First National Bank of Madison v. Damm

Cassoday, J. The hill of sale having been given to secure the loan of money must he treated in all respects as a chattel mortgage. Lamson v. Moffat, 61 Wis. 156; Manufacturers’ Bank v. Rugee, 59 Wis. 221; Rockwell v. Humphrey, 57 Wis. 410. Being a chattel mortgage, and the makers being residents of Madison at the time of its execution and since, the filing of it in the town of Blue Mounds was of no significance, under our statute, as against the appellants or any other person than the parties thereto. Sec. 2313, R. S.; Maier v. Davis, 57 Wis. 216; Rockwell v. Humphrey, 57 Wis. 421; Manufacturers' Bank v. Rugee, 59 Wis. 227. The filing being nugatory, it must, as to the appellants, be treated as though it was never filed. The same is true in respect to the fifing of the chattel mortgage taken by the appellants in the town of Blue Mounds. Had that mortgage been filed in the proper office in the city of Madison at the time it was so filed in the town, it would have, super [254] seded tie mortgage of the plaintiff, unless it was saved by the exception therein contained. Since the section of the statute mentioned is absolute, and without any reference to notice or the Iona fides of the transaction, it may be questionable whether the exception was of any significance. But since there was no filing of that mortgage which the courts can recognize until months after it is claimed the plaintiff took possession, it becomes unnecessary to consider that question here. Thus it appears that at noon, December 14, 1882, neither the plaintiff nor the appellants had, under the statute, any mortgage or lien upon the property in question which was of any validity as against the other. But it is not essential, under that statute, that the mortgage should be filed at all, in case “ the possession of the mortgaged property be delivered to and retained by the mortgagee.” The statute makes the mortgage invalid unless one or the other is done; but both are not required to make the mortgage valid. It is entirely optional with the parties as to which method they will adopt to make the mortgage effectual. There is no claim that the appellants at any time took possession or attempted to get possession. It is claimed that the plaintiff took possession on the afternoon of December 14, 1882. We think the finding to that effect is sustained by the evidence. It appears, in effect, that Mr. Morris took possession of the building under the bill of sale for the plaintiff in the presence of Mr. Roland, the sheriff, Mr. Weeks, who had attached certain grain in the building, and others; that the next day the keys of the building were delivered to Cowie, of Mount Horeb, for the plaintiff, and an agreement was made between the plaintiff,, the sheriff, and Mr. Roy, that the latter should be in the immediate charge of the building for the plaintiff, and sleep therein nights, and of the grain for the sheriff. Roy and Cowie were agents for the plaintiff. [255] These facts being undisputed, were certainly sufficient to show that the plaintiff took and retained possession of the building und.er the bill of sale. True, the 'evidence is quite meager, and fails to make any definite mention of the other articles of property covered by the bill of sale; but as the engine, boiler, machinery, scales, tools, trucks, and fixtures were necessarily all, or nearly all, in the building, which was the principal thing, we think, in the absence of any evidence to the contrary, it may fairly be inferred that the possession included all the items of property mentioned. The plaintiff certainly had the right, under the bill of sale, and with the consent of the makers, to take possession of the property at the time it did. Having taken possession, and the appellants at the time having no lien on the property as against the plaintiff, they are in no position to claim that such possession was prematurely taken. Besides, the makers were, to a certain extent, in default when possession was taken. Such taking possession was certainly equivalent to the filing óf the bill of sale in the proper office, and perhaps more; for whoever after that dealt with Roland & Blied in reference to that property necessarily did so in subordination to the rights of the plaintiff, under and by virtue of such possession. The filing of the chattel mortgage in the proper office by the appellants some months after such possession, must be treated the same as though their chattel mortgage had been executed to them at that time; for the prior filing was nugatory, and without filing it was invalid as against the plaintiff. The result is that the appellants took their chattel mortgage subject to all hens of the plaintiff under its bill of sale; the possession under it, and its parol agreement 'with the makers for such possession, was notice to the appellants of the nature and extent of the plaintiff’s claims. Coe v. Manseau, 62 Wis. 81. This obviates the necessity of considering the question so elaborately discussed by counsel, whether the bill of sale [256] was void, by its failure to accurately state the amouut for wbicb it was given to secure, and that it was given as security. Certainly there can be no objection to the validity of a mortgage or pledge taken as security for future advances to the extent of the advances actually made. Carter v. Rewey, 62 Wis. 552. Since the plaintiff’s mortgage contained no power of sale, and the appellants claimed that their mortgage was the superior lien, it was eminently proper that the controversy should be determined by action, and the sale made in pursuance of a decree. This is so whether the plaintiff’s rights were those of a mortgagee or pledgee or both. Jones, Pledges, §§ 640-648; Jones, Ch. Mortg. §§ 707, 711, 743, 756, 758, 821. Such foreclosure is certainly for the interest of all subsequent claimants, and could not in any event work to their prejudice, except in the matter of costs. We find no material error in the record. By the Cowrt.— The judgment of the circuit court is affirmed.