J. W. Wood & Co. v. Hall

Hall, J. For the; purposes of this case, we shall assume that the chattel mortgage executed by Love to Hall the garnishee, was, as to the creditors of Love, void, on account of the power therein conferred upon Love to retain possession of the stock of goods, and to sell the same in the usual course of trade, etc. But how does- the invalidity of the chattel mortgage benefit the plaintiffs, under the facts of this case ? The mortgage. was invalid as to the mortgagor’s creditors because it was to his use, and, therefore, in violation of section 2496, Revised Statutes. The mortgage was to his use because it gave to . him the right to the possession of the stock of goods, with the power to sell the same, etc. Had the mortgagor, immediately -upon the execution of the mortgage, waived those provisions of the mortgage made for his use, and turned over the-possession of the stock of goods to the mortgagee, would the mortgage, have been invalid simply because it retained those provisions uncancelled? We think not. The retention of the stock of goods by the mortgagor was the very basis of the invalidity, of the mortgage. Without such possession, the mortgagor could not have-exercised the power to sell in the usual course of trade, etc. Had the mortgagor so transferred the possession dfi the stock of goods, there would have been nothing upon which the invalidity of the mortgage could have rested. By such transfer of the possession of the stock of goods [117] ■all illegality -would have been eliminated from the mortgage. The mortgage was, notwithstanding the illegal provisions referred to, binding and valid, between the mortgagor and mortgagee. The illegal provisions, had they been enforced, would have vitiated the mortgage as to ■creditors of or purchasers from the mortgagor. But, surely, the parties to the mortgage had the right to waive and not to enforce those provisions. Had those provisions never been complied with, had the parties to the mortgage treated the mortgage as if it had not contained' those provisions, had the parties to the mortgage in their .acts obeyed, and not violated, the law, the mortgage would have been binding upon all. It'would not require a separate and distinct agreement between the mortgagor and the mortgagee, authorizing the mortgagor to take possession of the stock of goods as security for, or in satisfaction of, the mortgage debt. Greeley v. Reading, 74 Mo. 309 ; Nash v. Norment, 5 Mo. App. 545 ; Jones on Chattel Mortgages, sect. 178, and cases cited. The mortgage would have been binding upon all, had it not been for the illegal provisions. The parties to the mortgage could have cured it ■of the illegality by expressly eradicating therefrom the illegal provisions. They could also have effected the same cure by ignoring those provisions. Did the possession of the mortgage depend upon the illegal provisions of the mortgage, such possession, of course, would be illegal, and then it could properly be said that the possession could be no better than the warrant under which the possession was taken. But the possession of the mortgagee, in the case supposed, would be against and in ■conflict with the illegal provisions of the mortgage. Said possession would stand, not upon the illegal provisions ■of the mortgage, but in disregard of them. Had the mortgagor retained possession of the stock of goods his possession would have rested upon the illegal, provisions, and he could not, by any conduct of his, have made his [118] possession better than the warrant by means of which he-held such possession. The result would have been the same had the mortgagee, with the consent of the mortgagor, taken possession of the mortgaged goods at any time before a creditor of, or purchaser from, the mortgagor had acquired rights to the stock of goods. In this case, the garnishee, who was the mortgagee, took possession of the stock of goods long before the-plaintiffs acquired-any right thereto. The possession, however, was not taken with the consent of the-mortgagor. The mortgagor opposed the taking of such possession. But the possession was obtained by operation of law, in an action of replevin, on the ground that the conditions of the mortgage had been broken, and that the garnishee was, therefore, entitled to such possession.. Possessipn thus obtained must have the same effect that possession obtained with the consent of the mortgagor would have had. The possession was taken in accordance with the terms of the mortgage. The conditions of the mortgage upon which the illegal provisions rested had been broken, and those provisions were as completely rescinded and eliminated from the mortgage as-they could have been by the consent of the mortgagor.. The mortgagor had forfeited all right to the benefit of the provisions of the mortgage made for his own use. Possession taken by the mortgagee, with the consent of the mortgagor, would have cured the mortgage of the-illegality. Possession taken by the mortgagee, in accordance with the terms of the mortgage, on account of the forfeiture of the mortgagor’s right to possession, also-cured the mortgage of the illegality. In this case, there was no pretense of any actual fraud on the part of the garnishee. The action of the-court was based wholly upon the constructive fraud arising-from the illegal provisions of the mortgage. Under the-facts of this case, in our opinion, the judgment'should have been in favor of the garnishee. ■ [119] Since writing this opinion I have for the first time seen the case of Dobyns v. Meyer (20 Mo. App. 67), decided by the St. Louis court of appeals. The court expresses the opinion in that case that the views herein set forth are erroneous, and are at variance with the well settled rule in this country outside of this state. The rule referred to is the rule laid down with so much force by Ryan, J., in Blakeslee v. Rossman (43 Wis. 116). The St. Louis court of appeals felt constrained, by the force of the opinion of the supreme court of this state, in Greeley v. Reading, supra, to render judgment in accordance with the views expressed in this opinion. But, on account of the case of Armstrong v. Tattle (34 Mo. 432), which seems to be in direct conflict with Greeley v. Reading, and which was not expressly overruled in the latter case, and which might, therefore, have been overlooked by the supreme court, and on account of the importance of the question involved, and in order that the question might be authoritatively settled by the supreme court, the original transcript in Dobyns v. Meyer was certified to the supreme court for final determination. This action was had under section six, of the amendment to the constitution of this state, creating' this court, which provides that “When any one of said courts of appeals shall, in any cause or proceeding, render a decision which any one of the judges therein sitting' shall deem contrary to any previous decision of any of said courts of appeals, or of the supreme court, the said court of appeals must, of its own motion, pending the same term, and not afterward, certify and transfer said . cause or proceeding and the original transcript therein to the supreme court, and thereupon the supreme court must rehear and determine said cause or proceeding, as in case of jurisdiction obtained by ordinary appellate process ; and the last previous rulings of the supreme court on any question of law or equity shall, in all cases, be controlling authority in said courts of appeals.” Under said section, it seems to us, that where the [120] decision of either of the courts of appeals is in accordance with the last previous ruling of the supreme court on any question of law or equity, there is no authority for such court of appeals to certify and transfer the canse and transcript therein to the supreme court, because said decision may be in conflict with a prior ruling of the supreme court, which' has not been expressly overruled. The last ruling of the supreme court is binding upon both courts of appeals, and a decision by either of such courts, in accordance with such ruling, is the decision which must be rendered. We feel called upon to make these remarks as explanatory of our action in not transferring the transcript in this case to the supreme court. In view of the conflict between the different courts of this country, and the conflict in the views entertained by the appellate courts of this state, upon the subject under discussion, we cannot but feel a doubt as to the correctness' of our conclusion. But, after mature consideration and reflection, we have arrived at that conclusion, and, for the reasons given, adhere to it as correct. The judgment is reversed and the cause remanded. All concur.