McClellan v. F. A. N. Co.

• Decision Date: 02 October 1936
• Citation: 187 A. 337
• Parties: McCLELLAN et ux. v. F. A. NORTH CO. et al.
• Court: New Jersey Supreme Court

187 A. 337

McCLELLAN et ux.

v. F. A. NORTH CO. et al.

Supreme Court of New Jersey. Atlantic County.

Oct. 2, 1936.

Action at law by James R. McClellan and wife against F. A. North Company and another, wherein the named defendant filed a counterclaim.

Judgment in accordance with opinion.

William Charlton, of Atlantic City, for plaintiffs.

Waddington & Mathews, of Camden, for defendants.

JAYNE, Circuit Judge.

The controversial issues of law and fact in this action have been submitted by stipulation of counsel to the court for determination without a jury. It transpires, however, that the basic facts essential to the consideration of the case are not in a state of dispute or uncertainty.

The initial transaction between these parties, which apparently occurred on November 1, 1927, is evidenced by an agreement in writing. This agreement, if accepted literally, reveals that the F. A. North Company "leases and hires" a certain piano to James McClellan and Sarah McClellan for the term of thirty-three months for the aggregate rent of $2, 187. The agreement contains an acknowledgment of the receipt of $437, and it is conceded that the additional sum of $100 was paid upon the delivery of the piano. These are the only payments made by the so-called lessees to the North Company. The agreement embodies a promise by the lessees to pay to the company, as rent, the sum of $50 on December 8, 1927, and a like sum on the eighth day of each succeeding month during the term of the lease. Confessedly, none of the monthly payments was made. It is observed that the agreement by its terms likewise accords to the company the right to repossess the piano if default in the payment of any monthly rent should eventuate. The lessees, so styled, being delinquent, the company on April 2, 1928, caused a writ of replevin to be issued and executed by virtue of which the company obtained possession of the piano. Before deliverance of the piano by the sheriff to the company, the familiar bond, executed by the company and by the Fidelity & Deposit Company of Maryland as surety, was presented to the sheriff. This action in replevin, after seven uneventful years of its existence, was brought to trial at the Mercer circuit on April 30, 1935. At the trial a verdict was directed in favor of the defendants solely on the ground that the action had been instituted before any demand was made for the return of the piano. The action of the trial judge was reviewed and the judgment affirmed by the Court of Errors and Appeals. F. A. North Co. v. McClellan, 116 N.J.Law, 145, 182 A. 875. The rule for judgment awarded the return of the piano to the McClellans, who were the defendants in the replevin suit. After the affirmance of the judgment, the defendants in the replevin action caused a writ de retorno habendo to be issued. The sheriff to whom this writ was directed made return that the chattel had been eloigned. On May 22, 1935, the replevin bond was assigned by the sheriff to the present plaintiffs who were the defendants in the replevin action. Additionally it has been stipulated that the value of the piano at the time it was replevied was $2, 187. The F. A. North Company was the owner of the piano. The taxed costs in the replevin action are $51.50. The foregoing is a statement of the facts adequately established in the present action. The plaintiffs here allege a breach of the condition of the replevin bond. This allegation is fully sustained by the proof. The obligation of the F. A. North Company under the bond was to "duly return the said goods and chattels in case a return shall be awarded." The return of the piano was awarded and the piano was not returned.

The proof of damages may now be examined. The only proof relating to damages submitted by the plaintiffs is that concerning the taxed costs allowed them in the replevin suit and the value of the piano. The plaintiffs in their complaint seek to recover the value of the piano and the taxed costs of the replevin suit as the consequent damage suffered by them as a result of the breach of the bond. In the brief submitted in behalf of the plaintiffs there is a persistent adherence to such a claim. In the existing state of the proofs, the demand for such damages would seem to be conspicuously exorbitant. At the time the piano was taken from the plaintiffs, they were not the owners of it and they were admittedly in default in the fulfillment of their contractual obligations. They had agreed that upon the occurrence of such delinquency on their part, the F. A. North Company might repossess the piano. Their possession of the piano at that time was apparently a matter of favor rather than a matter of contractual right. The aggregate sum of all the payments made by them to the company was $537. The piano was worth $2, 187. Notwithstanding these evident circumstances, it is now contended that the initial situation of the parties has undergone a complete transformation in its legal character and that the plaintiffs are now entitled to recover the value of the chattel itself as damages. This anomalous outcome is said to be the inevitable effect of the judgment in the replevin action. The unfair insistence of the plaintiffs in the present case resembles the unrighteous contention of the plaintiff in Sloan v. Poor, 145 A. 469, 7 N.J.Misc. 197.

An examination of the pleadings filed in the replevin action discloses that the title to the piano was not in issue. Indeed, the absolute ownership of the F. A. North Company was admitted. An action of replevin is primarily possessory in its character, and a judgment in such action ordinarily determines nothing beyond the right to the possession of the goods and chattels. The title to personal property may be in one and the right to possession in another. Then, moreover, to maintain an action in replevin, the plaintiff must prove his right to the possession of the property at the time of issuing the writ. It may be determined that the plaintiff ought to have made a demand upon the defendant for a return of the property before suing out the writ of replevin and for this reason judgment may be rendered for the defendant. Therefore it is not to be conclusively assumed that a judgment for a defendant in replevin constitutes a judicial determination of the title to the property. The judgment in the replevin suit between these parties was not determinative of more than the right of possession of the chattel.

The argument in behalf of the plaintiffs seems to be that while it might have been competent to inquire into the title of the chattel and into the state of facts then existing in opposition to an order or an award for the return of the chattel in the replevin action, yet the return of the piano having been awarded, the company and its surety are now precluded from availing themselves of such evidence in this action, and that the award plus the failure to return the chattel make the defendants liable for the full value of the piano. True, the judgment awarding a return of the property to the defendants in the replevin suit is conclusive upon the parties. The failure to make return when so awarded constitutes a breach of the bond. The next question, however, relates to damages occasioned by the failure to return the property. This latter question obviously was not adjudicated or in issue in the replevin suit. Therefore the question of damages, so far as it has not been settled by any judgment, is clearly open to litigation in the present action.

In an action for breach of the replevin bond, involving also the liability of the surety, the defendants are permitted to introduce any relevant and competent evidence in mitigation of damages, provided such evidence does not constitute a collateral attack upon the judgment rendered in the replevin suit. The authorities uniformly affirm the right of a defendant in any such action to prove that the actual damage sustained by the plaintiff is less than the value of the property replevied as well as other facts properly to be considered in mitigation of the damages. The logical reasons for this rule may be found expressed in the following reported cases. Davis v. Harding, 3 Allen (Mass.) 302; Jones v. Smith, 79 Me. 452, 10 A. 256; Jackson v. Emmons, 59 Conn. 493, 22 A. 296; Fielding v. Silverstein, 70 Conn. 605, 40 A. 454; Hannon v. O'Dell, 71 Conn. 698, 43 A. 147; Harmon v. Flood, 115 Me. 116, 97 A. 834; Macomber v. Moore, Foster & Hillgrove, 128 Me. 481, 148 A. 682; Budracco v. National Surety Co., 112 Misc. 133, 182 N.Y.S. 590; Ringgenberg v. Hartman, 124 Ind. 186, 24 N.E. 987; Consolidated Tank Line Co. v. Bronson, 2 Ind.App. 1, 28 N. E. 155; 54 C.J. 671, footnote. Apparently in some states the admission of such evidence is authorized by statute. Magerstadt v. Harder, 199 Ill. 271, 65 N.E. 225; Bates v. American Surety Co. of New York, 50 R.I. 402, 148 A. 323.

In the instant case, the proof discloses (original file in replevin suit) that the title to the piano was not judicially determined; that at the time the piano was replevied, it was owned by the F. A. North Company, the defendant here; that under the terms of the agreement of November 1, 1927, the company was entitled to lawfully retake the piano by reason of the existing default of the lessees. The lessees had so agreed. The agreement expressive of the rights of the parties with reference to the possession of the piano is in evidence. Justice requires that these facts be noticed in undertaking to determine the just damages to which the plaintiffs are entitled in the present action. These facts are clearly sufficient to indicate that the plaintiffs are not entitled to recover the value of the piano. The plaintiffs must prove their actual damage. If they have not in fact been damnified, they can recover only nominal damages. The bond is one of indemnity. If, in the light of all the facts and in recognition of the judgment in the replevin suit, it is to be understood...