Funk v. Staats

Walker, J. There are various questions presented for determination by this record, the first of which is, whether it was necessary to show that the mortgage had been acknowledged by each of the mortgagors, before a justice of the peace, in the precinct in which he resided. It appears to be conceded that Wright resided in West Chicago, and that the instrument was acknowledged before a justice of the peace of that division, and the property to be affected by it was situated, and the business of the firm was carried on in that precinct, but Temple, the other partner, resided in a different district. Was this a sufficient compliance with the law regulating such instruments ? The act provides that the mortgagor “ may acknowledge such mortgage before any justice of the peace in the justice’s district in which. he may reside.” The act also requires the justice to make a memorandum of the mortgage, and enter a list of the property mortgaged, upon his docket. From these provisions it is manifest that the object, in requiring the acknowledgment, and the entry of the memorandum, in the justice’s district in which the mortgagor resided, was to give notice to creditors and purchasers. It being usual for the owner of chattels to have them at his place of residence or business, a compliance with these provisions would usually afford those wishing to purchase the property, a ready and easy means of acquiring information as to its situation, without resorting to the records at the county seat. It would therefore seem, that when the several partners or joint owners have acknowledged such a mortgage in the justice’s district in which one of them resides, and in which the property is situated and used, the object of the statute is fully answered. Otherwise, no matter how numerous the joint owners, or how different their residences, whether in the same precinct, county, State or country, they would have to acknowledge the instrument before the officer, and have the memorandum made on his docket, in the precinct of their several residences, in many cases hundreds of miles distant from the property. What possible object could the legislature have had, in requiring a resident of Massachusetts, who was a joint owner of property in Illinois, to make the acknowledgment in the justice’s district of his residence. Such could not have been their object. But when the property is situated in a district different from that of either of the joint owners, it may be different. It is also urged, that the evidence failed to show that the justice of the peace before whom the acknowledgment was had, made any entry of the fact, or made any memorandum of the property embraced in the instrument on his docket. The record fails to show that any objection was made to reading it in evidence on that ground. Other objections were urged at the time, and the party cannot now be heard for the first time to raise that question. To entitle it to consideration in this court, the question should have been raised on the trial below, and thus have afforded the opposite party an opportunity to obviate the objection. It is urged that the evidence shows, that appellee’s mortgage was executed to hinder and delay creditors. Hall testifies, that the mortgagors informed him that Foss was on the eve of obtaining a large judgment against one of the members of the firm, and that their means would not be sufficient to pay their creditors and satisfy that judgment, and that they wished to prefer the payment of appellee’s debt, to this judgment when obtained. Temple, in his letter to appellee, assigns the same reason for proposing to give the mortgage. It is true, that he afterwards, in his testimony, says that it, with the other mortgages then given, were designed to hinder and delay their creditors, and that he so informed Hall, appellee’s agent. We think the court below was justified in giving credence to the evidence of Hall, rather than to that of Temple. If the design of appellee was to secure his debt, and not to aid the mortgagors in hindering or delaying their creditors, there is no legal objection to the transaction. A debtor has a right to prefer creditors in payment or security, if the parties act in good faith. And the evidence in this case warrants the conclusion, that appellee’s only object was to secure his debt, and if that was the case, the motives governing the mortgagors could not affect the transaction, so long as he had no participation in it. The next question arising on this record, is, whether the appellee reduced this property to possession, on the default in the payment of the debt, so as to retain his lien. Appellants’ mortgage was subsequent in date to that of appellee’s, which appears to have been properly recorded, and the appellants, therefore, had constructive notice of its existence, when thpirs was executed. There can then be no question that they took their lien subject to that of the appellee’s. And unless appellee postponed his lien to that of appellants’, by delay in reducing the property to possession, after the default in payment, it remains a prior lien. It has been uniformly held, that to permit the mortgaged property to remain-in the possession of the mortgagor, contrary to the terms of the deed, is fraudulent per se, and is incapable of explanation. But whether the possession does so remain with the mortgagor, is a question of fact, which must be determined from the evidence. And it has been held, that after the property has been reduced to possession on default, and the title has become absolute in the mortgagee, he may then loan it to the mortgagor, or employ him to use it for the owner’s benefit, precisely as he might any other property he may own, and that these facts may be proved by any satisfactory evidence. It is believed that no adjudged case can be found, which holds that a mortgagee, after foreclosure, forfeits the right to such property by loaning it temporarily to the former owner, or by employing him to use it in the ordinary affairs of the owner, any more than he would to thus employ his other property. He receives it with no taint or infirmity growing out of the former existence of the mortgage. It all depends upon the good faith of the transaction after the foreclosure, of which the jury must judge from all the circumstances appearing in evidence, as well from the former relations of the parties, as their present condition. In determining whether the property in this case was, in good faith, reduced to possession by the mortgagee, the court had the right to consider all the circumstances attending the transaction. And a sufficient delivery and possession on a sale of chattels, to operate against creditors and purchasers, will be sufficient on a foreclosure of a chattel mortgage. The reason of the rule in the one case, is the same as in the other, and hence a delivery and possession which will sustain the one, will be sufficient in the other. The situation and nature of the property must of course be considered. Articles ponderous and unwieldy are not capable of the same visible signs of ownership, as are those which are light and more portable. What would be a sufficient possession of a steam boiler and engine, owing to their ponderous and unportable nature, would not be of household furniture, farming utensils, merchandise, and other lighter articles, which are susceptible of ready and easy change from the visible custody of one person to that of another.- Suppose, in this case, that the appellee had removed the engine and boilers from their fastenings and bed, and placed them in the yard or highway, would any one doubt that it was a sufficient assertion of ownership and possession to have answered the requirements of the law ? And yet, after much labor and some expense, the property would still have been apparently in the possession of the mortgagors. Again, Baldwin, Wright and Ryerson, all state in their testimony, that appellants were informed that appellee had taken possession of the property, before they made any effort for that purpose. But it is urged, that notwithstanding the notice, the acts done by appellee, through his agent, did not constitute a possession of the property. The brother of appellee came, on the 22nd of March, the day after the maturity of the mortgage, went into the mill, and there received possession of the engine and boilers, by a formal delivery, but they were not removed. He, however, at the time, took into his possession the keys and gibs of the engine, without the use of which it could not be started and used, and placed them in the hands of Baldwin, who was then appointed custodian of the property. It was at that time agreed that the mortgagors might run the engine, with permission of Baldwin. The evidence also shows, that until appellants obtained the exclusive possession of the property, it was only used by Baldwin’s permission. The keys and gibs were obtained from him each morning, and returned to him each evening, he remaining on the premises and about the mill during working hours, the whole time, except one day and a half, when he was sick. This, we think, was a sufficient possession, if bona fide, under the mortgage, to fulfill the requirements of the law. It was of the same character as that under which it was held by appellants, except that they had procured an assignment of the lease of the property on which the mill was situated. That circumstance had no tendency to render the possession more visible or notorious, unless the record of deeds had been examined. But either was all the possession which could be taken, without much inconvenience and considerable expense. The property was under the exclusive control of the custodian of appellee, and there is no evidence in the record from which it appears that the mortgagors, or either of them, while Baldwin was there, exercised any control, in person, over this mill or its machinery. The mere fact that the same hands who had operated the machinery under the mortgagors, were still so engaged, was not of itself calculated to mislead the public. They were only operatives, and being in the apparent actual possession, if this indicia of ownership was calculated to mislead the public, it would be to induce the belief that they were the owners. Whilst the evidence is not of that clear and satisfactory character that relieves the mind of all doubt as to the value of the property, we think the preponderance is in favor of the value fixed by the witnesses of appellee. They seem to have had the best opportunities of knowing its condition, and equal means of ascertaining its value, with those of the appellants’. That the court below fixed a value less than that of appellee’s witness, is not an error of which appellants have a right to complain. If it was erroneous, it was in their favor, and they have no right to object. On the whole record we perceive no sufficient error to require a reversal, and the judgment of the court below must be affirmed. Judgment affirmed.