Simpson v. Harris , 21 Nev. 353 ( 1893 )

I concur in the conclusion announced by Chief Justice Murphy, but upon grounds somewhat different from those stated by him. There can be no question that under our statute, where there is no change of possession of the property, a chattel mortgage which is not recorded until a second mortgage has been honestly and in good faith taken and recorded, must be postponed to the second mortgage, although the latter was taken with notice of the existence of the first. The statute itself is clear, and the numerous cases cited by appellant's counsel show that the question has been too often decided to be now open to further controversy. It is admitted by the pleadings that the intervener Chedic's mortgage was taken first, but not recorded until after the plaintiff Simpson's was made and placed on record. Simpson had notice of the first mortgage, but this alone is not sufficient to postpone his mortgage to the other. In my judgment, however, there are other grounds sufficient to support the decree. They are — First, that Simpson persuaded and induced Chedic not to record his mortgage, and afterwards took advantage of the fact that he had not done so, to get his own recorded first; second, that Simpson took his mortgage with intent to hinder, delay and defraud Chedic in the collection of his mortgage. Without recapitulating the allegations of the complaint of intervention, it is enough to say that the facts constituting these defenses are sufficiently set forth.

There can be no question that Chedic's mortgage, although not recorded, was good as between the parties. The fact that it was not recorded would only make it void as to others, who did not occupy the position of a party. It would be good as against Harris' heirs, legatees, donees or assignees, and, except as required to pay debts, good also against his executors and administrators. (Jones, Chat. Mortg. Secs. 237, 238, 239; Herm. Chat. Mortg. Sec 70; Waite, Fraud. Conv. Secs. 112-122.)

The only reason that can be urged why it is not good as against Simpson is that it was not recorded. But upon this point it is alleged that when Chedic was about to place it upon the records, he was requested and induced by Simpson not to do so. If so, Simpson is estopped from raising this objection. In Bigelow on Estoppel (page 507), speaking of a case which had been under discussion, it is said: "This, it may be proper to observe, is only an illustration of the familiar principle that' if A induce B to omit taking certain steps, he cannot afterwards object that B did not take them." Ashworth v. Brown, 15 Phila. 207, is to the same effect. So, where one has requested or induced another to take certain steps, he cannot afterwards object that the other had no authority or right to take them, or that he should not have done so. (Johnson v. Allen, 62 Ind. 57; Gebhardt v.Reeves, 75 Ill, 301; Burlington v.Gilbert, 31 Iowa, 356; 2 Herm. Estop. Sec. 1221.)

Again, the intervener alleges that Simpson's mortgage was made and taken for the benefit of the mortgageor, Harris, and to hinder, delay and defraud Harris' creditors, and particularly to hinder, delay and defraud the said Chedic, by preventing him from recovering the amount due upon his mortgage. This, also, constitutes a full and complete defense to Simpson's mortgage, although the sum for which it was taken was actually and honestly due him from Harris. If his mortgage was taken, not to secure himself, but to protect Harris, and to prevent Harris' other creditors from obtaining their just demands, then it was void as against those creditors. (Herm. Chat. Mort. Secs. 151, 170; Fuller v. Paige, 26 Ill. 358;Billings v. Russell, 101 N. Y. 232;Bradley v. Ragsdale, 64 Ala. 559; Boyd v. Turpin, 94 N. C. 137; Blennerhassett v.Sherman, 105 U. S. 107; Mechanics' Nat. Bank v. Burnet Manuf'g. Co., 33 N. J. Eq. 486.)

So here we find at least two defenses set up in the intervener's complaint, either of which, if true, is sufficient to postpone it to Chedic's mortgage, even though it was made for an honest debt and was recorded before Chedic's was. There may be others, but these are sufficient for the purposes of this decision.

The next point that naturally arises is, were either of these defenses established? The manner in which this case was tried is not to be commended. A jury was called, but no special issues were submitted to them, and they only found a general verdict in favor of the intervener. Where a jury is called in an equity case, only special issues should be submitted to them, and when found, their verdict is only advisory of the court. (Duffy v. Moran, 12 Nev. 94,97; Haynes, New Trials App. Sec. 234.)

A general verdict in such a case is improper and should be disregarded. (Wingate v. Ferris,50 Cal. 105; Brandt v. Wheaton, 52 Cal. 434;Warring v. Freear, 04 Cal. 54; Learned v. Castle, 67 Cal. 41.) If it could possibly have any weight with the court in deciding the case, it would only be where it was submitted to them under instructions clearly defining the questions upon which they were to pass, so that it might be known what had been determined by them and what had not. Even this was not done here, so far as can be judged from the instructions as presented in the transcript. The result is that the verdict is valuless, but as the plaintiff made no objection to the course taken, he can not now take advantage of the error. As the verdict in an equity case has no value until adopted and sanctioned by the court, and then only as a part of the findings, a motion for new trial should be made upon the findings and not upon the verdict. (Duffy v. Moran, 12 Nev. 94;Stockman v. Irrigation Co., 64 Cal. 57;Bates v. Gage, 49 Cal. 126.) The same as in any other case, if the findings do not cover the issues made by the pleadings, every material fact not found must be presumed in favor of the judgment. (Jones v.Adams', 19 Nev. 78, 80, 82; More v. Lott,13 Nev. 381.) This principle applies here.

The findings do not cover the real issues in the case. They are only upon matters concerning-which there was no controversy, such as the making of the mortgages, the order in which they were made and recorded, etc We are forced, then, under the doctrine of implied findings, to adopt the presumption that all the issues in the case necessary to support the judgment were found in. favor of the intervener. The case is not so presented to us that we are called upon or permitted to review the evidence to determine whether it supports these implied findings. No request was made to the court to supply the omitted findings, nor is it assigned as error that the implied findings are contrary to the evidence. The proper practice, where a party wishes such questions reviewed in the appllate court, was pointed out in Welland v. Williams.21 Nev. 230. We have seen that the intervener's complaint stilted some good defenses. Had the plaintiff asked for findings upon these issues, and the court refused them, it would have been error; had it found them in favor of the plaintiff, it would have left the decree without support; had it found them against him, he could have assigned as error that the findings were against the evidence, and perhaps he could have done this upon the implied findings. (More v. Lott 13 Nev. 381.)

I have looked into the assignments of error. The most of them are, under this view, directed to immaterial matters, or are otherwise insufficient to raise any question. (Haynes, New Trials App. Sec. 150.)

The plaintiff's answer to the complaint of intervention alleges that the intervener is not the owner of the mortgage claimed by him. No finding was made upon the point, so we must presume that it was found that he was the owner, as otherwise the judgment would not perhaps have gone in his favor. Possibly the tenth assignment of the insufficiency of the evidence, raises the point that the evidence does not support such a finding. But in my judgment the evidence is sufficient. It shows that although the intervener had assigned the mortgage, it was only done by way of security and had been reassigned to him before he intervened in the action. The evidence also supports the implied finding attacked in the fourteenth assignment. No error was committed in the admission of testimony. One of the issues being fraud, all of the surrounding circumstances, including the conversation of the parties concerning the matter, were properly admitted as reflecting upon the question. Conceding that in a case tried as this was, a party is entitled to ask instructions to the jury, no error was committed in refusing the two instructions asked by the plaintiff nor in modifying the others.

It remains to consider the order in which the decree directs the mortgages to be paid. Subsequent to the making and recording of the plaintiff's mortgage, bat before the intervener's was recorded, a mortgage was made and recorded to the Langley Michaels Company, a corporation. In their answer the company concede that the plaintiff's mortgage is entitled to payment before theirs, but as their mortgage was taken in good faith, and recorded before the intervener's, they are undoubtedly entitled to payment before the intervener. Upon this state of facts the Langley Michaels mortgage should be paid before Chedic's, Chedic's before Simpson's, and Simpson's before Langley Michael's. This presents what may be properly called a mathematical impossibility. The decree directs that Langley Michaels shall be paid first, Chedic second, and Simpson third, As the nearest approach to justice possible under the circumstances, this was, in my judgment, correct, and is supported by the only precedents found upon, the question. In Sayre v. Hughes,32 N. J. Eq. 652, 659, it is said: "Where a third incumbrancer acquires a right of priority as against the first, but the act or omission from which such right flows does not change his relative position towards the second, yet, as it is impossible to put him in advance of the first without also advancing him over the second, his lien must of necessity be advanced to the first position, as against both the first and second incumbrances."

For these reasons I concur in affirming the judgment and order appealed from.