Oster v. Mickley

28 N.W. 710, 35 Minn. 245, 1886 Minn. LEXIS 108

• Court: Supreme Court of Minnesota
• Decided: May 28, 1886
• Status: Published

Opinion

Mitchell, J.

In Johnson v. Carpenter, 7 Minn 120, (176,) it was held that the privileged character of negotiable paper does not extend to the mortgage by which it is secured, but that the mortgage is subject to the same defences in the hands of an assignee as in the hands of the mortgagee. This case was deliberately followed in Hostetter v. Alexander, 22 Minn. 559. The doctrine of these cases received recognition, and was at least impliedly approved, in Blumenthal v. Jassoy, 29 Minn. 177, (12 N. W. Rep. 517.) It is therefore now too late to question it in this court; neither would we have any disposition to do so, even if it were a question of first impression. The peculiar privileges which attach to negotiable paper constitute an exception to the common law regarding choses in action, and were accorded for the supposed benefit of trade; but, at least as applied to promissory notes, it may well be doubted whether they are not invoked to shield a fraud much oftener than to protect an honest business transaction. We are disposed to confine these privileges strictly to the notes themselves, and not to extend them to collateral mortgages. Of course, there is no distinction in this respect between mortgages on realty and those on personal property.

2. The appellant contends that there is no evidence that the agents of the Aultman & Taylor Company, who sold plaintiff the horsepower, had any authority to take it back, and agree to surrender the notes given for the purchase-money. It may well be doubted whether any such point was made in the court below. But, however this may be, the point is not well taken for another reason. The undisputed evidence (introduced without objection) is that the original bargain between plaintiff and their agent was that if the horse-power did not work he could return it. In short, that the only contract of sale ever made was merely a conditional one, on trial. The evidence is undisputed that the horse-power did not, and could not be made to work, and that thereupon plaintiff returned it to the agents of whom he got it. It will be conceded that a power to sell gives an agent no authority, after an unconditional sale, to make a new and subsequent contract rescinding the sale. But here the original contract itself was merely a conditional sale, on trial, with the privilege of returning in case the article did not work. The contract was to take effect as a sale, only in case the horse-power worked. Such a contract is within the authority of an agent intrusted with personal property to sell. Deering v. Thom, 29 Minn. 120, (12 N. W. Rep. 350.)

Order affirmed.