Harris v. Moreland Motor Truck Co.

• Citation: 279 F. 543
• Decision Date: 27 March 1922
• Docket Number: 3759.
• Parties: HARRIS v. MORELAND MOTOR TRUCK CO. et al.
• Court: U.S. Court of Appeals — Ninth Circuit

279 F. 543

HARRIS v. MORELAND MOTOR TRUCK CO. et al.

No. 3759.

United States Court of Appeals, Ninth Circuit.

March 27, 1922

Rehearing Denied May 8, 1922.

Action by the trustee of the Davis Transit Company, a bankrupt corporation, formerly in the automobile stage business against the Moreland Motor Truck Company, a corporation, and individual defendants, to recover $51,000. Verdict and judgment for the defendants below. It is charged that the Moreland Company, under a pretended contract with individuals, fraudulently took possession of all the property and franchise of the bankrupt company and converted the same to its own use, except a number of vehicles which it destroyed or sold, that the Davis Company had a number of motor vehicles under contracts of conditional sale, that the company owned shops and furniture and nine busses and a good will, including franchise and permit, and that it conducted a profitable business. Defendants denied all allegations of conversion and pleaded that the Davis Company made certain contracts with the Moreland Company for the purchase from the Moreland Company of certain automobiles and trucks, payments to be made as shown in the contracts, the title to remain in the Moreland Company until full purchase price was paid; that as additional security for six trucks sold the Davis Company made a chattel mortgage upon certain automobile busses to the Moreland Company; that after default in payments the Moreland Company notified the Davis Company that it would exercise its right under the contracts and retake possession of the trucks described therein; that in October, 1918, after such notification and after default the Davis Company authorized the defendant Scales to take possession of all the property known as the Davis Transit Company and to assume control and management thereof; that Scales did assume charge of the business of the Davis Company in accordance with the authorization and conducted it until in January, 1919, when on account of the heavy expense of operating the business was unable to meet expenses; that the automobiles were rapidly depreciating in value; that the Davis Company was unable to live up to the contract; that in December, 1918, with its consent possession of the trucks was taken by the Moreland Company; that in January, 1919 inventory was made and furnished the Davis Company; that the Moreland Company obtained permission from the state authorities to operate an automobile line between San Jose and Palo Alto, Cal; and that the Davis Company never transferred any office furniture.

Mervyn R. Dowd and John E. Bennett, both of San Francisco, Cal., for plaintiff in error.

Bert Schlesinger, of San Francisco, Cal., and Foley & King, of San Jose, Cal. (S. C. Wright, of San Francisco, Cal., of counsel), for defendants in error.

Before GILBERT, ROSS, and HUNT, Circuit Judges.

HUNT Circuit Judge (after stating the facts as above).

Plaintiff in error contends that the verdict was against the law, in that the jury did not apply the instructions to the evidence; the point urged being that no recaption of the trucks was had by the Moreland Company, but that it proceeded in another way to collect, by taking charge of the business, under a promise to conduct it and collect the amount owing to it from the proceeds, and then to turn back the business to the Davis Company. Although all the evidence is not included in the bill of exceptions, we gather these facts from the record:

The conditional sales contracts made between December, 1917, and October, 1918, contained a clause giving to the Moreland Company the right to retake the trucks agreed to be sold into its own possession, and that upon failure on the part of the Davis Company to pay any installment, or upon any default all moneys theretofore paid on the purchase price should be forfeited, and all...