Gunnell v. Largilliere Co., Bankers

• Decision Date: 24 July 1928
• Docket Number: 4900
• Citation: 46 Idaho 551,269 P. 412
• Parties: R. B. GUNNELL, Respondent, v. LARGILLIERE COMPANY, BANKERS, a Corporation, Appellant
• Court: Idaho Supreme Court

269 P. 412

46 Idaho 551

R. B. GUNNELL, Respondent, v. LARGILLIERE COMPANY, BANKERS, a Corporation, Appellant

No. 4900

Supreme Court of Idaho

July 24, 1928

JUDGES-HEARINGS IN CHAMBERS-CHATTEL MORTGAGES-EFFECT OF RENEWAL NOTE-FORECLOSURE-CONVERSION-DAMAGES.

1. Under C. S., sec. 6493, par. 13, and sec. 6496, district judge had power, of his own motion, without formal application, to specify city outside county in which action was pending, but in same judicial district, as place for hearing of demurrer to complaint at chambers, whether or not he resided in such city.

2. A chattel mortgage being regarded as security for debt, not as instrument evidencing debt, mortgage is not defeated, while original debt remains, by change in form or evidence thereof but continues as security for debt in its new form.

3. The giving of a new note in renewal of or substitution for original note does not discharge chattel mortgage securing original note.

4. Chattel mortgage was not due by reason of insecurity clause in note secured when foreclosure affidavit, declaring on original note, and not expressly stating that mortgagee deemed itself insecure, nor mentioning renewal note, was placed in sheriff's hands during period of renewal note taking of which extended time of payment for such period and fixed amount of unpaid balance on original indebtedness.

5. Chattel mortgagee, present through its agents when mortgaged property was wrongfully seized by sheriff, and directing him in seizure and subsequent storage thereof, was not relieved from liability for damages by jury's acquittal of sheriff in former trial, wherein sheriff and mortgagee were jointly charged with wrongful taking, careless handling and wrongful detention of property.

6. A verdict cannot be set aside because seemingly inconsistent with another verdict, or because latter is wrong or some other party has been discharged or exonerated.

7. When a chattel mortgage is foreclosed by notice and sale without legal right because the debt secured was not due, a cause of action in conversion arises.

8. The measure of damages for wrongful foreclosure of chattel mortgage by notice and sale before debt is due is value of property at time of conversion, plus special damages caused by taking, if specially pleaded, and interest.

9. Measure of damages for detention of property, seized on wrongful foreclosure of chattel mortgage before debt is due is value of its use up to time mortgagee became entitled to its possession.

10. Exemplary or punitive damages cannot be recovered, unless evidence shows clearly that wrongdoer's action was wanton, malicious or gross and outrageous, or facts were such as to imply malice and oppression.

11. In action for wrongful foreclosure of chattel mortgage before debt was due, facts held to show that defendant merely attempted to apply remedy it deemed itself entitled to without wilful fraud, malice or gross negligence, and hence was not liable for punitive or exemplary damages.

APPEAL from the District Court of the Fifth Judicial District, for Caribou County. Hon. O. R. Baum, Judge.

Action for damages for wrongful foreclosure of chattel mortgage. Judgment for plaintiff and defendant mortgagee appeals. Affirmed in part and reversed in part.

Reversed and remanded, with directions. Costs to appellant.

R. J. Dygert, for Appellant.

C. S., secs. 6496 and 7195, and the supreme court's decision in the case of Callahan v. Dunn, 30 Idaho 225, 165 P. 356, do not authorize a district judge upon application of counsel, unsupported by any showing, to cite counsel, who resides in Caribou county, to appear in Pocatello, in Bannock county, to argue a demurrer in a case pending in Caribou county, and upon his failure to appear to overrule the demurrer for failure to prosecute.

Where a mortgagee in good faith prosecutes an action in foreclosure of his mortgage, even though he exceeds his legal rights and takes property that he has no legal right to take, still punitive damages cannot be allowed. (Unfried v. Libert, 20 Idaho 708, 119 P. 885.)

J. H. Peterson, D. Worth Clark and C. E. Melvin, for Respondent.

A demurrer may be heard on order anywhere in the district where the cause is pending. (C. S., secs. 6496, 7195; Callahan v. Dunn, 30 Idaho 225, 165 P. 356.)

The note sued upon in this case and under which purported sale was had, had been paid by renewal and hence action thereon was wrongful. (11 C. J. 589; Steidl v. Aitken, 30 N.D. 281, Ann. Cas. 1915E, 192, and note, 152 N.W. 276; First Savings Bank v. Sherman, 33 Idaho 343, 195 P. 630.)

Where personal property is taken unlawfully and wrongfully by a mortgagee he is liable to such mortgagor for actual damages. (Pickle v. Smalley, 21 Wash. 473, 58 P. 581; Marchand v. Ronaghan, 9 Idaho 95, 72 P. 731; Rein v. Callaway, 7 Idaho 634, 65 P. 63; Willows v. Rosenstein, 5 Idaho 305, 48 P. 1067; Lerock v. Paxson, 208 Pa. 602, 57 A. 1097; Boyd v. Beaudin, 54 Wis. 193, 11 N.W. 521; Vreeland v. Waddell, 93 Wis. 107, 67 N.W. 51.)

Where the mortgagee in a chattel mortgage foreclosed such chattel mortgage by notice and sale before the debt was due, it is conversion of the mortgaged property. (First Savings Bank of Pocatello v. Sherman, supra.)

VARIAN, Commissioner. Brinck, Baker, CC., Wm. E. Lee, C. J., Budge, Givens and T. Bailey Lee, JJ., concurring.

OPINION

VARIAN, Commissioner.--

Plaintiff brought this action in claim and delivery against his mortgagee and the sheriff, alleging wrongful foreclosure of a chattel mortgage. At the first trial the jury found for the sheriff, but disagreed as to the liability of the mortgagee. On the second trial, plaintiff recovered a verdict against the defendant mortgagee for the return of certain chattels or their value ($ 550), $ 300 compensatory damages, and $ 1,000 punitive damages. Said defendant moved for a new trial, alleging excessive damages given under the influence of passion or prejudice, insufficiency of the evidence to justify the verdict, and that it was against law. The court reduced the value of the chattels taken to $ 450, the compensatory damages to $ 35, and entered judgment for these amounts together with $ 1,000 punitive damages. This appeal is from the judgment as reduced, and the order denying a new trial.

The facts are as follows: On December 5, 1924, plaintiff executed his promissory note to defendant for $ 2,225, payable one year after date, with interest at eight per cent per annum. On the same day he executed a chattel mortgage to secure the payment of said note upon crops for the season 1925-1926, certain farm machinery, horses, cattle and pigs. On December 15, 1925, ten days after the note became due, plaintiff went to defendant's banking house at Soda Springs, paid the interest to December 5, 1925, $ 225 on the principal, and executed a new note for the balance of $ 2,000, dated December 5, 1925, payable one year after date. Defendant wrote across the new note the words, "This note is a renewal of note # 2914 dated December 5th 1924," and retained the original note for $ 2,225, which was marked "No. 2914." The transaction was had with August Largilliere, president of defendant bank, who directed a clerk, Mr. Touressen, to make out the papers. Plaintiff, at the time he executed the renewal note, signed a new chattel mortgage and a financial statement, dated December 15, 1925, on the form used by the defendant, in blank, both to be filled in later by Touressen from date communicated by plaintiff. Plaintiff left the bank, and later in the same day E. W. Largilliere, cashier of defendant bank, came to him and said he could not take the settlement negotiated by the president. The same evening, defendant's attorney and a deputy sheriff came down to Smith's, where plaintiff was, and told him he represented the defendant and that plaintiff would have "to come through with $ 500." Plaintiff said he did not know whether he could get that sum or not, but would go to Montpelier the next day. He did go, and failed to raise the money. He then sold $ 267 worth of cattle, and offered it to defendant, who at first refused it, but subsequently accepted and credited the amount on the indebtedness.

On December 18, 1925, defendant, acting upon a report made by its attorney as to the value of its security, directed summary foreclosure by notice and sale, and the cashier executed the affidavit required by C. S., sec. 6380 et seq., declaring on the original note and mortgage and making no reference to the renewal note. There is some evidence to show that plaintiff had sold a few head of livestock covered by the chattel mortgage, and was slow in accounting to defendant therefor. On December 24, 1925, defendant directed the foreclosure to proceed, and on the 26th its attorney and a deputy sheriff demanded possession of the mortgaged property, and on refusal the deputy sheriff, on receipt of notice to foreclose, served the copy of the affidavit on foreclosure, and proceeded to take possession of all the property covered by the chattel mortgage. It was located on two ranches, about four and six miles, respectively, from Soda Springs. All of the property, except certain hay and grain, was removed to Soda Springs; the implements were stored on a lot adjoining defendant's store, and the livestock taken to the Knollin barn in Soda Springs.

On December 28, 1925, the chattels in Soda Springs were noticed by the sheriff for sale there at 2 P. M. on January 2, 1926 and hay and grain for sale at the Gunnell ranch, Daisyville precinct, in Caribou county, on January 4, 1926. On December 31, 1925, plaintiff remitted to defendant, by registered mail, at Soda Springs, $ 1,744, covering the principal and interest unpaid upon its renewal note. This remittance was not received by the...