Burton v. Randall

• Decision Date: 01 September 1896
• Docket Number: 107
• Parties: JOHN M. BURTON v. A. E. RANDALL
• Court: Kansas Court of Appeals

46 P. 326

4 Kan.App. 593

JOHN M. BURTON v. A. E. RANDALL

No. 107

Court of Appeals of Kansas, Northern Department, Western Division

September 1, 1896

Opinion Filed October 9, 1896.

MEMORANDUM.--Error from Rawlins district court; A. C. T GEIGER, judge. Action by A. E. Randall against John M. Burton for an alleged conversion of a stock of goods. Judgment for plaintiff. Defendant brings the case to this court. Reversed. The opinion herein, filed October 9, 1896, states the material facts.

Judgment reversed and case remanded.

Dempster Scott, A. H. Ellis, and F. T. Burnham, for plaintiff in error; Valentine, Godard & Valentine, of counsel.

Bertram & McElroy, and R. S. Hendricks, for defendant in error.

GARVER J. All the Judges concurring.

OPINION

GARVER, J.:

This was an action brought by Mrs. A. E. Randall against John M. Burton to recover the value of a stock of goods and merchandise alleged to have been wrongfully converted by the defendant to his own use. The property was of the alleged value of $ 2,700. The material facts are: On April 23, 1891, Mrs. Randall exceced a chattel mortgage on the goods in question in favor of Burton to secure the payment of the sum of $ 200 and interest, borrowed from the latter on that date. The goods consisted of a stock which had been a short time previously purchased from one S. T. Smith, at publican City, Neb., and shipped to Atwood, in this state, where it was stored, packed in boxes, at the time the mortgage was given. Some time in May, 1891, S. T. Smith, claiming ownership, commenced an action of replevin in Rawlins county against John M. Burton, and, by a writ of replevin issued therein, secured possession of the goods. On May 26, 1891, the replevin action was dismissed by agreement of the parties thereto, Smith retaining possession of the goods, and removing them to Nebraska. Before consenting to the dismissal of the action and the retention of the goods by Smith. Burton received from the former the amount of the Randall loan, and assigned to Smith his mortgage on the goods, but retained the note which was given for the $ 200 and interest. At this time Mrs. Randall was absent in Arkansas.

It does not appear that Mrs. Randall was given an opportunity to defend her right to the goods against the claim of Smith in the replevin action; neither does it appear in this case what, if any, rights, as against her, Smith had. It is contended on the part of the defendant in error, that when Burton took possession of the goods in question under his mortgage he was bound to hold them with a recognition of the mortgagor as owner; that he could only dispose of them so far as might be necessary for the payment of the debt secured thereby; and that the disposition made of them constituted a conversion. This contention is apparently not seriously disputed by counsel for plaintiff in error, their defense being based upon other grounds.

A mortgagee in possession of mortgaged property has well-defined rights. The property is in his possession for a specific purpose, and its use or disposition must be with particular reference to the purpose for which it is held. Hence, any sale or disposal of mortgaged property in denial of the title or interest of the mortgagor therein, or inconsistent with his rights, may be regarded as a conversion. The mortgagee in this case could not, without laying himself liable as for a conversion, voluntarily surrender possession to one not entitled thereto as against his mortgagor. Hence the proceedings instituted by Smith, whereby he obtained possession, and to which Burton voluntarily submitted, are no defense in this case, unless it is made to appear that his claimed ownership was well founded, and that he was in fact the real owner and entitled to the possession of the property. (Greena-wait v. Wilson, 52 Kan. 109; Storage Co. v. Rogers, 35 Neb. 61, 52 N.W. 826; Hicks v. Lyle, 46 Mich. 488, 9 N.W. 529; Gibbons v. Farwell, 63 id. 344; Ashmead v. Kellogg, 23 Conn. 70; Ripley v. Dolbier, 18 Me. 382; Norton v. Kidder, 54 id. 189; White v. Phelps, 12 N.H. 382.)

It is urged by counsel for plaintiff in error that this action cannot be maintained without proof of a previous tender of payment of the mortgage debt. With this contention we do not agree. Where the property is, as conceded in this case, greatly in excess of the amount of the debt secured by the mortgage thereon, no tender of payment of the debt is necessary before the commencement of an action to recover the value of the goods converted. A tender under such circumstances would be a vain and useless thing when the mortgagee has already in law received full satisfaction of the debt out of the property of the debtor. A tender always...