Citizens Trust Company v. Elders
| Decision Date | 31 August 1923 |
| Parties | CITIZENS TRUST COMPANY, Appellant, v. GEORGE W. ELDERS, Defendant, J. S. MERRELL DRUG CO., Interpleader, Respondent |
| Court | Missouri Court of Appeals |
Appeal from Circuit Court of Pemiscot County.--Hon. Sterling H McCarty, Judge.
REVERSED AND REMANDED.
Judgment reversed and cause remanded.
Shepard & Hawkins for appellant.
(1) Plaintiff's peremptory instruction should have been given (a) because the mortgage itself under which interpleader claimed, as well as all the evidence shows that the mortgage covered a stock of goods, including movable fixtures which stand in the same light as the stock of goods, and the mortgagor was given the right to sell and dispose of the goods covered by the mortgage without being required to account to the mortgagee for the sales made. Such mortgages are void as to the creditors of the mortgagor and as to both the stock of goods and fixtures of the nature of the fixtures embraced within the present mortgage. Independent Packing Company v. Barth, 128 Mo.App. 592; Cahme v Weber, 173 S.W. 76; Hubbell et al. v. Allen, 90 Mo. 574; Liles v. Potter, 206 S.W. 582. (2) The mortgage on its face made the mortgagor the agent of the mortgagee to sell and dispose of the stock of goods and fixtures, and the evidence shows the sale was made under the terms of the mortgage and with the consent and approval of the mortgagee. Therefore there was no breach of the terms of the mortgage and where the mortgagee gives the mortgagor permission to sell he cannot afterwards claim under the mortgage. DeWitt v. Syfon, 202 Mo.App. 469, 211 S.W 716; Coffman v. Walton, 50 Mo.App. 404; Rogers v. Davis, 192 Mo.App. 378, 184 S.W. 151. (3) Interpleader not only gave the mortgagor the right to sell but accepted a bill of sale from the party to whom the mortgagor sold in lieu of the outstanding obligation of the mortgagor, to it, therefore, the mortgagee was estopped to claim under the mortgage. Western Auction & Storage Co. v. Shore, 179 S.W. 769. (4) Where attached property has been sold and an interplea is filed in the proceeding, the finding of the jury is for the interpleader must be for his interest in the fund derived from the sale of attached property. Stadden Grocer Co. v. Lusk, 95 Mo.App. 261. (5) In a controversy between a special lienholder and a stranger to the lien no more than the actual value of the property may be recovered no matter what may be the amount of the encumbrances. Payne v. King, 141 Mo.App. 246; Exchange National Bank v. Daley, 237 S.W. 846.
Ward & Reeves for respondent.
(1) Even though a mortgage provides on its face for future advances, and that the mortgagor shall replenish the stock as sold, and also providing that the mortgage shall cover after acquired goods, and giving the mortgagor the possession and right to sell in the regular course of business--all, or none, of these privileges makes the mortgage void on its face, unless it further provides that the proceeds shall be kept and used by the mortgagor and not applied on the indebtedness. Smith-Wallace Shoe Co. v. Wilson, 63 Mo.App. 326; Bullene v. Barrett, 87 Mo. 185. (2) We contend that there was no competent proof to prove this alleged agreement, and that all the evidence of witnesses Spore and Case, as to this agreement with interpleader's agent Stole, was incompetent because Stole was dead. Real Estate Co. v. Building Co., 196 Mo. 358; Carroll v. United Ry. Co., 157 Mo.App. 247; Edwards v. Scharff, 213 S.W. (Mo. Sup.) 823; Taylor v. George, 176 Mo.App. 215. (3) As to this alleged agreement, or consent of the interpleader, if it be admitted that the evidence was competent, the burden of proof was upon appellant, and this being true, the court could not direct a verdict on this oral testimony. This was a jury question, and the question of the release of the mortgage was submitted to the jury by the instructions, and the finding was not disturbed by the trial court. This court is therefore bound by the finding of the jury and trial court as to this issue however much uncontradicted oral testimony the appellant might have introduced on the question. Burgess v. Life Ins. Co., 230 S.W. (Mo. Sup.) 315; Foster v. Life Ins. Co., 233 S.W. (Mo. App.) 499; Trust Co. v. Hill, 223 S.W. (Mo. Sup.) 434; Quissenberry v. Steward, 219 S.W. (Mo. Sup.) 625; State ex rel. v. Reynolds, 277 Mo. 14; Hay v. Bankers' Life Co., 231 S.W. (Mo. App.) 1035; Lafferty v. Casualty Co., 229 S.W. (Mo. Sup.) 750. (4) It is unquestionably the law in this State that the jury should make no finding whatever respecting any fund in court, but all the jury determines is the right of possession of the property at the time it was attached, and if the interpleader has a special interest therein on account of the mortgage, then it is the duty of the jury to determine such interest, which of course, is the amount of the debt. Distilling Co. v. Hubbard, 53 Mo.App. 23; Grocer Co. v. Goetz, 57 Mo.App. 8; Engine & Thrasher Co. v. Glazier, 55 Mo.App. 95; Beck v. Wisely, 63 Mo.App. 239; Bank v. Totten, 114 Mo.App. 197; Hewson v. Tootle, 72 Mo. 632; Car Co. v. Bernard, 139 Mo. 142. (5) As there was substantial evidence in the case that the interpleader was in possession of the property, then the interpleader was entitled to recover as to the after acquired property. Keating v. Hennenkamp, 100 Mo. 161; Bank v. Bank, 171 Mo. 307; Gregory v. Tauenner, 38 Mo.App. 627; Watkins v. Crenshaw et al., 59 Mo.App. 183; Scudder v. Bailey, 66 Mo.App. 40; Littlefield v. Linley, 75 Mo.App. 511.
A suit upon certain notes was brought by plaintiff against defendant George W. Elders. A writ of attachment was issued and a stock of drugs and certain store fixtures and furniture was seized under the writ of attachment. The J. S. Merrell Drug Company filed an interplea claiming all the property under a chattel mortgage. A trial was had before a jury upon the interplea which resulted in a verdict for the interpleader for the fixtures and the jury found the value of interpleader's special interest therein to be $ 665.70. On this verdict the court rendered judgment which adjudged that at the time of the levy of the writ of attachment, the interpleader was entitled to the possession of certain property specifically described in the verdict and further adjudged that the interpleader's special interest in said property was the sum of $ 665.70 and followed this with a judgment against plaintiff for costs. Plaintiff appealed.
The evidence discloses that Ralph Spore was the owner of the stock of drugs, fixtures and furniture in question and on January 6, 1919, executed a note to J. S. Merrell Drug Company for $ 896.40 and secured it by a chattel mortgage on the stock of drugs, fixtures and furniture in question in this suit. This mortgage was duly recorded January 23, 1919. Later Mr. Spore sold the stock of drugs, fixtures and furniture to defendant George W. Elders and received from Elders the notes in suit which he negotiated to plaintiff. The mortgage was in the usual form and valid upon its face but the evidence shows that Spore was conducting a retail business and that he sold and replenished the stock of drugs in the ordinary way without accounting to the mortgagee for the proceeds of sales. The property levied upon by the attachment writ was sold by order of the court and the proceeds of the sale, in contemplation of law, was in the custody of the court at the time of the trial. There was some testimony on part of plaintiff tending to show that when Spore sold the goods and fixtures to Elders it was done with the interpleader's consent and that interpleader took a bill of sale from Elders covering the stock of drugs and fixtures and released Spore and the chattel mortgage given by him. That question, however, was submitted to the jury by an instruction given at the request of plaintiff and the jury having found against plaintiff, that binds us.
The chattel mortgage under which interpleader claims, though valid upon its face, yet, when it was shown that the mortgagor remained in possession and sold the goods covered by the chattel mortgage at retail in the usual way without applying the proceeds on the mortgage, the mortgage was void as to creditors as far as the stock of drugs was concerned and the jury having found for interpleader for the furniture and fixtures only found in effect, against the interpleader as to the stock of drugs. The fact that the mortgage on the stock of drugs was void as to the creditors of Spore did not render it void in toto. The furniture which consisted of a stove, a water cooler, a mirror and a thread case, and the fixtures which consisted of a soda fountain outfit, shelving, counters, etc., were not goods to be sold and replenished from time to time as were the articles composing the stock of drugs. As to the furniture and fixtures, the mortgage was valid and binding though void as to the stock of drugs. [Donnell v. Byern, 69 Mo. 468; Bullene v. Barrett, 87 Mo. 185; Mallmann v. Harris Bros., 65 Mo.App. 127.]
From the foregoing it is clear that interpleader was entitled to recover the furniture and fixtures but nothing more. The abstract of the record in this case shows that the jury "brought in a verdict which the court refused to accept." No copy of that verdict appears in the record but from the statements of counsel and the court in the presence of the jury at the time, we infer that this verdict was for interpleader for the furniture and fixtures without assessing any value upon the interest of interpleader therein. The trial court was of the opinion that the jury should assess that value and for that reason refused to receive the verdict. The jury then...
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