Bank of Perry v. Cooke

• Decision Date: 07 September 1895
• Citation: 1895 OK 59,41 P. 628,3 Okla. 534
• Parties: BANK OF PERRY v. E. H. COOKE et al.
• Court: Oklahoma Supreme Court

1895 OK 59

41 P. 628

3 Okla. 534

BANK OF PERRY v. E. H. COOKE et al.

Supreme Court of Oklahoma

Decided: September 7, 1895

Error from the District Court of P County.

STATEMENT OF THE CASE.

On the 9th day of February, 1894, Brogan & Jackson, a firm composed of J. M. Brogan and Junius E. Jackson, at the city of Perry, in P county, executed a certain chattel mortgage to the Bank of Perry for the sum of $ 425, due in ten days after date, and secured the same on the entire stock of groceries, flour, feed, etc., of the said firm. Said mortgage was, on the 20th day of February, 1894, filed in the office of the register of deeds of said county at 4:30 o'clock P. M.

On the 10th day of February, 1894, J.

E. Jackson made, executed and delivered to the Bank of Perry, Perry, O. T., a certain chattel mortgage on all of the stock of groceries, tobacco, etc., of the said Jackson, to secure the sum of $ 225, due in thirty days after date, said mortgage being filed for record on the 20th day of February, 1894, at 4:30 P. M.

On the 9th day of February, 1894, Brogan & Jackson were partners, doing a general merchandise business. On the 10th day of February, 1894, the said firm dissolved partnership, J. E. Jackson assuming control of the business.

On the 20th day of February, 1894, J. E. Jackson made, executed and delivered to E. H. Cooke, a certain chattel mortgage on the entire stock of goods of the said Jackson, to secure the sum of $ 700, due on demand, said mortgage being filed for record in the office of the register of deeds of said P county, on the 20th day of February, 1894, at 5 o'clock P. M., said mortgage being subject to said mortgages to the Bank of Perry.

(At 4 o'clock P. M. on the 20th day of February, 1894, the plaintiff in error took possession of the stock of goods in question, under the mortgages above set out.)

On the same day, Nix, Halsell & Co., Henry Flock and Reid, Murdock & Co., levied upon the stock of goods in question, under an order of attachment, in the order named. Following these attachment creditors, E. H. Cooke filed his chattel mortgage on said stock, and Dale & Nessly, Armour Packing Co. and Symns Grocery Co. followed with writs of attachment in the order named.

On the 11th day of June, 1894, a jury being waived, a trial was had before the court, and the court made the following findings of fact and conclusions of law:

FINDINGS OF FACT.

"1. On February 8, 1894, J. E. Jackson, being indebted to E. H. Cooke, executed and delivered to Cooke his promissory note payable on demand, for the sum of $ 700, on which note demand for payment was made on February 20, 1894, and which remains unpaid.

"On February 20, 1894, J. E. Jackson executed and delivered a chattel mortgage to E. H. Cooke on a certain stock of groceries with all fixtures, furniture and goods of every kind and character in the store room in Perry, P county, Oklahoma Territory, theretofore owned and managed by Brogan & Jackson, the Jackson of said firm being J. E. Jackson who executed this mortgage. The mortgage contained provisions authorizing the mortgagee to take possession of the property at any time he should feel unsafe and insecure. It also contained a provision and said mortgagor hereby represents that he is the sole and exclusive owner of the property above described, and that there is no other mortgage or lien of any kind thereon except to the Bank of Perry. This chattel mortgage was executed in Oklahoma City, Oklahoma Territory, and on the afternoon of the same day Jackson and Cooke both came to Perry, arriving in Perry about 5 o'clock, P. M. E. H. Cooke went to the Bank of Perry and from there to the register of deed's office, where he filed the chattel mortgage at 5 o'clock, P. M.

"2. On February 9, 1894, J. M. Brogan and J. E. Jackson were partners engaged in the mercantile business in the city of Perry, having a stock of groceries, flour, feed, etc., and were largely indebted to numerous wholesale merchants for goods bought on credit.

"On the same day, February 9, 1894, J. E. Jackson went to the Bank of Perry, in Perry, O. T., said bank being a banking institution of which T. K. Robinson was president and F. W. Farrar was cashier, and borrowed of said bank the sum of $ 425 and gave therefor his note payable ten days after date, and to secure the same gave a chattel mortgage signed by Brogan & Jackson, per J. E. Jackson, Partner. This mortgage contained provisions authorizing the mortgagor to remain in possession of the goods and property mortgaged. Also contained a provision that in case of default in payment of the note at maturity or in case the mortgagee should at any time feel unsafe or insecure, 'it shall be entitled to and may take and hold possession of said mortgaged property, at the expense of the mortgagors, until the payment of the note or performance of the act for the performance of which the mortgage is security.'

"On the 10th day of February, 1894, the firm of Brogan & Jackson having dissolved partnership on that day, J. E. Jackson succeeding said firm, said J. E. Jackson again went to the Bank of Perry and borrowed, in his own name, the sum of $ 250, and gave therefor his note payable in 30 days after date, and another chattel mortgage on the same stock of merchandise as the first, said chattel mortgage being in the same form and containing the same conditions as the mortgage made on the 9th day of February by Brogan & Jackson.

"These mortgages were signed in the presence of T. K. Robinson, the president of the said bank, but not in the presence of any other person, and were not signed by attesting witness in the presence of Jackson, but afterwards T. K. Robinson and V. C. Talbert signed the mortgages as attesting witnesses, Jackson not being informed or knowing that said parties so signed the mortgage as attesting witnesses.

"By agreement between the Bank of Perry, through T. K. Robinson as president, and J. E. Jackson, these mortgages were retained by the bank and not filed of record until the 20th day of February, 1894, at 4:30 o'clock P. M., for the reason that if said mortgages were so filed they would injure and ruin the commercial credit of J. E. Jackson.

"3. J. E. Jackson continued to run his mercantile business and buy and sell goods and merchandise in the usual course of trade after said mortgages were given, the same exactly as before, no notice of any kind being given to any person of said chattel mortgages until the 20th day of February, 1894, the goods being sold from said stock and new goods bought and placed therein daily, some of the purchases being made during that time from Nix, Halsell & Co., and some from the Armour Packing Co., and during the time from the 10th of February, 1894, to and including the 20th day of February, 1894, before these mortgages were filed for record, more than $ 700 worth of goods and more than the amount of the notes and interest given to the bank of Perry was sold from this stock of goods by J. E. Jackson, no account being kept of the same excepting of the amount of the proceeds of such sales, which were deposited by J. E. Jackson in the Bank of Perry, $ 465 of such amount being deposited in the Bank of Perry, $ 100 of the amount of such sales was retained by J. E. Jackson and the balance of the proceeds of such sales being expended in the purchase of goods for said store and in running expenses of said store and other expenses of said J. E. Jackson.

"From February 10, 1894, to February 17, 1894, exclusive, J. E. Jackson deposited in the Bank of Perry the sum of $ 1,001.50, of which sum there remained in the Bank of Perry to the credit of J. E. Jackson, on the 20th day of February, 1894, the sum of $ 155.74.

"4. On the 19th day of February, 1894, J. E. Jackson went to Oklahoma City, Oklahoma Territory, leaving in charge of said store W. G. Shapland, as clerk in said store. Said Shapland was given no authority whatever to turn the possession of said store over to the Bank of Perry or to any other person.

"5. Shortly after 4 o'clock on the 20th day of February, 1894, F. W. Farrar, cashier of the Bank of Perry, deeming the bank insecure in its claim of a chattel mortgage lien on said stock of goods under the said two mortgages of February 9 and 10, 1894, went to the store and place of business of J. E. Jackson and found W. G. Shapland in charge and possession thereof, and demanded possession of the store under said chattel mortgages, and said Shapland, believing that said Farrar had or would have an officer with him to enforce his demand, delivered the key to the front door of the store to said Farrar, but refused to deliver the possession of the store to said Farrar, and said Shapland, together with Miss Harbalds, another clerk in said store, remained in the store building and in possession of said store, together with one Hart, who had come to said store with said Farrar to procure said possession, and the front door of the store was locked at that time. Some of the goods of said stock, when the door was locked, were left outside in front of said place of business, as usual.

"6. On the 20th day of February, 1894, and at the time F. W. Farrar went to the store of J. E. Jackson to obtain possession of said stock, J. M. Brogan and J. E. Jackson, as partners, and J. E. Jackson, since the dissolution of the partnership, in the name of Brogan & Jackson, no notice of such dissolution having been given the creditors, so far as the evidence shows, were indebted to numerous parties, among others, in the following amounts, to wit:

Nix, Halsell & Company $ 954.49

Henry Flock 370.00

Reid, Murdock & Company 986.17

Dale & Nessly 203.89

Armour Packing Company 249.08

Symns Grocery Company 429.11

"Said creditors being entirely insecured.

"Immediately after the front door of the store was locked an order of attachment, issued out of the probate court of P county, Oklahoma Territory, in the suit of Nix, Halsell & Co., against Brogan & Jackson, for the sum of $ 954.49 and costs,...