Helms v. American Sec. Co. of Indiana
| Decision Date | 11 October 1939 |
| Docket Number | 27236. |
| Citation | 22 N.E.2d 822,216 Ind. 1 |
| Parties | HELMS et al. v. AMERICAN SEC. CO. OF INDIANA, Inc. |
| Court | Indiana Supreme Court |
Appeal from Tipton Circuit Court; Frank B. Russell Judge.
William L. Peck, of Anderson, for appellants.
Browne Campbell & Gemmill, of Marion, and Gifford & Appleton, of Tipton, for appellee.
This case calls for a construction of certain provisions of the Chattel Mortgage Act of 1935 ().
The facts out of which the controversy arose are not substantially in dispute. They may be summarized as follows: A. H. Hinton was engaged in the automobile sales business under the trade name of Hinton Motor Sales in the City of Tipton, Ind. In furtherance of his business Hinton maintained a salesroom where motor cars were displayed to attract retail purchasers. Among the cars so exhibited was a certain Chevrolet automobile. The appellant Ruby Helms had negotiations for the purchase of this car and it had been demonstrated for her by one of Hinton's agents. Thereafter Hinton mortgaged this car to the appellee, The American Security Company of Indiana, Inc., for $395. The mortgage was duly recorded on December 22, 1936. On the following day Miss Helms purchased the automobile from Hinton for $550, giving in exchange therefor another car at an agreed price of $160, and executing a note and conditional sales contract for the balance of $390, with interest and finance charges. Hinton immediately sold and assigned the note and conditional sales contract, without recourse, to the appellant Lincoln Loan Company for the principal amount thereof in cash. Neither appellant knew at the time of the existence of the appellee's mortgage.
Appellee's mortgage provided that the mortgagor might retain possession of said automobile but should not use it in any way except to display it in his salesroom. The mortgage also contained the following specific clause:
Upon default of its mortgage the appellee brought an action against the appellants to replevin the automobile. Both appellants filed answers in general denial and, under our practice, this was sufficient to authorize all the defenses upon which they rely. In actions for replevin waiver, estoppel, and fraud may be proved under the general denial, without pleading them specially. Benjamin v. McElwaine-Richards Company et al., 1894, 10 Ind.App. 76, 37 N.E. 362; Jackson v. Morgan, 1906, 167 Ind. 528, 78 N.E. 633; Indiana, etc., Securities Co. v. Whisman, 1926, 85 Ind.App. 109, 138 N.E. 512. The trial resulted in a finding and judgment in favor of the appellee. This appeal is from the denial of appellants' separate motions for a new trial, in each of which it was charged that the decision of the court was not sustained by sufficient evidence and was contrary to law.
To sustain the judgment appellee relies upon the provisions of sections 1, 2, 4, and 6 of the Chattel Mortgage Act of 1935. Without quoting said sections, it is sufficient to observe that they purport to protect a mortgagee of chattels against all subsequent purchasers thereof unless the proceeds of such sales are actually applied upon the mortgage debt or subjected to the lien thereof. If this construction is to prevail, the act of 1935 is a radical departure from the policy of this state as it uniformly existed for nearly a century. Under the decisions of our courts prior to the act of 1935, chattel mortgages on goods or merchandise were held to be invalid against innocent purchasers when the mortgagors were permitted to have possession with the power of sale in the ordinary course of business. The proceeds of such sales were regarded as applied and the debts extinguished, although they were not, in fact, paid over. Indiana, etc., Securities Co. v. Whisman, supra; Vermillion v. First Nat. Bank, 1915, 59 Ind.App. 35, 105 N.E. 530, 108 N.E. 370.
Appellee's contention is clearly set forth in the following quotation from its brief:
'By that act (of 1935), the 'caveat emptor' rule was substituted for the 'innocent purchaser' rule long recognized by the common law and affirmed by our courts. Thenceforth, customers who purchase previously mortgaged personal property which is displayed and offered for sale at retail must buy at their peril, provided the mortgage is executed and recorded as required by said act. The 'caveat emptor' rule now obtains. That rule means 'Let the purchaser beware.'
We can not agree with the appellee with respect to the functions of this court. It would lead to serious and evil consequences if courts should be powerless to say or do anything if the legislative branch of the government should assume to enact unjust and oppressive laws, calculated to prejudice legitimate enterprise and create absurd situations. To meet such situations, if and when they arise, there have been established rules of statutory construction which may be applied to make statutes conform to the accepted principles of order and justice. It has accordingly been held that statutes should be construed in the most beneficial way the language will permit to prevent absurdity, hardship, or injustice and to favor public convenience and oppose all prejudice of public interests. Gaebler v. Town of Rockville, 1933, 96 Ind.App. 715, 185 N.E. 318. All statutes are to be construed as far as possible in favor of equality of rights and against restrictions of human liberty and claims for special privileges. Lee v Burns, 1932, 94 Ind.App. 676, 182 N.E. 277. The common law of the land is based upon human experience in the unceasing effort of an enlightened people to ascertain what is right and just between men. State of Kansas v....
To continue reading
Request your trial