George W. Brown & Sons State Bank v. Polen

• Decision Date: 10 April 1928
• Docket Number: Case Number: 17309
• Citation: 132 Okla. 121,270 P. 9,1928 OK 242
• Parties: GEORGE W. BROWN & SONS STATE BANK v. POLEN et al.
• Court: Oklahoma Supreme Court

1928 OK 242

270 P. 9

132 Okla. 121

GEORGE W. BROWN & SONS STATE BANK v. POLEN et al.

Case Number: 17309

Supreme Court of Oklahoma

Decided: April 10, 1928

Syllabus

¶0 1. Trover and Conversion--Definition of Conversion.

Conversion is any distinct act of dominion wrongfully exerted over another's personal property in denial of or inconsistent with his rights therein. McClintock v. Parish, 72 Okla. 260, 180 P. 689.

2. Chattel Mortgages--Unauthorized Sale of Property by Mortgagor--Liability to Mortgagee for Conversion.

An absolute sale, to the exclusion of the rights of a mortgagee, by a mortgagor, who, under the terms of the mortgage, remains in the possession of the mortgaged chattels, works a conversion thereof, for which the mortgagee may maintain an action for conversion.

3. Trover and Conversion--Liability of Participants in Act or Beneficiaries

Every person who participates in an act of conversion, or who knowingly benefits by its proceeds in whole or in part, is liable to the owner in an action for conversion.

4. Same--Failure of Petition to Allege Right to Possession of Property--Cure of Defect by Trial Amendment.

In an action for conversion, where the petition contains allegations of facts which, if true, would entitle the plaintiff to the possession of the property, but fails to state that plaintiff was entitled to the possession, such petition is defective only, and it is within the discretion of the court to allow an amendment at the trial so as to cure such defect.

Commissioners' Opinion, Division No. 2.

Error from District Court, Okfuskee County; John L. Norman, Judge.

Action by the George W. Brown & Sons State Bank against C. R. Polen and J. I. Cromwell. Judgment for plaintiff against defendant Polen and in favor of Cromwell. Plaintiff appeals, and defendant Polen files cross-petition in error. Affirmed in part, and reversed and remanded in part.

Twyford & Smith, for plaintiff in error.

P. J. Carey, for defendant in error J. I. Cromwell.

DIFFENDAFFER, C.

¶1 Plaintiff in error filed its action, consisting of two causes. The first cause of action is based substantially upon the following allegations: That on or about the 3rd day of December, 1922, defendant C. R. Polen executed and delivered to plaintiff a note in the sum of $ 7,537, together with a chattel mortgage to secure said note covering a certain string of drilling tools, then located in Trego county, Kan.; that shortly after the execution of said note and mortgage, defendants Polen and Cromwell entered into a general partnership for the drilling of oil wells in Oklahoma; that it was the object and purpose of the partnership to secure the tools upon which plaintiff held its mortgage, and remove the same from Kansas to Oklahoma; that in order to so do, it was necessary to obtain the consent of plaintiff; that it was agreed between the defendants that Polen should proceed to the office of plaintiff at Augusta, Kan., and advise plaintiff of the formation of such partnership, which had been organized under the name and style of "Wellen Drilling Syndicate"; that upon the representations of Polen as to the existence of said partnership, and that defendant Cromwell was a man of considerable wealth, and that the partnership had a profitable arrangement made for the drilling of a well in Oklahoma, and that the partnership would assume said indebtedness and pay plaintiff's note, thereby the consent of the plaintiff was obtained for the removal of said mortgaged property to Oklahoma, and that by reason of the representations so made, defendants became jointly and severally liable to said plaintiff for said indebtedness, and prayed judgment against the defendants for the amount thereof.

¶2 The second cause of action of plaintiff is one in conversion, and plaintiff pleaded that while said mortgage was in full force and effect, and after the tools had been delivered to said defendants and removed to Oklahoma, said defendants Polen and Cromwell, under and by virtue of a bill of sale, conveyed and transferred and delivered the mortgaged property to P. J. Carey and Mabel Y. Cromwell; that said sale was made by said defendants acting severally and jointly, while said mortgage remained in full force and unsatisfied, and without the consent of plaintiff and in derogation of the rights and ownership of plaintiff in and to said property. A copy of the chattel mortgage was attached to and made a part of the petition, which chattel mortgage, among other provisions, contained the following clause:

"Or in case of a sale, disposal or mortgage, or attempt to sell, dispose of, or mortgage the above described property, * * * then and thereupon, it should be lawful for said parties of the second part (mortgagee) to take possession of, remove, and dispose of the same," etc.

¶3 Defendant Polen filed his separate answer, consisting of an unverified general denial. Defendant Cromwell filed a general and separate demurrer to each of the counts contained in the petition of plaintiff. The demurrers were overruled, and thereafter defendant Cromwell filed his answer, consisting of: First, a general denial; and, second, that prior to the bringing of this action, plaintiff had filed its petition in the district court of Seminole county in replevin for the property covered by the mortgage. Defendants further alleged that the replevin action was between the same parties and involved the same subject-matter that is involved in the instant case; and that the issues had been determined in said replevin action, and that plaintiff is barred from bringing this action. The answer of Cromwell was duly verified.

¶4 Plaintiff for reply to the answer of Cromwell pleaded: First, a general denial to the allegations of the answer, and further alleged that, in said replevin action, the plaintiff was adjudged to be entitled to the property subject to certain liens in favor of certain lien claimants; that all of the liens were created by Cromwell and Polen, without any knowledge on the part of plaintiff, and that such liens were created against said property by defendants combining and confederating themselves for the purpose of beating, cheating and defrauding the plaintiff; that said liens were foreclosed against said property, and the same was sold to satisfy the liens thus created, and that by reason thereof plaintiff was deprived of the benefits of its mortgage.

¶5 The case was tried to a jury, and after the introduction of plaintiff's evidence, a demurrer was filed by the defendants to plaintiff's evidence as to each cause of action. The demurrer was sustained as to the defendant J. I. Cromwell, and overruled as to the defendant Polen, and judgment rendered for defendant Cromwell and in favor of plaintiff as against Polen for the amount prayed for in the petition. And from the judgment in favor of Cromwell, plaintiff brings this appeal.

¶6 Defendant Polen filed a cross-petition in error, but has filed no briefs in the case, and has apparently abandoned his cross-petition in error, and same will not here be considered.

¶7 The assignments of error are: That the court erred in sustaining the demurrer of defendant Cromwell to the evidence as to the first cause of action, and a like assignment as to the second cause of action. As to the first assignment, we have examined the evidence, and are of the opinion that the trial court did not err in sustaining the demurrer thereto.

¶8 As to the second cause of action, we feel compelled to hold that the court committed error in sustaining the demurrer to plaintiff's evidence. Briefly, the evidence tends to show that on about the 20th day of December, 1922, defendants Polen and Cromwell entered into an agreement whereby Polen was to secure the permission of plaintiff to remove the tools from Kansas to Oklahoma; and that Polen and Cromwell were thereafter to carry on a...