Moll v. Turnbow

• Decision Date: 08 December 1936
• Citation: 155 Or. 229,62 P.2d 941
• Parties: MOLL et al. v. TURNBOW et al.
• Court: Oregon Supreme Court

62 P.2d 941

155 Or. 229

MOLL et al. v. TURNBOW et al.

Supreme Court of Oregon

December 8, 1936

Department 2.

Appeal from Circuit Court, Umatilla County; C. L. Sweek, Judge.

Suit by C. A. Moll against F. W. Turnbow and others, wherein the State, by Frank C. McColloch, Public Utilities Commissioner and another intervened as plaintiffs. From an adverse decree defendants J. E. McCormmach and Wentworth & Irwin Incorporated, appeal.

Affirmed.

Will M. Peterson, of Pendleton, and Will H. Masters of Portland (Peterson & Peterson, of Pendleton, and Will H. Masters, of Portland, on the brief), for appellants.

George R. Lewis, of Pendleton (Lewis & Isaminger, of Pendleton, on the brief), for respondent Moll.

BAILEY Justice.

The defendants J. E. McCormmach and Wentworth & Irwin, Inc., appeal from the decree of the circuit court annulling and declaring void certain transfers of personal property connected with transactions between the appellants and the defendants F. W. Turnbow and Hazel Turnbow, his wife, as in fraud of certain creditors of said F. W. Turnbow, to wit, plaintiff C. A. Moll and interveners state of Oregon and Carl Detering, receiver of King Brothers, a corporation.

Prior to the institution of this suit C. A. Moll, on March 21, 1935, commenced an action against the defendant F. W. Turnbow to recover on a promissory note for $786.22 given by said Turnbow to the plaintiff, and immediately caused to be attached a Moreland truck and a Wentwin trailer in the possession of McCormmach and claimed to belong to Turnbow, and in addition garnished any and all property in the possession or control of McCormmach belonging to the defendant Turnbow.

Upon the claim of said McCormmach to be the owner of said truck and his making a return that he had no property in his possession belonging to Turnbow this proceeding in the nature of a creditor's suit was instituted by Moll against all the defendants hereinabove named. Thereafter the state of Oregon, acting by and through Frank C. McColloch, public utilities commissioner, and Carl Detering, receiver of King Brothers, a corporation, respectively filed petitions to intervene as plaintiffs in the proceeding. At the time of filing these petitions each of said intervening petitioners was a judgment creditor of the defendant F. W. Turnbow in the sum of approximately $300 and $250 respectively, upon which judgments execution had been issued and returned wholly unsatisfied.

The facts involved in the present suit are somewhat complicated, but are substantially as follows: In the early part of 1933 the defendant F. W. Turnbow purchased from Wentworth & Irwin, Inc. (hereinafter to be mentioned as the defendant corporation), a GMC truck and a trailer of make or manufacture not clearly shown by the evidence. This equipment was used by Turnbow on the highways as a contract carrier under a permit to operate issued by the public utilities commissioner of the state of Oregon. In the early part of August, 1934, Turnbow traded the truck and trailer to T. A. Reid for a Moreland truck and a Wentwin trailer, the same truck and trailer attempted to be attached by Moll in his above-mentioned action against the defendant Turnbow. At the time of Turnbow's acquiring this Moreland truck and Wentwin trailer the Pacific Finance Corporation had a lien against the same either by chattel mortgage or conditional sale contract, amounting to several hundred dollars, and for that reason retained certificate of title to the equipment.

Shortly after Turnbow had acquired this truck and trailer from Reid the defendant corporation installed a new motor in the truck and Turnbow executed to the corporation a chattel mortgage on the truck and trailer for $764.77, which chattel mortgage was dated August 7, 1934. This instrument was filed for record in Umatilla county soon thereafter and up to the date of the trial the mortgage had not been satisfied of record, although it was admitted by the defendant corporation that the debt had been paid.

Turnbow had in his employ for many months prior to October 10, 1934, a man named Bob Marshall, as operator of his truck. On that date a pretended sale of the Moreland truck and Wentwin trailer was made by the defendant Hazel Turnbow to said Bob Marshall for the sum of $3,200, the purchase price evidenced by six notes of $500 each and one of $200 and secured by a chattel mortgage on the truck and trailer, which mortgage was filed for record on the date of its execution. A permit was issued by the public utilities commissioner to Marshall on October 29, 1934, to operate as a contract carrier in interstate business.

The preponderance of the evidence is that this attempted transfer of the truck and trailer was merely for the purpose of permitting F. W. Turnbow to continue to operate as a contract carrier in the name of Marshall, because Turnbow's own permit had been revoked and he was continually having trouble with the utilities commissioner. The money which was received in operation by Marshall was turned over to the Turnbows and nothing was ever credited by Turnbow or his wife on the notes given by Marshall to Mrs. Turnbow. Some of the items which make up the plaintiff Moll's claim against Turnbow were charges for gasoline and oil furnished by him while the equipment was being operated by Marshall at the instance and request of F. W. Turnbow. Near the close of the year 1934 or early in 1935 Marshall apparently abandoned the truck and trailer to Turnbow and left his employ. At the time of the trial no one knew his whereabouts.

Possession of the truck was taken by F. W. Turnbow and on January 8, 1935, he filed an affidavit with the secretary of state for the purpose of obtaining licenses for 1935 for the truck and trailer, in which affidavit he referred to the transaction between himself and Reid and stated that he had been the owner and in possession of the truck and trailer and operating the same ever since said trade, but that said Reid, because of difficulties over the transaction between them, had refused to deliver the registration receipt to him and that the said registration receipt and certificate were retained by Pacific Finance Corporation. On January 14, 1935, temporary license certificates were issued in the name of F. W. Turnbow. Nothing further seems to have occurred with relation to the issuance of licenses or license plates for the truck and trailer until several months later.

Prior to March 19, 1935, the plaintiff Moll made several attempts to collect the account owed him by the defendant F. W. Turnbow, amounting to $786.22. About a week or ten days before the last-mentioned date negotiations were had between Moll and Turnbow for the sale of the truck and trailer to Moll at a price of $2,000 cash, plus cancellation of the indebtedness due Moll from Turnbow. At that time Moll's son telephoned Charles G. Irwin, general manager of defendant corporation, stating that negotiations were being had and asking the amount which Turnbow owed on the equipment. The contemplated purchase by Moll was not consummated, and in the morning of March 19 Moll requested Turnbow to pay the account or give him a note signed by Turnbow and his wife for the amount owing Moll. Turnbow departed, and about 2 or 3 o'clock in the afternoon returned and executed a note for the amount of the debt to Moll, but stated that his wife had refused to sign. After Turnbow left Moll's place of business in the morning of March 19, he and Mrs. Turnbow went to the ranch of J. E. McCormmach and prevailed upon McCormmach to purchase the truck and trailer for $2,500, with a cash payment of $600 and fifteen notes of $126.66 each for the balance, payable consecutively, one each month, to Hazel Turnbow, wife of F. W. Turnbow. At the same time a chattel mortgage on the truck and trailer for the unpaid balance was executed by McCormmach in favor of Hazel Turnbow. This transaction between the Turnbows and McCormmach seems to have taken place during the interval between the two conferences which Moll had with Turnbow on March 19. Early in the evening of March 19, after the transaction with McCormmach had been completed, or early the next morning, Turnbow and his wife went to Portland and began negotiations of some nature with the defendant corporation.

The note which Turnbow gave to Moll was payable one day after date, and on March 21 Moll, apprehensive that Turnbow was not acting in good faith and was seeking to avoid payment of his debt to Moll, instituted the action hereinabove mentioned, to recover on the note. On the same day J. B. Moll, son of the plaintiff, on his behalf telephoned to Mr. Irwin and advised him of the attachment against the Turnbow truck and trailer and the garnishment of McCormmach, and further advised him that Turnbow apparently was attempting to put his property beyond the reach of his creditors. Mr. Irwin asked Moll to delay until the next day to do anything, as he desired to consult Turnbow, who on that day, he said, was in Salem. In the evening of March 21 the plaintiff sent a telegram to the defendant corporation in the following language: "We have attached the Frank Turnbow truck. Will be ready to make settlement with you in the next few days." On March 25 the attorney for the plaintiff wrote the defendant corporation, calling attention to the attachment of the truck, the garnishment of McCormmach and the transaction between Turnbow and McCormmach. This letter was received by the defendant corporation on March 26. On that day the defendant corporation procured Hazel Turnbow to sign a purchase order for a used GMC truck and a Wentwin trailer for the sum of $4,001.25, the same truck and possibly the same trailer that had formerly been traded to Reid for the Moreland truck and...