Jackson City Bank & Trust Co. v. Blair

• Decision Date: 01 April 1952
• Docket Number: No. 88,88
• Citation: 333 Mich. 399,53 N.W.2d 493,32 A.L.R.2d 920
• Parties: , 32 A.L.R.2d 920 JACKSON CITY BANK & TRUST CO. v. BLAIR et al. ,
• Court: Michigan Supreme Court

Page 493

53 N.W.2d 493

333 Mich. 399, 32 A.L.R.2d 920

JACKSON CITY BANK & TRUST CO. v. BLAIR et al.

No. 88, April Term, 1952.

Supreme Court of Michigan.

May 16, 1952.

Dahlem & Dahlem, Jackson, for defendants and appellants.

John S. Denton, Jackson, for plaintiff and appellee.

Before the Entire Bench.

BUTZEL, Justice.

Jackson City Bank & Trust Company, plaintiff, made a loan to one Woodrow C. Artz of Munith, County of Jackson, Michigan, a licensed dealer in International Harvester Farm equipment, who on November 4, 1949, gave the bank a chattel mortgage on

'1 A-2 International Ensilage Harvester

1 U-4 Power Unit Serial UBH 16206

1 A-21 Power 7 Mower

[1 No 30 Power Sheller W/Elevator]

Paid 1/6/50 *

59 Bales Baler Twine'

The chattel mortgage was duly filed with the Register of Deeds for Jackson county on the following day.

The property was left in Artz's possession at Munith, Michigan. He sold the harvester and other items to defendants Blair on September 12, 1950, but neither secured a discharge of the mortgage or a release of the property sold. The invoice to defendants described the machine in question as 'No 2--Ensilage Harvester.' Upon default in payment, the bank sought payment from defendants, who then first learned of the mortgage. We need not discuss the claim that no demand was made as John Blair, one of the defendants, admitted that he told plaintiff that defendants would not turn over the machine without a court order. Plaintiff instituted the instant replevin proceedings and the trial judge instructed the jury to bring in a verdict giving plaintiff the right of possession. A judgment was entered accordingly; defendants' motion for a new trial being denied, the latter appeal. We shall not discuss appellants' claim of error in the selection of the jury, as the verdict was a directed one for plaintiff.

Defendants' answer read in part:

'They say that they bought the said harvester at retail from the said William C. Artz * * *

'* * * deny that the plaintiff has ever lawfully requested or demanded them to surrender possession of the said ensilage harvester.

'* * * they had lawful possession of the said machines * * * deny that plaintiff has any right, title or interest in the said ensilage harvester and that if it ever had any such right, title or interest in the said harvester, it is estopped from asserting such right, title or interest * * *.'

It appeared during the course of the testimony that defendants had bought a machine designated as a 'No 2--Ensilage Harvester' as evidenced by their invoice from Artz, and that the machine is designated in the mortgage as '1 A-2 International Ensilage Harvester.' Counsel for defendants notwithstanding their answer, for the first time at the trial sought to claim that the description in the mortgage was not sufficient to identify the machine as the one plaintiff replevined. The court, however, held that the language in the answer made it clear that defendants raised no issue of identity. Counsel then moved to amend his answer, to clarify the language and raise the defense of identity. This motion was denied by the court on the basis that the issue of identity would raise an entirely new issue in the trial which would require the introduction of the witness Artz, whom plaintiff had not called in view of the admission in the pleading. In denying the motion for a new trial, the court referred to a conversation which took place prior to the trial in the judicial chambers. At the time it was stated that owing to defendants' answer admitting the identity of the machine, plaintiff would not call Artz, the mortgagor. Defendants object to the consideration of such statements as they claim there was no formal pretrial procedure as no reporter was present, no notes taken, no stipulations made. This is admitted. There was sufficient justification for the decision of the trial judge without considering the unrecorded proceedings in his chambers. Under the statute of amendments, C.L.1948, § 616.1, et seq., Stat.Ann. § 27.838, et seq., the trial court has the power to allow amendments to pleadings for furtherance of justice, and whether or not the amendment may be allowed rests in a large measure in the discretion of the trial judge. Randall v. Douglass, 321 Mich. 492, 32 N.W.2d 721. During the trial or hearing, only those amendments should be allowed which do not work to the surprise or disadvantage of the adverse party. Injecting the issue of identity into the instant case would have had such an effect under the circumstances, and there was no abuse of discretion in the judge's refusal to allow an amendment of the answer, particularly when it would result in a defense that contradicted the answer upon which plaintiff had a right to rely in preparing for the trial. For cases in which a similar refusal was approved, see People, for Use of National Regulator Co. v. Rosewarne, 247 Mich. 22, 225 N.W. 590; Morocco v. Lange, 266 Mich. 238, 253 N.W. 281; Stankrauff v. DeVoe, 281 Mich. 660, 275 N.W. 723; National Land Co. v. Ternes, 298 Mich. 455, 299 N.E. 144. The admission of testimony as to the description of the harvester, whether 'No. 2' or '1 A-2' is not inconsistent with the ruling of the trial court, as such proofs might properly bear upon the issues of constructive notice, which we shall discuss.

It is not claimed that defendants had actual notice of the existence of a mortgage on the harvester prior to the time they were contacted by the representatives of the plaintiff. Defendants also contend that the description of the machine in the mortgage filed did not sufficiently specify the exact machine to constitute constructive notice, and that consequently they took as bona fide purchasers with rights superior to plaintiff.

Plaintiff on appeal claims that a discussion of that issue would be improper as there was no issue raised by the pleadings concerning a proper description of the mortgaged property. An examination of the record, however, reveals that although the trial court refused to consider the issue of description as going to the problem of identity, the question of whether or not the mortgage afforded constructive notice in general was fully discussed at the trial. No objection was taken to any of defendants' testimony concerning lack of constructive notice, nor did counsel object to a discussion of the problem in the motions for directed verdict and new trial. In numerous cases, this court had refused to consider objections to the sufficiency of pleadings which were not raised below. See Cadillac Theatre Co. v. Fitzgerald, 210 Mich. 6, 177 N.W. 228; Greenough v. Willcox, 238 Mich. 52, 213 N.W. 175; Willox v. Townsend, 245 Mich. 632, 223 N.W. 226; Hasson v. Mutual Benefit Health & Accident Association of Omaha, 309 Mich. 331, 15 N.W.2d 659; Cooper v. Cooper, 319 Mich. 692, 30 N.W.2d 398. For our purposes, therefore, we may assume that the issue of constructive notice or the lack of it by reason of the description of the property was properly before the court and presented on trial, and we will proceed to a discussion of the merits of the issue. The description of an A-2 harvester in the mortgage was sufficient to give defendants constructive notice in purchasing a 2 International Ensilage Harvester. The mortgage further provided that if the mortgagor should sell any of the mortgaged property, plaintiff would have the power to seize it and sell it at a public sale.

The case of Willey v. Snyder, 34 Mich. 60, is the leading Michigan case concerning the sufficiency of the description of property covered by a chattel mortgage. Justice Cooley, writing therein for a unanimous court, laid down the general rules which have been followed by this court in subsequent decisions. The description in question was

'One Durm bull, known as the Grinnalls bull,--said bull is four years old and weighs about 2,400 pounds,'

and was held not to be open to objection. The mortgagor at the time had but one bull who was called a Durham and was known as the Grinnalls bull. The court pointed out that there was only one bull to select from, and it could even if necessary be picked out from a large number of bulls as distinguishing characteristics had been given, and continued 34 Mich. at pages 60-61:

'But if a stranger is to be sent out to select property mortgaged, with no other means of identification than such as are afforded by the written description, and without being at liberty to supplement that information by such as can be gained in the mortgagor's neighborhood by inquiry of those who would know what property the mortgagor was possessed of which would answer the description in the instrument when it was given, and by possessing himself of such other circumstances as persons usually avail themselves of in applying written descriptions to the things intended, it is much to be feared that the stranger would be so often at fault that chattel mortgages, if their validity depended upon his success in identifying the property, would seldom be of much value as securities.

'Written descriptions of property are to be interpreted in the light of the facts known to and in the minds of the parties at the time. They are not prepared for strangers, but for those they are to affect; the parties and their privies. A subsequent purchaser or mortgagor is supposed to acquire a knowledge of all the facts, so far as may be needful to his protection, and he purchases in view of that knowledge. * * * Descriptions do not identify of themselves; they only furnish the means of identification. They give us certain marks or characteristics,--perhaps historical data or incidents --by the aid of which we may single out the thing intended from all others; not by the description alone, but by that explained and applied.' (Italics ours.)

The rule of Willey v. Snyder, supra, casts the burden on the subsequent purchaser or mortgagee to make reasonable inquiry beyond the description in the...