Harris v. Seaboard Air Line Ry. Co.
| Decision Date | 18 November 1925 |
| Docket Number | 252. |
| Citation | 130 S.E. 319 |
| Parties | 190 N.C. 480, 49 A.L.R. 1452 v. SEABOARD AIR LINE RY. CO. HARRIS |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Wake County; Daniels, Judge.
Action by J. E. Harris against the Seaboard Air Line Railway Company. From a judgment for plaintiff on an agreed statement of facts, defendant appeals. Reversed.
Registration of conditional sale contract affects rights only of purchasers for value from mortgagor.
Murray Allen, of Raleigh, for appellant.
Winston Winston & Brassfield, of Raleigh, for appellee.
Judgment herein was rendered upon statement of facts agreed as follows:
"That some time prior to September 18, 1919, the plaintiff sold to W. M. Richards one five-passenger Ford automobile under a title-retaining contract recorded in the office of the register of deeds of Granville county, on October 20, 1919 in Book No. 137, at page 448, and in the office of the register of deeds of Wake county, on February 21, 1920, in book No. 360, at page 32, a copy of said contract being attached hereto and made a part of this case agreed, and the amount due plaintiff on said title-retaining contract was $300, with interest from September 18, 1919.
The said Ford automobile was delivered to W. M. Richards at the time said contract was made, and he continued in possession thereof until about October 23, 1921. That on or about October 23, 1921, the said automobile was being driven by W. M. Richards, and was negligently injured and damaged by one of the defendant's trains at a railroad crossing between Neuse and Wake Forest, N.C. That on the 4th day of November, 1921, the defendant paid W. M. Richards the sum of $250 for the damage to the said automobile, and W. M. Richards executed to defendant a release, a copy of which is hereto attached and made a part of this case agreed.
Upon the foregoing facts agreed, the plaintiff contends that he is entitled to recover the sum of $250, with interest thereon from November 4, 1921. The defendant contends that plaintiff is not entitled to recover any sum whatsoever."
The note and contract executed by W. M. Richards to plaintiff, trading under the name and style of Creedmoor Auto Company, dated September 18, 1919, at Creedmoor, N. C., is in words and figures as follows:
"$400.00. On the 15th day of November, 1919, I promise to pay to Creedmore Auto Company, or order, the sum of four hundred dollars, with interest thereon from maturity, at the rate of six per cent. per annum. Payments of $25.00 to be made monthly until paid in full.
This note is given for part of the purchase price of an automobile manufactured by Ford Motor Co., being No. _____, with motor No. 625330, this day purchased by W. M. Richards of said Creedmoor Auto Company, and the title to said automobile is hereby retained by said Creedmoor Auto Company, until this note and interest is paid in full.
And upon default in the payment of this note when due the said Creedmoor Auto Company is hereby authorized to take possession of the said automobile, and sell the same, by public auction, for cash, first giving twenty days' notice of the time and place of such sale, the proceeds of such sale to be applied to the payment of this note, the interest thereon, and the cost of the sale, and the surplus, if any, to be paid to W. M. Richards.
Witness my hand and seal this 18th day of September, 1919.
[Signed] W. M. Richards. [ Seal.]"
The release executed by W. M. Richards to the defendant is as follows:
"For and in consideration of the sum of two hundred and fifty dollars, to me paid, the receipt of which is hereby acknowledged, and for no other consideration whatsoever, I, W. M. Richards, do hereby release and forever discharge the Seaboard Air Line Railway Company, and any and all railroads, owned, leased, operated, or controlled by it, and its successors, from all claims and causes of action for or by reason of all injuries of whatsoever nature, including especially to damage and destruction to Ford (five passenger) auto, property of W. M. Richards, also any and all personal injuries and claims received by me on or about the 23d day of October, 1921, at or near Smith Crossing, National Highway, between Neuse and Wake Forest, N. C., Wake Co., N. C.
In witness whereof I have hereunto set my hand and seal this 4th day of November, 1921.
[Signed] W. M. Richards. [ Seal.]"
Defendant excepted to the judgment herein, and assigns same as error. It does not deny liability for damages, resulting from injuries to said automobile, caused by its negligence. It is conceded that the amount of such damages is $250. In defense of the action brought by plaintiff mortgagee to recover such sum, defendant pleads payment of said sum to W. M. Richards, mortgagor, in possession of the automobile, with the consent of plaintiff, at time same was injured. Defendant relies upon the settlement with and release by W. M. Richards as a bar to plaintiff's right to recover.
The question therefore presented by this appeal is whether a settlement made in full for all damages to a chattel by the tort-feasor with the mortgagor in possession, using the chattel with the consent of the mortgagee, is a bar to the action to recover such damages by the mortgagee, whose mortgage is duly recorded at the time the chattel was injured. This question has not been heretofore presented to this court.
The relationship between plaintiff and W. M. Richards, with respect to said automobile, by virtue of the contract which provides that the title to the automobile sold by plaintiff to W. M. Richards is retained by plaintiff until the note given in part payment of the purchase price has been paid in full, is that of mortgagee and mortgagor. The title-retaining contract is to all intents and purposes a chattel mortgage. Sloan Bros. v. Sawyer-Felder Co., 175 N.C. 657, 96 S.E. 39; Piano Co. v. Kennedy, 152 N.C. 196, 67 S.E. 488; Hamilton v. Highlands, 144 N.C. 282, 56 S.E. 929, 12 Ann. Cas. 876; Puffer v. Lucas, 112 N.C. 379, 17 S.E. 174, 19 L. R. A. 682.
The legal title to the automobile remained in plaintiff, as mortgagee, from the date of the contract to the date of its injury by defendant. This title drew to it the right of possession, certainly after default in the payment of the note, when plaintiff was expressly authorized by the contract to take possession of the automobile and sell the same. It has been held by this court that a mortgagee, both before and after default in the payment of the note or indebtedness secured thereby, has the right of possession of the mortgaged property, where there is no express provision or necessary implication to the contrary. By express provision of the contract, the right to possession was in plaintiff at time of injury. Johnson v. Yates, 183 N.C. 24, 110 S.E. 603; Hamilton v. Highlands, 144 N.C. 280, 56 S.E. 929, 12 Ann. Cas. 876; Satterthwaite v. Ellis, 129 N.C. 67, 39 S.E. 726; Moore v. Hurtt, 124 N.C. 28, 32 S.E. 317; Hinson v. Smith, 118 N.C. 503, 24 S.E. 541.
Plaintiff, the owner of the legal title, and by reason thereof entitled to possession of said automobile, permitted same to be and remain in the possession of W. M. Richards, his mortgagor. W. M. Richards, with the consent of plaintiff, was driving the automobile at the time it was injured by the negligence of defendant. His possession was therefore rightful and lawful. The rights and liabilities of said mortgagor, in possession of the mortgaged property, after default in the payment of the note, with the permission and by the consent of the mortgagee, are those of a bailee. Chicago, R.I. & P. Ry. Co. v. Earl, 121 Ark. 514, 181 S.W. 925, Ann. Cas. 1917D, 552; 5 R. C. L. p. 464, note 20.
It has been held by this court, in an opinion written by Justice Brown, in Railroad v. Baird, 164 N.C. 253, 80 S.E 406, that, where a third party has deprived a bailee of the possession of the property bailed, or has injured it by his negligence, the bailee may recover the whole value of the...
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