Greer v. Newland

• Decision Date: 01 December 1904
• Docket Number: 13,677
• Citation: 70 Kan. 310,77 P. 98
• Parties: J. E. GREER et al. v. J. W. NEWLAND et al
• Court: Kansas Supreme Court

77 P. 98

70 Kan. 310

J. E. GREER et al. v. J. W. NEWLAND et al

No. 13,677

Supreme Court of Kansas

December 1, 1904

Decided June 11, 1904; July, 1904.

Rehearing granted July 7, 1904.

Error from Wyandotte court of common pleas; WILLIAM G. HOLT, judge. First opinion filed June 11, 1904. Affirmed. Rehearing granted July 7, 1904. Second

Judgment affirmed.

SYLLABUS

SYLLABUS BY THE COURT.

CHATTEL MORTGAGE--Constructive Notice--Commission Merchant Held Liable on an Implied Contract. A commission merchant who receives mortgaged cattle sent to him for sale without the consent of the mortgagee, and in violation of the terms of the mortgage, and who sells them and pays the proceeds to the consignor without actual notice of the mortgage, but with constructive notice imparted through its record, is liable to the mortgagee in an action upon an implied contract to pay him the proceeds of the sale.

Muckle, Hayward & McLane, for plaintiffs in error.

Botsford, Deatherage & Young, and McFadden & Morris, for defendants in error.

MASON J. All the Justices concurring.

OPINION

MASON, J.:

The owner of certain cattle in Wilson county executed chattel mortgages on them, securing two notes. The mortgages were properly recorded. Afterward the mortgagor turned the cattle over to another person who, without the consent of the mortgagee, and in violation of the terms of the mortgage, shipped them to Greer, Mills & Co., commission merchants at East St. Louis, for sale. The commission merchants sold the cattle and remitted the proceeds, less charges and expenses, as directed by the consignor, without actual notice of the mortgages. The notes and mortgages remained unpaid and were transferred to J. W. Newland and D. R. Newland, who sued the commission merchants, not for damages resulting from the conversion of the cattle, but upon the allegation of an implied promise by them to pay to plaintiffs their net proceeds, the tort being expressly waived. Plaintiffs recovered a judgment which defendants seek to reverse.

Upon the facts stated it is clear that defendants would have been liable in an action for conversion, and the fact that they had no actual notice of the claim of the mortgagees would have constituted no defense. (Brown v. Campbell, 44 Kan. 237, 24 P. 492, 21 Am. St. Rep. 274.) But defendants claim that they were not liable in an action upon contract for the reason that in the transaction they acted only as the agents of the real wrong-doer, the person who shipped the cattle to them, and that their own estate was not intended to be benefited, and was not in fact benefited, by the sale--that they never acquired or claimed the beneficial title to the cattle or their proceeds. It is true that the rule is well established that "if no benefit accrues to the tort-feasor by reason of the tort committed, assumpsit will not lie. He cannot be charged as on an implied contract unless some benefit has actually accrued to him." (15 A. & E. Encycl. of L., 2d ed., 1115. See, also, ch. 3, Keen. Quasi-contr., and Fanson v. Linsley, 20 Kan. 235, and cases cited.) It is also true that the title of property consigned by the owner to a commission merchant for sale, and of its proceeds, is in the consignor, and no title vests in the factor except as trustee. (12 A. & E. Encycl. of L., 2d ed., 695, 696.)

In considering whether these principles protect the defendants from an action upon an implied contract to pay the mortgagee the price of the cattle, it must be borne in mind that no distinction is to be made between an actual knowledge by the consignee that goods sent to him belong to another than the shipper and the constructive knowledge of that fact given him by the public records. The effect of the notice imparted by the record does not depend upon the form of action. In the case cited it was held equivalent to actual notice in an action for conversion; it is so in an action upon an implied contract. The case must therefore be treated as though defendant had had actual notice of the existence of the mortgages.

If a factor, while still holding the proceeds of goods sold by him, knows they were stolen, he cannot assert, as a protection against the claims of the real owner, what is untrue in fact, that the title is in the one who has stolen them; and, having in his hands money belonging to another, in the absence of a reason to justify his holding it himself or making some other disposition of it he is liable to the owner upon an implied contract to pay it to him.

"Where the defendant is proved to have in his hands the...