Williamson v. Nealey , 81 Me. 447 ( 1889 )

Foster, J.

Trover for the value of certain personal property, the title to which is claimed by both parties. The plaintiff claims it as assignee in insolvency of Abner Hodgdon who, in 1878, conveyed in mortgage “all the goods, wares, merchandise * * and stock in trade” then in his store to secure payment of an indebtedness of $400. The mortgage contained the following clause: “It is agreed that the said Hodgdon may barter, sell and exchange the above described property in the usual course of trade, and with the proceeds of such barter, sale and exchange, purchase other property of like kind, which shall be equally subject to the lien of this mortgage; and it is also specially agreed and understood that any and all property added to said stock in any way, shall also be equally subject to the lien of this mortgage.”

At the date of the mortgagor’s petition in insolvency, all the property conveyed by the mortgage had been sold by him in the usual course of trade, and with the proceeds of such sale he had purchased and then had in his possession other property of like kind of the value of one hundred dollars.

The defendant duly became the owner of the mortgage by assignment long before the mortgagor’s petition in insolvency, although his foreclosure of the same has been perfected since that time.

The defendant’s rights are therefore precisely those of the original mortgagee.

The lights of the plaintiff are only those of the insolvent himself. lie stands in the place of the debtor, and. takes only the property and interest which he liad, subject to all valid claims existing in reference to such property. His rights are only those which the insolvent himself had and could assert at the time of his insolvency, except in case of fraud, and no fraud is alleged in this case. Herrick v. Marshall, 66 Maine, 435; Hutchinson v. Murchie, 74 Maine, 187, 189.

This controversy, in reference to title, may then be considered as if it were between the original parties to the mortgage.

It is a principle established by the decisions of this court, that as between the parties, a mortgage upon goods which authorizes the mortgagor to sell them, and with the proceeds of such sale to purchase other goods to take their place, may be upheld as to such after-acquired property. Allen v. Groodnow, 71 Maine, 424; Deering v. Cobb, 74 Maine, 332, 334.

In the case of Allen v. Groodnow, supra, Ltbbey, J., in delivering the opinion of the court says: “We know no principle of law which prevents the parties from making such a contract; and if honestly executed by the mortgagors by using the proceeds of sales in purchasing other goods which were put into the store to take the place of those sold, the title to such goods is in the mortgagors, precisely the same as if they had made the sales and purchases themselves by the consent of the mortgagors.”

The question before us, it must be noticed, is not one between the mortgagee and a subsequent purchaser for value, or an attaching creditor, but, as we have stated, between the original parties to the mortgage, and must be determined by the stipulations contained in the mortgage. These stipulations render the case unlike that of Griffith v. Douglass, 73 Maine, 532, in which there was no power of sale with the duty to invest the proceeds for the benefit of the mortgagee, and which was a mortgage of the furniture “now owned or to be owned” by the mortgagor, without reference to such renewals as should be procured by any reinvestment of proceeds arising from sales of the original stock. That case, and that of Jones v. Richardson, 10 Met. 481, cited by the plaintiff, arose between the mortgagee and third persons claiming as attaching creditors of the mortgagor, and consequently have no application to the facts in this case.

Upon the facts presented for consideration in the case now before us, the entry must be

Judgment for defendant.

Peters, C. J., Daneorth, Libbey, Emery and Haskell, JJ., concurred.