Johnson v. National Sugar Mfg. Co.

Decision Date30 March 1931
Docket Number12290.
Citation297 P. 995,88 Colo. 404
CourtColorado Supreme Court

Error to District Court, Crowley County; James A. Park, Judge.

Action by E. P. Johnson against the National Sugar Manufacturing Company and others. Judgment for defendants, and plaintiff brings error.

Affirmed in part, and reversed in part, and cause remanded, with directions.

I. H. Stanley, of Ordway, for plaintiff in error.

Harry E. Mast, of Ordway, for defendants in error.

J. E Robinson, of Denver, amicus curiae.


E. P Johnson, plaintiff in error, hereinafter referred to as plaintiff, brought an action to recover judgment in the sum of $766,69 and interest, from the National Sugar Manufacturing Company, a corporation, one of the defendants in error, hereinafter referred to as defendant. Upon motion of defendant, on November 5, 1925, H. E Brayton, as trustee of the estate of J. F. Rife, a bankrupt, was made a party defendant, and thereafter the cause came at issue. Trial was had to the court on June 27, 1927; the matter was taken under advisement until October 22, 1928, when judgment for costs was rendered in favor of defendants. The plaintiff prosecutes this writ to review the judgment.

The case was tried upon a stipulation of facts which, so far as material here, disclosed the following: J. F. Rife, as mortgagor, on June 13, 1924, executed and delivered to defendant his chattel mortgage upon a certain sugar beet crop, then maturing, to secure the payment of his promissory note in the sum of $235.33, payable to the order of defendant; on August 1, 1924, Rife, as mortgagor, executed and delivered to plaintiff his chattel mortgage, expressly subject to defendant's chattel mortgage, upon the same sugar beet crop, and other property, to secure the payment of his promissory note due November 1, 1924, in the sum of $734.09, payable to the order of plaintiff. Prior to November 14, 1924, the date upon which the sugar beet crop was delivered to defendant, in an action against the mortgagor, defendant was garnisheed, and on December 2, 1924, answered, as garnishee, that it held the proceeds of the sugar beet crop, subject to plaintiff's chattel mortgage; on November 25, 1924, plaintiff, having learned of the garnishment proceedings, wrote defendant demanding the payment to him of the amount of his note secured by the chattel mortgage. December 4, 1924, Rife, mortgagor, filed his voluntary petition in bankruptcy, and on December 6, 1924, was regularly adjudged a bankrupt; on January 2, 1925, codefendant Brayton was appointed and qualified as trustee in bankruptcy, and on January 10, 1925, an ex parte order was entered by the referee in bankruptcy requiring defendant to forthwith pay to the trustee all moneys in its hands belonging to the bankrupt, which order was complied with by defendant, and, in this order, the referee enjoined all further proceedings in the action in which the mortgagor and bankrupt were defendants, and the defendant herein was the garnishee. No extension of plaintiff's chattel mortgage was filed or recorded. On January 23, 1925, plaintiff presented his note and chattel mortgage to the referee in bankruptcy, requesting that the same be allowed as a secured claim, but, because the parties asked, and were allowed time within which to submit briefs, the matter was not sumitted to the referee for final determination, and on June 19th, after submission of all briefs, upon request of plaintiff, the referee entered an order permitting plaintiff to withdraw his claim, upon payment of all costs in connection therewith, which costs were paid and the claim withdrawn. Plaintiff was aware that defendant kept itself advised of all chattel mortgages on sugar beet crops, and, when mortgaged, sugar beets were purchased by it, the check for the proceeds thereof was made payable to the order of the grower and mortgagee. Plaintiff neither expressly consented to the sale of the sugar beets to defendant, nor did he expressly object thereto.

The complaint alleges the note and the chattel mortgage given by Rife to plaintiff; that the proceeds of the sugar beet crop purchased by defendant were sufficient in amount to fully pay and discharge the indebtedness of Rife to defendant, with a sufficient surplus to pay plaintiff's note, and discharge the lien of his chattel mortgage; demand for this amount, and refusal, and prays judgment. The answer of trustee, considered in the light of the stipulated facts, is an admission of the allegations of the complaint, and for a separate defense it pleads the proceedings in the bankruptcy court as res judicata; a second separate defense alleges that plaintiff had no lien or claim on the property described in the chattel mortgage, after December 1, 1924, because no extension thereof was filed or recorded within the statutory period, and possession within such time was not taken by mortgagee, plaintiff herein; a third separate defense alleges that the proceeds of the sugar beet crop are lawfully in the custody of the bankruptcy court, and the trial court is without jurisdiction. Defendant alleges that it has complied with all orders of the bankruptcy court, with reference to the disposition of funds in its possession as proceeds of the mortgaged beet crop; that the issues and questions herein involved, were in fact, or could have been, litigated in other actions, and therefore the trial court was without jurisdiction to hear and determine this matter.

The plaintiff, on November 25, 1924, demanded from defendant sufficient of the surplus remaining in its hands, after the payment of its senior mortgage, with which to discharge the junior or plaintiff's mortgage, and this demand was refused. It therefore becomes necessary for us to determine the relative rights and duties of the parties, as of this date.

'It is a well-settled rule that a junior mortgagee of the property is entitled to any part of the proceeds remaining after satisfying prior encumbrances.' 11 C.J. 714. See, also, White v. Quinlan, 30 Mo.App. 54, 65; Vale v. Stubblefield, 39 Okl. 462, 135 P. 933; Northern Brewery Co. v. Hotel, 78 Or. 453, 153 P. 37, Ann.Cas. 1917C, 621; Smith v. Donahoe, 13 S.D. 334, 83 N.W. 264; Money v. Somers Bank, 202 Iowa 106, 209 N.W. 275; Russell v. Lau, 30 Neb. 805, 47 N.W. 193; Clendening v. Hawk, 8 N.D. 419, 79 N.W. 878; Central Corp. v. Norton Co., 23 Ariz. 517, 205 P. 810.

The complaint is one in assumpsit for money had and received, and defendant is in error in assuming that the action is one in conversion.

In Zang Brewing Co. v. Bernheim, 7 Colo.App. 528, 529, 44 P. 380, 381, it is said: 'The case must be treated as, in effect, a suit * * * to compel them to pay over money had and received to the plaintiffs' use. Such actions can always be maintained wherever one has received money which, in equity and good conscience, he ought to pay over. It is wholly unnecessary to the maintenance of this action that there should be any privity between the parties, or any promise to pay, other than the implied promise which results when one man has another's money, which he is bound to pay over.' See also: Mumford v. Wright, 12 Colo.App. 214, 219, 55 P. 744; Spencer v. Brundage, 69 Colo. 520, 523, 194 P. 1104.

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7 cases
  • In re Porter McLeod, Inc., Civ. A 97-B-1133
    • United States
    • U.S. District Court — District of Colorado
    • 17 Marzo 1999
    ...78, 80 (Bankr.N.D.Ill. 1996) ("Section 544(b) was clearly designated as the Trustee's tool of choice."); Johnson v. National Sugar Mfg. Co., 88 Colo. 404, 411, 297 P. 995, 998 (1931); J.H. Hincke Printing Co. v. Bailey, 83 Colo. 242, 248, 263 P. 719, 721 (1928). Consequently, the trustee in......
  • Jenkins v. Metropolitan Life Ins. Co.
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    • 21 Diciembre 1944
    ... ... to District Court, City and County of Denver; Samuel W ... Johnson, Judge ... Action ... by Mattie Jenkins against Metropolitan ... LeClair Mines Co., 88 Colo. 381, 296 P. 543; ... Johnson v. National Sugar Mfg. Co., 88 Colo. 404, ... 297 P. 995; Foss v. First National ... ...
  • Aaberg v. H. A. Harman Co.
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    • Colorado Supreme Court
    • 12 Diciembre 1960
    ...if he refuses to pay, an action in assumpsit for money had and received will lie. Springhetti v. Hahnewald, supra; Johnson v. National Sugar Mfg. Co., 88 Colo. 404, 297 P. 995; Spencer v. Brundage, 69 Colo. 520, 194 P. 1104; Ph. Zang Brewing Co. v. Bernheim, 7 Colo.App. 528, 44 P. 380, 2 R.......
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    • Colorado Supreme Court
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    ... ... [58 P.2d 1225] ... lie. Springhetti v. Hahnewald, supra; Johnson v. National ... Sugar Mfg. Co., 88 Colo. 404, 297 P. 995; Spencer v ... ...
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