A number of horses mortgaged to secure the payment of a
promissory note of their owner given to the mortgagee were, under
the provisions of a statute of Montana relating to chattel
mortgages, sold by a sheriff on the maturity of the note without
payment. With the assent of the attorney of the mortgagee, who was
present at the sale, the purchaser paid a part of the purchase
price in cash, and left the horses with the sheriff as security for
payment of the remainder in five days. On the expiration of that
time, he failed to pay the balance. The attorney refused to receive
the sum paid in cash and the horses as security for the remainder,
but the principal received the amount paid in cash, and sued the
sheriff and his bondsmen to recover the remainder.
Held
that he could not repudiate the transaction in part and ratify it
in part, and that, having ratified it in part by the receipt of the
sum paid in cash, he could not maintain this action.
This case comes from the Supreme Court of the Territory of
Montana, and presents the following facts: William Rader, one of
the defendants in the case as commenced in the district court of
that territory, was Sheriff of Meagher County, Montana, and the
other defendants were his bondsmen. Maddox and Gaddis were the
owners, respectively, of two notes, given by P. D. Kinyon, and
secured by a chattel mortgage on some four hundred horses. At that
time there was in force in Montana the following statutory
provision:
"It shall be lawful for the mortgagor of goods, chattels, or
personal property to insert in his mortgage a clause authorizing
the sheriff of the county in which such property or any part
thereof may be, to execute the power of sale therein granted to the
mortgagee, his legal representatives and assigns, in which case the
sheriff of such county at the time of such sale, may advertise and
sell the mortgaged property in the manner prescribed in such
mortgage. Compiled Statutes of Montana § 1550. "
Page 150 U. S. 129
This mortgage contained the clause referred to in the statute.
On the maturity of these notes, and on the 9th day of August, 1887,
one N. B. Smith, an attorney at law, as attorney for Maddox, placed
in the hands of Sheriff Rader this mortgage, endorsed as
follows:
"You are hereby authorized to execute the power of sale
contained in certain chattel mortgage, of which the within is a
true copy."
"Fletcher Maddox & William Gaddis"
"By N. B. Smith,
Their Agent and Attorney"
Rader collected the horses and advertised them for sale. At the
day of the sale, a party by the name of A. B. Kier was a bidder,
and after some horses had been knocked down to him, Rader -- no
money having been paid -- refused to receive any further bids.
Thereupon Kier represented that he had in the bank $1,752; agreed
to turn that money over to the sheriff, and leave with him all
horses that should be knocked down to him; and, further, that if in
five days he should not complete the payment, both money and horses
should be forfeited. Neither Maddox nor Gaddis were present, but
Smith, their attorney, was. The matter was referred to Smith, and
he directed the sheriff to continue the sale, and receive the bids
of Kier. Horses to the amount of $8,096.50 were struck off to Kier.
The $1,752 was deposited with the sheriff, and the horses were left
with him. Kier failed to complete his purchase by the payment of
the balance of the money. After the five days had expired, the
sheriff tendered the $1,752 and horses to Smith, for Maddox and
Gaddis, but Smith declined to receive either. Thereafter Maddox and
Gaddis took the money, but declined to receive the horses. The
sheriff received no other instructions, and, after holding the
horses for about a month, turned them over to his bondsmen, and
Maddox and Gaddis, one as plaintiff and the other as intervener,
brought this suit to recover the difference between $1,752 and
$8,096.50. They obtained judgment in the district court, which
judgment was affirmed by the supreme court.
Maddox v.
Rader, 9
Page 150 U. S. 130
Mont. 126. From that judgment the sheriff and his sureties have
brought the case here by both writ of error and appeal.
MR. JUSTICE BREWER, after stating the facts in the foregoing
language, delivered the opinion of the Court.
On the trial of this case, all the testimony offered by the
defendants to show the circumstances of the sale was on motion of
the plaintiffs stricken out by the court. For the purpose of this
hearing, therefore, it must be assumed that the facts were as this
testimony tended to show that they were. The owners of these notes
and mortgage were not present at the sale, but were represented by
their agent and attorney, and by his direction the sheriff received
the bids of Kier up to $8,000 and upwards, and, as security for the
completion of those purchases, retained all the property bid for,
and in addition received $1,752. The contention of the mortgagees
is that an attorney has, in the absence of special authority, no
power to make a sale on credit, or to receive anything other than
money on a claim placed in his hands for collection. Without
questioning the truth of that proposition, it seems to us that it
is inapplicable. No competent sale was made; no title passed, and,
while these horses were struck off to Kier, the transaction was
evidently merely a conditional sale, to be perfected if, and only
if, within five days the balance of the purchase money was
paid.
But it is unnecessary to pursue any inquiry in this direction,
for upon a very clear rule of law, the mortgagees are estopped from
maintaining this suit. The arrangement, whether within or without
the power of the attorney, was made and carried into effect by his
directions, and it was an arrangement by which
Page 150 U. S. 131
the proposed buyer deposited $1,752 with the sheriff, as well as
left with him the horses which he had attempted to purchase. If
that transaction was beyond the power of the attorney, and the
mortgagees were intending to repudiate it, they were bound to
repudiate it
in toto. They could not accept that which was
beneficial and avoid that which was burdensome. 1 Parsons on
Contracts (7th ed.) 49 to 52, and cases cited in notes. It is
urged, however, that it was the sheriff's duty to pay over the
entire amount of the notes, and that the mere receiving from him of
a part of that which it was his duty to pay did not work a
ratification of any unauthorized proceedings by which he obtained
that sum. This argument rests upon the assumption that a different
rule obtains where the deposit by the proposed buyer is money, from
that which would obtain if it were some other personal property.
But can the question of ratification depend on the character of the
deposits? If Kier had deposited a gold watch as security for the
completion of his purchase, and the plaintiffs had received that
from the sheriff, there would be no doubt that they had ratified
the act of their attorney. Suppose that the deposit was a package
whose contents were unknown, and that deposit was accepted by the
plaintiffs, would it prove a ratification if, when opened, the
contents turned out to be watches, and not a ratification if only
money? It may be that this case turns somewhat on whether the
sheriff and plaintiffs understood and intended that the payment of
this money was in fact a transfer by him to them of the deposit, or
merely a payment on account; but, even it this be so, the question
was one of fact to be settled by the jury, and should not have been
disposed of by striking out all the testimony and withdrawing the
case from the jury. Kier parted with his property on the faith of
this agreement between Smith and himself, and if it was
unauthorized, and gave him no rights, he was entitled to a return
of his deposit, whether that was a watch or money, and if the
plaintiffs have taken from the sheriff this deposit, they have
deprived him of the power to return it. It unnecessary to hold that
the horses became the property of plaintiffs. It is enough that
they, by receiving
Page 150 U. S. 132
this deposit, have ratified the arrangement made by their
attorney as to the sale which the sheriff was making, and if they
desired a resale of the property they should have directed it. They
cannot repudiate the action of their agent and attorney and treat
the sheriff as having made a completed sale when in fact he had
not. When the money and horses were tendered to their attorney, he
declined both. But they took the money, while declining to receive
the horses, and failed to give any instructions to the sheriff as
to further sale or otherwise. They assume to treat this as a
completed sale to Kier when in fact it was not, and when they have
ratified what the sheriff did in respect thereto in obedience to
the instructions of their agent and attorney by taking the deposit
made by Kier.
The judgment must be reversed, and the case remanded for a new
trial. As since it was brought to this Court the Territory of
Montana has been admitted as a state, and as not question of a
federal nature is presented, the case will be remanded to the
supreme court of the state.
Reversed.
THE CHIEF JUSTICE did not hear the argument or take part in the
decision of this case.
