Opinion
December 7, 1956 —
January 7, 1957.
APPEAL from a judgment of the circuit court for Walworth county: ELMER D. GOODLAND, Circuit judge. Affirmed.
For the appellant there was a brief by Brendemuehl Brendemuehl of Oconomowoc, and oral argument by Alvin G. Brendemuehl.
For the respondent Carlton Ells there was a brief and oral argument by H. Maxwell Manzer of Madison.
For the respondent Ellis Border there was a brief by Godfrey, Godfrey Warren of Elkhorn, and oral argument by Thomas G. Godfrey.
Action in replevin by plaintiff Bank of Ashippun, a Wisconsin banking corporation, against defendants Carlton Ells and Ellis Border, to recover possession of a farm tractor which was included in a chattel mortgage given to plaintiff by Bierman-Turnacliff, Inc. From a judgment dismissing the complaint, plaintiff appeals.
Bierman-Turnacliff, Inc., conducted a farm-implement business in Waukesha county. To secure a temporary loan it gave to the plaintiff bank a note and chattel mortgage in amount of $3,200, which mortgage was filed in the office of the register of deeds for Waukesha county on December 24, 1952. The mortgage contained the following covenant:
"Said mortgagor further covenants . . . not to sell or remove said property or any part of the equipment thereof from the county where said property is now located without the written consent of the mortgagee."
Among the chattels listed was the Minneapolis-Moline farm tractor which is the subject of this action. It was kept at the mortgagor's place of business and commingled with its general stock in trade. The bank made no request that it should be segregated or tagged, and on several occasions the bank officials visited the mortgagor's place of business to check sales of the mortgaged property.
In March of 1953, Bierman-Turnacliff sold the tractor to Carlton Ells, a farm-machinery dealer at Lake Beulah, Walworth county, who in turn sold and delivered it to defendant Border, a farmer residing in Walworth county. Neither Ells nor Border had any knowledge of the existing mortgage. This action was commenced after delivery of the tractor to Border who has had it in his possession since the purchase from Ells.
Further facts will be stated in the opinion.
The trial court held that plaintiff had waived its mortgage lien on the tractor and the evidence supports that conclusion. The bank permitted the tractor to be commingled with Bierman-Turnacliff's other stock in trade without any mark indicating it was mortgaged property; it knew that it was necessary for Bierman-Turnacliff to sell its merchandise in order to remain in business; it checked the stock from time to time to see whether any of the mortgaged property had been sold. The note which the mortgage secured was due April 22, 1953. On July 7, 1953, by which time plaintiff knew that Bierman-Turnacliff had sold the tractor and other mortgaged items, it accepted a $200 payment on the note. Under all the circumstances the plaintiff's conduct constituted an implied agreement that Bierman-Turnacliff might deal with the mortgaged property as it did and it thereby waived its lien.
As stated in Southern Wisconsin Acceptance Co. v. Paull (1927), 192 Wis. 548, 550, 213 N.W. 317:
"`The rule of law is settled that where a mortgagee of chattels authorizes the mortgagor to sell the property described in the mortgage, and the sale is accordingly made, the mortgagee has thereby waived his lien.' Warrick v. Rasmussen, 112 Neb. 299, 301, 199 N.W. 544, 545; Singer v. Farmers State Bank, 166 Minn. 327, 207 N.W. 631, 632; Peterson v. St. Anthony D.E. Co. 9 N. Dak. 55, 56, 81 N.W. 59, 60; Hoyt v. Clemans, 167 Iowa, 330, 149 N.W. 442, L.R.A. 1915 C, 166, 170; Carr v. Brawley, 34 Okla. 500, 125 P. 1131, 43 L.R.A. n. s. 302, 305, and cases cited in note."
The trial court properly dismissed the complaint.
It appears from the evidence that Ells located the tractor at Bierman-Turnacliff through a "block man," an employee of the Minneapolis-Moline Company, who had been a witness to the execution of the chattel mortgage. Plaintiff asserts that the block man was Ells' agent and thus his knowledge of the existence of the mortgage was the knowledge of Ells. Nowhere does plaintiff cite any authority that these facts constitute agency. The block man merely furnished Ells with the information he requested and this did not clothe him with any authority to act for or on behalf of Ells.
Plaintiff objects to the taxation of costs by both defendants on the ground that they are united in interest. Its objections in the lower court were made under sec. 270.66, Stats., but it abandoned this position by failing to appear at the hearing on the motion. We cannot consider plaintiff's present objection since it was not raised below. Diggle v. Boulden (1880), 48 Wis. 477, 4 N.W. 678.
By the Court. — Judgment affirmed.