Marquam v. Sengfelder

Mr. Justice Moore delivered the opinion of the court. 1. The respondent contends that the clause of the lease above quoted created a lien upon all the personal property on the leased premises, which in equity should be treated as a chattel mortgage. The said clause does not create a chattel mortgage, because the title to the property was not transferred; nor does it create a pledge, because possession thereof was not delivered. It was formerly held in this state that a chattel mortgage created only a lien upon personal property: Chapman v. State, 5 Or. 435; Knowles v. Herbert, 11 Or. 240 (4 Pac. Rep. 126): but in Case Threshing Machine Co. v. Campbell, 14 Or. 465 (13 Pac. Rep. 324), this court, by Thayer, J., in our judgment, announced the correct doctrine, and held that a chattel mortgage created more than a lien, and that the mortgagee after condition broken has a right to the thing, which he may maintain by an action in the nature of replevin, to recover it, if, upon demand, delivery thereof be denied. 2. In a clause of a written agreement which provided that in case of default the parties were authorized “ to take immediate possession of ail goods, wares, and merchandise, lumber and shingles, and the personal property, now in our possession, and belonging to us,” it wras held that it was nothing but a naked power, not coupled with any interest, and could not operate to give any right to the property itself until reduced to possession: Holmes v. Hall, 8 Mich. 66 (77 Am. Dec. 444). Where a stipulation of a lease provided that “ all goods, wares, and merchandise, household furniture, fixtures, or other property which are, or — 11 — shall he placed, on said premises, shall be liable, and this lease shall hereby constitute a lien or mortgage on said property to secure the rent due, or to grow due, on this lease,” the court held that it did not create a mortgage: Dalton v. Laudahn, 27 Mich. 529. In a covenant of a lease which contained the following: “And the said parties of the second part hereby pledge and bind all improvements and machinery which they may put on said premises for the payment of the rent aforesaid, and for the due performance of all other covenants herein contained,” the court held that it did not create a mortgage, nor purport to mortgage after acquired property; that it was simply a contract for a lien whenever the rent became in arrears, and would constitute a lien in equity. The highest claim which can reasonably be made for the stipulation in the lease in the case at bar is that it created an equitable lien. It is an express executory agreement in writing, whereby the lessee indicated an intention to make the property therein described a security for the rent, which is enforceable against the property in the hands of the lessee, and of his voluntary assignees, purchasers, and encumbrancers with notice: 3 Pom. Eq. Jur. § 1235. 3. The claim being a lien, and creating no property right, nor interest analagous to property, but only a mere personal right and obligation, by means of which the plaintiff is entitled to follow the identical thing, and to enforce the defendant’s obligation by a remedy which operates directly upon the thing itself (3 Pomeroy Eq. Jur. § 1234), can this remedy be enforced .against one who has acquired the thing without notice of the plaintiff’s claim? In the case of Fejavary v. Broesch, 52 Iowa, 88 (2 N. W. Rep. 963; 35 Am. Rep. 261), Seevers, J., in construing a similar clause 'n a lease which provided that the lessor should have a perpetual lien upon certain personal property, as security for rent, says: “Technically, it is said, the instrument in this case cannot be regarded — 12 — as a mortgage, because it does not contain a grant or conveyance of the property. But clearly it creates a lien or equitable charge, and the right of a party to execute it, and its validity, must depend on the same principle as a mortgage.” The law which determines the validity of a chattel mortgage must be applied with equal force and like effect to such equitable liens. In Marks v. Miller, 21 Or. 317 (14 L. R. A. 190; 28 Pac. Rep. 14); it was held that under our statute, when a chattel mortgage has not been filed, a presumption of fraud is created from the retention of possession of the mortgaged property by the mortgagor, which may be rebutted by showing that it was made in good faith, and for a valuable consideration. We think it unnecessary to quote the testimony offered upon this branch of the question, since, in our judgment, it conclusively shows that the lien was created in good faith and for a valuable consideration. 4. Was the specification in the lease of “all personal property in said premises, including furniture and household goods of every description,” sufficient to create a lien? Mr. Jones, in his work on Chattel Mortgages, section 54, says: “A description which will enable third persons, aided by inquiries which the instrument itself suggests, to identify the property, is sufficient.” “The identity of the property is not, in such cases, ascertained by any specific description which distinguishes it from other property of the same kind or species, but by its locality”: Lawrence v. Evarts, 7 Ohio St. 194. “Apparently it seems a more bald description to say ‘all my household furniture,’ than to enumerate the articles and describe them as ‘two dozen of chairs, five tables,’ etc.; but in reality the latter will require extrinsic evidence to identify the property as much as the former would”: Harding v. Coburn, 12 Met. 333 (46 Am. Dec. 680). Thus it would appear that the description, “furniture and household goods,” was sufficient (Beach v. Derby, 19 Ill. 617) — 13 — and, from their locality, the several articles thereof might be identified by extrinsic evidence; but could the articles described as “all personal property” be identified in this manner from the lease? In Morrill v. Noyes, 56 Me. 458 (96 Am. Dec. 486), Davis, J., clearly enunciates the rules for determining what property should be included in similar descriptions, as follows: “(1) The contract must relate to some particular property described therein, which, though not in existence, must be reasonably certain to come into existence, so that the minds of the parties may be in agreement as to what it is to be; and, if the sale is absolute, what, with reasonable certainty, taking the ordinary contingencies into consideration, is the present value. (2) The vendor or mortgagor must have a present, actual interest in it, or concerning it. As is said in illustrating rule 14 of Bacon’s Maxims, ‘the law doth not allow of grants, except there be the foundation of an interest in the grantor.’ There must be something in prmsenti, of which the thing in futuro is to be the product, or with which ii is to be connected, as necessary for its use, or as incident to it, constituting a tangible, existing basis for the contract.” Applying these rules to the case at bar, can it be said that the contract or specification in the lease included all the personal property, or that the minds of the lessor and lessee met and agreed upon what it should be? We think it could not; but this would not render the contract void as to such property as could be identified thereby: Jones, Chattel Mortgages, § 74. The word “furniture” means all personal chattels which may contribute the use or convenience of the householder, or the ornament of the house (Roper, Legacies, 269); and the term “household goods” means every article of a permanent nature which is not consumed in its enjoyment: Roper, Legacies, § 253. The wines, liquors, and groceries are not •“furniture,” and they cannot be considered as “household goods,” and hence the lease did not create any lien thereon. — 14 — The return of the receiver shows that the wines and liquors were sold for one hundred and twenty dollars, .the groceries and canned goods for forty-three dollars artcF seventy-five cents, and that the restaurant furniture, and household goods, upon which plaintiff had a lien, brought one thousand three hundred dollars. 5. The defendant Barnes contends that Sengfelder’s mortgage to Thompson was fraudulent. It is true that Sengfelder was in failing circumstances, and no doubt Thompson had a better knowledge of this fact than any other creditor; but would this make the transaction fraudulent? If Sengfelder had given his mortgage to the bank to secure the note it held against him, no one would contend that such act would have been fraudulent. A debtor in failing circumstances may prefer a creditor, and appropriate his property to the satisfaction of such creditor’s claim: Kruse v. Prindle, 8 Or. 158; Burrill, Assignments, 218; Bump, Fraudulent Conveyances, 314. When Thompson secured the assignment of the note from the bank he had a bona fide claim against Sengfelder, and, since the’ latter could have preferred the bank, he could, in like manner, have preferred Thompson. When the mortgage was executed and filed, Thompson demanded payment of the note, and, upon default, took immediate possession of the chattels. This gave him a conditional title to the goods, and the possession thereof, for the purpose of foreclosing his mortgage, and such possession was taken before any attachments were levied. 6. Some testimony was taken for the purpose of showing that Sengfelder’s mortgage to Thompson was executed for a fraudulent purpose. The officer who levied the writ of attachment for Barnes swears that when he went to the restaurant for that purpose Sengfelder requested him not to close up the place, while the latter swears that such request was made upon the levy of a former writ. Admitting that he made this request at that time, this does not, — 15 — in our judgment, necessarily prove that there was any secret trust existing between him and Thompson. He had an interest as mortgagor, and may have entertained a hope that he could adjust the matter. The mortgage given to secure nineteen hundred and ten dollars and forty cents included all Sengfelder’s property, but when it was sold by the receiver fourteen hundred and sixty-three dollars and seventy-five cents was the full amount received therefor. This, in our opinion, purges the transaction of every badge of fraud. 7. Sengfelder swears, in relation to the attempt to remove the goods to pay the help, that Geo. W. Hazen, the agent of the bank, who had known Mr. Thompson for several years, told the latter that the law required attaching creditors to pay the help, and that Mr. Thompson was trying to observe Mr. Hazen’s advice. The Session Laws of 1891, p. 81, provide that when goods are attached the laborers in defendant’s employ shall have a preferred claim, within certain limits as to time and amount; but while the attached goods could not have been appropriated in the summary manner here attempted, we do not think Thompson’s act indicated an intent to protect Sengfelder. There was some testimony taken before the referee which tended to prove that the defendant, Sengfelder, with the knowledge of plaintiff, sold in the ordinary course of business articles of personal property, consisting of stock in trade, but the pleadings having raised no issue upon this question, it was properly held irrelevant. The decree of the court below will be modified in accordance with this opinion.