Bank of Ukiah v. Gibson

39 P. 1069, 5 Cal. Unrep. 11, 1895 Cal. LEXIS 1198
CourtCalifornia Supreme Court
DecidedApril 3, 1895
DocketNo. 16,662
StatusPublished
Cited by1 cases

This text of 39 P. 1069 (Bank of Ukiah v. Gibson) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bank of Ukiah v. Gibson, 39 P. 1069, 5 Cal. Unrep. 11, 1895 Cal. LEXIS 1198 (Cal. 1895).

Opinion

SEARLS, C.

This is an action by the Bank of Ukiah (a corporation) to foreclose two mortgages executed by E. S. Gibson, to secure the payment of a promissory note made by him to said bank. One of the mortgages was upon certain real property, and the other a chattel mortgage upon three thousand five hundred head of sheep, more or less, and one hundred head of neat cattle, more or less, upon a certain ranch therein described. The court entered a decree in favor of plaintiff for the foreclosure of the mortgages and sale of the real property and the neat cattle, but denied a foreclosure as to the sheep. Plaintiff appeals from so much of the decree as denied to it a foreclosure and sale of the sheep, etc., described in the complaint and chattel mortgage. The cause comes up on the judgment-roll, without a statement or bill of exceptions.

Under these circumstances, the question for determination is, Do the findings support the decree? All reference to the mortgage upon the real estate may be omitted, as no question is made in regard to it. As to the chattel mortgage, the following facts, drawn from the pleadings as admitted and from the findings, will serve to an understanding of the legal question involved. On the thirtieth day of June, 1892, at Ukiah city, Mendocino county, the defendant E. S. Gibson made to the Bank of Ukiah, the plaintiff herein, his promissory note for $29,917.88, payable one year after date, with interest at ten per cent per annum, etc. To secure the pay[13]*13ment of this promissory note, defendant executed to plaintiff a chattel mortgage upon certain personal property, then being upon that certain ranch of defendant Gibson, in the county of Mendocino, known as “Island Mountain Ranch,’’ said personal property so mortgaged consisting of three thousand five hundred head of sheep, more or less, and one hundred head of neat cattle, more or less, being all the sheep and cattle owned by defendant Gibson on said ranch. The mortgage was made, executed, acknowledged, and verified in all respects as provided and required by section 2957 of the Civil Code, except' that it was not recorded until May 9, 1893, when it was duly recorded in the office of the county recorder in and for the eounty of Mendocino, in which county the parties resided and the property was situate. The mortgagor, B. S. Gibson, retained possession of the mortgaged property. It may be remarked here, by way of parenthesis, as it is not within the findings, that, at the date of the execution of the mortgage, neat cattle and sheep were not among the articles of personal property upon which personal mortgages could be made under section 2955 of the Civil Code, but that on the ninth day of March, 1893, said section 2955 was amended so as to include “neat cattle, horses, mules, swine, and sheep, and the increase thereof.” Subsequent thereto, and on the ninth day of May, 1893, the mortgage was recorded as before stated. After the recording of said mortgage, viz., after May 9, 1893, the defendant T. J. Welden, with full knowledge of the existence and recording of said mortgage, and without the knowledge or consent of the plaintiff, purchased from defendant B. S. Gibson, at the ranch of the latter in Mendocino county, the said neat cattle and sheep so mortgaged, and drove the sheep hence to Drury’s corral, in the county of Humboldt, where on May 19, 1893, he sold and delivered them to the defendant Mrs. M. C. Drew, who purchased said sheep in good faith, for a valuable consideration, and without notice in fact of the mortgage of the plaintiff, and without knowledge that Gibson ever owned the sheep. The contract for the purchase of the sheep between Mrs. Drew and Welden was made at Ukiah, in Mendocino county, before the sheep were driven from said county, but she was not aware of that fact, and went with Welden to said Drury’s corral, Humboldt county, the day the sheep were driven thither from Humboldt county, viz., May 19, 1893. Welden, when he purchased [14]*14the mortgaged property from defendant E. S. Gibson, gave to the latter an agreement to pay $2.50 per head for the old sheep, and $20 per head for the cattle. Lambs and calves were to be- thrown in. He has paid nothing on account thereof, and the court finds that said Welden “is not the owner of the neat cattle described in the complaint, and his title and claim thereto is not paramount to plaintiff’s mortgage, and he is not the purchaser of said property in good faith or for value without notice.” As before stated, the sheep were removed from Mendocino to Humboldt county May 19, 1893, and within ten days thereafter, viz., May 29, 1893, plaintiff’s chattel mortgage was duly recorded in said county of Humboldt. The chattel mortgage authorized the mortgagee, upon default in the payment of the promissory note, to take possession of all the mortgaged property, and dispose of the same according to law.

In the early history of California as a state, section 17 of the statute of frauds provided that “no mortgage of personal property hereafter made shall be valid against any other person than the parties thereto, unless possession of the mortgaged property be delivered to and retained by the mortgagee.” In 1857 an act was passed under which certain personal property might be mortgaged by complying with its provisions, one of which involved recording, which should be valid without delivery of the property to the mortgagee: Stats. 1857, p. 347. This act provided also that such mortgages should not be valid (except between the parties) unless the statute was complied with. This act was again amended in 1861: Stats. 1861, p. 197. This last act also left mortgages of personal property absolutely void, except between the parties, save upon a compliance with its provisions, or where accompanied by a delivery of the property to the mortgagee and retention of possession by him. Under these statutes, the decisions of this court were to the effect: (1) The provisions of the statute only applied to the specific articles of personal property therein enumerated; (2) that where the provisions of the statute were not complied with, and as to mortgages of personal property not therein provided for, the mortgage was absolutely void (except between the parties thereto), unless accompanied by a delivery of the property to the mortgagee : Gassner v. Patterson, 23 Cal. 299; Meyer v. Gorham, 5 Cal. 323; Stringer v. Davis, 30 Cal. 318; Glenn v. Arnold, [15]*1556 Cal. 631. Under our Civil Code (section 2957), “a mortgage of personal property is void as against creditors of the mortgagor and subsequent purchasers and encumbrancers of the property in good faith and for value, unless (1) it is accompanied by the affidavit of all the parties thereto that it is made in good faith and without any design to hinder, delay; or defraud creditors; (2) it is acknowledged or proved, certified and recorded in like manner as grants of real property.” The distinction between the former statute and the section of the code quoted supra is this: Under the former law, a mortgage which failed to comply with its provisions was void as against purchasers. Now it is only void as against subsequent purchasers in good faith and for value; that is to say, against thpse who purchase without notice and for a valuable consideration. A mortgage of personal property not specified in section 2955 of the Civil Code may be made, and, if possession of the mortgaged property is delivered to the mortgagee, it is good against all the world. If no such possession is delivered to the mortgagee, it is still valid between the parties and against purchasers with notice: Tregear v. Water Co., 76 Cal. 537, 9 Am. St. Rep. 245, 18 Pac. 658; Works v. Meritt (decided January 5, 1895), 105 Cal. 467, 38 Pac. 1109.

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Bluebook (online)
39 P. 1069, 5 Cal. Unrep. 11, 1895 Cal. LEXIS 1198, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bank-of-ukiah-v-gibson-cal-1895.