Kroeger v. Ogsden, 41546

• Decision Date: 20 June 1967
• Docket Number: No. 41546,41546
• Citation: 429 P.2d 781
• Parties: Karl KROEGER and H. A. Kroeger, Co-Partners, d/b/a Karl Kroeger Finance Company, Plaintiffs in Error, v. Chuck OGSDEN, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 781

429 P.2d 781

1967 OK 142

Karl KROEGER and H. A. Kroeger, Co-Partners, d/b/a Karl

Kroeger Finance Company, Plaintiffs in Error, v. Chuck OGSDEN, Defendant in Error.

No. 41546.

Supreme Court of Oklahoma.

June 20, 1967.

Syllabus by the Court

Where a chattel mortgage provides that, in the event of default in payment of the mortgage indebtedness, the mortgagee may exercise the option, without notice, of entering upon the premises where the mortgaged chattel may be, and removing same, said mortgagee, or his bona fide assignee, may, in order to repossess the chattel and foreclose the mortgage, go upon the premises of one who has purchased the chattel with constructive notice of said mortgage, in said owner's absence and without his consent, and not be guilty of trespass; and, where such assignee, and/or its agents in such endeavor, making no overt effort to conceal their presence or mission there, or to deceive said owner, take possession of the chattel in an orderly manner, without damaging it, and, under circumstances in which no breach of peace was likely to, nor did, result, they are not guilty of conversion.

Appeal from the District Court of Oklahoma County; A. P. VanMeter, Judge.

Action by the owner of an airplane, as plaintiff, to replevin it and recover damages for its alleged conversion, against the assignee of a chattel mortgage on it and its co-partners, as defendants. After judgment for plaintiff, and the overruling of defendants' motion for a new trial, the latter appeal. Reversed and remanded with directions.

Tom J. Lee, Oklahoma City, for plaintiffs in error.

Delmer L. Stagner, Oklahoma City, for defendant in error.

BLACKBIRD, Justice.

This appeal involves an action brought by defendant in error, hereinafter referred to as 'plaintiff', for replevin and for damages, and other relief, against plaintiffs in error, hereinafter referred to as 'defendants', on account of the latter's alleged conversion of plaintiff's Beechcraft Bonanza Airplane, in purporting to repossess it from him.

In return for some cash and a Cessna Airplane, plaintiff, a famrer and rancher in the Boise City area of Western Oklahoma, acquired the Bonanza in September, 1962 from a Midwest City man, John Harold Wood, who had mortgaged it as security for a promissory note he executed and delivered to one Leo Overture, in July, 1961, for $6,024.00. The defendant, Karl Kroeger Finance Company, acquired the note and mortgage by assignment from Overture. Plaintiff did not have actual notice of said defendants' note and mortgage until Overture defaulted in his payments thereon, and he had received a letter dated March 27, 1963, written for the Finance Company by the defendant Karl Kroeger, stating, among other things, in substance, that when Wood had been contacted the day before, in an effort to make collection, he had 'intimated that he had either traded the airplane to you or is negotiating a deal.' The letter informed plaintiff that the balance due on Wood's note was $4300.00, including interest on delinquent installments; and further stated: 'If you have purchased the airplane please advise me and make some arrangements to retire the balance under Wood's note. I(t) could be entirely possible that we would be agreeable to financing a portion of this balance for you should it become necessary in the consideration of your transaction. * * *.'

Thereafter, nothing further having been paid on the above balance, one L. J. Canavan, as agent for defendants, learned by telephoning plaintiff at Boise City that the Bonanza was in a hangar at the Boise City Municipal Airport. Thereafter, the defendant Finance Company's manager, a Mr. Myrick, flew Mr. Canavan and an unnamed individual who was a pilot, to Boise City. There they took possession of the Bonanza and the pilot flew it back to Oklahoma City, where it was sold at a chattel mortgage foreclosure sale on August 10, 1964, to the defendant Karl Kroeger Finance Company for $2600.00, by application and credit on the mortgage indebtedness.

When plaintiff filed his petition in the present action, during August, 1964, he alleged, among other things, in substance, that the Bonanza's motor was started at Boise City airport by wiring around its ignition switch and that the plane's taking and removal from the hangar was without his knowledge or consent, was unlawful, and amounted to a theft of his property. He further alleged that the plane was reasonably worth $7500.00, and prayed for a judgment in that amount, together with his costs and attorneys fees.

In their answer, defendants denied that they had taken possession of the airplane without plaintiff's knowledge, and alleged, among other things, that 'on the contrary' they 'advised him that they were going to take possession of the plane and requested that he be present if he so desired, at the time of the taking, and * * * plaintiff interposed no objection to the re-possession of the plane by the defendants under their mortgage, * * *'.

At the trial, Mr. Canavan, testifying for defendants, stated that, in a long distance call he placed to plaintiff at Boise City, he told him that the Finance Company wanted the plane located and repossessed, and asked plaintiff if he had any objection to his bringing a pilot there and flying the plane to Oklahoma City; that plaintiff told him he did not; and that he (the witness) made an 'arrangement' with plaintiff to meet him 'at the airport where the plane was.' Canavan further testified that, in one of the long distance telephone conversations he had with plaintiff during the following 'week or so', plaintiff asked him to locate the Cessna he had traded in on the Bonanza. This witness further testified that he located the Cessna, made pictures of it, and sent copies of them to plaintiff. Canavan further testified that thereafter, when he and his Oklahoma City companions flew to Boise City and arrived at said City's airport, taking with them a copy of the chattel mortgage on the Bonanza, plaintiff was not there, and they contacted the Sheriff's office. Canavan further testified that he informed one of the Sheriff's deputies of the nature of their mission, showed him the mortgage copy and inquired as to how he might 'get a hold of' plaintiff, and the deputy answered: '* * * well, he lives here, farms around here and I don't (know) just how to get a hold of him.' Canavan further testified that, at the Boise City airport, he and his Oklahoma City companions found the Bonanza in an open hanger, and identified it by the serial number on the mortgage copy, as the one they were looking for. He further testified that 'the plane had the key * * * ('that they turn the ignition on with') * * * sticking in the switch'; that the pilot they brought with them for that purpose, then flew the Bonanza to Oklahoma City, and he (Canavan) flew back to said City with Myrick in the same plane in which they had made the trip to Boise City.

When plaintiff testified, he stated in substance, that he was never apprised, in advance, of defendants' intention to take the plane and that, when it was taken, he was working on his farm, and did not know they had taken it until the night of the day they took it. He admitted that, while he was in Boise City one day previous to the taking, he was called to a long distance telephone at the Ford garage there to take a call from 'somebody' in Oklahoma City wanting to know where the plane was based and he told the caller it was at Boise City Municipal Airport. Plaintiff further testified that this was the only time he ever talked to Mr. Canavan, and denied that, in this long distance telephone conversation, he asked Canavan to locate his Cessna. He further testified, in substance, that he didn't have any reason for trying to find out where it was. Plaintiff further testified that the hanger that the Bonanza was in at that time was owned by him; that he had one ignition key to the plane; and that, at the time defendants took the plane, this key was at his residence; that the plane's battery was dead; and that he still has the ignition key in his possession.

After all of the evidence had been introduced, including testimony as to the value of the Bonanza at the time plaintiff purchased it, the cost of improvements he had made on it, and its value when defendants took it, both parties rested; and the trial court entered judgment in plaintiff's favor for possession of the Bonanza, or recovery of its value in the sum of $3500.00, plus costs and interest until paid. The journal entry of said judgment contains the specific finding that the mortgage on the plane was duly and regularly filed with the Federal Aviation Authority (FAA) and that plaintiff was charged with constructive notice of it; but it also contains the finding that the manner in which defendants obtained possession of the plane from plaintiff constituted a conversion of it, and that 'by virtue of' said conversion, defendants' mortgage lien on the plane was extinguished; and the judgment so decreed.

In connection with its alternative judgment in plaintiff's favor for possession of the plane, the court decreed that if defendants redelivered it, plaintiff will be entitled to damages for depreciation 'in such amount as he shall show himself entitled and that this court retains jurisdiction of this cause for the purpose of determining such damages or any issue as to appreciation upon the motion of the plaintiff therefor, * * *'.

Relative to the issue of conversion, the trial court's judgment made the following findings of fact:

'* * *

'2. That a bona fide dispute arose between the parties as to the validity of the lien of the defendants and upon defendants' demand for possession of the airplane the plaintiff refused to give such possession.

'3. That the agents of the defendants ascertained the location of the airplane from the plaintiff and without his permission they went upon his private property and removed the...