Genesee Merchants Bank & Trust Co. v. Grand Packing Co.
| Decision Date | 01 December 1967 |
| Docket Number | No. 1557,No. 2,1557,2 |
| Citation | 8 Mich.App. 568,155 N.W.2d 193 |
| Parties | GENESEE MERCHANTS BANK AND TRUST COMPANY, Plaintiff-Appellant, v. GRAND PACKING COMPANY and Parsell Packing Company, Defendants-Appellees |
| Court | Court of Appeal of Michigan — District of US |
Neithercut & Neithercut, by Kittredge R. Klapp, Flint, for appellants.
Edwin H. Rabin, Flint, for Grand Packing.
Joseph R. Joseph, Flint, for Parsell Packing Co.
Before LESINSKI, C.J., and QUINN and H. W. GILMORE, * JJ.
This is an appeal from the Genesee circuit court's dismissal of a nonjury case, on motion at the conclusion of plaintiff's case under GCR 1963, 504.2. The basic question relates to the sufficiency of a description in a chattel mortgage.
On April 20, 1963, Burton Turner purchased at public auction in Mason, Michigan, without plaintiff's knowledge, three head of registered Holstein cattle and eleven head of unregistered Holstein cattle. For payment, turner issued a check payable to the auctioneer drawn on plaintiff's bank without sufficient funds. Turner believed, however, that the bank would honor the check when it was presented for payment. On May 2, 1963, Turner's check was received by the bank. Mr. Pollard, an employee of plaintiff bank, on that date called Turner to the bank and had him execute a chattel mortgage, prepared by Pollard, to secure a loan an amount somewhat greater than the purchase price of the cattle. The description of the cattle in the chattel mortgage reads as follows:
'Situated in the township of Clayton, county of Genesee, and State of Michigan, and free from all incumbrances, towit: 14 head registered Holstein cows'.
The day following the execution of the chattel mortgage, Pollard went to Turner's farm in Clayton township and saw the 14 head of Holstein cattle. Pollard had no personal knowledge that these were the same cattle purchased by Turner some two weeks before at the Mason auction and had no way of identifying them as such.
Some time later, between May 3 and May 9, 1963, Pollard visited another farm leased by Turner in Gaines township, some 2 1/2 to 3 miles from the Clayton township farm, and observed thereon 14 Holstein cows. Pollard was not able to identify these cows as those purchased by Turner at the Mason auction or those he had formerly seen in Clayton township. The mortgage in question was recorded on May 9, 1963, in the Genesee county register of deed's office as originally written.
Some time later Turner approached Pollard with regard to the sale of the cattle, and Pollard advised him that he could sell the cattle if he could find a cash buyer, or if he would find a prospective purchaser who would make special arrangements for the financing of the cattle.
On July 2, 1963, Turner represented to Jacob Wapner, owner of defendant Grand Packing Company, that he had 14 head of cattle for sale, and that they were free and clear of any encumbrances. Wapner inspected the cattle, which were in Gaines township, and purchased them for $2,300. Subsequently, they were sold to the defendant Parsell Packing Company for the price of $2,100 and were slaughtered.
At the conclusion of this entire transaction, plaintiff bank learned of the situation and filed its complaint against Parsell Packing Company and Grand Packing Company, seeking damages for the alleged conversion of the cattle.
The first issue relates to the sufficiency of the description of the cattle identified in the chattel mortgage as 'Situated in the township of Clayton, county of Genesee, and State of Michigan, and free from all incumbrances, to-wit: 14 head registered Holstein cows,' as against the third-party purchaser defendants. Two significant facts appear. First, when the chattel mortgage was executed, the cattle were in Clayton township and were described as being there. Second, the description of the cattle was that of '14 head registered Holstein cows'. The cattle purchased from Turner were 3 registered and 11 unregistered Holstein cows, and they were purchased from Turner at another farm in Gaines township, approximately three miles away from the Clayton township farm of Turner. The question thus becomes whether the chattel mortgage is valid and binding as to the defendants.
The general rule with reference to description of property in a chattel mortgage to be sufficient against the third person is found in 124 A.L.R. 945, where it is said that the description of mortgaged property must be definite enough to enable a third party, aided by inquiries which the instrument itself suggests, to identify the property.
Several Michigan cases have addressed themselves to this general problem. In Jackson City Bank & Trust Company v. Blair (1952), 333 Mich. 399, 53 N.W.2d 493, 32 A.L.R.2d 920, the description of an '1 A--2 Internation ensilage harvester' in a chattel mortgage gave sufficient notice to a defendant purchasing a 'No 2 ensilage harvester.' The Court further held in that case that the subsequent purchaser from a mortgagor has the burden of making reasonable inquiry beyond the description of the property in a chattel mortgage itself If it furnishes a means of identification, and if such reasonable inquiry would reveal the complete identification. Other descriptions considered by Michigan court include 'one Sorrel horse' found to be insufficient in Montgomery v. Wight (1860), 8 Mich. 143; 'one Durm (Durham) bull, known as the Grinnalls bull, said bull is 4 years old and weighs about 2,400 pounds,' held to be sufficient in Willey v. Snyder (1876), 34 Mich. 60; and 'all the cattle, consisting of 2 yoke, aged 6 and 7 years, color, red, white, and blue * * * and all other property now in our possession in or about said village,' held to be sufficient in Fordyce v. Neal (1879), 40 Mich. 705.
See, also, National Live Stock Credit Corp. of St. Louis v. Thompson (CA 10, 1935), 76 F.2d 696; Genger v. Albers (1949), 90 Cal.App.2d 52, 202 P.2d 569; and ...
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