First Nat. Bank of Grandfield v. Hinkle
| Decision Date | 30 January 1917 |
| Docket Number | Case Number: 8245 |
| Parties | FIRST NAT. BANK OF GRANDFIELD v. HINKLE. |
| Court | Oklahoma Supreme Court |
¶0 1. Trusts -- Express Trust--Personal Property--Creation by Parol. An express trust in personal property may be created by parol where there is an immediate delivery of the property to the trustee, followed by an actual and continued change of possession thereof.
2. Pledges -- Elements -- Right of Redemption. It is an essential element of a pledge that there should be a right of redemption in the pledgor.
3. Pledges--Principal and Agent--Trusts--Personal Property--Action for Conversion--Delivery for Sale. The absolute transfer and delivery of personal property to a third person, with directions to sell the same and apply all the proceeds to the payment of certain debts of the owner thereof, creates a trust rather than an agency, or a pledge, and vests the trustee, accepting such trust, with the right to maintain an action for the conversion thereof.
4. Trusts -- Property Subject--Trust Property--Fraud. In the absence of facts showing such a transfer and delivery to be fraudulent as to creditors, the trust property, after delivery thereof to the trustee, may not lawfully be seized in attachment against the creditor of the trust brought by one of his general creditors.
5. Appeal and Error--Review--Theory of Case Below. Although a plaintiff in error is here held to his theory of the case advanced in the court below, the same rule does not apply to a defendant in error so far as to work a reversal of a judgment, proper under the pleadings, evidence, and instructions, because defendant in error seeks in his brief to support such judgment upon an untenable theory.
Wilson & Roe, for plaintiff in error.
Mounts & Davis, for defendant in error.
¶1 H. D. Hinkle sued the First National Bank of Grandfield for the conversion of two mules. His petition as finally settled alleged that one W. R. Hinkle purchased the mules from O. P. Gammell and executed a promissory note, secured by a chattel mortgage on the mules, for the purchase price; that plaintiff signed said note as surety; that at about the time of maturity of said note W. R. Hinkle delivered the mules to plaintiff and directed him to sell them and apply the proceeds upon the balance due Gammell, and the remainder upon other debts; that while the mules were in plaintiff's possession, and he was seeking to sell them, they were taken on attachment in a suit brought by the defendant against W. R. Hinkle, and that by means of such process defendant obtained possession of the mules, sold them, and applied the proceeds to the payment of a debt due from W. R. Hinkle to the bank. The bank denied generally the allegations of the petition. Upon the trial the court instructed the jury, in substance, that if they believed from the evidence that W. R. Hinkle delivered the mules to plaintiff for the purpose and with the agreement above set out, and that while in plaintiff's possession the mules were seized by the bank and sold, and the proceeds applied to the payment of the bank's note, they should find for plaintiff. The proof was practically undisputed, and established the allegations of the petition. It further showed that almost immediately after delivering the mules W. R. Hinkle left and went to Texas, and that he thereafter entered an appearance and confessed judgment in the suit brought by the bank against him. The jury rendered judgment for the plaintiff, and the defendant thereupon brought the cause here for review. There is no question in the case of any insolvency of W. R. Hinkle, or as to the transfer to H. D. Hinkle being in fraud of creditors. Nor does it appear why Gammell did not enforce his mortgage, except that an inference may be drawn that it was not filed. In any event Gammell raises no question of any violation of his rights as mortgagee by the transfer to plaintiff. The controlling question is the right of plaintiff to recover upon the admitted facts. Upon the part of the bank it is insisted that plaintiff was merely the agent of W. R. Hinkle to sell the property, and that the mules still belonged to W. R. Hinkle, and were therefore subject to attachment at the hands of his creditors. Plaintiff, upon the other hand, insists that the property was delivered to him as a pledge to secure him against loss by reason of his having signed, as surety, the purchase-money note to Gammell. Neither position is tenable. As hereinafter shown the delivery of the property and contemporaneous agreement in regard to it constituted more than an agency, and one of the essential elements of a pledge, i. e., the right to redeem, is absent. It is inherent in the nature of a contract of pledge that the pledged property is delivered as security for a debt, or the performance of an obligation, and that though a right to sell be given, that right ordinarily, in so far as it bars the interest of the pledger in the property, arises only after a failure to perform the condition of the pledge, as, for instance, by paying the debt or performing the obligation secured. Here all the evidence shows an absolute parting by W. R. Hinkle with all title to the property at the time it was delivered. Nowhere is there any element of a right to redeem. Without such right a pledge does not exist. See, generally, as to the nature of a pledge, Jackson v. Kincaid, 4 Okla. 554, 46 P. 587; Carothers Warehouse Ass'n v. McConnell, 30 Okla. 394, 121 P. 191. The same considerations eliminate the idea of agency. After delivery of the property W. R. Hinkle left the state. Apparently he had no intention of having any further dealing in regard to the mules. Neither his appearance in the action, nor his letter inquiring what the mules brought at the sale, evidence any such intent. His apparent purpose in this regard was merely to find out the status of his indebtedness, and how much it had been decreased by the sale of the mules. His whole conduct indicates an executed intention to part with the possession and title to the property. Such being the case, neither a pledge nor an agency was established, but a trust for the benefit of Gammell, and the other creditors, with the plaintiff as trustee. The fact that plaintiff was a surety and that he would benefit by the payment of the Gammell note is immaterial. So far as the laws of the...
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