Morrison v. Elzy

Mr. Presiding Justice Thompson

delivered the opinion of the court.

The question in this case is whether the mortgage, given by Elzy to Morrison on sixty-one steers was such as will hold the proceeds of the sale of the stock which were received by the First National Bank of Findlay. The evidence shows that the description of the stock was not such that it could all be identified by a third party. The description in the Morrison mortgage is: “61 head of 2 yr. old short horn steers.” The proof shows that the cattle were of mixed stock. The greater number of the steers were red or roan two years old, which were half or more than half short horns. There were a number of the steers in which Hereford or Polled Angus was the prevailing type. They were all two-year-olds, and were lotted in Chicago, and sold as short horns or Herefords.

Dazey, the cashier of the bank to whom the mortgage and note assigned to the Bank of Findlay were given, had no interest in them. The description of the prop- - erty is the same in both mortgages given to Dazey and both contain the provision that they are given subject to a former mortgage to Morrison. The agent of the bank who made the loan and accepted the mortgage was told at the time that Morrison had a prior mortgage on the stock on which the bank was taking a mortgage.

. The joint answer of the bank and Dazey states, “that many, if not all of the cattle so shipped were not mentioned in any of said mortgages unless it be that they were mentioned in the last mortgage given to the said Dazey,” and “alleges that said Dazey hearing of a proposed shipment of cattle by the said Elzy from Findlay to Chicago, went to Chicago for the purpose of protecting the rights of the First National Bank of Findlay, if need be, in the mortgage which it then held executed by the said Elzy and for no other purpose.” The record shows that the same counsel appear for, filed the answers for and represent the bank, Dazey and Elzy.

The preponderance of the proof is that the steers sold by Morrison to Elzy were kept on a farm, known as the Lanham farm, with some younger cattle and that none of the Morrison cattle were sold at the public sale that Elzy had in December, 1910; that these cattle were included in the Dazey mortgage with another steer; that the steers sold in Chicago by Elzy were the ones he bought of Morrison, and that Dazey, in the stock yards at Chicago, demanded by virtue of the mortgage held by thó bank that the proceeds of the sale of the cattle in Chicago be deposited in the Bank of Findlay, when Elzy stated that the Morrison mortgage on these cattle must be paid. The conclusion is inevitable that the Bank of Findlay received the proceeds of the cattle only because of its second mortgage.

The settlement of the Chicago commission house that sold the stock shows that sixty-six cattle were sold for Elzy on June 7th for $3,941.89, of which five were cows sold on the account of a neighbor for $251.24; that the expenses of the sale including freight and commissions were $143.98; and that the net proceeds of the sale of the sixty-one steers were $3,546.17, without maldng any deduction from the expense account for the expenses chargeable against the five cows. From this statement it would appear that only sixty-one steers were shipped to Chicago.

An incorrect description of a part of the property included in a chattel mortgage will not invalidate the mortgage as to the part correctly described. If the description of the property in a chattel mortgage is such as will enable third persons to identify the property, aided by inquiries which the mortgage indicates, then the mortgage is constructive notice to parties even who purchase in good faith. A description wholly false voids the mortgage, but if a part of the description only is false, this may be rejected and the mortgage will take effect, if the remainder of the description is sufficient, aided by inquiries which the mortgage suggests, to enable the property to be identified. Boyle v. Miller, 93 Ill. App. 627, 5 Am. & Eng. Encyc. of Law, 958; 6 Cyc. 1036. “Persons with actual knowledge of the property covered by the mortgage stand in no better position than the mortgagor in respect to their right to object to an insufficient description.” 6 Cyc. 1023, and authorities there cited.

Such of the steers as were grade short horns were accurately described. All the steers were described as two-year-olds. These steers included in the Morrison mortgage were all two-year-olds and were kept and fed by themselves, except that there were some yearling cattle with them.

The- mortgage to the bank described the cattle mortgaged to it as subject to the Morrison mortgage. The agent of the bank who took its mortgages having been informed by Elzy at the time the first bank mortgage was taken about the cattle being covered by the Morrison mortgage, the bank stands in no better position than Elzy to object to the partially inaccurate description in the Morrison mortgage. The bank is estopped to deny the title of Morrison for the reason that all the title the bank received was a conveyance of the equity of Elzy. The bank being- represented at the sale in Chicago, consenting to it and receiving the proceeds of' the sale of the mortgaged cattle by virtue of its mortgage, must be held to hold the proceeds in trust for the holder of the first mortgage. The net proceeds of the sale of the cattle sold in Chicago were more than the amount due on the Morrison note, and the balance unpaid on-that note must be paid from the proceeds of the sale.

There is an issue in the case as to whether or not Morrison was paid anything on the note dated October 15, 1910, by the purchase of stock at the sale held by Elzy in December, 1910. Morrison testified that the price of the cattle and other property bought by ffim at that sale was credited on a $2,000 note and mortgage held by him against Elzy, while Elzy testified that it was credited on the note of October 15, 1910. We express no opinion concerning this issne.

Counsel for appellant in their original argument and in their reply have gone out of the record to abuse the trial court by insinuations reflecting on the court which are unseemly and unprofessional. Such practice should not be passed by without comment. Briefs and arguments containing such insinuations, on motion, should be stricken from the files.

The decree is reversed and the cause remanded with instructions to state the account as to the amount due and unpaid on the noté of October 15, 1910, and to render a decree for the balance due on that note to be paid by the First National Bank of Findlay out of the proceeds of the sale of the sixty-one steers covered by the mortgage given by Elzy to Morrison.

Reversed and remanded with directions.