O'Neil v. Patterson & Co.

Mr. Justice Boggs delivered the opinion of the Court.

On the 31st day of October, 1892, appellees purchased a stock of hardware from one George Robinson, who delivered possession thereof at once to them. On the 12th day of November of the same year the appellant O’Neil, as sheriff, and appellant Chiles, as constable, by virtue of certain writs of attachment in their hands against one George B. Cunningham, levied upon and took possession of such hardware, as being the property of, or as subject to attachment as the property of, said Cunningham. The appellees brought an action of replevin against each of the officers to recover the goods. These actions were consolidated and tried by the court without a jury. The appellees prevailed and judgment in replevin and for costs followed, to reverse which, this appeal was taken.

Cunningham, defendant in the writs of attachment, once owned the goods in dispute. He executed a chattel mortgage upon them to one J. B„ Shelton, which contained a clause authorizing the mortgagee to take possession of the mortgaged articles, declare the mortgaged debt to be due, and to foreclose the mortgage by selling the property at public or private sale if he should feel “unsafe or insecure.” Cunningham absconded, or at least disappeared for a time, and left the mortgaged goods so unprotected that the mortgagees, upon quite sufficient grounds, deemed themselves insecure, and by virtue of the authority given by the mortgage sold the goods to Robinson, who received possession of them and sold and delivered them to the appellees. Some ten or twelve days afterward the writs of attachment were issued.

The appellants insist that the chattel mortgage was fraudulent in point of fact, because, as they urge, there was only a pretended and not a real indebtedness secured by it, and that it was executed to hinder and delay creditors of the mortgagor and that it was fraudulent in law, because, as they contend, it contained a provision authorizing the mortgagor to retain possession of the property and sell and dispose of it in the due course of his business and trade as a retail dealer in hardware. Appellants further contend that the proofs showed that the appellees bought with knowledge of the alleged fraudulent character of the mortgage, and are for that reason not to be regarded as bona fide buyers. The court, in the second proposition of law, held that if the appellees had or were chargeable with notice of such alleged fraud, they were not to be treated as innocent purchasers, and as the finding was for the appellees, it is manifest that the court either did not regard the alleged fraud as proven by the evidence, or did not find from the evidence that appellees had or were chargeable with notice thereof. The evidence upon each of these propositions was, to say the least, conflicting, and upon familiar principles the conclusion of the court as to the weight or preponderance of evidence is to be accepted by this court as the correct determination of the questions. Appellants argue that the mortgage is a link in the chain of title of the appellees to the goods, and that they are therefore chargeable with notice of the provision of the mortgage permitting the mortgagor to sell and dispose of the goods in his retail trade, and that such provision of itself rendered the mortgage fraudulent and void in law. We do not think the mortgage does so provide. The mortgage does provide that the mortgagor “ may retain possession of * * * and keep and use the said goods and chattels until default,” etc., and the supposed right given to sell and dispose of them rests upon a labored argument that the only use to be made of such articles is to sell them. Another clause in the mortgage provides that if “the mortgagor shall sell or assign the goods and chattels or any interest therein ” the mortgagee may at once declare the mortgage debt to be due, and take possession of and sell the property and foreclose the mortgage. When the instrument in all of its parts is considered it seems clear that the appellant’s construction of it can not be upheld.

If it were otherwise we understand that the mortgage would be valid as between the parties, and that as default was made and the conditions of the mortgage broken, so that the possession of the goods passed under it before the writ of attachments was issued, the mortgage lien became complete against creditors in like manner and to the same extent as it would had the possession passed at the time the mortgage was given. This principle is, we think, announced in Frank v. Minor, 50 Ill. 444 ; Chepron v. Ferkert, 68 Ill. 284 ; Gaar, Scott & Co. v. Hurd, 92 Ill. 315 ; Jones on Chattel Mortgages, Sec. 118; Tiedeman on Sales, Sec. 326. This rule appellant thinks is limited tocases where the possession is obtained by the consent of the mortgagor. We think no such distinction is to be drawn.

When the mortgagee may lawfully take possession of the mortgaged property under the provisions of the mortgage, the possession so obtained is, we think, absolute and perfect, whether obtained with or without' the consent of the mortgagor, or rather such possession is, with his consent, expressly given by the terms of the mortgage.

A chattel mortgage is a conditional sale, the condition being the payment of a debt. The conditional title of the mortgagee becomes absolute upon default in payment of the debt, and the mortgager may then seize the property and sell and transfer the absolute title to a purchaser. Tiedeman on Sales, Sec. 221-326.

The mortgagor, in the case at bar, consented by the express terms of the mortgage that this might be done. By other provisions of the mortgage, the mortgagee was authorized to declare the debt to be due upon certain contingencies. This power he lawfully exercised, seized and sold the goods and thereby clothed Robinson with all the indicia, of title. The appellees being bona fide purchasers from Robinson, took the title to the goods free from any defects that might have affected, injuriously, his title.

It is well settled that a bona fide purchaser, from even a fraudulent vendee, will take the title free from the vendee’s frauds. Tiedeman on Sales, Sec. 327; 8 Amer. & Eng. Ency. of Law, page 833; Schweizer v. Tracy, 76 Ill. 345 ; Brown v. Riley, 22 Illinois, 45; 21 Amer. and Eng. Ency. of Law, page 569.

The propositions of law held by the court are in harmony with the views we entertain as to the rules of law governing the questions involved, and as there is no manifest reason why we should not accept the finding of the court upon the question of fact, the judgment must be, and is, affirmed.