McCormick v. First Nat. Bank of Mead

Citation299 P. 7,88 Colo. 599
Decision Date04 May 1931
Docket Number12424.
PartiesMcCORMICK v. FIRST NAT. BANK OF MEAD.
CourtSupreme Court of Colorado

Rehearing Denied May 25, 1931.

In Department.

Error to District Court, Weld County; Robert G. Smith, Judge.

Action by W. E. McCormick, administrator of the estate of William J Howlett, deceased, against the First National Bank of Mead Colo. Judgment for defendant, and plaintiff brings error.

Affirmed.

L. C. Brodbeck, of Seattle, Wash., for plaintiff in error.

E. T Snyder and Walter E. Bliss, both of Greeley, and William H. Scofield and Cass M. Herrington, both of Denver, on petition for rehearing, for defendant in error.

CAMPBELL J.

This action by plaintiff McCormick, as administrator of the estate of William J. Howlett, deceased, against the First National Bank of Mead, Colo., has for its object the recovery of a money judgment against the bank for damages which plaintiff says were suffered by the estate by reason of the conversion by the bank of its personal property. Howlett, during his lifetime, on May 1, 1923, borrowed of the bank $1,500, giving his promissory note therefor, payable to the bank November 15, 1923. He secured its payment by chattel mortgage on his live stock, wagons, plows, and various other chattels used by him in his farming operations. The form of this instrument is one that is in common use in this state. It provided among other things that until default is made by the mortgagor in the performance of the conditions of the mortgage, he may retain possession thereof and use the same, but in case default is made in the payment of the secured note, or if he fails to give the chattels proper care and treatment, or should in any manner in the judgment of the mortgagee impair the value or usefulness thereof, or in case the mortgagee at any time during the existence of the mortgage deems itself unsafe or insecure in the mortgage lien upon the mortgaged chattels, then it may take immediate and full possession thereof and sell the same at public or private sale as it may deem best, for the best price it can obtain, and out of the proceeds of the sale pay the note, rendering and paying all surplus, if any, to the mortgagor.

On November 15, 1923, three days before Howlett's death, the mortgage note became due but no part of it was paid. Thereafter on December 26, 1923, more than one month after Howlett's death, the defendant mortgagee, feeling insecure and unsafe in its mortgage lien, and during the existence of the mortgage, took possession of the mortgaged chattels and afterwards in January, 1924, at a public sale duly advertised to be held on the Howlett farm, caused the mortgaged goods to be sold for an amount not quite sufficient to pay the mortgage debt, but no claim is made here by the mortgagee for any balance due thereon. Howlett's widow was present at the time of the sale and made no protest or objection thereto. The defendant claims, among other things, that proper care was not being taken of the mortgaged goods and there was no one in charge at the farm where they were who was capable of taking care of them, and their value was being impaired, and its only recourse was to take possession and make the sale, as it did.

No proceedings were begun until December 13, 1924, more than one year after Howlett's death, to probate his estate. The record does not disclose the time when this action by the administrator was begun or when the original complaint was filed. An amended complaint was filed June 17, 1927, about three and one-half years after Howlett's death. The plaintiff filed various motions and demurrers, general and special, to the answer and amended answer, which the court overruled, and upon issues of fact joined by the amended answer and replication, trial was had, and at the close of plaintiff's testimony the court granted the defendant's motion for a nonsuit and dismissed the action.

Our examination of the record satisfies us that no prejudicial error was committed by the trial court in its adverse rulings against the plaintiff on the various motions and demurrers which he filed attacking the answer and amended answer. Neither was any prejudicial error committed in its rulings during the course of the trial in the admission or rejection of evidence. But if there were some questionable rulings in these particulars, the plaintiff in no event was entitled to recovery upon the cause of action stated in his complaint. The action is confessedly one in conversion of chattel property. In 38 Cyc. p. 2044, the author, among other things, says: 'An unbroken line of authorities establishes the rule that trover cannot be maintained by one who has neither title nor right of possession.' Trover was the common-law remedy for conversion of chattel property. While our Code of Civil Procedure (section 1) has abolished the distinct forms of actions and suits heretofore existing and has but one form of civil action for the enforcement or protection of private rights and redress of private wrongs, nevertheless the substantive law of conversion of chattels exists in Colorado and is to be found in the principles of the common law, which we have adopted as the rule of decision in this state. The author of the article in Cyc. above referred to further says: 'He who seeks to recover in trover must prove that he was in actual possession of the chattel converted at the time of conversion, or that he had the right of immediate possession thereof, and if such right of immediate possession depends on a property in the chattel, either general or special, he must also prove such property in himself as a fact.' Even if the plaintiff in trover has title to, or a right of property in, a chattel, this will not alone support an action in trover. It must be united with actual possession or a right of immediate possession. Tested by these rules just stated, let us see if the plaintiff in this action has brought himself within the requirements.

The administrator has only the rights in the mortgaged property that Howlett, when living, had. This property was subject to a valid chattel mortgage to the bank as mortgagee. The note which the mortgage secured became due and payable on November 15, 1923, three days before Howlett's death. By the terms of the mortgage itself, under our own decisions, the legal title to the chattels was, as the result of the chattel mortgage, vested in the mortgagee bank, though they were rightfully, and until default, in the physical possession of the mortgagor. When the note was not paid, a default occurred whereby the right of possession by the terms of the mortgage became forfeited to, and vested in, the mortgagee. The defendant bank, having the legal title under the chattel mortgage from the beginning, and an additional right to possession of the mortgaged chattels upon default of the mortgagor to pay, acquired the full ownership and had the exclusive right of possession to the mortgaged goods, subject only to the right of the mortgagor, or his legal representative, to the right of redemption or for an accounting of the proceeds of the mortgaged property. This was the only right of the mortgagor or his legal representative and the only asset the estate had to the chattel property covered by the mortgage. A mortgage of chattels under our statute is a conditional sale. The legal title to the...

To continue reading

Request your trial
5 cases
  • Cugnini v. Reynolds Cattle Co.
    • United States
    • Colorado Court of Appeals
    • December 31, 1981
    ...Reynolds under the bill of sale laws. Dorris v. San Luis Valley Finance Co., 90 Colo. 209, 7 P.2d 407 (1932); McCormick v. First National Bank, 88 Colo. 599, 299 P. 7 (1931). Where neither party can claim valid title under the livestock bill of sale laws, we must resort to the law merchant,......
  • Stokes v. Kirk, 14126.
    • United States
    • Colorado Supreme Court
    • January 17, 1938
    ... ... mortgages, lost the prior lien first enjoyed by him and that ... under these circumstances the ... of the proceeds thereof. McCormick v. First Nat ... Bank, 88 Colo. 599, 299 P. 7; ... ...
  • Herbertson v. Cohen, 17461
    • United States
    • Colorado Supreme Court
    • August 22, 1955
    ...mortgage executed by Duff, the terms of which mortgage had been breached by nonpayment of principal and interest. McCormick v. First National Bank, 88 Colo. 599, 299 P. 7. Plaintiff had a sufficient title to maintain the action because under the terms of the chattel mortgage he had a right ......
  • Byron v. York Inv. Co., 17588
    • United States
    • Colorado Supreme Court
    • April 30, 1956
    ...mortgagee in order to avoid a deficiency judgment against the makers of the note secured by the chattel mortgage. In McCormick v. First Nat. Bank, 88 Colo. 599, 299 P. 7, 9, we 'When the note was not paid, a default occurred whereby the right of possession by the terms of the mortgage becam......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT