Tootle, Hanna & Co. v. Lyster

— 594 — The opinion of the court was delivered by "Valentine, J.: It seems to be admitted by the parties that the only question involved in this case is, the validity or invalidity of a certain chattel mortgage. The mortgage reads as follows: “ Know all men by these presents, that I, L. P. Getman, of Sedan, Chautauqua county, Kansas, of the first part, am indebted to Tootle, Hanna & Co., of Kansas City, Missouri,- of the second part, in the sum of one thousand seventy-two and •^3- dollars, to be paid as follows, this day below mentioned, on open account, and dated November the 26th, 1879, due in sixty days after date. “Now, therefore, in consideration of such indebtedness, and to secure the payment of the same as aforesaid, said party of the first part does hereby sell, assign, transfer and set over to said party of the second part the property described in the following schedule, viz.: his entire stock, consisting of dry goods, groceries, hats, caps, clothing, notions, furnishing goods, queensware, glassware, cutlery, fixtures and show cases, woodenware, stove. “ This mortgage is given by the mortgagor, and accepted by the mortgagees, subject to a certain prior mortgage on the same property, dated February 9th, 1880, given by said L. P. Get-man to Camenga & Anderson, Dye Bros., M. Liebenberg, Peter Greer, W. H. Downing, and H. M. Waters; which mortgage is first to be paid and satisfied from the sale of said stock of goods above described. Provided, however, That if said debt and interest be paid as aboye specified, this sale and transfer shall be void. The property sold is to remain in possession of said party of the second part, until default be made in the payment of the debt and interest aforesaid, or some part thereof, but in case of a sale or disposal, or attempt to sell or dispose of the same, or a removal of, or attempt to remove the same, from where they are, or an unreasonable depreciation in the value, or if from any other cause the security shall become inadequate, the said party of the second part may take such property, or any part thereof, into their own possession. And upon taking said property into their possession, either in case of default, or as above provided, said party of the second part shall sell the same at public or private sale, and after satisfying the aforesaid debt and interest thereon, and all necessary and — 595 — reasonable costs, charges and expenses incurred, out of the proceeds of sale, they shall return the surplus to said party of the first part, or their legal representatives. And if from any cause said property shall fail to satisfy said debt and interest aforesaid, said party of the first part hereby agrees to pay the deficiency. In witness whereof, the said party of the first part has hereunto set his hand, this 17th day of February, 1880. L. P. Getman.” The defendants in error, who were defendants below, claim that this mortgage is void, for uncertainty in the description of the property intended to be mortgaged • while the plaintiffs in error, who were plaintiffs below, claim that the description of the property, as set forth in the mortgage, is sufficiently certain, and that the mortgage is valid. The court below held that the mortgage is void, and for that reason rendered its decision and judgment against the plaintiffs, who now seek to have such decision and judgment reversed. There are a few other facts not shown by the chattel mortgage, which are necessary to be known to enable us to come to a correct determination of this question. These facts must be gleaned from the plaintiffs’ petition • and as the plaintiffs’ petition was demurred to in the court below, and’ as the demurrer was sustained, all the facts stated in the petition must be taken as true for the purposes of this case. At the time that Getman executed the mortgage to Dye and others (which was the first mortgage), the mortgaged property was in the possession of Getman, in a certain warehouse owned by Getman, in the town of Sedan, Chautauqua county, Kansas. The mortgage described the property as being “the stock of merchandise, consisting of dry goods, groceries, queensware, clothing and notions, cutlery, hats and caps, now situate and being in the two-story frame business house now occupied and in possession of said party of the first part (Get-man), in the town of Sedan, in Chautauqua county, Kansas.” This mortgage was executed February 9, 1880, and was filed for record in the office of the register of deeds of Chautauqua county, Kansas, on February 10, 1880. The present mort — 596 — gage, the one now in controversy, was executed February 17, 1880, and was filed for record with the register of deeds of Chautauqua county on the same day. Whether the mortgaged property still remained, at the time of executing this last mortgage, in the possession of Getman, and in Chautauqua county, is hardly shown; but probably it did. The mortgage to the plaintiffs however says, by unavoidable implication if not directly, that at that time it was in the possession of the mortgagees, the present plaintiffs. There is nothing in the petition, or elsewhere, showing where the mortgagees mentioned in the first mortgage resided, or where they did business— and from the record of this case we can hardly form an opinion concerning the same; in fact, however, and outside of the record, we suppose they resided and did business in Kansas City, Missouri. The mortgagees mentioned in the second mortgage (the mortgage now in controversy) resided at Kansas City, while Getman resided in Chautauqua county. The demurring defendants in this case were not parties to either of these mortgages, and there is no allegation in the plaintiffs’ petition, or elsewhere, that they in fact had any knowledge of either mortgage. Under such circumstances, we think we must hold that, as between the demurring defendants,'who were third parties, having no knowledge in fact of the mortgaged property, and the mortgagees, the second CvoidfOTuncef-6’ mortgage is void; and that it is void because of an insufficient description of the mortgaged property. It is true that, as between the original parties to a chattel mortgage, who know what property is intended to be mortgaged, almost any description of the property is sufficient. It is also true that, as between the mortgagees and third persons, who in fact know what property intended was to be mortgaged, a very indefinite description will also be sufficient. This was the case in the case of Adams v. Hill, 10 Kas. 627; although in that case the description was probably sufficient, even if Adams, the third person, had not known what property was in fact mortgaged. It is also true that, as between the mortgagees and third persons, where the mortgagees, with — 597 — the consent of the mortgagors, have obtained possession of the mortgaged property before such third persons obtained any interest therein, a very indefinite and uncertain description will be held to be sufficient. This was the case in the case of The Savings Bank v. Sargent, 20 Kas. 576; and even where a mortgage would be held to be void for other reasons than an indefinite description, the mortgage may sometimes be held valid as between the mortgagees and third persons, where the mortgagees have obtained possession of the property before the third persons obtained any interest therein. (Dayton v. Savings Bank, 23 Kas. 421.) And in all eases where the description is such that third persons, by its aid, together with the aid of such inquiries as the mortgage itself suggests, may identify the property, the description will be held to be sufficient. (Brown v. Holmes, 13 Kas. 482; Shaffer v. Pickrell, 22 Kas. 619; King v. Aultman, 24 Kas. 246.) But in all cases where the mortgage does not describe the property so that a third person, by its aid, together with the aid of such inquiries as the mortgage itself suggests, may identify the mortgaged property, and where the mortgagees have not taken possession of the mortgaged property, the mortgage will be held void as against third persons who have obtained some interest in the property without notice of the mortgagees’ rights; and this because of the insufficiency of the description of the mortgaged property. (Golden v. Cockrill, 1 Kas. 259.) In the last case cited it is held that — “The description of property in a chattel mortgage, to be good, should contain either some hint which would have directed the attention of those reading it to some source of information beyond the words of the parties to it, or something which will enable third persons to identify the property, aided by inquiries which the mortgage indicates and directs, or a description which distinguishes the property from other similar articles.” And the case further holds that a description in the words following: “One hundred and twenty-four head of mules, now in the territory of Kansas,” and “ one pair of clay-bank horses,” is not sufficient. See also Savings Bank v. Sargent, — 598 — 20 Kas. 576, 580, which holds substantially the same way. The present case we think does not come within any of the decisions holding that the description is sufficient, but comes within the decisions holding that the description is not sufficient. The mortgage now in controversy does not show where the property was situated when the mortgage was executed; it does not show in what town, or city, or county, or state, the property was situated, whether in Kansas or in Missouri; it does not show where the mortgage was executed, whether in Kansas or in Missouri; and it does not truly state in whose possession the property was when the mortgage was executed. It states, as we construe it, that the property was in the possession of the mortgagees, which was not true in fact; and states that they resided in Kansas City, Missouri, which was true. But the mortgage was recorded at Sedan, in Chautauqua-county, Kansas, and not in Kansas City, Missouri. The mortgage' also states that the property had been previously mortgaged; but it does not state where the prior mortgage was. executed, whether in Kansas or Missouri, or where it was recorded, or whether it was recorded at all, or not. And it does not state where the mortgagees mentioned in the prior mortgage resided; nor does it state whether the mortgaged property remained at the place where it was situated when it was first mortgaged, nor whether it was in the possession of the same persons who held the possession of it when the first mortgage was executed; but the inference must be — if any inference is to be drawn from the language of the mortgage now in controversy — that both the situation and the possession of the property had changed since the first mortgage was executed and before the second was executed. At the time the second mortgage was executed, according to the language of the second mortgage the property was in the possession of the mortgagees mentioned in the second mortgage, who resided at Kansas City, Missouri; but it could hardly be supposed that the property was in their possession at the time the first mortgage was executed, as Getman, the mortgagor, resided in Chautauqua county, Kansas. The description in — 599 — the second mortgage is therefore vague, uncertain and misleading. It is certainly misleading as to persons not having any actual knowledge of what property was intended to be mortgaged. And the description is not only vague and uncertain, but it is untrue. The property was in fact never in the possession of the persons in whose possession the mortgage states that it was. Therefore, taking all the circumstances of the case together, we must hold that the description of the mortgaged property is not sufficient; and therefore, as between the present parties, the mortgage is void. The judgment of the court below will be affirmed. All the Justices concurring.