John W. Hixon, the Johnston Fife Hat Co. v. Hubbell

• Decision Date: 13 February 1896
• Citation: 4 Okla. 224,44 P. 222,1896 OK 13
• Parties: JOHN W. HIXON, THE JOHNSTON FIFE HAT CO., a corporation, THE WILLIAM B. GRIMES DRY GOODS CO., AND LOUIS DESTEIGUER, v. GEO. C. HUBBELL, JOHN S. GILMORE AND EDWARD E. ROOT.
• Court: Oklahoma Supreme Court

1896 OK 13

44 P. 222

4 Okla. 224

JOHN W. HIXON, THE JOHNSTON FIFE HAT CO., a corporation, THE WILLIAM B. GRIMES DRY GOODS CO., AND LOUIS DESTEIGUER, v. GEO. C. HUBBELL, JOHN S. GILMORE AND EDWARD E. ROOT.

Supreme Court of Oklahoma

Decided: February 13, 1896

Error from the District Court of Logan County

STATEMENT OF FACTS.

On December 5, 1890, the defendants in error, as sureties for one Moses Whitbeck, executed a note to a bank at Fredonia, Kansas, for the sum of one thousand dollars, bearing interest at the rate of ten per cent. and payable ninety days after date. When said note matured Whitbeck was engaged in the mercantile business at Guthrie, O. T., and was the owner of a general stock of merchandise, consisting of dry goods, hats, caps, boots, shoes, clothing and notions of the value of from three to seven thousand dollars. The note was not paid at maturity, and on March 3, 1891, at the request of said sureties, Whitbeck executed to them a chattel mortgage upon said stock of goods to secure them against loss on said note. At the time of executing the chattel mortgage Whitbeck was indebted to several mercantile creditors in various sums, and had no other property than the stock of merchandise embraced in the mortgage.

The mortgage contained a stipulation to the effect that if the mortgagees should, at any time, feel themselves insecure, they, or either of them, might take immediate possession of the mortgaged property, and sell the same in the ordinary course of business, or in such manner as said mortgagees might deem proper at public or private sale, and with or without notice, or so much thereof as might prove sufficient to pay the amount due on said note together with expenses incurred in the keeping and sale of said property, the excess, if any, to be paid to the mortgagor.

The mortgage contained this further provision:

"And it is further stipulated by and between said mortgagor and mortgagees, that until said mortgagees shall elect to take possession of said mortgaged property, that the said mortgagor shall have the right to sell said property in the usual course of retail trade, and all proceeds arising from such sales shall be promptly paid over to said mortgagees to be applied on the payment of said described note, and in making such sales, said mortgagor shall be deemed and considered the agent of said mortgagees, and such sales shall be for the use and benefit of said mortgagees until they are fully discharged from liability on said note."

On March 11, 1891, the mortgagees having failed to get the proceeds of sales from Whitbeck, took possession under their mortgage, with the consent of Whitbeck, and began the sale of goods at retail in the regular manner. and continued in such possession until March 16, when the goods were taken on writs of attachment, issued in causes in favor of the plaintiffs in error and against Whitbeck. The goods were sold at sheriff's sale and the proceeds applied pro rata on the judgments of plaintiffs in error against Whitbeck, as provided in the Statutes of 1890, under which the proceedings were had.

The defendants in error, the mortgagees, paid the note of Whitbeck upon which they were sureties, amounting to one thousand two hundred, thirty-nine dollars and forty-five cents. Thereafter they brought this action against the attachment creditors, the sheriff and DeSteiguer, who was surety on the attachment bonds, to recover damages for conversion of the goods described in their mortgage. Issues were formed, and the cause was tried by the court and judgment rendered in favor of the mortgagees for eight hundred, ninety-six dollars and sixty-three cents. From this judgment the plaintiffs in error appeal.

Syllabus

¶0 1.CHATTEL MORTGAGE--Lien. A chattel mortgage in Oklahoma does not entitle the mortgagee to possession until after condition broken, but creates a lien in favor of the mortgagee, while the title remains in the mortgagor.

2.SAME--Possession of Property. On condition broken, the mortgagor may deliver possession to the mortgagee, and pass the title of the mortgaged chattels to him.

3.MORTGAGE--Evidence of Title. Where the mortgaged property is taken from the mortgagee by attaching creditors of the mortgagor, after condition broken and delivery of possession to the mortgagee, and the mortgagee brings suit for conversion, alleging ownership of the goods, the mortgage is one of the evidences of title, and it is not error to permit the same to be introduced in evidence in support of the allegation of ownership.

4.DEFAULT--Delivery of Property. After default in a chattel mortgage, the interest of the mortgagor in the mortgaged property may be divested by actual delivery of possession in satisfaction of the mortgage debt, and without resorting to foreclosure proceedings.

5.MORTGAGE--Containing Power of Sale Not Fraudulent. A mortgage of chattels, which contains a power of sale conditioned that the proceeds of such sales shall be applied to the payment of the mortgage debt, is not per se fraudulent, as to the creditors of the mortgagor. The question of fraud is one of fact to be determined by the court or jury, and if made in good faith, such mortgages are valid and will be enforced.

6.APPELLATE COURTS--Rule. It is the settled policy of the appellate courts not to disturb the finding of the trial court upon disputed questions of fact, unless the finding is not supported by any evidence, or is manifestly against the weight of the evidence.

7.INDIANA CODE--Procedure--Construction. Our Code of Civil Procedure, Statutes 1890, was adopted from Indiana, and prior to its adoption by our legislature, the supreme court of Indiana held, that the provision of such court relating to trial of the rights of property, was only applicable to proceedings before a justice of the peace, and had no application to proceedings in the district court. (Davis v. Warfield, 38 Ind. 461. And we are bound by this construction.

8.MORTGAGED CHATTELS--Subject to Levy, When. Under the Statutes of 1890, § § 4628 and 4744, mortgaged chattels were only subject to levy and sale on attachment proceedings on condition that the purchaser should comply with the conditions of the mortgage and the sale of the goods by the sheriff and delivery of the same without requiring the mortgage debt to be paid, entitled the mortgagee to recover damages for conversion, or to his action on the official bond of the sheriff. (State ex rel. Jessup v. Milligan et al. 106 Ind. 109 followed.)

Wisby & Hornor, for plaintiffs in error.

Chas. Brown, for defendant in error.

BURFORD, J.:

¶1 The petition in this case alleges that the plaintiffs were the owners of the goods in question at the date of the alleged conversion. On the trial, to support this allegation, they introduced in evidence over the objection of the defendants the chattel mortgage executed to them by Whitbeck, and also showed by oral testimony the delivery of possession to the mortgagees by Whitbeck, or his agent, of the entire stock, and that they were in the actual possession of the goods at the time the attachments were levied.

¶2 This, it is contended,...