Keane v. Kibble

• Decision Date: 21 December 1915
• Citation: 28 Idaho 274,154 P. 972
• Parties: J. J. KEANE, Respondent, v. M. C. KIBBLE and W. C. KIBBLE, Appellants
• Court: Idaho Supreme Court

154 P. 972

28 Idaho 274

J. J. KEANE, Respondent, v. M. C. KIBBLE and W. C. KIBBLE, Appellants

Supreme Court of Idaho

December 21, 1915

TRANSFER OF PERSONAL PROPERTY-CONDITIONAL SALE NOTE OR CHATTEL MORTGAGE-RECEIVERS-WHEN APPOINTED-PRACTICE.

1. Under sec. 3392, Rev. Codes, the fact that a transfer was made subject to a defeasance on a condition may, for the purpose of showing such transfer to be a mortgage, be proved (except as against a subsequent purchaser or encumbrancer for value and without notice), though the fact does not appear by the terms of the instrument.

[As to what constitutes a conditional sale, see note in 46 Am.St 295.]

2. The right to have a receiver appointed in Idaho is statutory, and is available in an action by a mortgagee for the foreclosure of his mortgage and the sale of the mortgaged property, where it appears that the property is in danger of being lost removed or materially injured, or that the condition of the mortgage has not been performed, and that the property is probably insufficient to discharge the mortgage debt.

3. Whether the instrument sued upon in this case is a conditional sale note or a chattel mortgage, and whether or not respondent has mistaken his remedy, are questions which are dependent upon the agreement of the parties at the time the transaction was entered into, and must be decided from all the facts and circumstances which will tend to show the intent of the parties.

4. This court, on appeal from an order appointing a receiver and from an order denying a motion to set aside the appointment, can only inquire into the merits of the action so far as the facts may bear upon the propriety of making such orders.

[As to grounds on which a receiver may be appointed, see note in 72 Am.St. 29]

APPEAL from the District Court of the Third Judicial District for Ada County. Hon. Carl A. Davis, Judge.

Action to have written instrument, in form a conditional sale note decreed to be a chattel mortgage and foreclosed. Appeal from an order appointing a receiver and from an order denying the motion to set aside the appointment. Affirmed.

Action affirmed. Costs awarded to respondent.

C. H Lingenfelter, for Appellants.

There can be no mortgage without a conveyance from a debtor to a creditor. (Jones on Chattel Mortgages, sec. 26a, p. 36.)

The interest contemplated within the provisions of subd. 1, sec. 4329, Rev. Codes, as amended, must of necessity be an interest cognizable in equity. (San Jose Safe Deposit Bank of Savings v. Bank of Madera, 121 Cal. 539, 54 P. 83, 85, 270.)

In such a case involving merely legal as distinguished from equitable rights, the law does not authorize the appointment of a receiver. (Bateman v. Superior Court, 54 Cal. 285; Scott v. Sierra Lumber Co., 67 Cal. 71, 76, 7 P. 131.)

Hawley & Hawley, for Respondent.

The Idaho statute setting forth the formalities required in the execution of a chattel mortgage was involved in a Utah case, and it was there held that as between the mortgagor and mortgagee, a mortgage was valid, even though not possessing the statutory formalities. (Deseret Nat. Bank v. Kidman, 125 Utah 379, 95 Am. St. 856, 71 P. 873; People v. Burns, 161 Mich. 169, 137 Am. St. 466, and note, 125 N.W. 740; 5 Ruling Case Law, 391.)

To create a chattel mortgage as between the parties there need be no writing. (Mower v. McCarthy, 79 Vt. 142, 118 Am. St. 942, 64 A. 578, 7 L. R. A., N. S., 418.)

This court has often held that in the interpretation of a contract, it will attempt to put itself in the position of the parties and allow the introduction of oral evidence for this purpose, and also to explain ambiguities, as it is anxious that if possible some construction and effect be given to the actions and agreements of men, no matter how informal or illy expressed. (Burke Land etc. Co. v. Wells Fargo Co., 7 Idaho 42, 60 P. 87; Schurger v. Moorman, 20 Idaho 97, Ann. Cas. 1912D, 1114, 117 P. 122, 36 L. R. A., N. S., 313; Twin Falls etc. Fruit Co. v. Salsbury, 20 Idaho 110, 117 P. 118.)

This principle of interpretation has been used in determining whether an instrument was a mortgage or a conditional sale. (Studebaker Bros. Co. v. Mau, 13 Wyo. 358, 110 Am. St. 1001, 80 P. 151.)

"Where a party has property in his possession and under his control which he allows to depreciate in value, or wrongfully disposes of, in which another party has an interest, it is proper for the court to appoint a receiver." (Jones v. Quayle, 3 Idaho 640, 32 P. 1134; Loaiza v. Superior Court, 85 Cal. 11, 20 Am. St. 197, 24 P. 707, 9 L. R. A. 376; Cotton v. Rand (Tex. Civ), 92 S.W. 266; 34 Cyc. 68.)

MORGAN, J., SULLIVAN, C. J. Sullivan, C. J., Morgan, J., concurring. BUDGE, J., Dissenting.

OPINION

MORGAN, J.

On February 13, 1913, the appellants above named made, executed and delivered to respondent their promissory note in words and figures as follows:

"Boise, Idaho, February 13, 1913.

"On or before two (2) years from date thereof, for value received, I, we or either of us promise to pay to the order of J. J. Keane, Three Thousand One Hundred ($ 3,100) Dollars, in lawful money of the United States of America, with interest thereon in like lawful money from date until paid at the rate of ten (10) per cent per annum, interest to be paid monthly, and if not so paid the whole sum of both principal and interest to become immediately due and collectible. And in case suit or action is instituted to collect this note or any portion thereof, we promise to pay, besides the costs and disbursements allowed by law such additional sum as the court may adjudge reasonable as attorneys fees in such suit or action.

"It is understood and agreed that the consideration for this note is the purchase price of a National Automobile; and the principal of this note shall be paid at the rate of not less than One Hundred ($ 100) Dollars on or before the first day of each and every month, together with the proportionate amount of interest due thereon that the partial payment bears to the amount due, until the whole principal and interest is paid.

"And it is further understood and agreed that the ownership and title to said National Automobile shall not pass from J. J. Keane until the full sum of the principal and interest is paid.

"M. C. KIBBLE,

"W. C. KIBBLE."

On September 25, 1915, respondent filed his complaint in the district court against appellants wherein he alleged, among other things, the making and delivery, for a valuable consideration, of the note above set out; that respondent is the owner and holder thereof and that there is due, owing and unpaid thereon the sum of $ 2,296.70. It is further alleged in the complaint that at the time of the execution of said note, and as a part of the same transaction, the appellants and respondent agreed that the respondent should have title to the automobile as security for the payment of the note. It further appears from the complaint that appellant, M. C. Kibble, has the automobile in his possession and is using it as a carrier of passengers, and that the use to which it is being put is causing it to depreciate rapidly; that it is in great danger of being lost, removed and materially injured by said usage and that its value, which is alleged to be $ 750, is not sufficient to discharge the debt for which it was mortgaged as security.

Respondent prays for a judgment against appellants for the amount of the principal and interest due and attorney's fees; that the note be decreed to be a mortgage upon the automobile; that the court appoint a receiver to take and keep possession of the automobile during the pendency of the action and until the sale thereof; that the mortgage be foreclosed and that the automobile be sold and the proceeds be applied as is usual in the foreclosure of chattel mortgages.

On the day the complaint was filed respondent made written application to the district judge for the appointment of a receiver which was granted. Thereafter and on October 1, 1915, appellants filed a motion and gave notice of motion to set aside the order appointing the receiver which motion was, on October 16, 1915, denied.

From the order appointing the receiver and from the order denying the motion to set aside the appointment, this appeal has been taken.

Appellants contend that the complaint fails to disclose a cause of action entitling respondent to equitable relief and insist that, having failed to plead a mortgage, respondent has not invoked either the exclusive or the concurrent jurisdiction of a court of equity, and that the district judge was, therefore, without jurisdiction to appoint the receiver. In other words, that the instrument sued upon shows upon its face that it is a conditional sale note, and that title to the automobile never passed from respondent and that the transaction cannot be construed to have created the relation of mortgagors and mortgagee between the parties.

Appellants urge that the instrument sued upon is neither ambiguous nor uncertain in its terms, and that it must be inferred from the second and third paragraphs thereof that respondent conditionally sold the automobile to appellants, but retained the title to it until the full amount of the purchase price is paid; that since appellants do not and never have owned the property, they could not mortgage it. Respondent contends that the instrument discloses no such state of affairs; that it is ambiguous and uncertain; that while it does recite that the indebtedness mentioned is the purchase price of the automobile, it does not state from whom it was purchased whether from respondent or from a third party, and that the money mentioned in the note may have been, so far as is therein disclosed, loaned by respondent to appellants with...