Gay v. Moss

         1. Upon appellant's own statement of the case, he has no cause of action, whatever might have been the case had the action been brought in the name of White. What was it that the plaintiff, Gay, purchased from White, by the assignment under which he claims? It was not the securityor pledge which had been delivered to the defendant Moss, because that, as he alleges, had been converted long before he took his assignment from White. It was not a thing of which White had delivered, or could deliver, the possession. It was a mere right to recover against the defendant Moss, for a breach of duty, and a right to enter into a Court and litigate, and enforce, if he could. It was only the right to recover for a tort.

         2. That there was no conversion, in law or in fact. Was the assignment by White to Moss a mortgage or a pledge? The assignment is absolute and unqualified. But it is charged in the complaint, and admitted in the answers of Moss and Buttrick, that it was made to secure the debt of three thousand one hundred dollars, and interest. It, then, by the uniform decisions of California, was a mortgage. In Dewey v. Bowman , 8 Cal. 145, the assignment is upon a copy of an application, which application itself says it was made for securing said Bowman the payment of the note. This, the Court held, was a pledge; the title was not conveyed to the pledgee. So, in Mason v. Little , 2 N. Y., Coms., 446, the bond or note recited " having deposited with them, as collateral security. " The debt itself declared the stock was deposited as collateral, and shows the object and intention of the parties. Polhemus v. Trainer , 30 Cal. 686, was the assignment of a lease absolute, in security for three hundred dollars borrowed. The Court held this a mortgage, and that by it the mortgagee acquired no right to the rents arising from said lease. His only remedy was by foreclosure and sale of the leasehold estate of the defendant.

         In the present case, the assignment by White to Moss was absolute. For the consideration of three thousand one hundred dollars, he assigns, transfers, and delivers to Moss said contract, with all the rights, privileges, and benefits, and the present legal title passed to and became invested in Moss, subject, however, to be revested in White, his heirs or assigns, upon the performance by him or them of an express condition subsequent. This defeasance redeemed the absolute nature of the assignment, and by legal intendment made it a mortgage. Moss, his heirs or assigns, had a special property in the contract co-extensive with his debt, as owner pro tanto a jus in re, to the extent of three thousand one hundreddollars, and interest, and, as far as that right extended, could sell it absolutely, or could pawn, or could assign it. White, his heirs or assigns, had then right of redemption, and could redeem at any time before that right is foreclosed by judicial sale, or by sale after due notice; and hence a sale, either by judicial sentence or by due notice, cuts off the right of redemption--and this is the object of such sales. An assignment, however, is only a change of creditors, and, correctly speaking, there can be no such thing as a conversion of security until the pledgee or mortgagee, by some act, surprises the pledgor or mortgagor of the right of redemption of the specific article or property otherwise than by legal sale. This was the agreement entered into by White when he borrowed the money. (Chapman v. Brooks et al. , 31 N.Y. 75.)

         3. When there is an actual transfer of the goods by a deed or other legal conveyance by way of mortgage, there is no question that the mortgagee may assign over the goods, and the assignee will be entitled to hold them against the mortgagor until the mortgage debt, originally contracted, is paid. A legal, although a defeasible title, is vestedin the mortgagee, and to the extent of that title his assignment is operative and valid, and cannot be restricted by the mortgagor, even although the mortgagee shall have assumed to convey an absolute title. (Story on Bail., Sec. 317, p. 270.) The doctrine in New York is, that the mortgagee of a personal or chattel mortgage acquires an absolute title in the chattels, upon the failure of the mortgagor to perform the conditions of the mortgage. (Burdeck v. McNanner , 2 Denio, 181; Fuller v. Acker, 1 Hill, 475; Wilson v. Little , 2 N.Y. 443. See, also, Williams v. Rogers , 7 Mo. 556; Robinson v. Campbell , 8 Mo. 366; Thornhill v. Gilmer, 4 Sm. & Marsh. 153; Hall v. Snowhill, 2 Gr. 9-18.)

         JUDGES: Sawyer, J.

         OPINION

          SAWYER, Judge

         By the Court, Sawyer, J., on petition for rehearing:

         Respondent's counsel, in his petition for rehearing, bases his whole argument upon the hypothesis, that the further findings, made by the Court in response to plaintiff's exceptions for defects in the original findings, were filed without authority of law, and that they are, therefore, nullities, and constitute no part of the record. He claims that the findings upon which the decision turned are improperly in the record; firstly, because no written finding was demanded by the plaintiff; and secondly, because the exceptions for defects were not filed in time, and, being filed too late, the original findings were conclusive, and the Court had no authority to supply the defects in response to the exceptions. The Court was undoubtedly authorized to file written findings in the first instance, whether demanded or not, and it did, in fact, file them. But suppose it were otherwise; neither of these objections find any support in the record, and for this reason they were not noticed in the opinion, although urged in respondent's brief on the former hearing. These groundless objections are now made the basis of the entire argument in the petition for rehearing. The record states expressly that " said plaintiff, having duly requested a finding in writing therein," the Court subsequently, " on the 29th of December, 1866," rendered and duly filed the following findings of fact and conclusions of law. " Plaintiffs thereupon, to wit, on the ___ day of January, 1867, and in due time, duly filed and served notice of the following exceptions for defective findings." The date of filing does not appear here, but it is said to be " in due time ." In another part of the record the service of notice of exceptions, and of filing, appears to have been on the 14th of January, 1867, which was sixteen days after the filing of the finding on the 29th of December.

         But under section one hundred eighty the plaintiff was entitled to file and serve his exceptions within five days after receiving from, or giving to, the adverse party written notice of the findings. It nowhere appears when written notice of the findings was given or received, or whether it was ever given. Notice may well have been given within five days of the 14th of January. If so, the filing and serving of the exceptions were " in due time," and the record says they were " in due time." This is conclusive, and the subsequent findings in response to plaintiff's exceptions affirmatively appear to be in all respects regular.

         We have nothing to do with the evidence on this appeal, and the facts as found by the Court, and not as alleged by the answer, must be taken as the real facts of the case. On these facts it appears, not as respondent assumes, that defendant Moss assigned his three thousand one hundred dollar note, delivered the pledge with it as an incident to, and security for, the note, but, on the contrary, that " defendant Moss sold and assigned said contract (Exhibit A--the pledge) to William S. Fitch for the sum of six thousand dollars," etc., and " that the consideration of said sale and assignment to said Fitch received by said Moss was [not the amount due on the three thousand one hundred dollar note, but] six thousand dollars, to wit: two thousand dollars in cattle and four thousand dollars in notes bearing interest and secured by a mortgage." The Court also finds, that, at this time, there was only " due from said White to said Moss on said three thousand one hundred dollar note the principal thereof, three thousand one hundred dollars, and six hundred fifty-four dollars and ten cents interest--making an aggregate of three thousand seven hundred fifty-four dollars and ten cents." Whereas Moss sold the pledge itself (not the note and his interest in the pledge) for six thousand dollars. If he only sold the note, it must have been considerably above par, which is not usual in the case of notes of private parties. It nowhere appears that the three thousand one hundred dollar note was ever assigned to Fitch. The contrary is the plain and necessary inference from the other facts found. The Court also finds that Buttrick and Moss had been paid off all their demands for completing the contract, and that nothing was due from White, except the said sum due on said three thousand one hundred dollar note; that Buttrick held the pledge for Moss, and Moss, although he ostensibly sold in the name, and as the attorney of Buttrick, was in reality acting for himself. This sale of the pledge was clearly a conversion, as we held on the former hearing. Whatever the facts may be, the Court also found the value of the contract (the pledge) at the time of the sale and conversion to be eight thousand dollars--and that the balance, after deducting the three thousand seven hundred fifty-four dollars and ten cents due on the three thousand one hundred dollar note, belonged to White. The respondent did not complain of these findings, or move for a new trial on the ground that they were unsupported by the evidence, or otherwise. They are, therefore, facts in the case which cannot now be questioned by him.

         The respondent, in his petition for rehearing, has also labored to show, that the common law mortgage of personal property, like mortgages of realty, has lost its ancient character, and become assimilated in all its legal incidents to a pledge. We do not perceive for what end; for, if this be conceded, it is so much the worse for him. If a mortgage, as claimed by him, is in modern law to be treated in all respects as a pledge, then the District Court was certainly wrong, for it held the transaction to be a common law mortgage, strictly governed by the principles of common law, and it is only upon this theory that there could be any possibility of upholding the judgment of the Court below.