Jacobs v. McCalley

By the Court, Boise, J.:

It is claimed by the respondents that as there is a manner for foreclosing this mortgage provided in the instrument itself, the provisions of section 2, page 688, of the statute *125 apply to it, and that it must be foreclosed by the mortgagees under and in pursuance of the stipulation of the parties contained in the mortgage. Section 2 provides that “ whenever in any mortgage of goods and chattels the parties to such mortgage shall have provided the manner in which such mortgage maybe forclosed, such mortgage, upon breach of the conditions thereof, may be foreclosed in the manner therein provided, and not otherwise.” Section 1 provides that on the breach of the condition of such mortgage, the mortgagee shall be entitled to the immediate possession of the property mortgaged. The stipulation in the mortgage is a mutual agreement between the mortgagor and mortgagee which both parties are bound to observe, and neither party can avail himself of it unless he has kept the agreement on his part.

On breach of the conditions of the mortgage by the mortgagor, by failing to pay the note, it was his duty to deliver to the mortgagee the property, that he might sell the same according to the stipulation. On his refusal to give up the property, the mortgagee might have brought replevin against him, which action the mortgagor could have defended by showing that the property had been in some manner released from the mortgage. This remedy by replevin was a remedy which existed in such cases before this statute -was enacted. In the prosecution of such action to recover the possession of the property, the mortgagee would or might be subjected to delays, and might be obliged to take an alternate judgment for the property or its value, and would not be able to reach the property with that certainty as in a suit in equity, where the property could be put into the hands of a receiver. His remedy would not be as complete and adequate in an action as in equity. In this case, where an assignment had been made, there might be difficulty in proceeding under the stipulation in the mortgage, in determining to whom the surplus, if any remained after satisfying the mortgage, should be paid.

We think the proper construction of section 2 is, that when the parties have agreed to a certain manner of foreclosing, either has a right to insist on a foreclosure in that *126 manner, but before tbe mortgagor can insist on tbe sale of tbe property by tbe mortgagee, in tbe manner stipulated, be must fulfill bis part of tbe agreement by suffering tbe mortgagee to take possession of tbe goods, and that tbe mortgagor can not refuse to fulfill tbe agreement on bis part, by refusing to give up tbe goods, and at tbe same time insist on a performance by tbe mortgagee. To give any other construction to tbe contract would be to bold that tbe mortgagor can take advantage of bis own breach of contract to defeat tbe just claim of tbe mortgagee, which is contrary to tbe maxim that no man can avail himself of bis own wrong. Such a construction will also harmonize tbe provisions of section 2 with section 410, which provides that “ a lien on real or personal property, whether created by mortgage or otherwise, shall be foreclosed by suit.” Such a construction will do no violence to tbe plain meaning of the statute, and will facilitate tbe administration of justice and be in harmony with tbe general principles of tbe construction of statutes.

It is also claimed by tbe respondents that this mortgage is void as to subsequent creditors, for tbe reason that tbe mortgagor retained tbe property in bis possession with a general power to sell tbe same. If this be true, then tbe mortgage would be void. (Iri Orton v. M. W. Orton, 7 Or. 478 .) In Orton v. Orton, it appeared from the testimony on tbe trial, as a fact, that Iri Orton bad made M. W. Orton, bis mortgagor, bis agent to sell tbe mortgaged goods, consisting of a stock of merchandise in bis, tbe agent’s, business as a retail merchant, and put him in tbe store for that purpose. In this case tbe agreement in tbe mortgage is, that “ until default is made in tbe payment of said sum of money, tbe parties of tbe first part (tbe mortgagors), their executors, administrators, and assigns, may retain and continue in tbe quiet and peaceable possession of said goods and chattels, and in tbe full and free use and enjoyment of tbe same, except as herein-before providedand that proviso was that said goods should not be removed from within said county and state, so that whatever assignment was made, said goods were to remain in tbe county.

*127 We think the right to assign is by this instrument confined to an assignment subject to the lien of the mortgage, and that such a power of assignment would not render the mortgage void. Until condition broken, the mortgagor is the owner of the property, and “he may sell, incumber, devise, or convey the mortgaged property.” (Harmon on Chattel Mortgages, 459.) So that the power to assign contained in the mortgage gave the mortgagor no more power over the goods than he would have had if that word had not been inserted in the mortgage.

The demurrer in the suit will be overruled, and the decree of the court below sustaining said demurrer be reversed, and the suit remanded to the circuit court for further proceedings.