Moen v. Kilzer Lumber Co.

Robinson, J. This is an appeal from a judgment of $400 and costs against the defendant for the conversion of a.J. I. Case engine. In May, 1919, at Beulah, the plaintiff sold-the Case engine to Sam Crosby, and for the purchase price Crosby made to them a promissory note and a mortgage on the engine for $700. The mortgage was duly executed, [422] and on December 8, 19x9, it was filed in the office of the proper register of deeds. In November, 1919, and before the filing of the mortgage, defendant commenced, or attempted to commence, an action against the mortgagor, obtained an attachment, and levied the same on the engine.. Then he obtained a judgment and an execution under which the engine was offered for sale and sold to the defendant. In this action the judgment and the execution was justly held void for the reason that the proof failed to show any service of the summons; but if the judgment and the execution were valid that would be of no avail to the lumber company, because it is not in position to assert any rights as a subsequent bona fide purchaser or^a subsequent creditor. Its action against the mortgagor is based on two promissory notes made on December 3, 1918. Hence it cannot be either a subsequent bona fide purchaser or a subsequent creditor, and the filing of the mortgage is of no consequence. This case is ruled and governed by a well-considered decision of this court which is directly in point. Union National Bank v. Ouim, 3 N. D. 208-211, 54 N. W. 1034, 44 Am. St. Rep. 533. The reason is that a subsequent creditor parts with his property on the apparent responsibility of his debtor by reason of property then owned and possessed by him. When the lumber company trusted Crosby to the amount of $400, the presumption is they knew of his circumstances and knew he had the means to buy and pay for the Case engine. That was notice sufficient to put them on their guard.. They knew that if he bought such an engine or any property of like value it would be subject to a mortgage or a lien for the purchase money. Good faith consists in an honest intention to refrain from taking an unconscionable advantage of another, even through the forms and technicalities of the law. Judgment affirmed. Grace, C. J., and Christianson and Birdzell, JJ., concur.