Finance Corporation of Wyoming v. Commercial Credit Co., 1577

• Citation: 283 P. 1100,41 Wyo. 198
• Decision Date: 15 January 1930
• Docket Number: 1577
• Parties: FINANCE CORPORATION OF WYOMING v. COMMERCIAL CREDIT CO. [*]
• Court: United States State Supreme Court of Wyoming

283 P. 1100

41 Wyo. 198

FINANCE CORPORATION OF WYOMING v. COMMERCIAL CREDIT CO. ^[*]

No. 1577

Supreme Court of Wyoming

January 15, 1930

ERROR to District Court, Natrona County; EDGAR H. FOURT, Judge.

Action by the Commercial Credit Company against the Finance Corporation of Wyoming. Judgment for plaintiff, and defendant brings error.

Judgment reversed.

For the plaintiff in error there was a brief by Durham and Bacheller of Casper, Wyoming, and oral argument by E. Paul Bacheller.

A mortgage is an incident to the debt, and is not invalid if there be no debt. Graham v. Blinn, 3 Wyo. 746; Ramsey v. Johnson, 8 Wyo. 476; Langdon v. Buel 9 Wend. (N. Y.) 84; Bank v. Goodloe Co., 93 Mo A. 123. Plaintiff not having proven an obligation due from Nichols is estopped to claim under the mortgage from Nichols to Stanford. 11 C. J. 674; Brice v. Corporation (Va.) 10 A. L. R. 654, 102 S.E. 591; Glass v. Corp., (Fla.) 88 So. 876; Ind. Inv. Co. v. Whisman, 138 N.E. 512; Forgan v. Briges, (Mo.) 281 S.W. 34; Coffman v. Inv. Co., 290 S.W. 961; Harrison v. Securities Co., (Utah) 257 P. 677; Jones v. Inv. Tr., (Utah) 228 P. 896. Stanford having remained in possession after a sale to Nichols could make a sale to neither person who had no notice of the sale to Nichols. Sec. 4747 C. S. Plaintiff's mortgage created merely a lien upon the subject matter. 11 C. J. 399; Blythe Co. v. Houtz, (Utah) 66 P. 611; Kinney v. Bank, 67 P. 471. The court erred in giving judgment contrary to the express allegations or admissions in the pleadings. Nugent v. Powell, 4 Wyo. 172; Pardee v. Custer, 15 Wyo. 368; Harden v. Card, 15 Wyo. 217. The court erred in awarding attorney's fees and expense of repossession. Clendenning v. Guise, 8 Wyo. 91, 23 R. C. L. 911; Boswell v. Bank, 16 Wyo. 161.

For the defendant there was a brief by Curran and Cobb of Casper, Wyoming, and oral argument by Mr. William B. Cobb.

The defendant was charged with notice of the mortgage; he was not an innocent purchaser in his dealings with the finance company; it was his duty to look into the title. Utica Tr. v. Decker, (N. Y.) 217 A.D. 137; Blashfield Ency. of Auto Law, Vol. 4, page 2380; Commercial Cr. Co. v. National Credit, 255 P. 104. Even if purchased from a reputable dealer, and from his sales room, the car would have carried with it the obligation of the plaintiff. Teshner v. Roame, 210 P. 160; Hardin v. Bank, 205 P. 302; Rogers v. Booker, (N. C.) 113 S.E. 671; Finance Co. v. Isaacson, 260 P. 580; Acceptance Co. v. Paull, 213 N.W. 317. The damages suffered by plaintiff exceeded $ 250.00. The replevin action, employment of counsel and the depreciation in the value of the property, clearly exceeded the $ 250.00 damage item.

RINER, Justice. BLUME, C. J., and KIMBALL, J., concur.

OPINION

RINER, Justice.

The defendant in error, Commercial Credit Company, a corporation, subsequently mentioned herein as the "plaintiff," obtained a judgment in its favor in the District Court of Natrona County against the plaintiff in error, Finance Corporation of Wyoming, also a corporation and hereinafter referred to as the "defendant." The latter brings the record here for review by proceedings in error.

The facts to be considered are not, in many respects, in controversy, and appear to be as follows:

During the year 1928, one Stanford was a licensed dealer in Star automobiles in the town of Glenrock, Wyoming, and owned and had in his possession a certain Star coupe automobile. The latter part of January of that year, he sold it to a man by the name of Nichols, who did not pay the full purchase price therefor but gave a mortgage upon it, which was held by the defendant, through assignment from Stanford. Nichols assumed possession of the car and drove it for several thousand miles. Thereafter he became delinquent in the payments due on the machine, whereupon defendant, in satisfaction of the debt, and, so far as this record shows, with Nichols' full assent, took the car from him and placed it upon the floor of Stanford's garage, with instructions to the latter to sell it. There does not seem to be any dispute in the evidence that defendant gave Stanford full authority to dispose of this automobile.

On the day and about the time that the representative of defendant brought the car into Stanford's place of business to be sold as aforesaid, one Boehm, a representative of the plaintiff, arrived. Sometime that day or the next and on March 13, 1928, at the suggestion of Boehm, new papers were drawn. On this occasion Stanford, however, did not give Nichols a bill of sale for the car. His testimony concerning what was done being, briefly: "I didn't sell it to him the second time, I only refinanced it the second time." Nichols signed a note for $ 746.60, payable in twelve specified monthly installments to the order of Stanford, the note stating that it was secured by a chattel mortgage. This chattel mortgage, also executed and acknowledged by Nichols in favor of Stanford, recited that the indebtedness which the mortgage intended to secure was in the amount set out in the note aforesaid and particularly described both by serial number and motor number the Star coupe left with Stanford for sale by the defendant as the property mortgaged. Other statements contained in the mortgage and its assignment, presently to be mentioned, will be referred to later.

The note was endorsed without recourse by Stanford to the plaintiff, an assignment of the chattel mortgage upon the car was also made to it by him, and all these papers--the note, mortgage and assignment thereof--were placed in an envelope upon whose face was a sight draft drawn by Stanford upon plaintiff for the sum of $ 660. The difference between this amount and the face of the note appears to have represented plaintiff's handling charge in the matter. The sight draft with its accompanying papers was sent through banks by Stanford to Denver, where the plaintiff had its principal office in this territory and where the draft was immediately taken up and paid by plaintiff, which then, in due course, received the envelope and its contents. In addition to the form of sight draft on the envelope, there appeared the following over Stanford's signature:

"I, we, hereby agree that if, after your payment of the amount stated above for your purchase of the transaction or transactions covered by the papers herein, your subsequent investigations of any of the parties, papers or transactions are unsatisfactory to you, I, we, will repurchase the same and will honor your draft with such enclosure attached, for the amount you have paid for same, not later than twenty days after such payment by you."

Stanford duly received the money thus advanced by plaintiff, and turned it over to and it was accepted by the defendant in payment for its interest in the Star coupe obtained in the manner above related.

On April 3, 1928, and within the twenty day period mentioned in Stanford's agreement just quoted, the plaintiff, not satisfied with its investigation concerning the matter, notified Stanford that he would be expected to repurchase the papers aforesaid, and accordingly drew on him for the amount previously advanced by it. This draft was not paid by Stanford, and negotiations extending over a number of weeks ensued between him and plaintiff in the course of the latter's effort to obtain from him the agreed repurchase and repayment. Ultimately Stanford sent plaintiff, on account of the agreement, the sum of $ 300, leaving the remaining $ 330 unpaid.

Meanwhile the Star coupe had never left the possession of Stanford. Nichols had made no claim for it, but merely, on April 9th, sent a letter to plaintiff, received by the latter on the 11th of that month, notifying it of Stanford's possession of the car and inquiring as to what he (Nichols) should do. After Stanford learned of the attitude of the plaintiff concerning the transaction, as shown by its demand that he repurchase the paper and its draft upon him for the money previously paid out by it, he again endeavored to sell the car and succeeded in doing so to one Peterson on April 24, 1928. This action, on his part, appears to have been taken upon his own initiative, as he does not testify that he was given authority by plaintiff or anyone else to make the second sale. He states that Boehm, plaintiff's representative, who had no authority in the matter, knew that the car was for sale. Plaintiff's credit manager, however, gave testimony that it did not know that Stanford held the car in its possession for the purpose of selling it, did not learn it had been sold until June 18, 1928, and that no permission had been given Stanford by plaintiff to sell the car.

The sale to Peterson by Stanford was handled apparently in the same manner as the original Nichols' deal, i. e. Stanford took a note and mortgage from Peterson for the unpaid balance due on the automobile and transferred them to the defendant, which thereupon advanced in the neighborhood of $ 600 to Stanford on account of the transfer. What was done with this money by Stanford does not appear, but it was not used to pay off the debt to plaintiff.

Stanford as defendant's witness, when asked on cross-examination whether he told defendant that there was a mortgage on the car when he turned over the Peterson papers to it, testified: "No, sir." And in response to the following question: "Why not?" replied: "Not that I remember. Well I thought they were just as familiar with some things as I was. They knew it was the car Nichols had before." An employee of the defendant, as a witness in its behalf, stated that it did not know when it accepted the Peterson paper that the car was the same one involved in the transaction with Nichols and did not learn that fact until...