Kothe v. Krag-Reynolds Company

• Decision Date: 25 May 1898
• Docket Number: 2,470
• Citation: 50 N.E. 594,20 Ind.App. 293
• Parties: KOTHE ET AL. v. KRAG-REYNOLDS COMPANY
• Court: Indiana Appellate Court

50 N.E. 594

20 Ind.App. 293

KOTHE ET AL. v. KRAG-REYNOLDS COMPANY

No. 2,470

Court of Appeals of Indiana

May 25, 1898

From the Hancock Circuit Court.

Reversed.

M. W Hopkins, for appellants.

Hord & Perkins, for appellee.

OPINION

WILEY, J.

In this action, as originally commenced, the appellee, Krag-Reynolds Co., was plaintiff, and the appellant, Walter Claytor defendant, and the action was in replevin to recover the possession of certain personal property described in the complaint. A writ of replevin was issued, the necessary bond filed, and the sheriff took possession of the property described in the complaint and writ, and delivered the same to appellee. Whereupon appellants, George Kothe, Charles W. Wells, George Bauer and William Kothe, Jr., who are partners doing business in the firm name of Kothe, Wells & Bauer, filed a petition asking the court to be made parties defendant in said cause, which petition was granted, and they were accordingly made defendants. Thereupon the appellee filed its amended complaint, which is in the usual form of a complaint in replevin, in which it was averred that it was entitled to the immediate possession of all the property therein described, which consisted of a general stock of merchandise, etc. Appellants, Kothe, Wells & Bauer, then filed a cross-complaint, wherein it was charged that they were the owners and entitled to the possession of the property described in appellee's complaint, by virtue of a mortgage duly executed to them by Walter Claytor and his wife. The prayer of their cross-complaint is that they have judgment against the plaintiff for the possession of the goods, and in case the return of the property cannot be had, that they have judgment against the plaintiff for its value, to wit, $ 1,000.00, etc.

As no question is in the record as to the sufficiency of the pleadings, it is only necessary to say that the case was put at issue by a general denial filed to the complaint, and a general denial by appellee to the cross-complaint. Upon the issues thus joined, the cause was submitted to the court for trial, and upon proper request, the court made a special finding of facts and stated its conclusions of law thereon.

So far as the facts are pertinent to the only question in the case for our decision, they are as follows: That the appellee was on the 14th day of September, 1895, prior thereto, and still is a corporation organized under the laws of this State, but without banking powers; that on October 14, 1895, and up to and including October 25, 1895, the firm of Walter Claytor & Co. was doing business selling groceries and other goods at retail, in Hancock county, Indiana; that on October 15, 1895, appellee made a formal demand on Walter Claytor & Co. for the delivery to it, under a chattel mortgage executed by said firm of Walter Claytor & Co., in favor of appellee, of the property described in its complaint; that said Walter Claytor refused to deliver up the possession thereof; that said stock of goods was covered by a certain chattel mortgage which was executed to secure the payment of a note of $ 958.48, given by the firm of Walter Claytor & Co. to appellee, said note being dated September 14, 1895; that when said demand was made, appellee was the owner and holder of said note and mortgage, and that said note was due and unpaid; that in said mortgage it was stipulated that until the maturity of the note the said Walter Claytor & Co. should have the right to the possession of the goods described in said mortgage, but if said note was not paid at maturity, then the appellee should have the right to take and keep possession of such goods, etc., and they should become the absolute property of it. It was further stipulated in said mortgage, that upon failure to pay said note at maturity, appellee should have the right to the immediate and unconditional possession of the goods, and was authorized to sell the same at public sale and apply the proceeds thereof to the payment of said debt; that said mortgage was executed September 14, 1895, and acknowledged the same day by said Walter Claytor for and on behalf of said firm of Walter Claytor & Co., before W. W. Krag, a notary public; that said mortgage was duly recorded in the office of the recorder of Hancock county on September 24, 1895; that said W. W. Krag was at the time of taking such acknowledgement, a notary public in and for Marion county, Indiana, and that at said time there was outstanding one hundred shares of the capital stock of appellee, which was issued to the said W. W. Krag, part of the said shares being issued to him in the name of William Wallace Krag, and that at the time said acknowledgement was taken the said William Wallace Krag or W. W. Krag, being one and the same person, was a stockholder and director and the secretary of appellee company; that on the 2nd day of October, 1895, the appellants, George Kothe, Charles W. Wells and William Kothe, Jr., were the owners and holders of a promissory note for $ 688.39, given by said Walter Claytor & Co., payable one day after the date thereof, and also a certain chattel mortgage executed by said Claytor & Co. on said day to said firm to secure the payment of said note, and that said mortgage covered and embraced the same goods, merchandise, etc., as those described in appellee's complaint; that said mortgage was duly executed and acknowledged and recorded; that no part of the indebtedness of said Walter Claytor & Co. to the appellee, or to said firm, has been paid; that on October 5, 1895, a writ of replevin was duly issued, and on the 6th day of October, 1895, the sheriff seized and took possession of the property described and covered by said mortgage in favor of appellee, said property also being described in the mortgage executed in favor of Kothe, Wells & Bauer, and the appellee having given bond, said property was delivered to it, and that said property was wrongfully detained by said Walter Claytor & Co.; that the said property so taken and delivered to appellee, the appellee advertised for sale according to the terms of said mortgage, and at the time and place mentioned in such notice of sale, it offered said property at public sale, and the appellee, being the highest bidder thereon, bid said property in for $ 675.00, but that the actual value of said property was $ 900.00, and that by the detention of said property the appellee sustained damages of one dollar.

It is further found that said property was not taken for a tax assessment, etc., against the property of the appellee, and that the same was detained in the county of Hancock, State of Indiana, from the appellee. Upon the facts thus found the court stated its conclusions of law as follows: (1) That said mortgage executed by Walter Claytor & Co., in favor of the appellee is a valid mortgage, not only against the appellant Walter Claytor, but also against all persons whomsoever, including the appellants. (2) That at the time this action was commenced appellee was, and ever has been, and now is, entitled to the possession of the property described in the complaint. (3) That as against the appellee, the appellants Kothe, Wells and Bauer, acquired no right to the possession of the goods, etc., taken possession of by the sheriff under the writ of replevin. (4) That the lien of the defendants Kothe, Wells and Bauer, under their said mortgage, was subordinate to the lien of the appellee under its mortgage. (5) That the appellee is entitled to judgment in its favor for the possession of the said property seized under said writ and one dollar damages.

The appellants, Kothe, Wells and Bauer, excepted to each conclusion of law, and have assigned error as follows: "That the court erred in the conclusions of law and each of them stated upon the special finding of facts." The appellant Claytor has not assigned error, and is not making any contest in this appeal.

It appears from the special finding that when appellee's mortgage was executed, and the acknowledgment thereof taken by W. W. Krag, appellee was a corporation; that said Krag was a stockholder therein, and secretary thereof, and it is upon these facts that the appellants, Kothe, Wells and Bauer, base and rest their only contention. It is very earnestly insisted that because W. W. Krag was a stockholder and the secretary of appellee corporation, he was inhibited from acting as notary public in taking the acknowledgment of the mortgage, under which appellee claims, that such acknowledgment was a nullity and did not entitle the mortgage to record. As to the appointment and general powers and authority of notaries public, we need not advert, further than to say that in this State they are regulated by statute.

In 1852 the legislature passed an act entitled, "An act providing for the appointment of notaries public and defining their powers and duties." Section 7 of that act was as follows: "No person holding a lucrative office, or being an officer of any bank, corporation, or association possessed of any banking powers, shall be a notary public; and his acceptance of any such office shall vacate his appointment as notary."

In 1891 the above section was amended, and as amended is as follows "No person, being an officer in any corporation or association, or in any bank possessed of any banking powers, shall act as a notary public in the business of such bank, corporation or association. No person holding any lucrative office shall be a notary public, and his acceptance of any such office shall vacate his appointment as notary." Acts 1891, p. 335. See section 8041, Burns' R. S. 1894 (5966, Horner's R. S. 1897). In the enactment of this statute, the legislature evidently intended to remedy an existing, or provide against a possible evil. ...