Manufacturers Discount Company v. American Security Company
| Decision Date | 16 May 1928 |
| Docket Number | 13,041 |
| Citation | 161 N.E. 660,87 Ind.App. 446 |
| Parties | MANUFACTURERS DISCOUNT COMPANY v. AMERICAN SECURITY COMPANY ET AL |
| Court | Indiana Appellate Court |
From Fayette Circuit Court; E. Ralph Himelick, Judge.
Action by the Manufacturers Discount Company against the American Security Company and others. From a judgment for defendants the plaintiff appeals.
Affirmed.
Louis Rosenberg and Salem D. Clark, for appellant.
Wiles Springer & Roots, for appellee.
OPINION
Action by Manufacturers Discount Company against the American Security Company, Christian Eby, Charles Utsler and one Mallory. By the first paragraph of the complaint, the plaintiff sought to recover possession of a certain automobile. The second paragraph was to recover damages because of an alleged conversion of the automobile. A trial by the court resulted in a judgment for the defendants. The plaintiff appeals and assigns as error the overruling of its motion for a new trial. The specific contentions are that the decision of the court is not sustained by sufficient evidence and that it is contrary to law.
The evidence is sufficient to show that on January 16, 1925, appellant was the owner and in possession of a new Flint automobile which it had a short time prior thereto procured from the manufacturer; that on said day, H. E. Davis, doing business under the name of the "Connersville Motor Sales Company," was in the automobile sales business at Connersville; that on said day, appellant and Davis entered into an agreement by which said automobile was turned over to the Connersville Motor Sales Company; that at that time, and in appellant's office, a conditional sales contract was made out by the secretary of appellant company, whereby the Connersville Motor Sales Company purported to sell the automobile to Davis; that, as a part of the same transaction, the Connersville Motor Sales Company assigned the said conditional sales contract to appellant; the automobile was thereupon delivered to the Connersville Motor Sales Company and taken to Connersville, and placed in the show and sales room of that company for sale along with other cars. Appellant knew the car was on the floor of the sales room of Davis, or the Connersville Motor Sales Company, and knew that Davis was engaged in the business of selling automobiles. This contract of sale was neither acknowledged nor recorded. Soon thereafter, and while the car was in the sales room of Davis, he borrowed $ 1,100 from the American Security Company, and, as security therefor, gave a chattel mortgage upon this Flint automobile and another automobile. This mortgage was acknowledged and within ten days after its execution was recorded in the recorder's office of the proper county. At the time of borrowing the money from the security company, and in order to secure the same, Davis made an affidavit that he was the owner of the automobile in question, and that the same was free of all encumbrances and liens of every kind. A few weeks later, Davis, without having sold the car, disappeared and has not since been heard from.
After the disappearance of Davis, and some time in February, 1925, appellant sent an agent to Connersville and took the car from the sales room of Davis and in the nighttime drove it to Indianapolis, and entered into a conditional sale contract whereby it sold the car to Fred Zipp, he being the person who drove the car from Connersville to Indianapolis for appellant. Zipp and Dave Weber operated a garage at Brookville, to which place the car was taken the next day.
On July 1, 1925, an officer of the security company saw the car, parked in the street at Connersville, and took possession of the same under the provisions contained in the chattel mortgage, and placed the same in a garage operated by appellees, Utsler and Mallory. This action followed with the result above indicated. Appellee security company was organized and doing business under and by virtue of the Petty Loan Act, ch. 125, Acts 1917 p. 401, § 9777 et seq. Burns 1926.
A study of the evidence in the instant case prompts the remark that there was a time when check kiting was quite common, but appellant's method of doing business indicates that check kiting has, with the advent of automobiles, been superseded by something akin to automobile kiting, or at least the kiting of phony conditional sales contracts. This is not the first time this method of doing business has been before this court. See Guaranty Discount Corporation v. Bowers (1927), 158 N.E. (Ind. App.) 231.
Appellant's first contention is that the "automobile in question having been sold for a use other than resale, the title thereof could not be disposed of nor encumbered in any manner by Davis so far as to defeat the title owned by appellant under and by virtue of its conditional sale contract and assignment." The weakness of this contention is, that the automobile was not sold for a use other than resale. It was sold by appellant to the Connersville Motor Sales Company, that is, to Davis, for the purpose of a...
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