Edwards & Beardsley v. Cottrell & Babcock

Day, J. I. At the time of the filing of the report of the referee, May 24th, 1874, Wright was supposed to be solvent. Mellinger & Co., and -Cottrell & Babcock were satisfied with a judgment against him. The report of the referee exonerated Edwards & Beardsley from liability. The only party, therefore, who took exceptions before the referee, to his report, was Wright. Before judgment was rendered upon the report, Wright filed a motion to suspend proceedings against him for the reason that he had been adjudged a bankrupt, since the filing of the referee’s report. Thereupon Cottrell & Babcock, and Mellinger & Co., filed exceptions to that part of conclusion of law number five, which holds that the sale by Wright to Edwards & Beardsley should stand. Appellants now insist the court below can review the action of the referee only upon exceptions taken before and signed by him; and that, in acting upon the report of a referee, the power of the Circuit or District Court is appellate. In support of this position reference is made to the Code, sections 2819, 2820, 2821, 2822, 2823, 2830 and 2831. [202] 1 i'bacticb • ráeree>snre-° P°rt [201] -This position of appellants, we think, is not tenable. It is [202] true section 2820 provides that the trial shall be conducted in ^ie satne manner as a trial by the court. Section ^821 provides that the report of the referee shall stand as the finding of the court, and judgment may be entered thereon in the same manner as if the action had been tried by the court, and the report may be excepted to and reviewed in like manner. Section 2828 requires the referee to sign any true bill of exceptions taken to any ruling made by him in the case, whenever any party demands a bill of exceptions. The purpose of this last section is to preserve and present any objection to rulings made during the progress of the trial, which otherwise would not appear of record, such as the admission or rejection of testimony and the like. We cannot believe the intention to have been to deny a party the right to have a review of the conclusions of law by the referee, or of the correctness of the facts found by him, unless exception thereto is taken before the referee before the filing of the report. Such a course W'ould, in practice, prove very inconvenient, if not altogether impracticable. When all the evidence is submitted to a referee he usually takes time for the examination of it, and the preparation of his report. When the report is prepared it is filed in court without being submitted to the parties, and without giving them opportunity to except to the conclusions of fact or of law. The referee stands in the place of the court. His report on the facts and conclusions of law stands as the finding of the court, and they may be excepted to and reviewed in like manner. That is, as we understand it, the referee is simply substituted for the court, for the determination of the questions of fact and of law. When the report of the referee is filed, it stands in the same position and has the same effect as would a like finding of the facts and the law by the court. The party aggrieved thereby may file his exceptions, and may call upon the court to review or reconsider the finding, upon questions of law, and upon questions of fact, if the evidence has properly been preserved, and from the ruling of the court upon these exceptions he may have his appeal. [203] The correctness of this position, although not directly determined in, may be fairly inferred from the case of Oliver v. Townsend, 16 Iowa, 430. In that case, upon the coming in of the report of the referee, the defendants excepted to it, and moved to set it aside. It was held that the exception to the rep&rt, on the ground that it was not sustained by the evidence, was properly overruled, because it did not appear that all the evidence had been certified to the District Court with the report. No suggestion was made that such objection could not be made for the first time after the filing of the report. In Morris v. Hudson, 8 New York, 204, a construction was adopted which seems to be at variance with the doctrine of this opinion. The question is purely one of practice, and we are satisfied that the foregoing view is the better one. II. The conclusion of law that, when the press was shipped under the written order, the sale was completed, and the title vested in the Iowa Journal Company, without conditions, is a proper deduction from the facts found by the referee. The record does not purport to contain all the testimony, and it is quite apparent that, in fact, it contains but a small portion of it. We cannot, therefore, review any of the findings of fact, but must consider them as properly determined by the referee. The press in question was mortgaged by Helmúth & Foestinger, on the 30th day of August, 1870, to E. Gr. "Wright, to secure him as the indorser of a note for $150. It was also mortgaged by Massman & Helmuth to Cottrell & Babcock on the 8th day of September, 1870, for the unpaid balance of the purchase money. No objection is made to the legal conclusion that these mortgages are valid. • The lien of Wright is, therefore, prior in point of time, and superior to that of Cottrell & Babcock. The referee found that “After Wright paid the note for $150.00 to the Bank, for Helmuth as indorser, on December 2nd, 1870, under the conditions of his chattel mortgage, he sold, or rather traded the press to Edwards & Beardsley at private sale, with warranty of title, and took in payment thereof two [204] notes on E. E. Gay, for $75.00 each, and 160 acres of land in Crawford county, Iowa, valued at $4 per acre,” As a conclusion of law the referee found that this sale to Edwards & Beardsley should stand, and that Wright must account for the cash value of the press. Upon exception to this part of the finding of the referee the court held that Wright had no power to sell for anything but cash; that the sale was for less than the full value of the press; and that Edwards & Beardsley were bound to know what Wright’s powers were under the mortgage. 2. mobtgagk: thereunder. In this determination the court was clearly right. A mortgage of a chattel with power of sale confers no right to exchange the mortgaged property for other iiroperty. Sale means at all times a contract between parties to pass rights of property for money, which the buyer pays, or promises to pay the seller. Williamson et al v. Berry, 8 Howard, 544; Bigley v. Risher, 63 Penn. St., 155. Where a party mortgages a chattel with power of sale, he is entitled to the excess of the proceeds of the sale over the amount of the debt secured, and the mortgagee has no right, without the consent of the mortgagor, to barter the mortgaged property for other, or to compel the mortgagor to take in anything else than money the excess in value of the mortgaged property over the debt secured. The only effect of the sale to Edwards & Beardsley, therefore, was to transfer to them the lien whi.ch Wright had for the payment of $150.00. _. r0_ eiuu^Vo£is" surety. III. Cottrell & Babcock brought a replevin suit, based upon their mortgage, for the possession of the printing press, against Massman & Helmuth, and Mellinger & Co., and> obtaining possession of the press, they placed it in the possession of Osborn, Snow & Go. for keeping. Afterward Edwards & Beardsley commenced their action of replevin against Cottrell & Babcock and Osborn, Snow & Co., for the possession of the press, claiming it under the purchase from Wright. L. Teedriek was surety upon the replevin bond. The court below rendered judgment against Edwards & Beardsley and L. Teedriek, surety upon the replevin bond, for $1,300, the [205] value of the press, less the amount of Wright’s lien. This was error. We have already seen that Wright’s mortgage created a lien superior to that of Cottrell & Babcock, and that the transfer to Edwards & Beardsley invested them with this lien. At the time of the commencement of their, replevin suit,' Edwards & Beardsley were entitled to the possession of the press, as against Cottrell & Babcock, and the only thing which prevented a judgment awarding them the possession, was the consolidation of the several cases, and their transfer to the equity docket. This consolidation and transfer ought not to prejudice the rights of the surety on the replevin bond. As the parties for whom he stood surety were entitled to the possession of the property, at the time the replevin suit was commenced, the surety upon the replevin bond should be discharged from liability. It is true Edwards & Beardsley claimed to be the owners of the press under a purchase from Wright; but they were required to prove no more than was necessary to entitle them to the possession of the press. Code, section 2729. 4. landlord's claimed. IV. As appears from the findings of fact, Mellinger & Co., on July 1, 1870, by written contract, leased Massman, Foestinger and Helm nth certain premises on Jefferson street, at an annual rent of $350, payable monthly. They took possession and occupied about six mouths. The printing press was put into and used upon the premises till about November or December, 1870, when it was taken away by Cottrell & Babcock, on writ of replevin. The rent had not been paid up to that date, and has not since been paid. Mel-linger & Co. claim that they have a prior lien over all others, for the rent due them; whilst upon the other hand it is claimed that their lien has been lost under section 2017 of the Code, which provides that the lien shall not in any case continue more than six months after the expiration of the term. Upon this claim for rent the referee found, as a conclusion of law, that the press went into the premises leased from Mellinger & Co. unincumbered, and that the lien of the landlord for rent, accrued and to accrue, attached immediately, and is paramount to all other liens; and that although [206] Mellinger & Co. did not commence proceedings under the statute to enforce their lien, yet, being made parties to the Cottrell & Babcock replevin suit, and having set out their rights in their answers therein, the property was sufficiently in the custody of the law to protect their rights and preserve their lien, although more than six months had elapsed since the termination of this lease. The court also recognized this doctrine in giving Mellinger & Co. a lien for their rent. Erom appellant’s abstract it would seem that the first claim made by Mellinger & Co., for a lien for their rent, was in answer to the cross-petition of Cottrell & Babcock, which petition was filed June 12th, 1872. But an additional abstract of Mellinger & Co. shows that they were made parties to the original replevin suit of Cottrell & Babcock, and that, in answer to that suit, in January, 1871, which was within two months of the termination of their lease, they set up their claim and lien for rent, and asked judgment for a return of the property to them. In view of this fact, the court did not err in preserving their lien. Y. The court rendered judgment against Edwards & Béardsley for the value of the press, as found by the referee. In this there was error. The press never has been sold under the chattel mortgage. Edwards & Beardsley have simply succeeded to Wright’s lien. It is ordered, therefore, that the press be sold under the chattel mortgage, as its terms prescribe; that out of the proceeds there be paid, first: the claim of Mellinger & Co., $210, with interest from May 24th, 1874, the date of the referee’s report, with interest at six per cent; second: to Edwards & Beardsley the amount of the Wright lien, $152.50 with like interest; third: to the payment of Cottrell & Babcock’s claim, $1,058.15, with interest from the same time. If anything remains it shall be paid to the mortgagors. If Edwards & Beardsley have placed the press beyond the reach of special execution, judgment shall be entered against them for its value, $1,300.00, to be applied as above named. [207] The costs of appeal will be paid by Cottrell & Babcock, and by Mellinger & Co., in the proportion, as nearly as may be, of their respective liens. Eeversed