Hansboro State Bank v. Imperial Elevator Co.

179 N.W. 669, 46 N.D. 363, 1920 N.D. LEXIS 24
CourtNorth Dakota Supreme Court
DecidedOctober 15, 1920
StatusPublished
Cited by4 cases

This text of 179 N.W. 669 (Hansboro State Bank v. Imperial Elevator Co.) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hansboro State Bank v. Imperial Elevator Co., 179 N.W. 669, 46 N.D. 363, 1920 N.D. LEXIS 24 (N.D. 1920).

Opinion

Christianson, Ch. J.

This is an action in conversion. Plaintiff sues to recover the value of certain wheat and barley grown during the year 1917, on certain lands in Rolette county, covered by a chattel mortgage executed to the plaintiff by one Walter Gran on October 5, 1916. The complaint is in the usual form, and alleges that Gran during the year 1917 “raised, harvested, and threshed a crop of barley and wheat upon said premises, and was the owner of the undivided one half of such crop of barley and wheat;” and that the defendant received 435 bushels of barley and 256 bushels of said wheat, and converted the same to its own use to plaintiff’s damage in the sum of $1,020.43. The answer admits the corporate character of the parties to this action, and puts in issue the other allegations of the complaint.

The evidence shows that one Walter Gran in the year 1917 farmed, as a tenant, some land in section 32, township 164, range 68, in Towner county, and in sections 3 and 4, township 163, range 69, and in sections 31 and 33, township 164, range 69, in Rolette county. On October 5, 1916, Gran was residing on the lands located in Towner county. On that day he executed and delivered to the plaintiff bank certain promissory notes and two chattel mortgages. One of the mortgages covered certain personal property, such as horses and farm machinery, and the crops for 1917 on the Towner county lands. The 'other mortgage covered certain horses and machinery and the 1917 crops on the Rollette county lands. The first mortgage was filed in the office of the register of deeds of Towner county on October 7, 1917, and the second mortgage was filed in the office of the register of deeds of Rolette county on October 7, 1916. The two mortgages secured different notes. It appears that later in the fall of 1916, Gran moved upon the lands located in Rolette county, and took his personal property [365]*365with him; but the property was moved back and forth across the county line, as he was required to, and did, go back and forth in carrying on his farming operations in the two counties. Defendant offered to prove that the Towner county mortgage was not refiled, nor an authenticated ■copy thereof filed, in the office of the register of deeds of Eolette county.

It appears that in the fall of 1917 the plaintiff received from Gran the proceeds of the crops grown on the Towner county lands, and gave him credit therefor on the debts secured by such chattel mortgage. It also appears that on October 12th and 13th, 1917, certain men working for Gran hauled and delivered to the defendant’s elevator at Eolia certain wheat and barley, and that the defendant paid Gran therefor. Shortly thereafter Gran absconded. The plaintiff thereupon seized all of the horses, cattle and machinery covered by the Towner county mortgage, and sold all of such property at chattel mortgage foreclosure sale in Towner county, and applied the proceeds of such sale upon the debt, secured by such mortgage. Later in April, 1919, the plaintiff made formal demand upon the defendant for the grain in controversy, and, upon such demand being refused, it instituted this action to recover damages for the conversion thereof. The case was tried to a jury, but at the conclusion of the trial, both parties moved for directed verdicts. The court thereupon discharged the jury, and made findings and conclusions in favor of the plaintiff, and defendant has appealed from the judgment.

The various assignments of error are based upon two main propositions :

1. The failure to file an authenticated copy of the Towner county mortgage in Eolette county.

2. Insufficiency of the evidence to identify the wheat.

(1) Under our statute, “a mortgage of personal property is void as against creditors of the mortgagor and subsequent purchasers and encumbrancers of the property in good faith for value unless the original or an authenticated copy thereof is filed by depositing the same in •the office of the register of deeds of the county where the property mortgaged, or any part thereof, is at such time situated.” Comp. Laws 1913, § 6758. “The filing of a mortgage of personal property in conformity with the provisions of this article operates as notice thereof to nil subsequent purchasers and encumbrancers of so much of said prop[366]*366erty as is at the time mentioned in the preceding section situated in the county or counties wherein such mortgage or an authenticated copy thereof is filed.” Comp. Laws 1913, § 6759.

Basing his argument upon these statutory provisions, appellant’s counsel contends: (a) That upon Gran selling to it the mortgaged grain defendant immediately became one of Gran’s creditor’s; (b) that inasmuch as Gran removed the personal property covered by the Towner county mortgage to Rolette county, and an authenticated copy of such mortgage was not filed in Rolette county, such mortgage was void as against the defendant as Gran’s creditor; (c) that the plaintiff bank should have foreclosed the Rolette county mortgage, and applied the proceeds of the sale of the horses and farm machinery upon the debt secured by such mortgage, instead of foreclosing the Towner county mortgage, and applying the proceeds of such personal property upon the debt secured by that mortgage; (d) that it was the .duty of the plaintiff, under § 6716, Comp. Laws 1913, to resort to and sell under its Rolette county mortgage all the other personal property covered by that mortgage, and apply the proceeds thereof in payment of the debt secured thereby, before attempting to recover from the defendant for conversion of the grain covered by that mortgage.

Assuming, without deciding, that defendant was creditor of Gran, it by no means follows that it is in position to assail the validity of the chattel mortgage under which the horses and machinery were sold, or to invoke the equitable defense which it attempts to invoke in this case,

“Jt is important that there should be kept in mind a distinction between the right of a general creditor to insist that an unfiled chattel mortgage is void and the ability to enforce this right. While an unfiled chattel mortgage may be void as to a general creditor, he cannot avail himself of the statute until he has armed himself with attachment or execution and levied on the property, or has in some other way secured a lien thereon. Before he has seized the property covered by the chattel mortgage, or secured some lien thereon, he is in no position to raise the question that the mortgage is void as to him.” Union Nat. Bank v. Oium, 3 N. D. 193, 200, 44 Am. St. Rep. 533, 54 N. W. 1034.

As has already been noted, the answer (aside from certain admissions) contained merely a denial of the averments of the complaint. The doctrine of marshaling of assets or securities is an equitable one. [367]*367And the evidence which defendant sought to introduce as a basis for the application of this doctrine was not in denial of the averments of the complaint, but rather in confession and avoidance thereof. The evidence was not admissible under the general denial, and the trial court properly excluded it. 21 Enc. Pl. & Pr. 1107; 38 Cyc. 2072, note 26; Comp. Laws 1913, § 7448.

We do not find it necessary, however, to base our decision merely on procedural grounds.

It is undisputed that the mortgage under which plaintiff claims in this action was duly filed in Eolette county, and that such mortgage was a valid and subsisting lien upon the grain which Gran raised in 1917 on the Eolette county land.

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Related

Kelly v. Baird
64 N.D. 346 (North Dakota Supreme Court, 1934)
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207 N.W. 144 (North Dakota Supreme Court, 1926)

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Bluebook (online)
179 N.W. 669, 46 N.D. 363, 1920 N.D. LEXIS 24, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hansboro-state-bank-v-imperial-elevator-co-nd-1920.