Cont'l Gin Co. v. De Bord

• Decision Date: 09 April 1912
• Docket Number: Case Number: 1498
• Citation: 123 P. 159,1912 OK 291,34 Okla. 66
• Parties: CONTINENTAL GIN CO. v. DE BORD.
• Court: Oklahoma Supreme Court

1912 OK 291

123 P. 159

34 Okla. 66

CONTINENTAL GIN CO. v. DE BORD.

Case Number: 1498

Supreme Court of Oklahoma

Decided: April 9, 1912

Syllabus

¶0 1. JUDGMENT--Setting Aside--"Direct Attack." A "direct attack" on a judicial proceeding is an attempt to avoid or correct it in some manner provided by law.

2. SAME--"Collateral Attack." A "collateral attack" on a judicial proceeding is an attempt to avoid, defeat, or evade it, or deny its force and effect, in some incidental proceeding not provided by law for the express purpose of attacking it.

3. CHATTEL MORTGAGES--Foreclosure--Sale--Collateral Attack. Under the law in force in the Indian Territory prior to statehood, a foreclosure sale made pursuant to an order of court is not completed until confirmed by the court; and until such confirmation such a sale may be attacked in a collateral proceeding.

4. JUDGMENT--Trial by Court--Findings--Collateral Attack. When, in a judicial proceeding, the court expressly finds that the defendant is present, such finding is not subject to attack in a collateral proceeding.

5. APPEAL AND ERROR--Review--Prejudicial Effect of Error. It is reversible error to admit incompetent evidence, the probable effect of which is to arouse the sympathy of the jury in favor of the winning party, or to prejudice the jury against the losing party.

6. CHATTEL MORTGAGES--Rights of Parties--Wrongful Conversion. A mortgagee of personal property, who takes possession under an invalid sale; is a mortgagee in possession; and, if he disposes of the property without complying with the requirements of law or the terms of the mortgage, he is guilty of a conversion.

7. TROVER AND CONVERSION--Elements of Conversion--Possession of Property. While it is generally true that one, in order to be guilty of a conversion of personal property, must be in possession of it, yet, if he exercises acts of dominion over the property and participates in the wrongful act of him who is in actual possession by aiding and abetting in the wrongful disposition and sharing in the proceeds thereof, he would then be guilty of a conversion.

8. SAME--Right of Action--Conditions Precedent--Demand. Demand is not a necessary condition precedent to maintaining an action of wrongful conversion after the conversion has been completed, and the property has passed out of the possession of the defendant.

9. CHATTEL MORTGAGES--Damages--Measure. A mortgagor's measure of damages for wrongful conversion by the mortgagee is the difference between the market value of the property at the time of the conversion and the debts then existing, which were liens upon and satisfied by a sale of the property.

Error from District Court, Garvin County; R. McMillan, Judge.

Action by J. D. De Bord against the Continental Gin Company, a corporation. Judgment for plaintiff, and defendant brings error. Reversed and remanded.

W. F. Bowman, Yerker E. Taylor, and Stuart & Bell, for plaintiff in error.

C. H. Thomason and Blanton & Andrews, for defendant in error.

AMES, C.

¶1 This action was brought by J. D. De Bord, as plaintiff below, against the Continental Gin Company, as defendant below, to recover damages for the wrongful conversion of certain buildings and machinery comprising a cotton gin, located in the town of Johnson. The action arose in the Indian Territory, and was transferred to the district court after statehood. The plaintiff, as security for indebtedness to the Laidlaw Lumber Company, had executed a mortgage, conveying portions of this gin plant. To secure an indebtedness to the defendant, he executed another mortgage, conveying portions of the plant. He was also indebted to other creditors. In 1904 the Laidlaw Lumber Company foreclosed its mortgage by a proceeding in the United States Court for the Southern District of the Indian Territory. At the foreclosure sale, the property was bid in by Yerker E. Taylor, as attorney for and agent of the Laidlaw Lumber Company. The defendant appeared at the sale and protested against its consummation; but its protest was disregarded by the Laidlaw Lumber Company and the United States marshal, and its agent then left. After the marshal's sale, the property was delivered to Taylor, and he employed a caretaker and put him in charge of it. A few days after the sale, one Charles Dury, the agent of the defendant, hearing of an opportunity to sell the gin, opened negotiations with Taylor, who advised him that his only interest in the property was to collect the debt of the Laidlaw Lumber Company, and that if he could find a purchaser at a higher price he might apply the excess to the payment of De Bord's other creditors. Dury found a purchaser, who bought the property, taking a bill of sale therefor from Taylor, and executing notes and a mortgage covering the Laidlaw Lumber Company's indebtedness, and notes and a second mortgage to the defendant for the balance of the purchase price. The property was delivered to this purchaser in January, 1905, and in January, 1906, the plaintiff brought this suit for conversion against the defendant alone, without joining the Laidlaw Lumber Company, alleging that the defendant was a foreign corporation, and that it had taken this property from the possession of the plaintiff and converted it to its own use. The defendant denied the conversion, and at the trial the plaintiff recovered judgment for more than $ 2,000, after the defendant had been given credit for the plaintiff's debts.

¶2 The theory upon which the plaintiff recovered was that the foreclosure sale was invalid for want of service on the plaintiff (the defendant in that case), because it was not confirmed by the court, and because there was no appraisement; that therefore Taylor, in taking possession of the property for the Laidlaw Lumber Company, was a mortgagee in possession; that the defendant in this case co-operated with the Laidlaw Lumber Company in selling the property, without conducting the sale in pursuance of the terms of the mortgage; and that this amounted to a conversion, giving the plaintiff the right to recover the value of the property after deducting the indebtedness.

¶3 The first question which presents itself to our minds is whether or not the foreclosure sale can be attacked in this proceeding. This is not a proceeding to review that judgment in any manner provided by law, but is a suit against the defendant, who was not a party to that proceeding, alleging a conversion of the property which was sold at that time. As tending to show that he had not converted the property, the defendant offered in evidence the United States marshal's sale to Taylor and the judgment of the court in that case directing the foreclosure. That the plaintiff's attack on that judgment is not a direct, but a collateral attack, is not open to doubt. Van Fleet's Collateral Attack, secs. 2 and 3; Spade v. Morton, 28 Okla. 384, 114 P. 724; Eaves v. Mullen, 25 Okla. 679, 107 P. 433; Steele v. Kelley, 32 Okla. 547, 122 P. 934. In paragraph 2 of Van Fleet's Collateral Attack, it is said:

"A direct attack on a judicial proceeding is an attempt to avoid or correct it in some manner provided by law. Illustrations.--A motion for a new trial or for a venire de novo; a motion in the cause to vacate, modify, or correct the judgment according to the statute or the practice of the court; appeals; writs of error, certiorari, audita querela, and prohibition; petitions for rehearing and bills of review; bills in equity or complaints and petitions under the Codes to set aside, vacate, modify, or correct judgments for fraud, accident, mistake, or excusable neglect, are some of the modes provided by the law for avoiding or correcting judgments, and are direct attacks with which this work has nothing to do."

¶4 Paragraph 3 is in part as follows:

"A collateral attack on a judicial proceeding is an attempt to avoid, defeat, or evade it, or to deny its force and effect in some manner not provided by law. As there are only two ways to attack a judicial proceeding, direct and collateral, it is obvious that this definition complements the one in the last section, and they are both self-evident. Any proceeding provided by law for the purpose of avoiding or correcting a judgment, is a direct attack which will be successful upon showing the error; while an attempt to do the same thing in any other proceeding is a collateral attack, which will be successful only upon showing a want of power. Illustrations.--When a judicial order, judgment or proceeding is offered in evidence in another proceeding, an objection thereto on account of judicial errors is a collateral attack. Familiar instances are where a person relies on a judgment as a justification for a trespass, assault, or imprisonment; or to show his right or title in habeas corpus, replevin, trover, ejectment, trespass to try title, or suit to quiet title. That the objection to the judgment for judicial errors in such cases is a collateral attack, the cases all agree. Hence citations are useless. Less familiar instances are where the purchaser at execution or judicial sale refuses to complete or seeks to avoid the same on account of judicial errors; or where a garnishee or trustee refuses to comply with or seeks to avoid the order made against him because of judicial error in the main proceeding; or where the right of an executor, administrator, guardian, tutor, assignee, receiver, commissioner, trustee, or other person acting under judicial order, to sue or defend, is denied because of judicial error in the proceeding in which he was appointed, or in the order authorizing him thus to sue or defend. In all such cases the attack is collateral."

¶5 This being a collateral attack, we next inquire whether the objections to the judgment are such as can be raised in this proceeding. One of the objections is that the sale was never reported to and confirmed by the court. Is this an objection that may be raised in a collateral proceeding? As this case was...