McCarthy v. E. H. Miller & Co.

Ellison, J. Defendants, E. M. Miller & Co., obtained judgment against F. T. McCarthy, and had execution issued and levied upon a horse and side-bar buggy as the property of said McCarthy.. Plaintiff Fannie, who is McCarthy’s wife, in conjunction with him, instituted this injunction proceedings-against the constable and other defendants to restrain the sale, alleging that she had a chattel mortgage on the property, executed to her by her husband, which was unpaid. The injunction was made perpetual by the circuit court, and defendants appeal. The mortgage is on the property in dispute, as well as other horses. It contains the usual provisions, permitting the husband to remain in possession until default, “but, in case of a sale or disposal,-or attempt to sell or dispose, of said property, or a removal, or [204] attempt to remove,” etc., the said Mrs. McCarthy “could take the property into her possession,” etc. The mortgage, on its face, is’ valid, but we shall declare it to be void, on the evidence adduced. It was given on nineteen head of horses, including the one levied upon, and a buggy. The evidence of both husband and wife (mortgagor and mortgagee) establishes, without contradiction, that he had the right to dispose of the property by sale or exchange; and that he did, at different times, “trade” six of the horses. On one trade he got twenty dollars in money as a difference in value. He also sold two of the horses in liquidation of a grain or feed bill, which he was owing. This was all done with the knowledge and consent of Mrs. McCarthy, and without her getting any of the proceeds of the transactions. Her note was not reduced. But it would seem, from the tenor of Mrs. McCarthy’s testimony, that she regarded the fact of her knowledge of these transactions- at -the time, and permitting them, as thereby making them valid. The reverse of this is true. It is her knowledge and permission which makes them invalid. It must be borne in mind that this was not a mere exercise of a right of a mortgagor in possession to sell, subject to the mortgage, the mortgagee still retaining the lien, but the case shows it to have been a sale, by consent of the mortgagee, from under the lien. One portion of her testimony tends to show that he could make sales “as he saw fit, if he replaced something in its place.” If such should be considered the agreement between them, then it would still render the mortgage void under the view taken . in this state. Walter v. Wimer, 24 Mo. 63; Stanley v. Bunce, 27 Mo. 269; Goddard v. Jones, 78 Mo. 518. In the latter case it is said : “That, while the deed under consideration does not, in express terms, authorize the grantor to sell and dispose of the property, the power to do so is implied from the authority, expressly given, to substitute other [205] property of the kind conveyed.’’ Suck substitution can be no more nor less than replenishing a diminished lot of personal property, which is not permissible. Authorities cited, supra. In truth (as was said in Brown v. Elliott, 22 Wall. 513), the mortgage, if it can be so called, is but an expression of confidence, for there can be no real security where there is no certain lien. Whatever may have been the motive which actuated the parties to this instrument, it is manifest that the necessary result of what they did do was to allow the mortgagor, under cover of the mortgage, to sell the property as his own, and appropriate the proceeds to his own purposes, and this, too, for an indefinite length of time. This position renders it unnecessary to consider a second mortgage, which was, some time afterwards, given on four of the exchanged horses. II. W e are aware that the rule is that a mortgage will only be declared void as a matter of law when it appears from its face that it is to the use of the grantor; and that it has been said “that the court will not hear extrinsic evidence in relation to the validity of the conveyance, and, on such evidence, as a matter of law, pronounce the conveyance void.” Weber v. Armstrong, 70 Mo. 217. Nor do we find this deed to be void as a matter of law. We so find it from the evidence, which it is our duty to examine in a.case of this kind. But, if this had been a jury case, and the testimony of the plaintiffs themselves unequivocally disclosed facts which rendered the mortgage void, it would be the duty of the court, as in other cases, to give a peremptory instruction. The iudp’ment will be reversed. All concur.