Degenhart v. Cartier

157 P. 637, 52 Mont. 102, 1916 Mont. LEXIS 52

• Court: Montana Supreme Court
• Decided: March 2, 1916
• Docket: No. 3,598
• Status: Published

Opinion

MR. JUSTICE SANNER

delivered the opinion of the court.

The judgment from which this appeal is taken was entered .after a general demurrer to the complaint, filed by defendants jointly, had been sustained; the plaintiff declining to further plead. Hence the only question before us is whether a cause of action is stated against any of the defendants upon any theory.

The purpose of the action is to recover the sum of $1,012.80, with interest. The complaint is in three counts, doubtless so framed to meet the supposed exigencies of classification. We do not deem the attempt thus made to classify the-action as of great importance, since it is the facts pleaded upon which recovery must be had. These facts, as set forth in the first count, are: That on February 26, 1913, the plaintiff brought an action upon account to recover the sum of $397.51 then due him from the defendant George A. Cartier, caused a writ of attachment to issue therein, and placed said writ in the hands of the sheriff for levy and service; that the only property possessed by said Cartier not exempt from execution was certain livestock of the value of $1,600, which property was subject to a chattel mortgage to the defendant Power for $1,000, duly filed; that the plaintiff, being desirous of attaching said property and for the sole purpose of enabling a levy of the writ to be made thereon, deposited with the county treasurer, payable to Power, the amount due upon said chattel mortgage, to-wit, $1,012.80, as required by the provisions of section 5766, Revised Codes; that the sheriff proceeded to make the levy, but before he could reach the property the defendants, who had learned of the filing of plaintiff’s complaint, of the issuance of said writ, of said deposit, and of the purpose for which it was made, did, with the purpose of defrauding the plaintiff out of said deposit, cause said property to be encumbered with a second chattel mortgage, dated February 26, 1913, executed by the defendant George A. Cartier to the defendant Power for $675, and filed; the writ meanwhile was levied, and on February 27, 1913, the defendants served upon the sheriff a written demand that, because Power claimed a lien on the property by virtue of the mortgage last mentioned, the sheriff release said property from the levy; that the sheriff released, and thereupon the defendants demanded and received from the county treasurer the moneys which had been deposited by the plaintiff, and caused to be indorsed upon said chattel mortgage a certificate by said Power to the effect that said chattel mortgage had been fully paid, satisfied, and discharged; that thereafter the defendants caused other and further encumbrances to be given and placed upon said property, and caused said property to be sold and disposed of, and to come into the hands of innocent purchasers; that the defendants Cartier are insolvent, and the defendant Power has kept the moneys deposited by the plaintiff with the treasurer and paid over by the treasurer to said Power; that the acts and things above mentioned as done by the defendants were wrongfully and fraudulently done, for the single purpose of preventing, as they did prevent, the plaintiff from proceeding with his attachment or getting back his deposit, to his damage in the sum of $1,012,80, with interest.

In the second count, which takes the form of an action for money had and received, and in the third count, which takes the form of an action in conversion, the acts complained of are imputed to Power alone; but the theory underlying the [1-3] whole complaint is that the deposit by the plaintiff of the amount due on Power’s first mortgage did not pay the debt secured thereby or discharge the mortgage, but served to subrogate the plaintiff to the right of Power as such mortgagee; that the defendants could not lawfully destroy the right of recourse as against the mortgaged property for the amount so paid, thus obtained by the plaintiff; that they did destroy it when, under the circumstances stated, Power certified of record that the chattel mortgage had been fully paid, satisfied, and discharged, and in so doing committed a wrongful act, redressible in damages. We think this position is substantially correct. A creditor desiring to attach chattels, must, under section 5766, pay, tender or deposit “the amount of the mortgage debt and interest,” in other words, he must protect the mortgagee; but he is not required to pay, and does not satisfy, the mortgage; on the contrary, his right to look to the property for reimbursement of the sum paid to the mortgagee, is expressly recognized. The statute was designed solely for the benefit of the mortgagee. He alone could complain in the first instance if the property were seized under attachment without regard to his mortgage, and neither the mortgagor nor a junior creditor has ahy concern in the payment made to him by the creditor seeking to attach. This being so, it cannot be supposed that the debt secured by the mortgage is extinguished without the expenditure of a single cent by the debtor, or-that, should the attachment fail, the attaching creditor must lose, not only the security he hoped to obtain by the attaching for his original demand, but also the sum paid to place the mortgage lien in abeyance pending the attachment. Under statutory conditions similar to ours it has been recognized that a right in the nature of subrogation does vest in the attachment creditor who pays the amount of a prior mortgage, and if his attachment should fail he still has recourse to the property for the amount paid to the mortgagee. (Moore v. Calvert, 8 Okl. 358, 58 Pac. 627; Bell-Wayland Co. v. Miller-Mitscher Co., 39 Okl. 4, Ann. Cas. 1915D, 780, 130 Pac. 593; Carstenbrook v. Wedderien, 7 Cal. App. 465, 94 Pac. 372; Deering v. Wheeler, 76 Iowa, 496, 41 N. W. 200; Armstrong v. McAlpin, 18 Ohio St. 184.) As that right is a property right, he cannot be justly deprived of it by anyone, let alone the debtor, who has paid nothing, or the mortgagee, to whose claim against the property he has, in legal effect, succeeded. In our opinion, therefore, to destroy that right, as the complaint alleges it was destroyed in this instance, was a wrong, whether done by all the defendants, or by Power alone, and for it recovery can be had against the guilty party.

Counsel for respondents present this case as though the right of Power to procure the second mortgage, and with it to win an honest race of diligence against the plaintiff’s attachment, were the questions involved; but these are not primary considerations, because the plaintiff is not seeking to recover for the loss of his attachment security. It is also argued that no recovery based upon the satisfaction of the mortgage by Power can be had, because the statutes (Rev. Codes,'secs. 5755, 5771) require a mortgagee, whose mortgage has been paid, to satisfy the same. This is not tenable. The sections just referred to require a mortgagee to satisfy the mortgage only when the debt or obligation thereby secured has been paid or performed; as the debt secured by this mortgage was not paid by the deposit, but the right to collect it was thereby vested in the plaintiff, these sections have no application.

The judgment appealed from is reversed and the cause is remanded, with directions to overrule the demurrer.

Reversed and remanded.

Mr. Chief Justice Brantly and Mr. Justice Holloway concur.

Rehearing denied March 31, 1916.