McGraw v. Bishop

Grant, J. One Henry Newman, being indebted to plaintiffs in the sum of $700, on December 26, 1889, executed to them a chattel mortgage on his stock of goods, which consisted of gentlemen's furnishing goods, clothing, hats, caps, boots, and shoes. This mortgage provided for future advances by the plaintiffs, and also covered after-acquired goods. On December 28 unsecured creditors sued out a writ of attachment from the circuit court of Kent county against said Newman, and levied upon this mortgaged stock. The mortgage provided that the mortgagees might take possession whenever they should deem the claim secured by the .mortgage to he in jeopardy. After the levy the plaintiffs placed a man in joint possession with the sheriff, by his consent, while the inventory was being taken. After the inventory was completed, [75] plaintiffs demanded possession under their mortgage. Defendant refused possession, and announced that he held the goods in defiance of the mortgage. On being informed that plaintiffs would bring suit against him, he asked plaintiffs to wait until he got his bond, and then he did not care if they did sue him. Plaintiffs in the attachment suit gave the defendant a bond, and afterwards plaintiffs brought this suit in trover. The circuit judge directed a verdict for the defendant, and plaintiffs appealed. The circuit judge based his direction upon the ground that plaintiffs should have declared the mortgage to be due before they demanded possession. The attachment proceedings were void, and the circuit court was directed by this Court, upon a writ of mandamus, to quash them.1 The mortgage fixed no time when the $700 were to become due .and payable. They, therefore, became due at once. Bearss v. Preston, 66 Mich. 11. It is true that the mortgage contemplated that the mortgagor' might continue in possession, and carry on his business in the usual way. It is unnecessary to determine in this case whether or not, as against the mortgagor, the mortgage might be foreclosed immediately after its execution for the non-payment of the $700. The whole stock had been seized by the writ of attachment, and the mortgagor was thus prevented from carrying on his business in the customary manner. Under these circumstances plaintiffs' might well consider their claim in jeopardy, and proceed under the terms of the mortgage to take possession of the goods. The expression in this mortgage that the mortgagees might take possession whenever .they considered their claim in jeopardy is equivalent to the usual provision for [76] taking possession when the mortgagees consider themselves insecure. This Court has held that, under similar clauses in chattel mortgages, mortgagees are entitled to possession before condition broken, and may maintain trover as against those who wrongfully interfere with their possession. Grove v. Wise, 39 Mich. 161; Botsford v. Murphy, 47 Id. 536. Plaintiffs were entitled to bring replevin or trover. The circuit judge should have directed a verdict for the plaintiffs. Judgment is reversed, with the costs of this Court, and a new trial ordered. The other Justices concurred. Footnotes [1] See Newman v. Burch, Circuit Judge, decided January 28, 1890; no opinion being filed.