San Francisco Breweries v. Schurtz
Before: Belcher, Garoutte, Haven, McFarland, Searls, Vanclief
Synopsis
Appeal from a judgment of the Superior Court of Los Angeles County.
The facts are stated in the opinion.
The court erred, in overruling the demurrer to the complaint, as the mortgage covers furniture and other articles alleged to be in a saloon which are not subject to mortgage. (GassnerY. Patterson, 23 Cal. 299; Stringer v. Davis, 30 Cal. 318.) Even if some of the articles were the proper subject of a mortgage, yet, inasmuch as there was included property not subject thereto, the mortgage is void in toto. (Dufficy v. Shields, 63 Cal. 332.) Chattel mortgages are void unless made in strict conformity with the statute. (Qassner v. Patterson, 23 Cal. 299.) The affidavit to the mortgage is insufficient, as it does not appear to have been made by an officer of the corporation, and contains no allegation that the party recited therein as agent, and who signed it, was in fact the agent of the mortgagee. The fact that the mortgage was properly drawn does not validate the mortgage if the affidavit is insufficient. (Butte Hardware Co. v. Sullivan, 7 Mont. 307; BaJcer v. Power, 7 Mont. 326; Leopold v. Silverman, 7 Mont. 266; Balcer v. Cans, 7 Mont. 329.) Things set up by a lessee during his tenancy for the purpose of his trade remain personal property. (Hill on Fixtures, sec. 17; Lemar v. Miles, 4 Watts, 330; Raymond v. White, 7 Cow. 319; Heermance v. Vernoy, 6 Johns. 5; Reynolds v. Shuler, 5 Cow. 323.) To determine whether a chattel affixed by the lessee can be seized in execution, we have only to ascertain whether the lessee can lawfully remove it, for whatever rights and interests the lessee may have are subject to execution against him. ■ (Freeman on Executions, sec. 114, p. 155.) Inasmuch as the right of a creditor to treat chattels annexed to freehold as personal property depends upon the right of the debtor to do so, it follows that whatever fixtures the debtor is at liberty to remove may be seized, and severed by an execution creditor. ( Walton v. Wray, 54 Iowa, 531; State v. Bonham, 18 Ind. 231; Cresson v. Stout, 17 Johns. 116; 8 Am. Dec. 373; Gale v. Ward, 14 Mass. 352; 7 Am. Dec. 223; O’Donnell v. Hitchcock, 118 Mass. 401.) And the purchaser at the sale has a right to enter upon the premises and remove, them. (Lanphere v. Lowe, 3 Neb. 131; Doty v. Gorham, 5 Pick. 487; 16 Am. Dec. 417; Lemar v. Miles, 4 Watts, 330.)
The mortgage was valid as between the parties. Under the code mortgages on personal property mentioned in section 2955 of the Civil Code, if properly executed as required by section 2957 of the Civil Code, are valid as against every one, without delivery and change of possession of the property mortgaged, and are valid against every one except the classes enumerated in section 2957, if not executed according to the requirements of that section. (Civ. Code, sec. 2957; Harms v. Silva, 91 Cal. 636.) Mortgages on personal property not mentioned in section 2955 of the Civil Code, where there is an immediate deliver}7 of the property mortgaged, and an actual and continued change of possession thereof, are valid against every one (Civ. Code, sec. 3440; Woods v. Bugbey, 29 Cal. 466; Tregear v. Etiivanda Water Co., 76 Cal. 537; 9 Am. St. Rep. 245), and where there is no immediate delivery and no actual and continued change of possession thereof, said mortgages are valid against every one, except the certain special classes enumerated in section 3440 of the Civil Code, such as certain creditors and certain purchasers and encumbrancers. (Civ. Code, sec. 3440; Woods v. Bugbey, 29 Cal. 466; Tregear v. Etiwanda Water Go., 76 Cal. 537; 9 Am. St. Rep. 245.) The law governing the sale of personal property and a mortgage of personal property, where delivery of possession of the property is necessary to make them valid as against every one, is the same. (Woods v. Bugbey, 29 Cal. 466; Tregear v. Etiwanda Water Co., 76 Cal. 537; 9 Am. St. Rep. 245.) All personal property at common law was mortgageable (Barroilhet v. Battelle, 7 Cal. 453; Jones on Chattel Mortgages, 2d ed., sec. 176), and our codes have not changed the general rule, but have, as against the special classes enumerated in section 2957 of the Civil Code, substituted the record of the mortgage in place of delivery of possession as to property mentioned in section 2955 of the Civil Code (Martin v. Thompson, 63 Cal. 4; Berson v. Nunan, 63 Cal. 550; Beamer v. Freeman, 84 Cal. 554; Jones on Chattel Mortgages, 2d ed., see. 236), and as to all other personal property have made the delivery of the property mortgaged, and the actual and continued change of possession thereof, essential as against those certain special classes enumerated in section 3440 of the Civil Code. (Civ. Code, sec. 3440; Tregear v. Etiwanda Water Co., 76 Cal. 537; 9 Am. St. Rep. 245.) A mortgage covering property mentioned in section 2955 of the Civil Code, and also covering other personal property not mentioned in the section, is valid, as to the property mentioned as against every one. (In re Fischer, 94 Cal. 523.) The allegation of the complaint that the defendant has, or claims to have, some interest in or claim to the property mortgaged, or some part thereof, which interest or claim is subsequent and subject to the lien of plaintiff's mortgage, is a sufficient allegation, and, if defendant has any interest in, or claim to, the property or any part thereof, it is his duty to set it out in the answer, and not plaintiff’s duty to allege it in the complaint. (Poett v. Stearns, 28 Cal. 226; Anthony v. Nye, 30 Cal. 402; Sichler y. Look, 93 Cal. 600.) As to the leasehold interest the mortgage is a real estate mortgage, and valid, notwithstanding that it includes both real and personal property. (Tregear y. Etiwanda Water Co., 76 Cal. 540; 9 Am. St. Hep. 245.) The affidavit to the mortgage was properly executed by the agent of the corporation. (Jones on Chattel Mortgages, 2d ed., sec. 37.) All fixtures annexed to the leasehold interest are real property, and follow the leasehold interest as a matter of course, even without being mentioned, and the mortgage as to the fixtures and leasehold interest is to be construed according to the rules governing a mortgage of real property, and therefore, as to the leasehold interest and fixtures, the mortgage being a real estate mortgage and recorded among real estate mortgages, any claims of appellant as to them, being subsequent to plaintiff’s mortgage, are subject to plaintiff’s mortgage. {Merritt v. Judd, 14 Cal. 60; Boyle Ice Machine Co. v. Gould, 73 Cal. 153; Ewell on Fixtures, 276-81, and authorities there referred to.) Fixtures follow the leasehold. {McNally v. Connolly, 70 Cal. 3.) All fixtures pass with the freehold. (Ewell on Fixtures, 275; Sands v. Pfeiffer, 10 Cal. 258; Fratt v. Whittier, 58 Cal. 130; 41 Am. Rep. 251.)
Belcher, C. The defendant, Joseph Schurtz, had a lease for. the term of four years and two months, dated October 5, 1889, of the basement of a building known as the Wilson block, in the city of Los Angeles. He used the leased premises for the purposes of a saloon and [425]restaurant, and bad caused to be attached to them certain personal property used in conducting his business.
On June 25, 1891, he executed to the plaintiff his promissory notes for sums aggregating four thousand five hundred dollars, and a mortgage to secure payment of the notes on his said leasehold estate and on all fixtures, improvements, and appliances, which had been attached to or made a part thereof, and also on all personal property, including a piano, used in and about said saloon and restaurant.
The mortgage was properly executed as a mortgage of real and personal property, and on the day of its date was by the mortgagee caused to be recorded in the recorder’s office of Los Angeles county.
In August, 1892, the plaintiff commenced this action to foreclose its mortgage, making Henry P. Wilson the appellant, and others parties defendant, upon the ground that they had, or claimed to have, some interest in the mortgaged property, which interests or claims, it was alleged, were subsequent and subject to the lien of said mortgage.
All of the defendants, except Wilson, suffered their defaults to be entered. He demurred to the complaint, and, his demurrer being overruled, answered. The answer denied some of the averments of the complaint^ and alleged that the only property subject to mortgage was the leasehold interest and the piano, and also alleged that on May 26,1892, one Catherine Wilson recovered a judgment against Joseph Schurtz, the mortgagor, for two thousand three hundred dollars, on which an execution was duly issued and levied upon most of the property involved in this action, other than the said leasehold interest and piano; that under the execution the property levied upon was sold on June 15,1892, and bid in by said defendant, and is now owned by him and in his possession. And the prayer was that it be adjudged that defendant is the owner of the property so bid in by him, and that no part thereof is subject to plaintiff’s mortgage.
[426]
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