Midwestern Machinery Co. v. Parsons
| Decision Date | 12 May 1967 |
| Docket Number | No. 8601,8601 |
| Citation | 415 S.W.2d 545 |
| Parties | MIDWESTERN MACHINERY COMPANY, of Minneapolis, Minnesota, Plaintiff-Respondent, v. G. H. PARSONS, Defendant-Appellant. |
| Court | Missouri Court of Appeals |
James A. Dunn, Carthage, for defendant-appellant.
W. H. Pinnell, Pinnell & Monroe, Monett, for plaintiff-respondent.
This is a second appeal in a court-tried replevin case. See Midwestern Machinery Co. v. Parsons, Mo.App., 385 S.W.2d 224. Broadly stated, the case involves an attempt by the plaintiff, as vendor, to substitute or exchange a chattel which its vendee had mortgaged to the defendant, and the parties' rights arising out of the transaction. The essence of the plaintiff's claim is that it is entitled to possession of the chattel, as against defendant's assertion that the plaintiff is equitably estopped to assert its title. Briefly, the controversy came about in this manner: In February 1962, the defendant undertook to finance one Harrell Owens in the establishment of a machine shop. Mr. Owens purchased a vertical turret lathe from the plaintiff, and executed a chattel mortgage to the defendant covering the lathe.
Subsequently, the plaintiff discovered that it had sold the lathe without complying with applicable government regulations--apparently the plaintiff had had no right to sell the machine in the first place--and it became necessary for the plaintiff to get the lathe back. Consequently, the plaintiff arranged to repurchase the lathe from Mr. Owens and to loan him another for use in his business, while it attempted to locate yet another lathe larger and more suitable for his use. Mr. Parsons denied that he was told of the agreement to repurchase the machine and loan another; he testified he agreed only to return the first lathe upon condition the 'machine (would be) replaced with another machine that is satisfactory * * * that we can put on the mortgage in place of the ones on there * * *.' The record does not, however, indicate that this condition was communicated to the plaintiff before the exchange of machines was undertaken.
Midwestern did repurchase the lathe, giving in payment therefor a check in the sum of $2,000.00 made payable solely to Mr. Owens. Mr. Owens deposited the money to his business account, giving no notice to his mortgagee. Plaintiff then loaned Mr. Owens a second lathe, not as large as Mr. Owens wanted, with the understanding Mr. Owens could use the machine while plaintiff located another. The plaintiff's evidence was that Mr. Owens refused to purchase the second lathe, though its officers told him it was 'a consigned machine,' and sent a conditional sales contract covering the second machine for Mr. Owens' signature. Mr. Owens recalled plaintiff's having sent a 'sales contract' on the second machine, but said he had 'never thought about' buying it.
In August 1962, Mr. Owens' financial difficulties made it necessary for him to renegotiate his obligation to Mr. Parsons so he 'might survive and * * * could go ahead and operate (the) business.' On August 30, 1962, Mr. Owens and Mr. Parsons went to the Central National Bank at Carthage, Missouri, to which the original obligation had been 'pledged,' in Mr. Parsons' words, and there executed a new note and mortgage. This second mortgage included the second, loaned lathe, to which Mr. Owens had never acquired title. In October 1962, the mortgagee took possession of the second lathe and this action followed. The trial court entered a judgment finding the issues generally in Mr. Parsons' favor, and finding that he was the owner and entitled to possession of the lathe. The plaintiff appealed.
Upon the first appeal in this case, we held, among other things, that since Mr. Owens never acquired title to the second lathe he could not mortgage it; that when Mr. Parsons consented to the return of the first lathe he waived his lien under the first chattel mortgage and was required to look to the mortgagor personally for payment of the mortgage debt; and that since the record indicated no knowledge on the plaintiff's part that the lathe was released upon condition, the mortgagee could not claim the first lathe or its value from the plaintiff. In considering and ruling upon the defendant's claim that plaintiff's conduct estopped...
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