First State Bank of Ardmore v. Dougherty

• Decision Date: 09 January 1912
• Docket Number: Case Number: 1306
• Citation: 120 P. 656,31 Okla. 179,1912 OK 32
• Parties: FIRST STATE BANK OF ARDMORE v. DOUGHERTY.
• Court: Oklahoma Supreme Court

1912 OK 32

120 P. 656

31 Okla. 179

FIRST STATE BANK OF ARDMORE v. DOUGHERTY.

Case Number: 1306

Supreme Court of Oklahoma

Decided: January 9, 1912

Syllabus

¶0 1. CHATTEL MORTGAGES--Notice of Sale--Waiver. A mortgagor of chattels may waive the benefit of section 4418, Comp. Laws 1909, which provides for the posting of notices in five public places in the county where the property is to be sold at least ten days before the time therein specified for such sale, by consenting in the mortgage to a sale of the property on a different notice.

2. CHATTEL MORTGAGES--Sale--Purchase by Mortgagee--Validity. Under a power of sale in a chattel mortgage giving the right to the mortgagee to purchase at his own sale, as well as under the provisions of section 4419, Comp. Laws 1909, a chattel mortgagee is entitled in good faith to become such purchaser, but when he does so, and the sale is attacked, the burden is upon him to show that the same was openly and fairly conducted, and that the price paid was not so grossly inadequate as to raise a presumption of bad faith.

Error from Carter County Court; G. H. Montgomery, Judge.

Action of the First State Bank of Ardmore against A. L. Dougherty. Judgment for defendant, and plaintiff brings error. Reversed and remanded.

Potter & Potter, for plaintiff in error.

Eddleman & Graham, for defendant in error.

DUNN, J.

¶1 This case presents error from the county court of Carter county, and is an action by the First State Bank of Ardmore against A. L. Dougherty to recover a balance due on certain notes which it held against him. The defendant pleaded payment, averring that prior to the bringing of the action divers sums of money had been paid to plaintiff, and that horses, mules, and other personal property had been taken under a mortgage held to secure the payment of the notes, and that the property so taken by the plaintiff had been appropriated to its own use and benefit, and in the aggregate was more than sufficient to pay off and discharge the indebtedness sued for. The plaintiff claimed that the money received had been credited on the notes, and that the property taken was sold under the mortgage which had been foreclosed, and that proper credits had been given on the notes for the proceeds of the sale, and that the amount sued for was the sum yet due. The sole question presented arises out of the sale of the mortgaged chattels which was purchased by the plaintiff. The mortgage provided:

"I authorize and direct the Ardmore Loan & Trust Company (plaintiff's assignees) by its officers or agents, or the holder of said note to take possession of said property wherever the same may be found, without demand, and proceed to sell the same to the highest and best bidder for cash in hand, after advertising said sale and the terms thereof for ten days, by posting one written or printed notice in some public place in the city of Ardmore, Oklahoma, at which sale either party hereto may become the purchaser," etc.

¶2 Section 4419, Comp. Laws 1909, provides:

"The mortgagee, his assigns or any other person may in good faith become a purchaser of the property sold."

¶3 Counsel for defendant in error contends that the notice of the sale held was not in accord with the requirement of the statute (section 4418, Comp. Laws 1909), which provides that:

"Notice shall be posted in five public places in the county where the property is to be sold, at least ten days before the time therein specified for such sale."

¶4 It is to be seen, however, that under the terms of the chattel mortgage a power was conferred upon the mortgagee to sell the property by posting one written or printed notice in some public place in the city of Ardmore, Okla., and it is not claimed that this condition was not complied with. As the statutory method is not made exclusive, a mortgagor of chattels may waive the benefit of the terms of this section by consenting to a lesser notice. Denny et al. v. Van Dusen, Adm'r, etc., 27 Kan. 437; Jones on Chattel Mortgages (5th Ed.) sec. 789; Stevens v. Breen, 75 Wis. 595, 44 N.W. 645. The notice given complied with the requirements of the mortgage.

¶5 The mortgage provided that either party could become a purchaser at the sale, and section 4419, Comp. Laws 1909, provides:

"The mortgagee, his assigns or any other person may in good faith become a purchaser of the property sold."

¶6 So that under either the contract or this statute, the mortgagee was authorized to become a purchaser, but...