession of the mortgaged property be delivered to and retained by the mortgagee, or unless the mortgage be — 234 — filed in the office of the town clerk, where the mortgagor resides, or in case he does not reside in the jn ^he town where the property mortgaged ma^ at the time of executing the same, and such clerk shall endoise thereon the time of receiving the same.” Under this provision one of three things is necessary to he done, in order that a chattel mortgage may he valid as against others than the mortgagor and mortgagees. Either, 1st, possession shall he delivered to and retained hy the mortgagee; or, 2d, the mortgage shall he filed in the office of the town clerk of the town In which the mortgagor resides; or, 3d, in case the mortgagor do not reside in this State, the mortgage shall he filed in the office of the town clerk of the town in which the mort' gaged property is at the time of the execution of the mortgage. A performance of either of these things would satisfy the requirements of the statute, and in the absence of fraud, the mortgage would he valid as against third parties as well as the parties thereto ; hut a non compliance with the provisions of the statute, regardless of the question of fraudulent intent, would render the mortgage invalid as against every person except the parties to it. In this case, we believe that the evidence showed a sufficient compliance with the ninth section of chapter seventy-six, hy filing the instrument in the town clerk’s office, and so far as that section is concerned, no legal objection can he successfully urged against the mortgage. In Massachusetts, from the statute of which State the provision of our own statute under consideration, was al most literally copied, the only difference being in requiring the mortgage to he filed with the town clerk instead of being recorded hy him, we have several — 235 — decisions upon the point, to some of which we will refer. In the case of Bullack, vs. Williams et. al. (16 Pick. 33) Chief Justice Shaw says “ The language of the statute is, that no mortgage of personal erty shall be valid against any other person than the parties thereto, unless possession of the mortgaged property be delivered to and retained by the mortgagee, or unless the said mortgage be recorded, <fcc. The plain implication is, that if possession is delivered to and retained by the mortgagee, or if the mortgage is recorded pursuant to the directions of the statute, it shall be valid against other persons.” Soon after-wards, in the same court in the case, of Forbes vs. Parker (16 Pick. 462,) Mr. Justice Putnam in giving the opinion of the court, uses the following language : “The objection that there was no actual delivery,cannot be maintained, as the recording of the mortgage deed in the records of the town of Charlestown, where the mortgagor resided, was legally equivalent to an actual delivery ” Bo also in Ames vs. Phelps (18 Pick. 314) which was an action of trespass by a mortgagee of chattels (horses) against the deputy sheriff, who took them on writs in his hands against the mortgagor — the possession of the property had not been changed, but the mortgage had been recorded, and the court held thus: “ The original mortgage is certified to have been recorded by the town clerk, who, for this purpose, is the regular certifying officer ; The mortgagor relies upon it, and has good réason to rely' upon it as a valid security.” The same view of the question was taken in Dole vs. Bodman and another. (3 Met. 129.) The courts of New York furnish a number of de» cisions in which the filing of a mortgage of personal — 236 — ProPerty, tinder a statute on that subject similar in substance to our own, has been held insufficient as agajng.{; creditors where the possession has been retained by the mortgagor. But the fifth section of the New York statute concerning fraudulent conveyances of chattels, provides that all sales and conveyances of goods, whether absolute or by way of mortgage unless accompanied by an immediate delivery and followed by an actual and continued change of possession, shall be presumed fraudulent and void. Hence the courts of that State have frequently decided that notwithstanding the filing of the mortgage, if the possession of the property remained with the mortgagor, the onus of showing the bonafides of the transaction rested upon the party claiming under the mortgage, and until it was shown that the transfer was made in good faith, and not with a fraudulent intent, the law would presume it to be fraudulent and void, because there had been no change of possession. To this effect are the cases of Wood vs. Lowry (17 Wend. 492,) Smith & Howe vs. Acker (23 Wend. 653) Cole and Thurman vs. White (26 Wend. 511) and- Hanford vs. Aitcher (4 Hill, 271,) but in the case of Lee vs. Huntoon and another, (1 Hoffman Ch. R. 447,) the Vice Chancellor takes a different-view of the subject, and holds that the filing of the mortgage has the same effect as a change of possession. We think that under our statute, the filing of the instrument relieves the party claiming under the mortgage from the onus of proving the honesty and good faith of the transaction as effectually as a change of possession would. (Vide Donaldson vs. Johnson et al. 2 Chand. 160.) Either the filing of the mortgage or a delivery and change of possession of the goods — 237 — would impose the necessity on the party assailing the mortgage, to show that it was fraudulent in fact. Viewing the question in this light, we believe the court below, properly refused to give to the jury the second, third, fourth, fifth and eighth instructions asked by the defendants. The next question in the case relates to the first instruction asked by the defendants below. The mortgage in this case was a security for the payment on demand of the indebtedness of Grates to the mort - gagees, Mar.fi 1 and Frear, and it contained the fol* lowing clause: “And in case the said Marsh and Frear shall at any time deem themselves insecure, it shall be lawful for them to take possession of said property, and sell the same at public or private sale as aforesaid.” From the testimony of Grates it appears that after the filing of the mortgage, Groes, who acted as the agent of the mortgagees, took possession of the property, and subsequently placed Gates in posses lion again for Marsh and Frear, with instructions, “ to go on and sell as usual, and make remit tances to Marsh and Frear.” Now certainly the placing the mortgagor back again in possession of the goods with the power to dispose of them, was a fact very proper to be left to the jury in connection with the question of a fraudulent intent, but it did not of its elf amount to fraud, because our statute would hold the mortgage perfectly valid notwithstanding the possession had not been changed from the mortgagor, when the mortgage had been filed. Although in a transaction of this kind, permitting the mortgagor to retain the possession and control of the goods might induce a suspicion that it was intended as a cover for an unfair or fraud — 238 — ulent purpose, yet it is not necessarily so in view of the statute, because with an honest intention and from prudential motives the mortgagor may be left |n p0ggession, to dispose of the goods for the best interests of his mortgagee. It is true the jury may take this circumstance into consideration in connection with all the facts in the case in determining whether there was an intent to defraud in the transfer, but if the parties chose to assume this risk, we do not see why they were not as much at liberty to leave the property in the possession of Grates, the mortgagor, as in the possesion of a third party. He held possession for Marsh and Frear at the time of the levy, and if the transaction was not fraudulent in fact, of which the jury were to judge, then the possession of Gates was the possession of Marsh and Frear, and if the officer illegally invaded that possession and converted the goods, Marsh and Frear might maintain this action without making any demand of the goods. Hence we think the first instruction asked by the defendants below, was very properly refused. A careful examination of the charge given to the jury in this case, has satisfied us that the whole question of fraudulent intent, was fairly submitted to the jury, and we see nothing in the case which should render the determination at which they arrived, unsatisfactory. The sixth instruction asked by the defendants is not correct. One of the defendants, Higgins, was deputed by the defendant, Cotton, to execute the writ of fieri facias by virtue of which the goods were taken. By this deputation, Higgins acted for the U. S. marshal, Cotton, as his deputy in levying upon the goods in question. His acts were the acts in law of — 239 — the marshal, for the mandate of the writ as well as the return thereto, shows that the marshal was officially called upon to execute it, and by his deputy did execute it. The property was levied upon and removed by Higgins colore officii, and the mortgagees might pursue their remedy against Higgins alone, who unlawfully took the goods, or against Cotton, by whose direction and for whom Higgins acted, or against both of them, inasmuch as in law the acts of the deputy are also the acts of the marshal who deputed him. There can be no doubt that the plaintiffs in this action might have maintained trespass or trover against Higgins, if he took the goods away without authority of law, if they had chosen to do so. It is equally clear to our minds that as Higgins in taking the goods, acted in the name of the marshal, and by virtue and color of his office as deputy, in the execution of legal process — as he made the return of service in writing endorsed on the writ in the name of the marshal, and as, from the testimony of the witness Caleb Wall, it was shown that the marshal had recognized the act of his deputy in taking these goods, by making arrangements for the sale of them in Milwaukee and receiving a part of the proceeds of the sale thereof, the marshal himself became liable in trespass or trover, to the present plaintiffs,owhose title and possession as mortgagees had been invaded In Mr. Watson’s treatise on the law 9'elating to the office and duty of Sheriffs, page 37, it is said “ The sheriff is responsible for all the acts of his bailiff done in the execution of writs, but he is not liable for the criminal acts of his officer, by which is meant that he is not liable to be indicted for the acts of his officer. But the sheriff is liable to an action of trespass, when — 240 — his officer, in executing a writ against the goods of A. takes the goods of B<fec. Lord Mansfield, in delivering the opinion of the comq of Kings Bench in the case of Ackworth vs. Kempe (1 Doug. 40) where the sheriff of Sussex was held liable in trespess vi et armis for the acts of his officer, says, “For all civil purposes the act of the sheriff’s bailiff is the act of the Sheriff.” The same view of the sheriff’s liability had previously been taken by the Court of Common Pleas in Saunderson vs. Barker & Martin, (3 Wills. 309.) in which case the defendants as sheriffs of London were held liable for the illegal acts of their officer in levying an execution against one Beaver, on the goods of the plaintiff, and Mr. Justice Gould, in closing his opinion says, “ In this case I consider all three, the sheriff' under sheriff and deputy as one person.” In Woodgate vs. Knatcbull (2 Durn. & E. 146,) the sheriff was held liable for the conduct of his officers in taking illegal fees, although he was a stranger to the transaction. A case of a similar kind is McIntyre vs. Trumbull (7 John. 35,) where the court say : “ On this point the law is too well settled to be questioned. The sheriff is answerable, civiliter, for the acts of his deputies, and it is no objection that the act is of a criminal nature, for which the deputy might be answerable, orimmalr iter. Whether it was shown that the shexiff had recognized the acts of his deputy does not appear. If such recognition was necessary to be shown, we are to presume it was done in this case, but the better opinion is, that it was not necessary. Mr. Justice Bronson, in giving the opinion of the court in Waldon vs. Davison (15 Wend. 575) treats the question thus: “ In ascertaining whether the — 241 — sheriff is answerable for the acts of bis deputy, the question is whether the latter did an official or a mere personal act. If the act is personal only and does not relate to his duty as an officer, he is not the agent or servant of the sheriff, but if he execute process under color, or by virtue of his office, the sheriff is answerable for the consequences. It is not necessary to charge him, that the act of the deputy should in all cases be lawful, or one which he might rightfully do under the process.” Without citing other authorities, we may conclude this branch of the case, by saying that he who commands or procures a trespass to be committed, is equally liable with him who does the act — both are trespassers, and may be sued together. And if liable in trespass, the plaintiff or party injured in a case iike the present one, may choose his remedy and sue in trover. Another point insisted upon in this case by the plaintiffs in error, and upon which they requested their seventh instruction to the jury on the- trial in the Circuit Court, is that the mortgagor, Gates, had an interest in the mortgaged property which was subject to levy and sale on the execution against him. This is true, but not to the extent claimed in the instructions asked. A mortgagor of chattels has an interest in the mortgaged property until it has been barred or foreclosed, which may be seized, taken and disposed of by his creditors. But this is such an interest that it must be taken and treated as subservient to the paramount interest of the mortgagee. The latter has a vested right to require that the property be converted into a satisfaction of his demand, and subject to this right the creditor of the mortgagor — 242 — may attach or seize the property. He cannot, however, deprive the mortgagee of the possession of his security, if he has such possession, nor can he. assume co)Qqro;[ anc[ dispose of the property regardless of the prior right of the mortgagee. On this subject the charge given to the jury by the Circuit Judge was a correct exposition of the law, and is abundantly sustained by the following adjudications: Marsh vs. Lawrence, 4 Conn. R. 461; Phillips vs. Cook, 24 Wend. 390; Strip vs. Hart, Hand, 1 Comst. 20; Bank of Lansingburgh vs. Crary, 1 Barb. 542. See also Story on Bailments, § 353 ; Revised Statutesi chapter 102, sec. 49. We therefore think that the seventh instruction was properly refused. There is no other question presented in this case which requires discussion. The plaintiffs in the actiop, by their mortgage and the filing thereof, and by the possession of the mortgaged property taken in pursuance of the mortgage under the provisions of our statute, acquired such a property as enabled them to maintain this action against the present defendants, (the plaintiffs in error,) who had no legal right to seize and remove the property. The evidence in the case was satisfactory to the jury, to whom every legitimate question seems to have been submitted, and they have by their verdict declared the- transaction to have been bona fide and without any fraudulent intent. The judgment of the Circuit Court must therefore be affirmed.