Cahoon v. Miers

Miller, J., delivered the opinion of the Court. Authorities are to he found in other States to the effect that a mortgage of domestic animals which makes no mention of the increase, covers the increase, even as between the parties, so long only as it is necessary for the young to follow the mother for nurture ; or at all events that a purchaser of such increase from the mortgagor who is left in possession thereof, without actual notice of the mortgagee’s claim, will acquire a good title ; and in one case the same thing was held in regard to the title of an attaching creditor. Jones on Chattel Mortgages, secs. 149, 150; Winter vs. Landphere, 42 Iowa, 471; Darling vs. Wilson, 60 N. H., 59. But the law has long been settled differently in this State. In the case of Evans & Iglehart vs. Merriken, 8 [577] G. & J., 39, (decided, in 1836,) there was a mortgage of several female negro slaves in which nothing was said as to their issue or increase. One of them had a child born after default in payment of the mortgage debt, and while the mother was in possession of the mortgagor. When this child was about two years old the mortgagor sold it to his son for a valuable consideration, who thus became a bona fide purchaser for value, and immediately took possession of the child and raised it, with the knowledge of the mortgagees and without any claim of title on their part. Eleven years after the date of the mortgage the mortgagees filed their bill for the sale of the mortgaged property, and the trustee appointed to make the sale sold the child with its mother. The question then arose whether the proceeds of sale of the child should go to the mortgagees towards payment of the mortgage debt, or to the purchaser from the mortgagor. The Chancellor's decision was in favor of the purchaser, but this was reversed by the Court of Appeals. The question was conceded to be a new one, was argued before a very full Court, all the Judges but one being present, and they gave it a very careful consideration. In behalf of the appellee, the argument was pressed that the mortgage having made no mention of the issue, the public had no means of knowing where the title was, and they should be secured in dealing with the possessor as the legal proprietor; that when the boy was conveyed to him by the mortgagor, the appellee who was an innocent third party and a purchaser for value, did not, and could not know that he was touched by the mortgage. But the Court putting aside this argument, rested their decision upon the legal effect and operation of the mortgage, as between mortgagor and mortgagee. They said, and upon ample authority, that a mortgage does something more than merely create a lien for the debt; that upon its execution the legal estate, becomes immediately vested in the mortgagee, and the right of possession fol [578] lows as a consequence, subject only to the occupancy of the mortgagor, which is only tacitly -permitted, until the will of the mortgagee is determined; that this legal estate is defeasible at law upon the payment of the mortgage debt at the time stipulated, but if this is not done then it becomes indefeasible .at law and defeasible only in equity, where the mortgagor, nothwithstanding his default, is permitted to redeem. From this view of the nature and effect of a mortgage, they say, it results that the mortgagee must be considered as having an estate or interest in the subject-matter of the mortgage, not absolute, it is true, because such an estate is not imported by the terms of the instrument, but an interest commensurate with the object contemplated to be attained by it, as a security for the payment of the debt. They then applied the rule that the owner of the mother is the owner of her offspring, and held that the mortgage cover.ed the issue. For authority they referred to the case of Hughes vs. Graham, 1 Litt., 317, where the same question arose, and where the same decision in regard to the offspring was made. They said that in the case before them the title of the mortgagee had become absolute at law, when the issue was born, and therefore his title to the mother being absolute and indefeasible at law, he must, of course, be entitled at law to her offspring, subject to the equitable right of the mortgagor to redeem in equity on payment of the mortgage debt. In further support of their view they refer to the analogous rule in case of a pledge, and cite from Story on Bailments, sec. 292, where it is said, “by the pledge of a thing, not only the thing itself, but also as accessory the natural increase thereof, — -as if a flock of sheep are pledged the young afterwards born are also pledgedand from this they argue, that if such is the principle in the case of a pledge, where only a special property passes, a fortiori ought the rule to obtain in the case of a mortgage, where the whole legal title passes con [579] ditionally to the mortgagee, and more especially where by forfeiture the title has become absolute at law. By the reference thus made to the law of pledges, the Court unquestionably adopted the rule of the civil law on that subject, and placed a duly swor.n to and recorded mortgage of personal property, upon the same footing in regard to its covering the increase of the property mortgaged. The whole tenor and course of their reasoning is to this effect. The citation they make from Story on Bailments is founded on the civil law, and in the same section from which they cite, the extent to which the doctrine is carried by the Eoman law is thus stated: “ Grege pignori obligato, qucepostea nascuntur, tenentur. Sed et si capitibus decedentibus totus grexfueritrenovatus, pignori tenebitur.” So also Domat in giving us the Civil Law doctrine as to mortgages and powers, and the privileges of creditors thereunder says: “ Although the mortgage be restricted to certain things, yet it will nevertheless extend to all that shall arise or proceed from that thing which is mortgaged, or that shall augment it or make part of it. Thus when a stud of horses, a herd of cattle, or a flock of sheep is put in pawn into the creditor’s hands, the foals, the lambs and other beasts which they bring forth, and which augment their number, are likewise engaged for the creditor’s security. And if the whole herd or flock be entirely changed, the heads which have renewed it are engaged in the same manner as the old stock.” Domat’s Civil Law by Strahan, sec. 1663. By our statute law where the mortgage has been duly sworn to and recorded, (as is the case here) it has the same effect in transferring the title, even though the mortgagor may remain.in possession, as if the mortgagee had been put in possession of the mortgaged property. Code, Art. 24, secs. 29 and 39. When thus sworn to and recorded, the law presumes notice of it and of its legal effect, and all persons dealing with the mortgagor with respect [580] to such property, whether as purchasers or creditors are affected with such notice. Unquestionably a judgment creditor of the mortgagor may levy upon the mortgaged property and then file a bill in equity to redeem, and thus secure for his claim what may remain of the proceeds of sale after satisfying the debt due the mortgagee. But at law, the title all the while is in the mortgagee, and this being an action at law involving simply the legal title, we are constrained to hold, under'the decision referred to, that the title to the hogs in controversy was in the mortgagee. That decision has been acquiesced in and recog- ’ nized as the law of the State for more than half a century, and we see no good reason for overruling it now. (Decided 3rd November, 1887.) Judgment affirmed.