Roundy v. Converse

LyoN, J. Two questions were litigated on the trial. These are, (1) Is the mortgage of December 23, 1886, a valid security ? and, if so, (2) Should Converse have been allowed any exemptions? 1. There is nothing upon the face of the mortgage in question to impeach its validity, although the fair inference from its terms is that the mortgagor was authorized to sell the goods and replace them with others to be paid for out of the proceeds of such sales. Probably the attempt to extend the security of the mortgage over after-acquired goods was unavailing, except, perhaps, as a license to seize such goods. This clause does not affect the validity of the security. Such is the purport and effect of the opinion by Ryan, C. J., in Hunter v. Bosworth, 43 Wis. 583, and of the cases there cited. A persistent effort was made upon the trial to show that, [528] at the time of the execution, of the mortgage, there was some agreement or' understanding between the parties thereto that the mortgagor might dispose of the proceeds of sales of the mortgaged property for his own use and benefit, thus bringing the case within the rule of Anderson v. Patterson, 64 Wis. 567. A careful examination of the testimony satisfies us that the plaintiffs failed to establish this proposition, and failed also, we think, to show that the mortgage was tainted with fraud. The circuit court so held, thus establishing the validity of the mortgage. The ruling cannot be disturbed. We hold, therefore, that the mortgage was a valid security. 2. The ruling of the circuit court allowing Converse $200 out of the proceeds of the sale of the mortgaged property, as and for his exemptions, cannot be upheld. Tie made no reservation of exemptions in his mortgage to Mrs. Hamilton, and claimed none when she sold the property. Conceding that he was entitled to exemptions had he claimed the same while the property remained in the hands of Mrs. Hamilton (which is, to say the least, quite doubtful), he certainly lost all right thereto after the property was sold, and the proceeds thereof in the hands of Mrs. Hamilton attached by the plaintiffs. The exemption is of the specific property enumerated in the statute, that is to say, of $200 worth of the goods constituting the stock in trade, and does not extend to the proceeds thereof. R. S. sec. 2982, subd. 8. In this respect the case is unlike one which involves the proceeds of money arising from insurance upon exempt property destroyed by fire (subd. 17), or money arising from the sale of a homestead (sec. 2983). Such moneys are specially exempted by the statutes. We are aware of no provision of law which extends the exemption of stock in trade to the proceeds of such stock realized upon a sale thereof. It was error, therefore, to allow any exemptions to Converse out of the moneys in the hands of [529] Mrs. Hamilton. The result is that the plaintiffs’ judgment against the garnishee should he increased $200. It appeared that Mrs. Hamilton took, under the mortgage, goods of the value of $133 not covered by it. The circumstance is immaterial, because the plaintiffs recover of Mrs. Hamilton more than the value of such goods. By the Court.— The judgment is reversed, and the cause remanded with directions to the circuit court to render judgment for the plaintiffs in accordance with this opinion.