Hancock County IL Archives Court.....Prior, V White 1850
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Deb Haines http://www.genrecords.net/emailregistry/vols/00003.html#0000719 May 23, 2008, 8:06 pm

Source: Records Of Cases Illinois
Written: 1850

Jonathan Prior, plaintiff in wrror, v. Joseph White, defendant in error.

Error to Hancock.

Parties may stipulate in a chattel mortgage in such way as to limit or qualify 
the right of possession and use in the mortgagor, so as more effectually to 
secure the mortgagee. (a)

Notes may be given after the execution of a chattel mortage, for a pre-
existing debt, without vitiating the transaction.(b)

The declarations of a mortgagor as to his intention in executing the mortgage, 
unless knowledge of them is brought home to the mortgagee, are inadmissible in 
evidence and his connection with them must first be shown, before they can be 
offered as testimony. (c)

It is not error to refuse an instruction, when another instruction is given, 
whereby the party asking it, has the full benefit of the law as applicable to 
the conduct of the parties connected with the transaction. (d)

If evidence is admitted, competent for one purpose, which may have an improper 
effect, the party aggrieved should ask an instruction, explaining its 
legitimate effect; and then the views of the court, admitting the testimony, 
may be canvassed.

This was a trial of the right of property, before a justice of the peace of 
Hancock county. White was the claimant under a chattel mortgage from Daniel 
Prentiss. Prior claimed the property by virtue of an execution in his favor, 
against Prentiss. The cause was taken to the Circuit Court of Hancock county, 
and was tried before Minshall, Judge, and a jury, at September term, 1850, 
when a verdict and judgment were rendered for the complainant, White. Prior, 
by writ of error, brings the cause to the Supreme Court, and assigns for 
error, the admitting of the chattel mortgage, the notes and notice on the 
trial in the Circuit Court, the refusal of proof of the declarations of 
Prentiss, giving improper instructions, and refusing to give instructions 
asked for by claimant.

White introduced a chattel mortgage for the goods in controversy, dated and 
acknowledged April 25, 1850, recorded April 27, executed by Prentiss, to him, 
with these recitals and conditions:

1. Provided, etc., That if the said Prentiss shall well and truly pay, etc., 
to the said Joseph White, the sum of $200, according to the tenor of three 
several promissory notes, bearing even date herewith, and payable in manner 
following, to wit: One for $80, payable in two years, etc., with interest, 
etc., then this mortgage to be void, etc.

2. A stipulation, in the usual form, that Prentiss should retain possession, 
etc.

3. But if the same, or any part thereof, shall be attached or claimed by any 
other person or persons, at any time before payment, or the said Daniel 
Prentiss shall attempt to sell the same, without the authority and permission 
of the said Joseph White, or his assigns, in writing expressed, then it shall 
and may be lawful for the said Joseph White, or his assigns, to take immediate 
and full possession of the whole of said goods and chattels, to his and their 
own use, etc.

The mortgage was properly entered on the justice's docket. Three notes under 
the mortgage were also offered in evidence. Claimant proved, by the constable, 
a seizure under the execution of a portion of the property described in the 
mortgage, found in the possession of Prentiss. White also introduced a notice 
from him to the constable, that he, White, claimed the property seized upon, 
by virtue of his mortgage.

Prior offered proof, as to the declarations of Prentiss, in reference to his 
object in mortgaging his property, etc., and also, that the notes produced on 
the trial in the Circuit Court, were different from those produced on the 
trial before the justice of the peace.

R. S. Blackwell, Williams & Lawrence, for plaintiff in error.

Browning & Bushnell, for defendant in error.

Caton, J. It has been held, that in case of a chattel mortgage when under a 
provision in the mortgage, the mortgagor retains the possession and use of the 
property, he has such a legal interest in the property as may be seized and 
sold on an execution against him—the purchaser under the execution, succeeding 
to all the rights of the mortgagor, and no more: Bailey v. Burton, 8 Wendall, 
p. 347. Where, however, the possession is transferred to the mortgagee, then 
the mortgagor has but an equitable interest in the chattel, which is not 
subject to an execution at law: Marsh v. Lawrence, 4 Cowen, 461.

In this state, the right of the parties to stipulate in the mortgage, that the 
mortgagor may retain the possession and use of the property for a certain 
time, is secured by statute, and we can see no reasonable objection to 
allowing the parties to limit or qualify this right of possession and use in 
the mortgagor, so as more effectually to protect the security of the 
mortgagee, as was done in this case. The provision here is that the mortgagor 
may retain the possession and use of the property; but in case the chattels, 
or any part thereof, shall be attached or claimed by any other person, at any 
time before the payment of the money secured, or in case the mortgagor shall 
attempt to sell them without the consent of the mortgagee, then the latter 
shall have the immediate right to the possession of the whole of the said 
chattels, to his own use. We cannot perceive how this can be held to be 
fraudulent, as against the policy of the law, or in any way unreasonable. So 
long as the property is liable to be taken from the possession of the 
mortgagor, and transferred to that of a stranger, who might be disposed to 
remove it beyond the limits of the state, the security afforded by the 
mortgage, to say the least, must be extremely precarious. This is a 
contingency against which the party should have the right to protect himself. 
If he allows the mortgagor to retain possession of the goods, the parties may 
fix the limitation of that possession, which may as well depend upon the 
happening of an event, especially when that event may affect the stability of 
the security, as upon the lapse of a specified period of time. There was no 
error, then, in admitting the mortgage evidence.

Nor do we think that the fact that the notes had not actually been executed at 
the time of the making of the mortgage, but were made subsequently, so as to 
correspond with the mortgage, rendered the transaction fraudulent per se. This 
was undoubtedly a circumstance tending to prove fraud; and as such, was 
properly submitted to the consideration of the jury; but if, as was stated in 
the claimant's eighth instruction, the mortgage and notes were really given to 
secure a bona fide pre-existing debt, they should be upheld and enforced. The 
cases referred to in Connecticut were not at all parallel with this. Those 
were mortgages upon real estate, which purported to secure different 
liabilities from those actually existing between the parties. Those mortgages 
were postponed to subsequent encumbrances, because the policy of their 
recording laws required the actual condition of the title to real estate to be 
exhibited upon the face of the conveyances, and spread upon the public records.

In our apprehension, the most important question in this case, is presented 
upon the decision of the Circuit Court, in ruling out the declarations of the 
mortgagor, made prior to the execution of the mortgage. We shall not stop to 
review all of the decisions referred to, and which have been examined on this 
question, but shall content ourselves with adverting to the two cases in 
Massachusetts. The first is Clarke v. Wade, 12 Mass. R., 438, where, for the 
purpose of proving a deed fraudulent, the declarations of the grantor, made 
before and subsequent to the execution of the deed, were offered and rejected 
by the court, although the grantor had since died. After examining the 
question, the court concludes: "Upon the reason of the thing itself, as well 
as upon authority we are all of opinion that the evidence in the case at bar 
was properly rejected."

In that case, like the one before us, there was no evidence tending to connect 
the grantee with the declarations offered to be proved, or showing that he was 
cognizant of them at the time he took the conveyance. This is a case directly 
in point, supporting the decision below.

On the other side, is cited the case of Bridge v. Eggleson, 14 Mass. R., 244. 
In that case, several conversations of the grantor, made before the 
conveyance, tending to show his expected insolvency, were proved. At one of 
these, the grantor was present, and the court said: "So far as the 
conversation tended to prove the insolvency or embarrassment of Goodwin, 
before he conveyed his estate, we think the evidence proper. The fact was 
essential to be proved, in order to establish a motive on his part, to make a 
fraudulent conveyance."

This case does not profess to overrule or conflict with the former. In 
speaking of that case, the court said: "This decision does not establish the 
inadmissibility of declarations made before the deed, if connected with 
evidence of knowledge on the part of the grantee."

Enough has been quoted, to show a striking distinction which the court took 
between those two cases; and the same distinction exists between the case 
before us, and the one relied upon in the 14th Mass. R. Certainly the 
declarations of the mortgagor, not made at the time of the execution and 
delivery of the mortgage, or in the presence of the mortgagee, and not 
relating to the title of the property, ought not, by the ordinary rules of 
law, to be admitted in a controversy between the mortgagee and a third person. 
They are not a part of the res gesta and are not made by a party to the suit. 
They are in every sense of the word hearsay evidence. Indeed, they are made by 
a party whose interest it is to defeat the mortgage, and to have the property 
applied to the payment of a judgment against him. But it is said, he could 
have no such interest or object before the execution of the mortgage. This may 
not be so; he may as well anticipate the existence of such an interest and be 
prompted by the same object, before the execution of the mortgage as after. 
Finding himself pressed to make the mortgage, he might have the same motives 
then, to make declarations which would tend to defeat it, which he would have 
afterwards, to postpone it in favor of an execution against him. It is 
admitted on all hands, that such declarations are not evidence against the 
mortgagee, unless they were brought to his knowledge prior to the execution of 
the mortgage. If they are not evidence against the mortgagee they cannot 
properly be admitted, for it is against him alone; and to prejudice his 
interests that they are offered. If a knowledge of a fraudulent intent by the 
mortgagor, is brought home to the mortgagee, that may be competent evidence 
against the latter, as tending to show his participation in the fraudulent 
design. Hearsay evidence, or the declarations or statements of third persons, 
may often be competent, when the party to be affected can be connected with 
them, but when that is the case, it is not competent to admit them till such 
connection be shown. It will not do to say that it was the absolute right of 
the party to have the declarations admitted, and then if he did not connect 
the claimant with them, that the court should instruct the jury that they were 
not evidence against him. In this case there was no pretence that the claimant 
had any knowledge of these declarations, or that he had the least intimation 
of any fraudulent design on the part of the mortgagor. Such being the case, 
had the evidence been admitted, the court would have been obliged to have 
withdrawn it from the consideration of the jury, and we all know, in a case of 
this kind, how imperfect a security that often is, against the pernicious 
effect which such evidence is calculated to produce. The evidence once 
admitted and the mischief is done, which to a certain extent is often 
irreparable. In this case it was of no avail to prove that the mortgagor was 
actuated solely by fraudulent motives, unless the mortgagee participated in 
the fraudulent design. Here there was already, at least, as much evidence of 
fraud on the part of the former, as of the latter, and of what avail could it 
have been to have cumulated evidence of fraud against, the former, so long as 
there was an insufficiency, as the jury have found against the latter. We are 
of opinion that the legal rights of the party were not prejudiced by the 
exclusion of this testimony, and that in this the court committed no error.

We do not think the judgment should be reversed, for the error assigned upon 
the refusal of the court to give the second instruction asked for by the 
plaintiff in error. The principle of law which is there alluded to, so far as 
it is properly applicable to this case, is more accurately stated in the 
seventh instruction for the plaintiff in error, which was given; so that the 
party had the benefit of the law, as applicable to the conduct of the parties 
at the time of the execution of the mortgage. 

It was not denied on the argument, that the notice which was admitted, might 
be competent evidence to go to the jury for some purpose, but then it was 
insisted that the party claimed for it an effect to which it was not entitled, 
and that the court admitted it for a wrong reason. The decision of the court 
consisted in the admission of the evidence, and it is with that, rather than 
the reason for the decision, which we are now to consider. Had the party 
anticipated that the jury would allow that evidence an improper influence or 
effect, it was the right of the party to ask an instruction, explaining its 
legitimate effect. In that way the views of the court upon that evidence might 
properly have been brought before this court for review. 

Upon the evidence, we do not think a new trial should have been granted. There 
were undoubtedly some circumstances tending to show that the mortgagor 
designed to delay his other creditors, but still it may well have been, that 
he designed to produce that result, no further than would necessarily follow 
from his securing a bona fide debt due to White. This he had a right to do, 
and there is nothing connected with the claimant, showing that he had any 
other design than to secure his own debt. As the jury found that the 
transaction was an honest one, we arc not disposed to disturb their verdict.

The judgment of the Circuit Court is affirmed.

Judgment affirmed.

----------------
(a) See Davis v. Ransum, 18 Ill., 396; Read v. Wilson, 22 Ill., 377; Cleaves 
v. Herbert, 61 Ill., 126.

(b) The fact that a note is altered by the parties to it, after the execution 
of a chattel mortgage so as to make it conform to the mortgage in respect to 
the time of payment, does not render the transaction fraudulent per se, as to 
creditors, provided the mortgage was executed to secure a valid pre-existing 
debt: Meixsill v. Williamson, 35 Ill., 5229.

(c) Declarations or acts of a vendor of property, cannot be received to 
prejudice the title of his vendee to the property: Hessing v. McCloskey, 37 
Ill. 341 (annotated edition), and notes. Such acts and admissions are not 
evidence: Miner v. Phillips, 42 Ill., 123; Dunaway v. School Directors, 40 
Ill., 247; Bunker v. Green, 48 Ill., 243; Gridley v. Bingham, 51 Ill., 153.
Unless the vendee were at the time present, and expressly or tacitly assented 
to them: Wheeler v. McCorristen, 21 Ill., 40; Myers v. Kinzie, 26 Ill., 36; 
Randeggar v. Ehrhardt, 61 Ill., 101. Declarations made by the mortgagor at the 
time of executing a chattel mortgage are admissible in evidence as part of the 
res gestoe: Bushnell et al. v. Wood, 85 Ill., 88.

(d) It is not error to refuse an instruction not materially differing from and 
containing the same elements, or principle of law as an instruction already 
given: May v. Tallman, 20 Ill., 443; Mason v. Jones, 33 Ill., 212; Hessing v. 
McCloskey, 37 Ill., 341; C. & A. R. R. Co. v. Utley, 38 Ill., 410; McCartney 
v. McMullen, 38 Ill., 237; Bowen v. Schuler, 41 Ill., 192; Market, 44 Ill., 
225; Underwood v. White, 45 Ill., 437; Emery v. Hoyt, 46 Ill., 258; City of 
Chicago v. Smith, 48 Ill., 107; Weyrich v. Foster, 48 Ill., 115; Cossitt v. 
Hobbs, 56 Ill., 231; Henneberry v. Morse, 56 Ill., 394; Kuhnen v. Blitz, Id., 
Ill., 171; C. B. & Q. R. R. Co. v. Gregory, 58 Ill., 272; Bowen v. Rutherford, 
60 Ill., 41; Sangamo Ins. Co. v. McKeen, Id., 167; C. & A. R. R. Co. v. 
Murray, 62 Ill., 326; Bourne v. Stout, Id., 261; Cass v. Campbell, 63 Ill., 
259; Davis v. Wilson, 65 Ill., 525; Earll v. The People, 73 Ill., 329; 
McKichan v. McBean, 45 Ill., 228; Ware v. Gilmore, 49 Ill., 278; Freeman v. 
Tinsley, 50 Ill., 497; Calhoun v. O'Neal, 53 Ill. 354.

Additional Comments:
Reports of Cases Determined in the Supreme Court of the State of Illinois from 
November Term, 1850, to June Term, 1851, both inclusive by E. Peck, Counsellor 
at Law. Volume XII. Reprinted from the Original Edition, with Annotations by 
William Gordon McMillan of the Chicago Bar. Callaghan & Company, Chicago, Ill. 
1881.

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