Beach v. Derby

Catón, C. J. James N. Graves executed two chattel mortgages upon the property for which this action is brought. The first was to Horatio Graves, and the other to John B. Clark. The plaintiff below claims the property as the assignee of both these mortgages. Both mortgages contained provisions, authorizing the mortgagor to retain the possession and use of the property till default should be made iu the payment of the notes; but they also provided that in case any execution or attachment against the mortgagor should be levied on the goods, the mortgagees or their assigns should thereupon have the right to declare the notes due and the mortgages forfeited, and to take possession of the goods. Before the notes by their terms matured, Beach, the defendant below, levied upon and seized the goods, by virtue of a writ of attachment against the goods and chattels of the mortgagor. Subsequent to this levy, and while the goods were in possession of Beach, the mortgages were assigned to Derby, the plaintiff below, who thereupon replevied the goods from the possession of Beach. The first question which we shall consider, is, that which is raised by the appellant. He claims that the appellee could not purchase the mortgages, and thereby the property itself, while it was in the actual adverse possession of the appellant, according to the principle decided in McGoon v. Ankeny, 11 Ill. R. 558. This objection would be fatal to the right of Derby to recover in this case, if the facts warranted the application of the principle. But they do not. Until the maturity of the notes, to secure which these mortgages were given, the mortgagor had a right to the possession and use of the property, with the right in the mortgagees to hasten the maturity of the notes, in the event of the levy of attachments or executions on the property. Such levy of itself, however, did not at once mature the notes, but it only gave the right to the mortgagees to declare them due. Until that affirmative act was done, the rights, duties and obligations of all parties remained precisely the same as if the mortgage had contained no such provision. When this attachment was levied, the defendant therein had the right to the possession and use of the property. This was an attachable interest which the attaching creditor had a right to levy upon and sell, subject to the chattel mortgages. The possession of the officer under the attachment was not necessarily hostile, but subordinate to the mortgages. At the time the appellee purchased them, his assignors had not yet declared the notes due, for the reason that the attachment had not been levied, and consequently he had as yet acquired no right to the possession of the property. This right to hasten the maturity of the notes, and thereby acquire an immediate right to the possession of the property, was passed to Derby by the assignments of the mortgages. At the time of the levy of the attachment the mortgagees had no right to the possession of the property, but that right was then vested in the mortgagor, and the possession derived from him under the attachment, could not be hostile to the mortgages, but was necessarily subordinate to them. "We have thus far considered the case as if the assignments of both mortgages had been properly proved. This, however, was not the case. The only evidence of the execution of the power of attorney from Horatio Graves to Hudson, under and by virtue of which the latter assigned the mortgage to the appellee, was an acknowledgment before a notary public in Massachusetts. Had it been a power to convey real estate, this would have have been sufficient under our statute of conveyances. But this statute does not apply to instruments relating to or affecting personalty. These are left to be proved as at common law. Eor this reason the judgment will have to be reversed; although, perhaps, if this mortgage had been ruled out, Derby might have recovered upon the other mortgage. We see no objection to the description of the property in the mortgages; nor do we think the court erred in ruling out the evidence afforded, tending to show that Derby paid no consideration to Graves for the assignment of the mortgage. That was no business of the creditors of the mortgagor. The judgment must be reversed and the cause remanded. Judgment reversed.