Dohm v. Haskin

Grant, J. In 1874, Almerian and Malcolm B. Haskin became the owners as tenants in common of a flouring-mill, the property in dispute in this case. August 29, 1885, Almerian sold and deeded his half interest to George E. Hotchkin, who executed a mortgage to him for the full purchase price. Hotchkin and Malcolm Has-kin carried on the business as copartners until September, 1888, when Hotchkin conveyed his undivided interest to complainant, and the partnership was dissolved. Malcolm then leased complainant’s interest for a year for $300. [146] Soon after the organization of the partnership between Hotchkin and Malcolm, it was considered necessary, in order to insure success, to put in the ffroller process’” machinery. Hotchkin had no means, and it was agreed that Malcolm should furnish the money, and that Hotchkin should give him a-mortgage on his half interest to secure the payment. Half of the expense amounted to $1,325. June 22, 1885, Hotchkin executed a mortgage for this amount on his interest in the mill property, and also executed a chattel mortgage for the same debt on the, machinery. On October 3, 1888, Malcolm commenced the foreclosure of this mortgage by advertisement. The sale took place December 31, Malcolm bidding the property in for $1,106.08, and the deed was recorded January 9, 1889. Two bidders only were present at the sale, Malcolm and complainant, through her husband, who was acting as her agent. Malcolm then gave notice of this chattel mortgage, which he had filed December 12, and of his intention to foreclose it as against any purchaser at that sale. Complainant and her agent both knew that this chattel mortgage was for the same debt as the other mortgage. Meanwhile Malcolm procured an assignment of the mortgage given by Hotchkin to Almerian, and on February 6, 1889, commenced a foreclosure by advertisement, the amount due being between $1,100 and $1,200, exclusive of interest. The sale took place May 7, 1889, for the sum of $1,312.73, and the sheriff’s deed thereupon was duly executed and recorded. May 13, 1889, Malcolm posted notices of sale under his chattel mortgage. Complainant served upon him a written protest, but the sale proceeded, Malcolm bidding the property in for the sum of $300. The mortgage given by Hotchkin to Almerian was recorded subsequently to the mortgage given to Malcolm. [147] The assignment of this mortgage to Malcolm was executed in Kansas. It has but one witness, and purports to be acknowledged before a notary public. No certificate of a clerk or other proper certifying officer of a court of record was attached as required by the statute. How. Stat. § 5660. It was therefore not entitled to record, and the register of deeds should have refused to record it. Buell v. Irwin, 24 Mich. 145; Miller v. Clark, 56 Id. 340; Reynolds v. McMullen, 55 Id. 577. It was mutually agreed between Hotchkin and Malcolm on September 26, 1885, that said chattel mortgage should be ignored and canceled, and the property therein mentioned treated as a part of the realty. Under this state ■of facts, the sale under the chattel mortgage was void. So, also, was the foreclosure sale under the mortgage given to Almerian Haskin, for the reason that the assignment was not entitled to record. The right to foreclose by advertisement is conferred solely by the statute, and its provisions must be strictly complied with. Under this statute, the mortgage and assignment must not only be recorded, but they must be executed in such a manner as to entitle them to record. See the authorities above ■cited. I think the proper forum in which the defendant Malcolm Haskin should have proceeded to foreclose his mortgages was in equity, where all the rights of the parties could have been equitably determined and protected. Equity will not permit one tenant in common, in the possession of property, for the use of which he is bound to account to his co-owner, to foreclose by separate ■advertisements three mortgages which he holds upon his co-tenant’s interest, all of which are past due. While it is true that complainant knew that the chattel mortgage covered the same debt as the real-estate mortgage, yet the insistence at the sale of the validity of the chattel [148] mortgage, and the threat to foreclose it, might well deter her, or her agent, from bidding at the sale. This was evidently what Malcolm intended, and his object was accomplished. I think all these sales were void, and should be set aside. The decree of the court below must be reversed, and the case remanded for further proceedings. The property is so situated that it cannot be partitioned, and must therefore be sold, and the proceeds divided. Out of the complainant’s share must be deducted the amounts due defendant Malcolm under his mortgages. Complainant will recover the costs of this Court. The other Justices concurred.