Trudell v. Hingham State Bank

MR. JUSTICE GALEN

delivered the opinion of the court.

In this case the plaintiff seeks to recover $3,000 as damages from the defendant for the alleged conversion of a gas tractor,' John Deere plow, and separator. It appears that the plaintiff as the owner of such property, on or about July 12, 1917, mortgaged the same to the defendant as security for indebtedness, and on April 9, 1919, the plaintiff being in default in payments due on his debt, the defendant caused the property to be sold by the. sheriff under the terms of the mortgage. The plaintiff contends that the sale was irregular, in that part of the property, at the time of sale, was in one place and part in another; that it was not in sight at the time of the sale, and was not sold at the place designated in the *560 published notice of sale; and that because thereof the sale was void and amounted to a conversion of the property.

After issue joined, the case was tried to a jury and resulted in a verdict and judgment in favor of plaintiff for the sum of $468.54 and costs. The appeal is from the judgment and order denying defendant’s motion for a new trial.

Though several errors are assigned, in our opinion the questions presented determinative of this ease are: Was the sale legal, and, if not, did the sale thereof constitute a conversion ?

The mortgage was given as security for an indebtedness to the defendant of $460 represented by two promissory notes. The power of sale contained in the mortgage provides: “But in case default be made in payment of the principal or interest as provided in said promissory notes, then the said mortgagee, his [its] agent, attorney or assigns are, or the sheriff of any county in which the above-described property or any part thereof may be, is hereby empowered and authorized to sell the said goods and chattels, with all and every of the appurtenances, or any part thereof, and out of the money arising from such sale to retain the said principal and interest together with the costs and charges of making such sale, and reasonable attorney’s fee, and the overplus, if any there be, shall be paid by the party making such sale to the said mortgagor, heirs or assigns. The sale under the said power of sale shall be advertised by notice posted in five public places in said county, one of which shall be posted at the designated place of sale at least five days prior to such sale, giving the time and place of sale and a description of the property to be sold. Such sale must be at public sale and the mortgagee may become a purchaser thereat.” These provisions of the mortgage are in conformity with section 8286, Bevised Codes of 1921, reading in part as follows: “It is lawful for the mortgagor of personal property to insert in his mortgage a clause authorizing the sheriff of the county in which said property, or any part thereof, may be, *561 to execute the power of sale therein granted to the mortgagee, his legal representative and assigns, in which case the sheriff of such county, at the time of default, at the request of the mortgagee, must, and it is hereby made his duty to advertise and sell the whole or any part of the mortgaged property, wherever it may be, in the manner provided in such mortgage. # * * Notice of sale shall be given by posting five notices in five public places in the county wherein the property is to be sold, one of which shall be posted at the designated place of sale.”

Notices of the sale were posted as shown by the sheriff’s affidavit of posting, as follows: “One at Telephone Pole in Twp. 32—12. One at Post in Twp. 33 Ege. 11. One at Sec. 6 Twp. 32, Eg. 12. One at Post in Twp. 33 Ege. 11. One at Sec. 13, Twp. 33 Ege. 11, being the designated place of sale.” The notice so posted reads, in part, as follows: “And whereas, there is now due and unpaid on said in- [1,2] debtedness to the said mortgagee, the sum of five hundred sixty dollars ($560.00) :

“Now therefore, the property described in said mortgage, to-wit, one 25 horse Mpls. gas tractor, one 6 bottom John Deere plow, one Mpls. 32—56 separator, or so much thereof as may be necessary, will be sold pursuant to the power of sale in said mortgage contained, which has become operative, and to the statute in such case made and provided at public sale to the highest bidder for cash on the 9th day of April, 1919, the said tractor and plow at 1 o’clock P. M. of said day at the farm house situated on the S% of section 13, township 33 N. of range 11 E., Hill county, Montana, and the said separator at 2 o’clock P. M. said day at the farm situated on the NW.14 of section 6, township 32 N. of range 12 E., Hill county, Montana, * * to satisfy the debt secured by said mortgage and the cost and expenses of whatever nature, of these foreclosure proceedings.’.’

It is noted that this notice differs from the one included in the sheriff’s return of sale, in that the property described *562 in the latter notice bears date April 9, 1919, and fixes as the time and place of sale “the ninth day of April, 1919 at 2 o’clock P. M. of said day at Sec. 6, Twp. 32, Ege. 12, See. 13, Twp. 33, range 11, Hill county.” But as no question is raised on this discrepancy, it will be passed, and our decision will be based on the notice appearing to have been posted as above set forth, wherein it was stated that the sale of the property would be held “on the 9th day of April, 1919, the said tractor and plow at 1 o’clock P. M. of said day * * * and the said separator at 2 o’clock P. M. of said day.” There is no dispute as to the facts that the tractor, plow and separator were all sold together, at the place where the. separator was located on section 6, at 2 o’clock, April 9, 1919; that no sale nor offer of sale was made where the tractor and plow were located; and that at the time of the sale the tractor and plow were far removed from the place of sale, and not in view.

The affidavit of posting of the notices of sale, as shown by the sheriff’s return, designates section 13 as the place of sale; whereas, the sale was held, as shown by the sheriff’s return, and in fact, on section 6, three and a half miles from the place of sale as designated by the sheriff.

Under the most liberal interpretation, neither the law nor the terms of the mortgage were even substantially complied with. Both the statute and the mortgage require that, on foreclosure under power granted in the mortgage, notice shall be given by posting in five public places, one of which shall he posted at the designated place of sale. It clearly appears that but one place of sale was intended. However, should circumstances require a sale of mortgaged property in more places than one, the sales must be held at the times and the places specified and in conformity with the law and the provisions of the mortgage. Manifestly, a sale of all of the mortgaged property on section 6, when the designated place of sale was section 13, part of the property being on both of these sections, and a sale noticed at both places, and the *563 sale made in bulk in but one of the places noticed, is so irregular that it cannot be upheld on any theory.

Statutory requirements intended to protect and enforce the mortgage lien must be strictly followed. (First Nat. Bank of Butte v. Beley, 32 Mont. 291 , 80 Pac. 256 ), especially where a right of sale is based thereon (11 Cyc. 705). Such a summary statutory remedy must be strictly construed and followed by the mortgagee, otherwise he cannot divest the mort[3] gagor of title to his property. It is jurisdictional, and, where the mortgagee disposes of the property mortgaged without .complying with the requirements of the law or the provisions of the mortgage, he is guilty of a conversion. (Advance Thresher Co. v. Doak, 36 Okl. 532 , 129 Pac. 736 ; National Bank of Commerce v. Jackson (Okl.), 170 Pac. 474 ; Marchand v. Ronaghan, 9 Idaho, 95 , 72 Pac. 731 ; Richter v. Buchanan, 48 Wash. 32 , 92 Pac. 782 ; Burton v. Randall, 4 Kan. App. 593 , 46 Pac. 326 ; Kellogg v. Malick, 125 Wis. 239 , 4 Ann. Cas. 893, 103 N. W. 1116, 1120 ; Jankowitz v. Kaplan, 138 Minn. 452 , 165 N. W. 275 ; Swank v. Elwert, 55 Or. 487 , 165 Pac. 901 ; Burton v. Randall, 4 Kan. App. 593 , 46 Pac. 326 ; Anderson v. Joseph, 95 Ark. 573 , 130 S. W. 165 ; Hoover v. Brookshier, 32 Okl. 298 , 122 Pac. 171 .)

The mortgagor is properly entitled to damages for a sale of mortgaged property otherwise than that prescribed by law and the terms of the mortgage agreement. (Clark v. Baker, 6 Mont. 153 , 9 Pac. 911 .)

In this case the irregular sale amounted to a conversion, and the plaintiff was justly entitled to recover. The case of Potter v. Lohse, 31 Mont. 91 , 77 Pac. 419 , cited and relied upon by the defendant, is not applicable.

The judgment and order are affirmed.

Affirmed.

Mr. Chief Justice Brantly and Associate Justices Cooper and Holloway, and Honorable H. H. Ewing, District Judge, sitting in place of Mr. Justice Reynolds, disqualified, concur.