Harrill v. Weer

• Decision Date: 10 May 1910
• Docket Number: Case Number: 480
• Citation: 26 Okla. 313,109 P. 539,1910 OK 136
• Parties: HARRILL v. WEER.
• Court: Oklahoma Supreme Court

1910 OK 136

109 P. 539

26 Okla. 313

HARRILL v. WEER.

Case Number: 480

Supreme Court of Oklahoma

Decided: May 10, 1910

Syllabus

¶0 1. CHATTEL MORTGAGES--Sale of Chattels by Trustee--Remedy of Mortgagor. When a trustee in a deed of trust conveying chattel property sells the property under a power of sale in the deed of trust to a purchaser who is not a party to or beneficiary under the deed of trust, and the mortgagor brings his action against such purchaser to set aside the sale for fraud or for irregularities in the sale, and to recover the property or the entire value thereof, he will not be permitted to maintain the action without tender of the amount of the purchase price paid by the purchaser and interest thereon which has been applied to the liquidation of the mortgaged debt.

2. CHATTEL MORTGAGES--Power of Sale -- Notice of Sale--Waiver. Where a chattel deed of trust contains a power of sale authorizing the trustee under certain conditions to take charge of the mortgaged property, sell the same, and apply the proceeds to the payment of the mortgaged debt, but provides that no sale shall be made without five days notice to the mortgagor, failure to give such notice renders the sale voidable. Such notice, however, being for the benefit of the mortgagor, may be waived by him.

3. SAME-- Waiver of Notice by Participation in Sale. Where the mortgagor is present at the sale and participates therein by pointing out the property, giving information to the bidders as to its quality and value, and delivered the property to the purchaser after the sale, without any objections to the regularity of the sale, he waives such notice.

4. CHATTEL MORTGAGES-- Sale Under Power--Failure to Appraise. Failure of the mortgagee or trustee under a power of sale in a mortgage or deed of trust to have the property appraised before the sale as required by Mansf. Dig. sec. 4760 (Ind. T. Ann St. 1899, sec 3071), renders the sale void.

5. SAME--Waiver of Appraisal. Said provision of the statute requiring appraisal may be waived by the mortgagor in so far as it affects him; and where the mortgagor was present at the sale, and, with knowledge of all the proceedings, participated in the sale by pointing out the property to be sold, showing its qualities and value, and delivered the same after the sale to the purchaser, and stood by and permitted the purchaser to pay the purchase price to the trustee to be applied upon the mortgaged indebtedness, and makes no objections to the sale or the proceeding at the time of the sale, or for a period of nine months thereafter, he will be deemed, in the absence of fraud, to have consented to the sale and waived said appraisement.

Error from District Court, of Wagoner County; John H. King, Judge.

Action by John E. Weer against Thomas C. Harrill, trustee for the Western Investment Company. Judgment for plaintiff, and defendant brings error. Reversed and remanded.

Allen & Pinson, W. T. Hunt, and Hutchings, Murphey & German, for plaintiff in error.--Citing: Jones on Chattel Mortgages, secs. 801, 434, 435, 773, 684, 687, 683, 709, 812; Beebe v. De Baum, 8 Ark. 510; Wells v. Conable, 138 Mass. 513; Herman on Chattel Mortgages, sec. 214; Walker v. Stone, 20 Md. 195; Mapp v. Sharp, 32 Ill. 13; Clark v. Wilson, 56 Miss. 753; Honaker v. Shough, 55 Mo. 472; Dutcher v. Hobdy, 86 Ga. 108; Turner v. Topscott, 30 Ark. 312; Railroad Co. v. Parks, 32 Ark. 134; Hurst v. Sawyer, 2 Okla. 470; Whittenack v. Railroad Co., 57 F. 901; 2 Herman on Estoppel and Res Judicata, sec. 1059; Jowers v. Phelps, 33 Ark. 465; Bramble v. Kingsbury, 39 Ark. 131; Gill v. Hardin, 48 Ark. 409; Danley v. Rector, 10 Ark. 211.

W. A. Brigham and John R. Thomas, for defendant in error.--Citing: Ellenbogen v. Griffey, 55 Ark. 273; Webb v. Hunt, 2 Ind. Ter. 624; Rorer on Judicial Sales, secs. 678-682, 1060; Sherman v. Eakin, 47 Ark. 354; Dean v. Croll (Mich.) 38 Cen. Law Jour. 450; Bigelow on Estoppel, 437; 1 Story, Eq. sec. 391; Hill v. Epley, 31 Pa. St. 334; Zachtman v. Roberts, 100 Mass. 53; Lupton v. Bemer (Md.) 18 Cent. Law Jour. 176.

HAYES, J.

¶1 This action was brought in the United States Court for the Western District of Indian Territory at Wagoner by John E. Weer, now defendant in error, against the Western Investment Company and Samuel Feller, trustee. No valid service upon Samuel Feller was ever obtained, and the cause was as to him dismissed. The action was brought to have declared void and set aside for fraud and other irregularities a certain foreclosure sale under a deed of trust, and to redeem the property sold or recover its value. The case was filed on the equity side of the docket, and was referred to a master in chancery for his report on the facts. The master made his report before the admission of the state. At the time of the admission of the state, the cause was pending upon the exceptions of plaintiff to the master's report. In this condition it was transferred, under the terms and provisions of the enabling act (Act June 16, 1906, c. 3335, 34 Stat. 267), to the district court of Wagoner county for final disposition. The findings of fact of the master were favorable to the defendant, the Western Investment Company, but the court sustained general and special exceptions to the report, set the report aside, and found the issues of law and fact in favor of plaintiff, and rendered judgment accordingly. Subsequent to the rendition of judgment, the Western Investment Company became insolvent and was adjudged a bankrupt, and Thomas C. Harrill, trustee for the estate of said company, was made party defendant for the purpose of prosecuting this appeal. For convenience and brevity, we shall throughout this opinion refer to defendant in error as plaintiff and to the Western Investment Company and the trustee of the estate as defendant. There was a general and special demurrer to plaintiff's petition filed by defendant, which was overruled. A general and special demurrer to defendant's answer was sustained. These two acts of the court constitute the two assignments of error that are relied upon and urged for reversal of the cause. To consider them renders it necessary to state somewhat at length the substance of the pleadings.

¶2 Plaintiff in his petition alleges that on May 31, 1901, he executed and delivered a certain chattel deed of trust to Samuel Feller, trustee, to secure certain of his creditors therein named in the payment of indebtedness due by him to them in the aggregate sum of $ 9,961.51. The property covered and conveyed by the deed of trust consists principally of a stock of merchandise, furniture, and fixtures, books, accounts, notes, choses in action, store building, warehouse, ginhouse, and an agricultural lease, some cattle and farm implements, all of the alleged total value of $ 33,349. He alleges that on the 28th day of December, 1901, the trustee in said deed of trust made a pretended sale of all the property described therein to defendant, the Western Investment Company, for the sum of $ 5,202; that said sale was wrongfully, fraudulently, and unlawfully made, and is void for the reason that no part of the property was appraised before said pretended sale; and that plaintiff was not notified of the time and place of sale at least five days before the sale, as is provided by the terms of the deed of trust. He alleges that the trustee and certain of his creditors who were beneficiaries in the deed of trust represented to and promised him that the property would be sold and bid in by one of said creditors for him, the said creditors reserving the right to put a representative in the business establishment to look after and guard the interest of the purchasing creditors for a term of one year, unless the claim of said named creditors should be paid and satisfied before that time, and that in the meantime plaintiff should have control of and manage the business; that, relying on the honesty and good faith of said creditors, plaintiff did not bid upon the property at the pretended sale; that, by reason of his not having five days' notice of the time and place of sale, he was unable to raise sufficient money with which to pay off and discharge the indebtedness secured by the deed of trust; and that said representations and promises on the part of the trustee and said named creditors were made for the purpose of misleading, deceiving, and defrauding him, and that he was thereby deprived of an opportunity to save his property from the sale, as he could and would have done had five days' notice of the sale as required by the deed of trust been given to him. He alleges that the defendant, the Western Investment Company, consorted, confederated, and conspired with the trustee and said creditors named in the deed of trust to deceive him and defraud him out of his property. He alleges that at the sale of the property said creditors failed to purchase for him, and have since refused to carry out their agreement to turn the property over to him; that the same was sold and purchased by the defendant, the Western Investment Company, for much below the real value of the property. He alleges that, in addition to the purchase money paid for the property by defendant, he (plaintiff) has paid since the sale to the trustee the sum of $ 17,481; that he does not know whether there is a balance due by him on the indebtedness secured by the deed of trust; that he does not know whether the property sold to the defendant has been by it sold or otherwise disposed of but he prays for judgment requiring defendant to surrender all the property purchased by it, and in case it has sold or otherwise disposed of any of said property, or collected any of the notes or accounts purchased, to surrender into custody of the court all moneys or valuable things received by him thereon; and to render a full, true, and complete statement of all the property on hand, and that has been sold or otherwise disposed of so the same cannot be returned, that he...