Mauldin v. Milford

• Decision Date: 12 February 1924
• Docket Number: 11425.
• Citation: 121 S.E. 547,127 S.C. 508
• Parties: MAULDIN ET AL. v. MILFORD.
• Court: South Carolina Supreme Court

121 S.E. 547

127 S.C. 508

MAULDIN ET AL. v. MILFORD.

No. 11425.

Supreme Court of South Carolina

February 12, 1924

Appeal from Common Pleas Circuit Court of Anderson County; John S Wilson, Judge.

Action by W. D. Mauldin, George Shelor, and W. J Edwards against Galoway Milford. Judgment for plaintiffs, and defendant appeals. Reversed, and a new trial ordered.

Watts J., dissenting.

The following is the preliminary statement of the case:

The plaintiff Mauldin alone first brought action against the defendant, Milford, alleging in his complaint the same facts contained in the complaint set out below. To this complaint the defendant demurred upon the ground that it did not state facts sufficient to constitute a cause of action, in that it did "not show that any money or moneys have been paid out by the plaintiff Mauldin on account of an alleged breach of warranty or seizure of the automobile."

Thereupon on motion of plaintiffs' attorney, Special Judge Hon. C. C. Simms, passed an order "that the plaintiff leave to amend the summons and complaint in the case by making parties plaintiff or defendant, as he may be advised, all those parties who in the chain of transfers of the automobile, alleged to have been under mortgage, had possession of same as owner thereof, and that such amended summons and complaint be served upon defendant's attorney," etc.

Pursuant to this order, George Shelor and W. J. Edwards were then joined as parties plaintiff, and the summons and complaint amended accordingly. The complaint as thus amended is as follows: "That on or about the _____ day of July, 1920, defendant, Galoway Milford, traded to plaintiff W. D. Mauldin a Buick automobile, representing the same to be free of incumbrances, and in exchange received valuable property from said W. D. Mauldin; that said W. D. Mauldin later traded said Buick automobile to George Shelor, and George Shelor traded said car to the plaintiff W. J. Edwards; that all of plaintiffs traded for said car in good faith and for value, believing the said car to be free of incumbrances, but the owner and holder of a mortgage on said car, of which mortgage the defendant well knew, brought an action in this court for the possession of said Buick automobile against the plaintiff Edwards, and using defendant as a material witness the mortgagee prevailed in the action and recovered said car; that plaintiff Edwards having lost the car by process of law, called upon plaintiff George Shelor upon his warranty, and the plaintiff Shelor recognized his liability, and acknowledged same, and in turn called upon the plaintiff Mauldin, who had traded said car to him. The plaintiff Mauldin, well knowing that regardless of notice he was liable on his warranty, acknowledged his liability to plaintiff Shelor, and in turn called upon the defendant to make good on his warranty; that defendant Milford admitted that he knew the car was not paid for, and, without any claim that any of plaintiffs had assumed to pay the debt, refused to acknowledge his liability or make any effort whatsoever to adjust the matter, or save harmless his vendee or those claiming through him; that defendant is liable for the value of the car traded by him which plaintiff alleges to be $300, and by reason of defendant's unlawful act in disposing of property under mortgage, and by his breach of contract, he has damaged plaintiff in the sum of $200 actual and punitive damages. Wherefore plaintiffs pray that they have judgment against the defendant for the sum of $500, and for such other and further relief as may be just and proper."

To this amended complaint the defendant demurred upon the following grounds: "(1) There is no privity between this defendant and the plaintiffs jointly, or jointly and severally.

(2) If there be a cause of action against this defendant in favor of any one of the plaintiffs, it is several, and they are before the court improperly. (3) That W. D. Mauldin and George Shelor have not sustained any loss, and their acknowledgment of such loss is not sufficient, and they are improperly before this court." The demurrer was overruled by the presiding judge, Hon. John S. Wilson.

The defendant's answer alleged in substance: (1) A general denial. (2) That defendant was a purchaser for value without notice of an existing lien. (3) That the automobile was sold by the mortgagor to defendant under the authority of the mortgagee. (4) That the mortgagor was acting as agent of the mortgagee in the sale of the car. (5) That mortgagee knew of the sale to defendant, and was estopped by his conduct to claim the property in the hands of this defendant or any other person.

The case went to trial upon the pleadings.

The evidence for the plaintiff was in substance as follows: The plaintiff Edwards testified that he bought the automobile in question from George Shelor; that the estate of J. L. Tate brought suit against him and recovered the car; that in that suit the defendant, Milford, was a witness for the Tate estate; and that the chattel mortgage on the car, containing the usual provision as to seizure and sale after conditions broken, was given by one Charley Jones under date of November 24, 1919, to become due on November 1, 1920. The plaintiff Shelor testified, in substance, that he sold the automobile to Edwards; and that he had acquired the car in a trade from Mauldin; that he and Mauldin had an interview with Milford after they learned of the mortgage; that Milford admitted he knew there was a mortgage on the car, but would make no settlement with them; that he, Shelor, had been damaged $550; that he was liable to Edwards for that amount; that he thought he had paid Edwards $300. The plaintiff Mauldin did not testify.

The defendant moved for nonsuit substantially upon the grounds: (1) That there was no evidence tending to establish that when Milford sold the car any condition of the mortgage had been broken; and (2) that there was no evidence tending to establish any injury sustained by the "immediate purchaser" from Milford. The motion was overruled.

The defendant then adduced evidence tending to establish that he acquired the automobile from Charley Jones on July 12, 1920; that Jones represented to him that he owed Mr. Tate a little on the purchase of the automobile, but there was no mortgage on it, and that Mr. Tate had authorized him (Jones) to sell or trade the car; that defendant traded the car to W. D. Mauldin about August 15, 1920; that he would not have traded with Jones for the car if he had known there was a mortgage on it.

Defendant moved for a directed verdict upon the grounds that it appeared from the uncontradicted testimony (1) that the defendant had acquired and disposed of the automobile before any condition of the mortgage had been broken, and (2) that the mortgagor Jones, from whom he purchased, had the mortgagee's authority to sell and convey to him a title free from the lien of the mortgage. The motion was refused.

The presiding judge charged the jury as follows: "Mr. Foreman and Gentlemen, this is a suit of Mauldin, Shelor, and Edwards against the defendant, Milford. The complaint is not very long, and to refresh your memory I will read it. (The court reads complaint.) Now the defendant Milford denies each and every allegation and puts the plaintiff on proof. (The court reads answer.) Now, gentlemen, in dealing with personal property, if a man allows another to handle his property as if it was his own and hold out to the world that it is his own, innocent parties have a right to assume that he is the owner of the property, ordinarily; but, if a man puts his mortgage, if he has a claim on that property, puts his mortgage on record, if he does that, he is protected, even if another party has the property in charge. If he doesn't do that, doesn't put his mortgage, or bill of sale as it is sometimes called, on record, and allows another man to use the property as if it was his own for some reasonable time, then the parties who know nothing about this mortgage have a right to assume that the party in possession of the personal property is the owner of the same. If it is on record it is his business to go and see. But there may be circumstances that would put him on notice anyway, even if a mortgagee hasn't got his claim on record. Sometimes people take a claim and don't record it. And if a third party, if the facts are such as to put him on notice that there is a claim over the property, such notice in the opinion of the jury that an ordinarily prudent man should act on, if circumstances are such as that, then it would be as good as a notice. Because, whether a mortgage is recorded or not, if you have got notice, or if the circumstances are such that in the opinion of the jury a person of ordinary prudence and judgment should have notice, why then the purpose of recording is answered, don't you see, to put third parties on notice; and then, if a man trades for property under these circumstances, he would be liable. Now, as to the facts in this case, it is a matter entirely of proof for you to go by. The plaintiffs must make out their case by the greater weight or preponderance of the evidence.

"Mr. Dagnall: Your honor perhaps overlooked the question of punitive damages in here.

The Court: Wait a minute. That's

right. They claim actual damages $300, and punitive damages $200. So I will have to define to you what damages are. Damages is a sum of money assessed by the jury to give to a party claiming damages for the actual injury sustained, the actual injury. That's called actual damages. Punitive damages is an additional amount added to the actual damages given by way of punishment against the party committing a wrong to teach him not to do that any more and to teach others not

...