First National Bank of Sheridan v. C. D. Woodworth Company

• Decision Date: 07 July 1897
• Citation: 49 P. 406,7 Wyo. 11
• Parties: FIRST NATIONAL BANK OF SHERIDAN v. C. D. WOODWORTH COMPANY
• Court: Wyoming Supreme Court

49 P. 406

7 Wyo. 11

FIRST NATIONAL BANK OF SHERIDAN v. C. D. WOODWORTH COMPANY

Supreme Court of Wyoming

July 7, 1897

Commenced in District Court, October 22, 1895.

ERROR to the District Court for Sheridan County. Hon. W. S. Metz Judge.

Action by the C. D. Woodworth Company against the First National Bank of Sheridan, for goods sold and delivered. Judgment was rendered for the plaintiff, and defendant prosecuted error. The facts are stated in the opinion.

Reversed.

N. K Griggs & E. E. Lonabaugh, for plaintiff in error.

The conveyance under which defendant in error, plaintiff below, claimed was either an absolute bill of sale or a chattel mortgage. In either case the judgment was erroneous. Considered as a bill of sale, the transfer was void.

A sale of a chattel, the possession of which is retained by the vendor, is void as against creditors of the vendor. (Doucet v. Richardson, 27 A. 635; Bell v. McClellan, 67 Cal. 283; Barton v. Brown, 68 id., 11; James v. Fulkerth, 7 P. 768; Comaita v. Kyle, 19 Nev. 38; Ewing v. Merkley, 3 Utah, 406.) A bill of sale absolute on its face, if taken as security, is only a chattel mortgage. (Gray v. Delay, 53 Kan. 177; Sayward v. Nunan, 6 Wash., 87; Shad v. Longston, 12 So. 646.) The possession of the Woodworth Company was insufficient. (Richardson v. Matson, 51 Ill.App. 530.) The bill of sale was void as a chattel mortgage as it wholly failed to comply with the provisions of Sec. 1 of Chap. 7, Laws of 1890-91.

A. M. Appelget, for defendant in error.

Moore evidently intended the bill of sale as an absolute sale. The facts indicate that fact quite clearly. The instrument can not be considered as a chattel mortgage. The bank had notice of the bill of sale and the character of the possession of the person in charge of the goods. An absolute title was passed to defendant in error. The one from whom the bank assumed to buy had no title. One without title can give none. (Ballard v. Burgett, 40 N.Y. 314; Spraight v. Hawley, 39 id., 441.) No one can be a bona fide purchaser who has knowledge of facts sufficient to put him upon inquiry, which if followed up, would lead to an entire knowledge of the transaction. One claiming to be an innocent and bona fide purchaser must establish his own good faith. (Ransom v. Schmela, 13 Neb. 77.) The title being in the Woodworth Company, the property was in its possession though in charge of another. (1 Denio, 123.) Our statutes not requiring change of possession in sales of personal property, the rule of the common law prevails that non-delivery is a badge of fraud only. No fraud is alleged and the evidence disproves any. (Mead v. Smith, 16 Conn. 345.) Non-delivery is always open to explanation. If otherwise fair and made without intent to defraud, and for a valuable consideration, then the presumption of the fraudulent character of the transaction arising from non-delivery is to all intents of the law fully refuted. But, actual change of possession is not indispensable. Symbolical delivery answers all purposes. (Thorndike v. Bath, 114 Mass. 116; Benjamin on Sales, 655-8; Commonwealth v. Hess, 16 L. R., 176 and note.) Where there is an inability to take possession from the nature of the circumstances or the articles sold, the failure to do so is satisfactorily explained by taking possession at the earliest possible time. (Mead v. Smith, supra; Ingraham v. Wheeler, 6 Conn. 277.) There was a sufficient delivery of the bill of sale by delivery for record. (In re Guyer, 69 Ia. 585.) The bank is not a bona fide purchaser for value because it paid nothing.

POTTER, JUSTICE. CONAWAY, C. J., and CORN, J., concur.

OPINION

POTTER, JUSTICE.

This action was brought by defendant in error as plaintiff below to recover an alleged indebtedness for goods sold and delivered to the plaintiff in error, and judgment was rendered in favor of the defendant in error for the amount claimed, the case being tried to the court without a jury.

There is no real conflict in the evidence, but counsel for the respective parties draw different conclusions therefrom. The facts are that one C. E. Moore was engaged in the harness and saddlery business at Sheridan in this State, and was indebted to the defendant in error, a corporation doing business at Omaha, Neb., for goods which he had bought from them. The president of the defendant in error company testified that on May 4, 1895, such indebtedness approximated twelve hundred dollars. He was asked if any arrangements were made on that date relative to the securing of his claim, and testified as follows: "It was in March that I saw him. He had been slow, and I came up to see what was the matter with him. He told me that business had been quiet, and collections were slow, and that he would pay me $ 475.00 now, and as soon as he could make collections, he would pay me more, and that in case anything would happen that he could not pay, he would protect us for the amount of our claim either by mortgage or bill of sale." This promise on the part of Moore seems to have been entirely voluntary. It was not an agreement entered into at the time the indebtedness was contracted, and it does not appear that any new consideration existed for such an agreement. Although it is true so far as the record discloses that there was actual forbearance, there was not an agreed forbearance or any extension of time expressly granted on account of such promise of security.

On the fourth day of May, 1895, Moore executed a bill of sale absolute in form, reciting a consideration of one thousand dollars, conveying to the Woodworth Company all his stock of harness, goods, saddles, etc., situated in the Eads Building in the town of Sheridan, and said bill of sale was recorded on that day in the office of the county clerk and ex-officio register of deeds. It was not otherwise delivered to the grantee named therein nor to any other person for them. Indeed, it is a mere matter of presumption that Moore personally left the paper for record, or authorized it to be recorded, the evidence being entirely silent respecting that matter. The bill of sale is found on record, and the record thereof is offered and received in evidence, and a copy of it as so recorded is incorporated in the bill of exceptions, and that is the extent of the information which is to be obtained from the record in this case. Whether it ever came into the manual possession of the Woodworth Company does not appear. No notice of the execution or recording of the instrument was given to them by Moore at any time, and they had no knowledge thereof, until the twenty-first or twenty-second day of May, but more probably the twenty-second, such knowledge being obtained by means of a telegraphic message from one Innis who at some previous time, it incidentally appears, had been employed in some capacity not stated by Moore. On the twenty-third day of May they wired instructions to an attorney at Sheridan to take possession of the stock, and he did so at once upon receipt of such instructions. At that time and also on the two preceding days, the stock and store were in charge of one Rohleder, who had entered Moore's employ on the second or third day of May. We are unable to discover anything in the evidence to indicate the time when Rohleder was first left in charge. Neither does it appear whether Moore remained in town, nor if he had gone when he departed, nor under what circumstances; although the briefs of both counsel state that he had gone to the National Park. Rohleder testifies that after he went to work for Moore the business ran along the same way until he saw Mr. Burrows, which was the twenty-first, and that the store was kept open all the time until possession was taken by the Woodworth Company, with the exception of a few days when they were invoicing.

On the twenty-first day of May Mr. Burrows, the cashier of the plaintiff in error bank went to the store and found Rohleder in charge. He then purchased for the bank the goods in controversy, except a bill of fourteen dollars the following day. That circumstance is related by Rohleder as follows: "He wanted to buy the goods, and he made some remark and asked who I was working for, and I said, Mr. Moore; and he wanted to know if I would sell him goods, and I said, Yes; and he wanted to know if I would sell on time or trust him, and I said, Yes; and he said, 'Who are you working for?' and I said, Moore; and he said, 'What are your instructions?' and I said, To sell for cash or to responsible parties, and he asked me if the bank was a responsible party; and I said, Yes; and he wanted to know if I would sell the goods, and I said, Yes. The same witness informs us that his instructions were to make remittances to C. D. Woodworth when goods were sold. He made no such remittances prior to their taking possession, and had no communication with them, and so far as the evidence discloses he may have been ignorant of the fact of the execution of the bill of sale.

The answer of the plaintiff in error, defendant below, alleged that the goods had been purchased from Moore and fully paid for, and that is the contention here. Mr. Burrows so testified, but in reference to payment his cross-examination developed the fact that prior to May 21 the bank had made a loan to Moore and held the notes of Moore and another party and that constituted the payment, the notes, however, some of which were due and some not, remaining in its...