Knapp v. Hobbs , 50 N.H. 476 ( 1871 )

Foster, J.

A mortgagee of personal property is to be regarded as having the legal estate for the purpose of all lawful protection of his interests. And, under the provisions of the statute, a record of the mortgage renders the same valid as against all the world, as effectually as an open change of possession and actual notice. Smith v. Moore, 11 N. H. 61; Hoit v. Remick, ibid 289. If a mortgagor of personal property, or any one claiming under him, sell the mortgaged property, as owner, in exclusion of the rights'of the mortgagee, such sale is a conversion, and the mortgagee may maintain trover. White v. Phelps, 12 N. H. 382. And it would seem to be quite immaterial, so far as the plaintiff is concerned, whether the party thus intermeddling with his property received and enjoyed for his own profit and advantage the avails of the sale, or whether, as the mere agent and servant of another, lie was no more than the transient carrier and mandatary of his principal: in either case lié is instrumental in the removal to a distance, and out of the power of control of the mortgagee, the property to which he has no title. Neither does it make any difference,- so far as the mortgagee is concerned, that the defendant may, in fact, be totally ignorant of the mortgagee’s title, and may suppose that the mortgagor, from whom he receives the property,, has the right to control and dispose of it.

Thus, where a mortgagor, retaining possession after the record of the mortgage, for the purpose of cheating and defrauding the mortgagee, sent the mortgaged goods to an auctioneer, by whom they were sold and the proceeds paid over to the mortgagor, — it was held, that the mortgagee might maintain trover against the auctioneer, though he was no party to the fraud, and had no actual knowledge of the mortgage. Coles v. Clark, 3 Cush. 399;—and see Brackett v. Bullard, 12 Met. 308; Farebrother v. Ansley, 1 Campb. 343; Adamson v. Jarvis, 4 Bing. 66; White v. Phelps, before cited; 2 Hilliard on Mortgages 248, 830. And if the principal is a wrong-doer, the agent, however innocent in intention, who participates in his acts, must be regarded, in law, as a wrong-doer also. Story on Agency, § 312.

By the record of the mortgage he is charged, in law, with notice of the title ; and although, in a particular instance, the operation of the rule which thus charges all the world may work a hardship, yet the abrogation or suspension of the rule would obviously work a greater mischief in a multitude of cases.

There can be no valid objection to the form of the present action. As to the plaintiff, the defendant is a wrong-doer, and is liable in tort; but, says Woodbury, J., in Chauncey v. Yeaton, 1 N. H. 154, “if the wrong-doer hath sold, or used and then sold the property, the owner may waive the tort, and in assumpsit recover the net proceeds received both for the use and by the sale. The amount recoverable in assumpsit cannot, upon general principles, operate unfavorably to the trespasser. In an action ex contractu, nothing can be obtained from him except what has in fact been received for the use and by sale of the property ; while in one ex delicto, he may be subjected vindictively to pay much more than the real value of the article converted. Considering him, therefore, in the words of Jackson, J., in Cummings v. Noyes, 10 Mass. 436, as a ‘ purchaser, or agent, or a bailee ’ gives him no just cause of complaint, because it visits on him no actual loss, the amount recovered being merely the amount obtained as the fruits of the trespass.” And see Kimball v. Jackman, 42 N. H. 242; 1 Hilliard on Torts 44. And the limitation upon the general principle of waiver of tort, as decided in Smith v. Smith, 43 N. H. 536, that it is permissible only where the party charged has sold the property and received the money for it, does not affect the position of this case, — the substance of it being that if trespass or trover will lie, in such case defendant cannot complain that plaintiff'has chosen a milder form of action.

Lord Mansfield calls the action of assumpsit for money had and received “ a liberal action founded upon large principles of equity,” and applicable wherever the defendant having received money cannot conscientiously retain it. Sadler v. Evans, 4 Burr. 1,985; Moses v. Macferlan, 2 Burr. 1,005; Chitty on Contracts 673, note (f).

To support the count, it is, as a general rule, necessary to prove that the defendant or his agent (Coates v. Bainbridge, 5 Bing. 58) actually received money for the benefit of the plaintiff, under such circumstances as to create a privity of contract between him and the plaintiff. Chitty on Contr. 673; Hutchins v. Gilman, 9 N. H. 359.

But there need be no other privity of contract in order to support this action than that which results from one man’s receiving another’s money which he has no right conscientiously to retain. In such a case the law and the equitable principle upon which the action is founded imply the contract and the assumpsit. Mason v. Waite, 17 Mass. 563; Hall v. Marston, ibid 579; Penniman v. Patchin, 5 Vt. 346.

The result in this case is not at variance with the equity which is said peculiarly to characterize this form of action. By the agency of this defendant the plaintiff’s -property has been removed to a distance, and although the purchaser has not acquired a title to the ox, nor the plaintiff’s title been devested, yet he cannot regain possession of the property without great inconvenience and expense. And although both parties to the cause may be equally innocent in fact, if either must suffer through the rascality of a third party, he should bear the burden who has been actively instrumental in the removal of the other’s property ; and he must seek his remedy at the door of his own principal in the transaction.

The ruling of the court excluding the proposed testimony was correct. Judgment on the verdict.