American Nat. Bank of Wetumka v. Hightower

• Court: Oklahoma Supreme Court
• Writing for the Court: DANNER, Justice.
• Citation: American Nat. Bank of Wetumka v. Hightower, 87 P.2d 311, 184 Okla. 294, 1939 OK 31 (Okla. 1939)
• Decision Date: 24 January 1939
• Docket Number: 25938.
• Parties: AMERICAN NAT. BANK OF WETUMKA v. HIGHTOWER.

87 P.2d 311

184 Okla. 294, 1939 OK 31

AMERICAN NAT. BANK OF WETUMKA v. HIGHTOWER.

No. 25938.

Supreme Court of Oklahoma

January 24, 1939

Rehearing Denied Feb. 21, 1939.

Syllabus by the Court.

1. Where a chattel mortgage is signed in blank by the mortgagor and delivered to the mortgagee with authority to complete the same in a specified manner, it must be completed in conformity with the authority in order to constitute such mortgage a valid obligation between the immediate parties thereto.

2. The requirements of Section 360, O.S.1931, 12 Okl.St.Ann. § 578 are mandatory, and unless complied with complaints regarding instructions given or refused cannot be reviewed in appeal.

3. Where a determination of questions of fact incidental to the real issue is proper, interrogatories may be submitted to the jury for such purpose.

4. Conversion is any distinct act of dominion wrongfully exerted over another's personal property in denial of or inconsistent with his rights therein. McCracken v Cline, 55 Okl. 37, 154 P. 1174.

5. Exemplary damages may be recovered by the defendant in an action in replevin where the plaintiff taking the property has been guilty of oppression, fraud, or malice. Shobe v Sykes, 169 Okl. 491, 37 P.2d 908.

Appeal from Court of Common Pleas, Tulsa County; John R. Woodard, Judge.

Action in replevin by the American National Bank of Wetumka, Oklahoma, against B. F. Hightower, wherein the defendant filed a cross-petition. From a judgment in favor of the defendant on the cross-petition, the plaintiff appeals.

Judgment affirmed.

WELCH, V. C.J., dissenting.

E. M. Connor, of Tulsa, for plaintiff in error.

Byron V. Boone, of Tulsa, for defendant in error.

DANNER Justice.

This is an appeal from a judgment of the Court of Common Pleas of Tulsa County. The parties occupy the same position here as they did in the trial court and will be referred to as plaintiff and defendant.

The action was commenced on January 23, 1934, by the American National Bank of Wetumka, Oklahoma, filing a petition and affidavit in replevin against B. F. Hightower for the possession of certain personal property therein described and in which it alleged a special ownership and the right to immediate possession by virtue of the provisions of a certain chattel mortgage. A copy of the mortgage was attached to the petition and purported to be a mortgage on certain growing crops, livestock and farm implements.

The plaintiff in this action sought possession solely of the livestock and the farming implements. A motion to quash the service of summons and a general demurrer were successively filed by the defendant and overruled by the court. The defendant thereupon filed an answer and cross petition wherein after denying generally the allegations of plaintiff's petition he alleged he had signed the chattel mortgage in blank and had authorized the completion thereof by the inclusion of certain enumerated livestock and farm implements, and that all other property described in said mortgage had been placed therein without his knowledge or consent, and therefore said mortgage was null and void.

In his cross petition the defendant alleged that the plaintiff had during the month of December, 1933, by means of threats, duress and coercion taken possession of certain corn and cotton belonging to defendant and had converted the same to the plaintiff's own use and benefit, and that the reasonable value of said property so taken and converted was the sum of $217.04; and further alleged that on the 22nd day of January, 1934, the plaintiff had oppressively and maliciously seized other property belonging to the defendant which was of the reasonable value of $1415, and that by reason thereof he was entitled to a judgment against the plaintiff for the total sum of $1632.04, for which amount he prayed judgment, together with $850 as punitive damages on account of the alleged unlawful acts of the plaintiff in taking and converting his property.

Plaintiff in its reply denied all of the allegations of defendant's answer and cross petition.

The cause was tried to a jury. Motion of plaintiff for directed verdict in its favor at the conclusion of all of the testimony was overruled. The court thereupon instructed the jury and submitted to them a form of verdict which contained five interrogatories; this was done over the objections and exceptions of the plaintiff. Under the form of verdict thus submitted to them the jury made a finding of the amount due the plaintiff on its notes; a finding that the chattel mortgage held by plaintiff had been materially altered after its execution and delivery; a finding that the plaintiff had maliciously and wrongfully taken possession of a portion of the defendant's property prior to the institution of the action in replevin; a finding that the defendant was entitled to punitive damages in the sum of $50 on account of the acts of the plaintiff, and a finding of the issues generally against the plaintiff and in favor of the defendant. Upon the verdict and answers to the interrogatories thus returned, the court entered a money judgment in favor of the defendant, decreed the chattel mortgage to be void and entered judgment for defendant for $50 as punitive damages. A motion and an amended motion for new trial were filed and overruled.

Plaintiff appeals and assigns fifteen specifications of error and presents them under six general propositions, which may be further reduced to the following: The first of which is whether a chattel mortgage which has been admittedly signed in blank with authority to insert therein the description of certain personal property is by the inclusion of other property not authorized thereby rendered null and void. Second, insufficiency of evidence to sustain the verdict and error of the court in denying motion of plaintiff for directed verdict.

The plaintiff is a banking corporation located at Wetumka, Oklahoma; the defendant is a farmer living in Tulsa County near Sand Springs; for a number of years the defendant had had business dealings with the plaintiff and incurred indebtedness which was evidenced by various notes, and which had been secured by chattel mortgages; some three years prior to the events which gave rise to this litigation, the defendant had removed from the vicinity of Wetumka and had finally located in Tulsa County; during the month of December, 1933, the plaintiff, through its agents, had gone to the premises of the defendant and removed therefrom some 330 bushels of corn and approximately a bale of cotton, part of which it sold. Whether this was done with the consent of the defendant was disputed. On the 22nd day of January, 1934, the plaintiff, through its agents, again went to the premises of the defendant and sought to remove therefrom a quantity of livestock and farming implements; the defendant objected and the next day this suit was filed. The evidence as to what took place prior to the institution of this action is in direct and hopeless conflict upon practically every material point.

The testimony of the parties with particular reference to the execution and delivery of the chattel mortgage is conflicting. The plaintiff offered testimony to the effect that all of the matters and things recited and contained in the mortgage were inserted therein prior to its execution and delivery by the defendant. On the other hand, the evidence of the defendant was sufficient, if believed, to justify the jury in finding that the chattel mortgage had been signed in blank and delivered to the plaintiff with authority to complete the same by enumerating therein certain livestock and farm implements and nothing more, and that the authority given had been exceeded by the inclusion of growing crops and other property without knowledge and consent of the defendant. The dispute in this respect thus became a question of fact as to the extent of the authority of the plaintiff to complete the instrument, and whether the same had been completed in accordance with the authority given. The jury by its verdict found that the plaintiff had inserted in said mortgage other and additional property than which it had been authorized to do.

So if the agreement of the parties was that the chattel mortgage was to cover only certain specified property and the mortgagee was given authority to include only such property in the mortgage, and the mortgagee thereafter inserts the description of other property in the mortgage without the knowledge and consent of the mortgagor, this would amount to a material alteration of the instrument and would destroy the lien created upon all the property described in the mortgage.

The general rule applicable to such a situation is stated in 1 R.C.L., page 1021, as follows: "As between the immediate parties, the maker and the person who exceeds his authority the paper, of course, can only be filled up in conformity with the authority conferred, and the maker cannot be held on the instrument as altered." This rule is also laid down in the case of Davidson v. Lanier, 4 Wall. 447, 456, 18 L.Ed. 377, wherein the court held: "The delivery of a bill of exchange signed and indorsed in blank only authorizes the receiver, as between himself and the drawer and indorser, to fill it up in conformity with the authority given him. If there has been no agreement, the authority is general; if there has, it must be pursued. The burden of proof that there was an agreement, and that its terms have been violated, is, in such a case, upon the defendant; but if he can make the proof it will avail him. No person, unless authorized, either directly or by just inference from the nature of the transaction, can fill up a blank bill for its own benefit. Nor can such a bill be enforced...