Commonwealth Finance Corp. v. Schutt

• Decision Date: 06 March 1922
• Citation: 116 A. 722
• Parties: COMMONWEALTH FINANCE CORPORATION v. SCHUTT.
• Court: New Jersey Supreme Court

116 A. 722

COMMONWEALTH FINANCE CORPORATION

v. SCHUTT.

Court of Errors and Appeals of New Jersey.

March 6, 1922.

(Syllabus by the Court.)

Appeal from Supreme Court.

Action by the Commonwealth Finance Corporation against Henry J. Schutt. From a judgment of nonsuit, the plaintiff appeals. Affirmed.

Hartshorne, Insley & Vreeland, of Jersey City, for appellant.

William F. Burke, of West Hoboken, for respondent.

BERGEN, J. The defendant purchased from Cole & Dixon, dealers in auto trucks, two such trucks, and paid for them. The plaintiff, claiming to own the trucks, brought a suit in replevin to recover possession of them, in which action the defendant gave bond and reclaimed them, filed a proper answer, and the cause proceeded to trial, in which the court ordered a judgment of nonsuit, from which the plaintiff appeals. The evidence shows that Cole & Dixon had purchased from the manufacturers the two trucks in question, who shipped them to Cole & Dixon at Newark, N. J., mailing the bill of lading with draft attached to the National Bank of Commerce of New York, which it was required Cole & Dixon should pay, amounting to $5,801.48, before they could obtain the bill of lading which it was necessary for them to have to obtain delivery of the trucks from the transporting carrier; that Cole & Dixon not having sufficient funds to do this applied to the plaintiff for financial assistance and it gave Cole & Dixon its certified check, payable to the order of the bank holding the draft, for its full amount. To make up the amount of the certified check Cole & Dixon advanced $1,056.10 out of which the plaintiff retained $42.24 for what it calls the "accommodation," leaving the sum advanced by the plaintiff $4,787.62. With this certified check Cole & Dixon took up the draft, obtained the bill of lading, and with it secured possession of the trucks from the carrier, removed them to their ware-rooms, and sold them in the ordinary course of their business to the defendant, who, so far as this record shows, was an innocent purchaser, and who paid or accounted for the purchase price to Cole & Dixon and took possession of them.

The ground of this appeal is that the trial court refused to admit in evidence certain written papers offered by the plaintiff; all of them being offered for identification appear in the record. These writings consist of the check given by the plaintiff for the purpose of paying the draft; the account of the transaction kept by the plaintiff in its books, as well as copies of the original bills of lading, none of which are material to the issue raised and argued. The papers material to the issue argued are two storage receipts signed and delivered by Cole & Dixon at the time they received the certified check. They are each in the same form, being one for each of the trucks, and recite that—

Cole & Dixon had received from the plaintiff one new automobile, describing it, "which is stored at the expense of the undersigned for the said Commonwealth Finance Corporation at 235 West 54th street, New York, N. Y.; and the undersigned acknowledges that said automobile is the property of the Commonwealth Finance Corporation, and agrees that the undersigned will deliver same only to Commonwealth Finance Corporation or its order, and only upon surrender of this receipt, duly indorsed by Commonwealth Finance Corporation."

To refuse to admit in evidence this receipt was error, because it was some evidence of the right of possession and title in the plaintiff, as between it and Cole & Dixon, and competent if the defendant was not a purchaser in good faith, but even if admitted as they appear in the record, the result would have been the same because an innocent purchaser whose title is assailed may explain his possession, and, that being done in this case, it appears that the transaction was not as it appears in the writing, the evidence showing conclusively that these receipts were nothing more than a chattel mortgage which was not properly verified or recorded so as to charge the defendant with notice. Where there is an indebtedness, and the arrangement between creditor and debtor is merely to transfer the property of the debtor to the creditor for the purpose of securing the payment of the debt, and leaves in the debtor the equity of redemption and the right to possession of the property after the debt is paid, the writings constitute a mortgage. Hastings v. Pithian, 71 N. J. Law, 311, 60 Atl. 350.

The witness Weed, who was the vice president of the plaintiff corporation, testified that if Cole & Dixon...