Hall, J.
The petition avers that the defendant Wilcox, on the twenty-third day of October, 1884, executed and' delivered to the defendants, Quinlan, Montgomery & Company, his promissory note, due January 20, 1885, for $16,700.00, with twelve per cent, interest; and at the same time, to secure the payment of said note, defendant Wilcox executed his chattel mortgage on four hundred head of cattle in Montgomery county, Kansas; that, on March 12, 1880, defendant Wilcox executed and delivered to plaintiff his promissory note for eight thousand dollars,' due June 1, 1885, and that this note was given for five thousand dollars advanced by plaintiff to defendant Wilcox, and that, to secure the payment of said note, defendant Wilcox executed and delivered to plaintiff his chattel mortgage upon the same property mortgaged to Quinlan, Montgomery & Company and other property; that, on April 1, 1885, all the property embraced in both mortgages was shipped to Quinlan, Montgomery & Company for sale; that Quinlan, Montgomery & Company sold the cattle, and after liquidating the indebtedness of Wilcox to them, ■and accounting to plaintiff for twenty-eight hundred dollars of the proceeds, had a surplus in their hands of $2,211.31, for which plaintiff asks judgment against Quinlan, Montgomery & Company. No judgment is asked against defendant Wilcox.
Defendants, Quinlan, Montgomery, and Burnside, filed an amended answer, October 26, 1885, which is in [63] two counts. The first count is a general denial “except as hereafter admitted.” The second count admits the partnership; admits that Wilcox made the note and mortgage to them. They deny that Wilcox is indebted to the plaintiff White, in the manner charged in the petition; they deny that the plaintiff ever had any valid claim on the cattle themselves, or the money which was in the hands of Quinlan, Montgomery, and Burnside; they deny that White ever loaned any money to Wilcox on the note and mortgage; they deny that White had or ever had any legal or equjtable claim on the cattle, or on the proceeds of their sale. They alleged that Wilcox was indebted to them in a large sum of money over and above the mortgage ; that the cattle were shipped to them to sell, and that they applied this money to pay the Wilcox debt to them. They claim that the mortgage was fraudulent and void as to them, creditors of said Wilcox.
The plaintiff replied with a general denial. The trial resulted in a judgment as prayed against Quinlan, Montgomery & Company. There was no judgment against, and no finding as to, the defendant Wilcox.
The general rule is, that the mortgageor of personal property after forfeiture has no legal title to, or interest in, the property; the mortgagee has the absolute title to the property subject only to the mortgageor’s equitable right to redeem it. This rule is the settled law of this state.
The mortgageor after the forfeiture has no legal title, and of course, can neither sell nor mortgage any interest in the property depending upon such title. The question is, can the mortgageor convey by mortgage his equity of redemption % The question would seem to be answered in the negative in Hulson v. Walter, 34 How. Pr. 388. But in Smith v. Coolbaugh, 21 Wis. 437, an affirmative answer is given to the question. The court says : “ It is claimed that he [the mortgageor] had no mortgageable interest, because the title to the property, on default, had become absolute at law in the first [64] mortgagee. But still, as just observed, he was in possession, and had the right to redeem until this right was foreclosed by a sale, or perhaps by the lapse of time. We have no doubt but that he had such an interest as was the subject of sale or mortgage.”
The general rule as to what is the subject of mortgage is thus stated by Mr. Jones in his work on Chattel Mortgages: “In general, any property which is capable of absolute sale may be mortgaged. All claims growing out of and adhering to property, rights of action for damages ex contractu, and interest in actions pending and undetermined, may be the subject of mortgage.” Sec. 114. As to the precise question under discussion the same author says: “The owner of a chattel has a mortgageable interest in it after default of a prior mortgage of the same, until foreclosure is completed. The junior mortgagee has, until that time, a right to redeem.” Sec. 115.
Mr. Hermann states the general rule as follows : “ At common law nothing can be mortgaged that does not belong to the mortgageor, at the time when the mortgage is made, but everything which is the subject of , contract, or which may be assigned, is capable of being mortgaged.” Hermann on Chattel Mort., sec. 36. Among the things subject to mortgage under the rule stated by him the author recognizes “ the residuary interest of a debtor in goods assigned in good faith by him in trust for the payment of debts, or other specific purposes.” Id., sec. 8.
There is, of course, no question as to the power of the mortgageor to convey his equity of redemption ; such right is assignable. The sale of the property by the mortgageor conveys the right to redeem, which is the only interest he has in the,property. The sale conveys no more than the mortgageor’s interest, but it does convey his whole interest. Jones on Chat. Mort., sec. 454.
Free access — add to your briefcase to read the full text and ask questions with AI
Hall, J.
The petition avers that the defendant Wilcox, on the twenty-third day of October, 1884, executed and' delivered to the defendants, Quinlan, Montgomery & Company, his promissory note, due January 20, 1885, for $16,700.00, with twelve per cent, interest; and at the same time, to secure the payment of said note, defendant Wilcox executed his chattel mortgage on four hundred head of cattle in Montgomery county, Kansas; that, on March 12, 1880, defendant Wilcox executed and delivered to plaintiff his promissory note for eight thousand dollars,' due June 1, 1885, and that this note was given for five thousand dollars advanced by plaintiff to defendant Wilcox, and that, to secure the payment of said note, defendant Wilcox executed and delivered to plaintiff his chattel mortgage upon the same property mortgaged to Quinlan, Montgomery & Company and other property; that, on April 1, 1885, all the property embraced in both mortgages was shipped to Quinlan, Montgomery & Company for sale; that Quinlan, Montgomery & Company sold the cattle, and after liquidating the indebtedness of Wilcox to them, ■and accounting to plaintiff for twenty-eight hundred dollars of the proceeds, had a surplus in their hands of $2,211.31, for which plaintiff asks judgment against Quinlan, Montgomery & Company. No judgment is asked against defendant Wilcox.
Defendants, Quinlan, Montgomery, and Burnside, filed an amended answer, October 26, 1885, which is in [63] two counts. The first count is a general denial “except as hereafter admitted.” The second count admits the partnership; admits that Wilcox made the note and mortgage to them. They deny that Wilcox is indebted to the plaintiff White, in the manner charged in the petition; they deny that the plaintiff ever had any valid claim on the cattle themselves, or the money which was in the hands of Quinlan, Montgomery, and Burnside; they deny that White ever loaned any money to Wilcox on the note and mortgage; they deny that White had or ever had any legal or equjtable claim on the cattle, or on the proceeds of their sale. They alleged that Wilcox was indebted to them in a large sum of money over and above the mortgage ; that the cattle were shipped to them to sell, and that they applied this money to pay the Wilcox debt to them. They claim that the mortgage was fraudulent and void as to them, creditors of said Wilcox.
The plaintiff replied with a general denial. The trial resulted in a judgment as prayed against Quinlan, Montgomery & Company. There was no judgment against, and no finding as to, the defendant Wilcox.
The general rule is, that the mortgageor of personal property after forfeiture has no legal title to, or interest in, the property; the mortgagee has the absolute title to the property subject only to the mortgageor’s equitable right to redeem it. This rule is the settled law of this state.
The mortgageor after the forfeiture has no legal title, and of course, can neither sell nor mortgage any interest in the property depending upon such title. The question is, can the mortgageor convey by mortgage his equity of redemption % The question would seem to be answered in the negative in Hulson v. Walter, 34 How. Pr. 388. But in Smith v. Coolbaugh, 21 Wis. 437, an affirmative answer is given to the question. The court says : “ It is claimed that he [the mortgageor] had no mortgageable interest, because the title to the property, on default, had become absolute at law in the first [64] mortgagee. But still, as just observed, he was in possession, and had the right to redeem until this right was foreclosed by a sale, or perhaps by the lapse of time. We have no doubt but that he had such an interest as was the subject of sale or mortgage.”
The general rule as to what is the subject of mortgage is thus stated by Mr. Jones in his work on Chattel Mortgages: “In general, any property which is capable of absolute sale may be mortgaged. All claims growing out of and adhering to property, rights of action for damages ex contractu, and interest in actions pending and undetermined, may be the subject of mortgage.” Sec. 114. As to the precise question under discussion the same author says: “The owner of a chattel has a mortgageable interest in it after default of a prior mortgage of the same, until foreclosure is completed. The junior mortgagee has, until that time, a right to redeem.” Sec. 115.
Mr. Hermann states the general rule as follows : “ At common law nothing can be mortgaged that does not belong to the mortgageor, at the time when the mortgage is made, but everything which is the subject of , contract, or which may be assigned, is capable of being mortgaged.” Hermann on Chattel Mort., sec. 36. Among the things subject to mortgage under the rule stated by him the author recognizes “ the residuary interest of a debtor in goods assigned in good faith by him in trust for the payment of debts, or other specific purposes.” Id., sec. 8.
There is, of course, no question as to the power of the mortgageor to convey his equity of redemption ; such right is assignable. The sale of the property by the mortgageor conveys the right to redeem, which is the only interest he has in the,property. The sale conveys no more than the mortgageor’s interest, but it does convey his whole interest. Jones on Chat. Mort., sec. 454.
I have no doubt that an equity of redemption in [65] mortgaged chattels can be mortgaged, and that a mortgage of snch chattels is effectual as a mortgage of such equity of redemption. This question was not determined in Beckham v. Tootle, Hanna & Company, 19 Mo. App. 601. The appellant in that case contended for the contrary rule; for the purposes of that case his contention was yielded to, and the case still decided against him. The property was shipped by the mortgageor, with the consent of the second mortgagee, to the defendants, the first mortgagees, for sale. The sale by the defendants was equivalent to a formal foreclosure of the equity of redemption. Jones on Chat. Mort., sec. 775. The surplus remaining in the hands of the defendants, after satisfying their mortgage debt and costs of sale, they held in trust for the owner of the equity of redemption. The plaintiff, as we have seen, was such owner. The defendants refused to pay such surplus to the plaintiff on his demand therefor. The plaintiff, under such circumstances, properly brought an action for money had and received against the defendants. 2 Jones on Chat. Mort., sec. 817; Jones on Mort., sec. 1940, and cases cited. The equity of redemption had been foreclosed by the sale consented to by the plaintiff. No suit to redeem could, therefore, be maintained. The surplus belonged to plaintiff, and for it he could sue in assumpsit. It was not necessary to resort to equity to recover such surplus. This is made clearer by consideration of the rule allowing the mortgageor to recover from the mortgagee as for a conversion, where the mortgagee, after selling a portion of the mortgaged property for a sum sufficient to pay the debt and costs, sells the remainder of such property. Charter v. Stevens, 3 Denio, 34. The property remaining after the satisfaction of the debt and costs belongs to the mortgageor, and for a conversion of it he may maintain an action in trover. Id. And so, too, a creditor of the mortgageor may by attachment reach 'the surplus [66] proceeds in tile hands of the mortgagee. Fisher v. Tallman, 74 Mo. 40.
For these reasons we think that the petition was good, in form and in substance.
The action of the court in giving instructions is not open to review by us, because the defendants failed to specify such action in the motion for a new trial as a ground thereof. Any error in such action must be deemed waived. Ray v. Thompson, 26 Mo. App. 437; Kimberlin v. Short, 24 Mo. App. 647. The rule of practice is generally as stated by the defendants’ counsel, and requires a finding as to all the defendants where they are two or more in number. But this rule"was not violated in this case, for here, although Wilcox was made a party, the pleadings raised no issue as to him. The petition neither-stated a cause of action, nor prayed for judgment, against him. He filed no answer, and on the stand as a witness for plaintiff he testified that he had no interest in the money in suit. As the pleadings raised no issue as to Wilcox, as they showed no interest in the subject of the suit had by him, and as he, under oath, disclaimed any such interest, on what could a finding as to him have been made? No finding as to him was necessary. Cole v. Barron, 8 Mo. App. 513.
The defendants’ counsel finally make the point that the debt secured by the plaintiffs’ mortgage was paid, and that such payment was conclusively shown by the evidence. This defence was not pleaded in the answer, and, therefore, cannot avail the defendants. Wilkerson v. Farnham, 82 Mo. 678. This defence was in no way called to the attention of the trial court by the instructions or otherwise. It is too late to make it here for the first time.
Judgment affirmed.
All concur.