Ghio v. Byrne

• Decision Date: 16 June 1894
• Citation: 27 S.W. 243,59 Ark. 280
• Parties: GHIO v. BYRNE
• Court: Arkansas Supreme Court

27 S.W. 243

59 Ark. 280

GHIO v. BYRNE

Supreme Court of Arkansas

June 16, 1894

Appeal from Miller Circuit Court, RUFUS D. HEARN, Judge.

Action by L. A. Byrne, as trustee, and the Gate City National Bank against A. L. Ghio. The facts are stated by the court as follows:

This is an action by appellees, against the appellant, instituted in the Miller circuit court on the 18th day of November, 1890 in which the plaintiffs claim damages against defendant for the unlawful taking and conversion of certain personal property named in the complaint, alleged to be of the value of five thousand dollars, and for which sum they ask judgment.

One Ernest Zucchini, a saloon keeper in the city of Texarkana Texas, being indebted to the plaintiff, the Gate City National Bank, in the sum of eleven hundred, eighty-one and 59-100 dollars, as evidenced by his promissory note, to secure the payment of the same, executed, acknowledged and delivered his certain deed of trust to plaintiff L. A. Byrne as trustee, wherein, for that purpose, he sold and conveyed to said trustee the following property, to-wit: "His entire bar and saloon fixtures and outfit, located in the Ghio corner building, on Broad and State streets, in Texarkana, Texas, consisting mainly of the following items All the bar and lunch counters, looking glasses, billiard and pool tables, all glass and bar ware, all office chairs, all gas fixtures, tables, iron safe, cooking apparatus, and all property of every character or kind in said building. Also all his entire stock of wines, whiskies, brandies, and all other spirits located in said building." It was provided in said deed of trust that, upon the execution and delivery of the same, the possession of all of the said property was to be absolutely given to said trustee by said Zucchini for the purpose aforesaid, Zucchini being then in possession of the same. It was further provided in said deed of trust that "the said Ernest Zucchini is by the said L. A. Byrne appointed as special agent, and for the following purposes only: that is, he shall be permitted to make sales of the stock of goods above set forth, and conduct the daily sales thereof, but with the express and unqualified understanding that all daily receipts arising from said business shall be by said Zucchini deposited in the Gate City Bank of Texarkana, Arkansas, for the satisfaction of the debt and obligation hereinafter set forth; and this condition shall be strictly pursued without regard to the maturity of the debt until the same is fully satisfied." In other respects, this deed of trust is substantially as such instruments of writing usually are. This deed of trust was immediately delivered by Byrne to the recorder for registration, and was, filed and recorded, and the original returned to Byrne, who sent it back at once to the recorder, calling his attention to the error in the manner of registration, when the error was corrected, and the instrument properly registered.

The defendant in his answer disclaims all knowledge of the execution and delivery of plaintiff's said deed of trust and note; denies that plaintiff trustee took possession as alleged in his complaint, or that the property was delivered to him or his co-plaintiff by said Zucchini for the purposes of said trust, or for any other purpose. He denies that he took possession without right. Defendant alleges that the property was, and continued to be, in Bowie county, Texas; and that the same consisted of a stock of goods, wares and merchandise; and that the same continued to be exposed to daily sale in course of business by the mortgagor, the said Zucchini, who was then a resident of Bowie county, Texas, and was in active and exclusive possession and control of said business for his own use and benefit; and that, on the 5th day of November, 1890, (after plaintiffs' mortgage was filed the first time and before it was filed the second time), Zucchini, for a valuable consideration, sold, conveyed and delivered to defendant all of said property, and put him (defendant) in possession of same, and that he has since owned the same; that the consideration of said sale and purchase was the payment of a valid and substantial indebtedness due from Zucchini to defendant, exceeding in amount the value of said property.

Defendant further alleges that the laws of the State of Texas provide as follows (Sayles' Civ. St., art. 3190 b.):

"Sec. 1. Every chattel mortgage, deed of trust, or other instrument of writing intended to operate as a mortgage of or a lien upon personal property, which shall not be accompanied by an immediate delivery and be followed by an actual and continued change of possession of the property mortgaged or pledged by such instrument, shall be absolutely void as against the creditors of the mortgagor or person making same, and as against subsequent purchasers and mortgagees or lien holders in good faith, unless such instrument or a true copy of same shall be forthwith deposited with and filed in the office of the county clerk of the county where the property shall then be situated, or if the mortgagor or person making the same be a resident of this State, then the county of which he shall at the time be a resident."

"Sec. 2. Upon the receipt of any such instrument the clerk shall endorse on the back thereof the time of receiving it, and shall file the same in his office, to be kept there for the inspection of all persons interested; provided that if a copy be presented to the clerk for filing instead of the original instrument, he shall carefully compare such copy with the original and the same shall not be so filed, unless it is a true copy thereof; and a copy can be so filed only when the original has been acknowledged."

"Sec. 4. The county clerk shall keep a book in which shall be entered a minute of all such instruments which shall be ruled off into separate columns with heads as follows: Time of Reception; Name of Mortgagor; Name of Trustee or Mortgagee and Cestui Que Trust; Date of the Instrument; Amount secured; When due; Property Mortgaged and Remarks; and the proper entry shall be made under each of such heads. Under the head of property mortgaged it will be sufficient to enter a general description of the property pledged and the particular place where located, and an index shall be kept in the manner as required for other records."

And the defendant alleges that none of the requirements of said laws have ever been complied with, and therefore said deed of trust was and is absolutely void as against this defendant.

Defendant further alleges that the laws of Texas provide as follows, to-wit:

Art. 65 r. "Every mortgage, deed of trust, or other form of lien attempted to be given by the owner of any stock of goods, wares or merchandise daily exposed to sale in parcels in the regular course of business of such merchandise, and contemplating a continuance of possession of said goods and control of said business by sale of said goods by said owner, shall be deemed fraudulent and void."

The case was tried by the court, sitting as a jury, upon the deed of trust and note and evidences of witnesses on the part of plaintiffs, and the bill of sale and evidence of witnesses on the part of defendant, and upon the agreement that the property was worth $ 5000.

The bill of sale from E. Zucchini to A. L. Ghio is in words and figures following:

"The State of Texas, Bowie County. Know all men by these presents, that I, Ernest Zucchini, of the county and State aforesaid, for the consideration hereinafter stated, have this day sold and delivered to A. L. Ghio, of Bowie county, all my stock of liquors, goods, wares and merchandise; also all of the bar fixtures, gas fixtures, mirrors, two billiard tables, all office furniture, iron safe, ice chest, etc., now situated in the brick building on lot 12 in block No. 28, Texarkana, Texas. The said stock of liquors, goods, wares and merchandise and other articles are to be promptly invoiced, each and every article at its original cost, and the consideration to be paid by said A. L. Ghio for said stock of goods, wares and merchandise, is eighty per cent. on each dollar invoice value of goods, and the said total amount paid and to be paid is as follows: Said A. L. Ghio is to receipt me for fifteen hundred and forty-six dollars, which I am now owing him, and the said A. L. Ghio assumes and agrees to pay L. C. De Morse thirty-seven hundred and fifty ($ 3750) dollars, evidenced by five (5) promissory notes as follows: One for $ 1000; one for $ 1500; one for $ 1000, and two for $ 125 each; and to assume and pay two of my notes held by the Texarkana National Bank, one for $ 250, and one for $ 200, endorsed by L. C. De Morse and John Mayher, with interest and costs on same. Said Ghio also assumes and agrees to pay A. P. Ghio the sum of $ 500, which I owe him. Also one note for $ 600, now in the Gate City National Bank, endorsed by L. C. De Morse and A. L. Ghio. This sale is made subject to a mortgage lien now subsisting on the above described property, in favor of the Gate City National Bank, for the sum of eleven hundred and eighty-one dollars.

Witness my hand this 5th day of November, 1890.

ERNEST ZUCCHINI.

Witness:

H. C. Hynson, L. C. DeMorse.

The possession of Byrne consisted in the stipulation in the deed of trust, and the immediate delivery to him by Zucchini of one of the front door keys -- the only one had at the time -- and an effort to procure the others from clerks and other employees who happened to be away at the time, the house having been closed on account of a pending election. Byrne had directed the book-keeper of the bank, Mr. John Ousley, to go to the saloon morning and evening, and receive the proceeds of the sales of the night and...