Merrill v. Denton

41 N.W. 823, 73 Mich. 628, 1889 Mich. LEXIS 1180
CourtMichigan Supreme Court
DecidedFebruary 1, 1889
StatusPublished
Cited by6 cases

This text of 41 N.W. 823 (Merrill v. Denton) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Merrill v. Denton, 41 N.W. 823, 73 Mich. 628, 1889 Mich. LEXIS 1180 (Mich. 1889).

Opinion

Morse, J.

In the summer of 1886 John M. Blakely was carrying on the grocery business in the city of Alpena. On June 10 in that year he was indebted to plaintiffs, Merrill, Fiñeld & Go., of Bay City, Mich., in the sum of at least $2,579, and he executed on that day -& chattel mortgage to them for that amount. This mortgage was for the sum above mentioned, and embraced all the property in his business, except an iron safe, and contained a clause that the mortgage should cover also all goods and merchandise thereafter purchased for, or made .a part of, or entering into, the business and stock in trade of the said Blakely, whether delivered at said place of business or elsewhere, or in process of delivery. 'The mortgage also embraced all book-accounts and credits, —in fact, all the property of the said Blakely. This mortgage was executed without the knowledge of the plaintiffs. Blakely kept it in his safe until June 18, 1886, when he put it on file at 4:40 o'clock, p. m., and telegraphed the plaintiffs that he had filed a mortgage for their benefit. This was the first notice they had of its existence. They accepted it without inquiry as to its date or amount.

Previous to June 18, 1886, one Bobinson, acting as the agent of the defendant Becor, contracted to sell Blakely .a quantity of oats and corn. He commenced delivering the same on the morning of the 18th, and closed the delivery on the 19th, of June. He claimed that oats to the amount of $344.88 were delivered on the 18th. He admits that, shortly after the delivery of the oats and corn, Blakely told him that he had given the mortgage to plaintiffs, and that he did not take the goods away when he learned this, because Blakely promised to pay [630]*630for them; admits that Blakely told him that he wanted the bill of the goods made out to J. M. Blakely, Agent, Commission,” and that he made it so on this request; but denies that they were left on commission, or that Blakely told him the best plan would be to leave them on commission. He sold Blakely, after he knew of the mortgage, $115 worth of flour, upon which Blakely after-wards paid $65.55. The flour was also billed on commission.

Blakely testified that at noon on June 18, while the oats were being delivered, he told Bobinson that he did not propose to be unfair with him, and have him put goods in the shop, and not know how things were; that, there was a chattel mortgage on the shop to Merrill,. Fifield & Co. for $2,500, and that if he did not want to put in the rest of the grain not to do it; that he might-put it in as commission goods, and leave it in that way, and he (Blakely) would pay for it as fast as he sold it. Bobinson said he would put it in anyway, and billed it-to him on commission. Blakely paid him1 some money from time to time until July 31, 1886, when Bobinson wanted to settle up for the grain, and take Blakely'snotes for the same. Blakely wanted the grain left, as it was, on commission, but Bobinson said he was going away, and wanted to close the matter up. Blakely said if it went into the stock it would be covered by plaintiffs’’ mortgage, but Bobinson insisted upon his signing the notes he had drawn up, and finally Blakely did so. The defendant Becor made these notes the basis of an attachment suit, and the sheriff, Denton, under the writ, levied upon the goods of Blakely in the store in October, 1886. May 3, 1887, Becor recovered judgment in this attachment suit for the sum of $371.38.

October 26, 1886, the plaintiffs replevied the goods attached, Blakely making the affidavit, being directed to-[631]*631do so by the plaintiffs, and the goods were delivered to him by the sheriff. He claims to have received them as their agent. He remained in the store, selling goods and carrying on business, until January 27, 1887, when plaintiffs took possession, and sold out the stock under their mortgage. Upon the trial of this replevin suit,' — the one now before us,' — the jury returned a verdict in favor of the defendants, and found their lien to be for the sum of $384.17, for which amount they had judgment. The plaintiffs bring the case here for review on writ of error.

The court charged the jury that the mortgage of plaintiffs was void as against the defendants, as far as the delivery of goods between June 10 and Jun,e 19 was concerned; that the defendants were entitled to the value of the goods sold and delivered before the 19th, unless Eobinson, by his acts, had consented that the goods should go in under the mortgage.

The plaintiffs claim that this instruction was erroneous; that in law the mortgage was not made until June 18, when it was put on record, and the plaintiffs notified of its existence; that it had no legal existence until it was delivered to plaintiffs, which was not until that day. The defendants answer that when the plaintiffs accepted this mortgage they received it as of the day it was made; that the acceptance related back to June 10.

We think the plaintiffs are right in this contention. The evidence shows that the plaintiffs knew nothing of the making of this mortgage until they received the telegram that it had been filed, nor did they have any arrangement that such a mortgage should be made and subsequently filed. They received the mortgage in good faith for a debt that was valid and subsisting at the time to the full amount of the mortgage. This is unlike the cases where the mortgagee takes the mortgage and keeps it off the record, or where he knows it has been made, [632]*632and agrees with the mortgagor that it may not be filed until some emergency arises. In such cases there is a fraud upon the persons who sell goods to the mortgagor between the making of the mortgage and its filing, and the mortgagee is a party to the fraud. In this case, under all the authorities, the mortgage was not delivered until June 18, and it could have no force until it was delivered. The plaintiffs could not, by accepting it on the 18th, in the absence of any fraud on their part, be held to -receive it as of the 10th, — its date.

In Root v. Harl, 62 Mich. 420 (29 N. W. Rep. 29), Ramsey obtained his mortgage April 13, 1883, and he did not record it until July 16, 1883. It was held that his mortgage was void as far as debts were concerned contracted by the mortgagor between those dates. But here the mortgage was not obtained by plaintiffs until it was filed, as they had no notice of it until then. It could have no life until delivered to and accepted by them.

The plaintiffs’ attorneys requested the court to instruct the jury as follows:

“If the jury find that after Robinson, defendant Recor’s agent, knew of the plaintiffs’ mortgage, he consented that the goods purchased of defendant Recor by Blakely should be considered commission goods, and afterwards, on July 31, 1886, settled up with Blakely, and took notes for the same, then this mortgage of plaintiffs is valid and binding as against defendants.”

This request should have been given as asked. The testimony was undisputed that the grain was billed to Blakely on commission of date June 19, 1886, being headed as follows:

“St. Clair, Mich., June 19, 1886.
“Mr. J. M. Blakely, Agt. on Commission.
“Bought of E. O. Recor.”

[633]*633Before the settlement of July 31, 1886, the following bill was rendered by Bobinson to Blakely:

“Mr. J. M. Blakely,*Agt., Goods on Commission,

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Cite This Page — Counsel Stack

Bluebook (online)
41 N.W. 823, 73 Mich. 628, 1889 Mich. LEXIS 1180, Counsel Stack Legal Research, https://law.counselstack.com/opinion/merrill-v-denton-mich-1889.