Appeal
from circuit court, Multnomah county; E.D. Shattuck, Judge.
Action
by M. Fisher Sons & Co. against Penumbra Kelly. Judgment for
defendant. Plaintiffs appeal. Affirmed.
This is
an action to recover the value of, and damages for the
alleged wrongful conversion of, a stock of goods. The
plaintiffs allege that on February 4, 1893, by virtue of a
chattel mortgage executed to them by one O.C. McLeod, they
had a first lien upon, and were entitled to and in the
possession of, a stock of woolen and other cloths, of the
value of $5,000; that on said day the defendant wrongfully
took said goods from their possession, and converted the same
to his own use, to their damage in the sum of $5,000; and
that by reason of such seizure and conversion they were
further damaged in the sum of $1,000, on account of expenses
and attorneys' and counselors' fees in establishing
their right thereto,--for which sums they demand judgment.
The defendant, after denying the material allegations of the
complaint, pleaded in justification of the acts complained of
the facts, in substance, as found by the court, and also
alleged that plaintiffs' mortgage was fraudulent and void
as to McLeod's creditors. The reply having put in issue
some of the material allegations of new matter contained in
the answer, a trial was had before the court, which made and
filed the following findings:
"(1)
That plaintiffs are partners, and were partners at the time
of the several transactions herein mentioned, doing business
under the firm name and style of M. Fisher Sons & Co. (2)
That at the times of the several transactions herein the
defendant was then the duly elected, qualified, and acting
sheriff of Multnomah county, Oregon. (3) That one O.C
McLeod, in January, 1893, and until the levy of the
attachment herein mentioned, was engaged in the business of a
merchant tailor at Portland, Oregon, and in such business
owned a stock of merchant-tailoring goods, and was indebted
to the plaintiffs and others. (4) About the 12th day of
January, 1893, the plaintiffs sent their claim against McLeod
to a firm of attorneys in Portland for collection, or, if the
same could not be collected, then that payment thereof should
be secured. McLeod, being unable to pay the claim, offered to
secure the same by his real estate; but plaintiffs, after
being consulted, declined to accept this, and, through their
attorneys, insisted on a mortgage upon the stock. This demand
McLeod refused to accede to, claiming that a mortgage upon
his stock must be made public, and, when made public, would
have the effect of destroying his credit, and bringing down
upon him all of his creditors and stopping his business, thus
placing it beyond his power to pay his creditors. Thereupon
the plaintiffs, through their attorneys, agreed with McLeod
that if he would execute the mortgage upon the stock they
would not place the same upon record, nor permit the fact
that he had executed such a mortgage to become public, but
would keep the mortgage in their possession, so that nothing
might be known of it. McLeod accordingly, on January 12
1893, and pursuant to this agreement, executed the mortgage
and the same was locked up in the safe of the attorneys for
the plaintiffs; and meanwhile McLeod continued to do business
as before, without any change of possession in the business
of any kind whatsoever, and he continued to work up his stock
into manufactured goods, and dispose of the same, accepting
orders and doing business in all respects after the execution
of the mortgage in like manner as before. (5) The plaintiffs
through their attorneys, on or about February 1, 1893, made
demand upon McLeod that he pay them a certain sum of money on
account of his indebtedness to them; but this request Mr
McLeod refused to accede to unless the plaintiffs would
supply him with goods for his trade of about the same value
as the sum of money which he was to pay. A controversy then
arose between the plaintiffs' attorneys and McLeod, and
thereupon, and on or about February 3, 1893, the
plaintiffs' attorneys undertook to place some one in
possession of the stock; but McLeod refused to surrender
possession of the same, and continued to employ his men and
to operate his business in all respects as before the
plaintiffs attempted to take possession, except that the
plaintiffs maintained in the store some person through whom
they claimed to hold possession. Such person, however, had
not the keys to the store, nor had he any power or authority
over the business or over the property which he claimed to
have in possession, McLeod meanwhile exercising all acts of
ownership and possession thereof after such attempted seizure
just as prior to the execution of the mortgage. (6) On the
4th day of February, 1893, Stein, Simon & Co., creditors of
McLeod, before the execution of the mortgage above mentioned,
and on said day, commenced an action in the circuit court of
the state of Oregon for Multnomah county, against McLeod, to
recover the sum of $1,334, with interest and costs, and in
such action duly sued out a writ of attachment, and caused
the same to be placed in the hands of the defendant, as
sheriff of Multnomah county. Thereupon, pursuant to the
command of said writ of attachment, the sheriff of Multnomah
county duly seized the stock of goods in controversy, and
locked up the store, ejecting all persons therefrom. At the
time of this levy, McLeod still had the keys of the store,
and was doing business in all respects as before any mortgage
was executed; and neither the officer who levied the writ,
nor the plaintiffs in the writ, knew anything of this
transaction between McLeod and the plaintiffs. Thereafter,
and on the same day, one H.E. Fowler, a creditor of McLeod,
commenced another action in the same court to recover the sum
of $300, with interest and costs, and duly sued out a writ of
attachment in said action, and the same was placed in the
hands of the defendant, the sheriff of Multnomah county, for
execution, and was duly executed by such sheriff by seizing
the property in controversy, the same being then in his
possession under a prior writ in favor of Stein, Simon & Co.;
and the sheriff, under such writs, held the stock of goods
until after judgment, and under such writs and the order of
court, hereinafter mentioned, held such property until sale
was made thereof by him under the executions, as hereinafter
alleged. (7) Afterwards the said attaching creditors, Stein,
Simon, & Co. and H.E. Fowler, each duly recovered judgment
for the sum sued for against O.C. McLeod, and, as a part of
such judgment, the court made an order directing that the
attached property be sold; and that, thereupon, executions
were issued upon such judgment, directed to the sheriff of
Multnomah county, Oregon, and commanding him to sell the
attached property. Accordingly the defendant, as sheriff of
Multnomah county, did sell the property on the 8th day of
March, 1893, for the sum of $1,965.00. That such sale was
regularly and legally made by the defendant as sheriff, and
due return of the executions made to the court, and the money
realized from such sale applied in satisfaction of said
judgments. And this is the conversion complained of by the
plaintiffs. (8) The mortgage to the plaintiffs was never
placed on file, nor was any possession thereunder ever taken.
(9) The mortgage to plaintiffs was executed pursuant to an
understanding between the plaintiffs and O.C. McLeod that its
existence should not be made public, and that no creditors of
McLeod, or persons with whom he might desire to deal, might
be advised thereof, so that the attaching creditors did not
know, and could not have ascertained, the existence of such
mortgage; and such understanding was intended to deceive
creditors, and tended to hinder, delay, and defraud them, and
that the mortgage was therefore executed with such intention,
and received by plaintiffs, through their attorneys, with the
same intention."
"And
the court finds as conclusions of law: (1) That the mortgage
of the plaintiffs is fraudulent and void as to the attaching
creditors, Stein, Simon & Co. and H.E. Fowler, and is
fraudulent and void as to the defendant, Penumbra Kelly,
seizing the property under writs of attachment sued out by
said creditors. (2) That the seizure of the property under
the writs of attachment in favor of the creditors, Stein,
Simon & Co. and H.E. Fowler, and subsequent sale by the
defendant as sheriff of Multnomah county, was regularly and
legally done by the defendant as sheriff, and such acts of
the defendant do not constitute a conversion of which the
plaintiffs can complain. (3) That the action should be
dismissed, and that the defendant should have judgment for
his costs and disbursements."
The
court having rendered judgment on these findings in favor of
the defendant, the plaintiffs appeal.
A.C. Emmons and W.A. Williams, for appellants.
J.N.
Teal, for respondent.
MOORE,
C.J. (after stating the facts).
There are two questions presented by this appeal: (1) Are
the conclusions of law deducible from the findings of fact?
And, (2) if so, are they, taken together, sufficient to
support the judgment? The defendant having failed to allege
that McLeod was indebted to either Stein, Simon & Co., or
Fowler, counsel for plaintiffs contend that, the relation of
creditor not being in issue, the defendant could not attack
the bona fides of their mortgage, and hence the finding of
the court that it was void as to the creditors of McLeod is
erroneous. If the defendant had relied upon the
attachment of the property as the foundation of his right to
continue to hold the possession thereof, the objection urged
must...
