Peoples v. Whitworth

• Citation: 41 Idaho 225,238 P. 306
• Court: United States State Supreme Court of Idaho
• Decision Date: 27 July 1925
• Parties: CON C. PEOPLES, Appellant, v. GEORGE A. WHITWORTH and AGNES WHITWORTH, Husband and Wife, GEORGE D. WHITWORTH and CLARA M. WHITWORTH, Husband and Wife, THE FIRST SAVINGS BANK OF POCATELLO, a Corporation, THE FIRST NATIONAL BANK OF POCATELLO, IDAHO, a Corporation, MCCAMMON STATE BANK, a Corporation, CONSOLIDATED WAGON & MACHINE COMPANY, a Corporation, and ALEXANDER KITTLE, Respondents

238 P. 306

41 Idaho 225

CON C. PEOPLES, Appellant, v. GEORGE A. WHITWORTH and AGNES WHITWORTH, Husband and Wife, GEORGE D. WHITWORTH and CLARA M. WHITWORTH, Husband and Wife, THE FIRST SAVINGS BANK OF POCATELLO, a Corporation, THE FIRST NATIONAL BANK OF POCATELLO, IDAHO, a Corporation, MCCAMMON STATE BANK, a Corporation, CONSOLIDATED WAGON & MACHINE COMPANY, a Corporation, and ALEXANDER KITTLE, Respondents

Supreme Court of Idaho

July 27, 1925

TRIAL BY COURT - FINDINGS OF FACT - CONFORMITY TO PLEADINGS, ISSUES AND PROOFS - MATTERS NOT IN ISSUE - IMMATERIAL MATTERS-CHATTEL MORTGAGES-PERMISSION TO SELL PROPERTY-EFFECT.

1. A trial court need not find on issues not tendered by the pleadings.

2. A trial court need not find on immaterial matters.

3. A mortgagee who gives his mortgagor permission to sell personal property covered by the mortgage waives the lien of the mortgage as to such property.

APPEAL from the District Court of the Fifth Judicial District, for Bannock County. Hon. O. R. Baum, Judge.

Action in conversion, Judgment for defendants. Affirmed.

Judgment affirmed. Costs to respondents.

Peterson & Coffin, for Appellant.

Where the mortgagee of chattels authorizes the mortgagor to sell the same and hold the proceeds subject to the orders of the mortgagee, and such an understanding is communicated by the mortgagor to a bank to whom the proceeds come, and the bank has full knowledge of the agreement between the mortgagor and mortgagee, the bank is liable to the mortgagee for the amount of the proceeds if it applies those proceeds upon its own indebtedness upon receipt of the same. (Bellevue State Bank v. Hailey Nat. Bank, 37 Idaho 121, 215 P. 126.)

Where the mortgagee, under such circumstances, agrees with the mortgagor that a sale of the mortgaged property may be had and the proceeds applied upon the mortgaged indebtedness, and the bank to whom the proceeds come has notice of such agreement, it is liable to the mortgagee for the proceeds if it applies those proceeds other than upon the mortgage indebtedness. (Bellevue State Bank v. Hailey Nat. Bank supra; Cone v. Ivinson, 4 Wyo. 203, 33 P. 31, 35 P 933; Alter v. Bank of Stockham (on rehearing), 53 Neb. 223 73 N.W. 667.)

Budge & Merrill, for Respondents.

The findings of the trial court should be responsive to the issues raised by the pleadings, and it is not error for the court to fail to find on matters not within the issues. (Kent v. Richardson, 8 Idaho 750, 71 P. 117; Glassell v. Glassell, 147 Cal. 510, 82 P. 42; Ward v. Sherman, 155 Cal. 287, 100 P. 864; Boothe v. Farmers & Traders' Bank, 53 Ore. 576, 98 P. 509, 101 P. 390; Johnson v. All Night and Day Bank, 17 Cal.App. 571, 120 P. 432; Mentry v. Broadway Bank & Trust Co., 20 Cal.App. 388, 129 P. 470; Gowdy Gas, Well, Oil & Mineral Co. v. Patterson, 29 Ind.App. 261, 64 N.E. 485.)

When mortgaged personal property is sold by the mortgagor with the consent of the mortgagee, the lien of the mortgage is waived and the mortgagor cannot follow either the property previously mortgaged or the proceeds. (Knollin v. Jones, 7 Idaho 466, 63 P. 638; Adamson v. Moyes, 32 Idaho 469, 184 P. 849; Bellevue State Bank v. Hailey Nat. Bank, 37 Idaho 121, 215 P. 126; Maier v. Freeman, 112 Cal. 8, 44 P. 357; Ramsey v. California Packing Corp., 51 Cal.App. 517, 201 P. 481; Luther v. Lee, 62 Mont. 174, 204 P. 365; Carr v. Brawley, 34 Okla. 500, 125 P. 1131, 43 L. R. A., N. S., 302; Rawlins County Bank v. Walters, 92 Kan. 391, 140 P. 864; Courgran v. Western Elev., 22 S.D. 214, 116 N.W. 1122; Hout v. Clemans, 167 Iowa 330, 149 N.W. 442, L. R. A. 1915C, 166; Loughlin v. Larsen, 27 S.D. 376, 131 N.W. 304; Simon-Casady & Co. v. German Savings Bank, 159 Iowa 149, 140 N.W. 401; Fairweather v. Nelson, 76 Minn. 510, 79 N.W. 506; Stinson v. Sneed (Tex. Civ.), 163 S.W. 989; Irish v. Citizens' Trust Co., 163 F. 880; New York County Nat. Bank v. Massey, 192 U.S. 138, 24 S.Ct. 199, 48 L.Ed. 380; Rogers v. Whitney, 91 Vt. 79, 99 A. 419; Stephens v. Board of Education, 79 N.Y. 183.)

TAYLOR, J. Wm. E. Lee and Givens, JJ., concur. William A. Lee, C. J., Budge, J., did not sit at the hearing and took no part in the decision.

OPINION

TAYLOR, J.

This action was instituted in the district court of Bannock county to foreclose four mortgages, one a real property mortgage and the other three chattel mortgages, executed by George A. Whitworth and Agnes Whitworth, his wife, and George D. Whitworth and Clara M. Whitworth, his wife, George D. Whitworth being the son of George A. Whitworth. All of these parties, together with three banks, the First Savings Bank of Pocatello, the First National Bank of Pocatello, and the McCammon State Bank of McCammon, were made defendants.

The complaint, as finally amended, alleged, inter alia, that, on or about November 18, 1920, defendants George A. Whitworth and George D. Whitworth, "without right and in violation of the terms of" a certain chattel mortgage, referred to in the complaint as exhibit "B," sold 239 head of cattle to Clay, Robinson & Company of Omaha, Nebraska, for $ 10,196.84, which sum was delivered to defendant McCammon State Bank; that the three defendant banks, knowing that the said money was the proceeds of the sale of cattle that were included in the chattel mortgage referred to, acting concertedly, converted the said sum of $ 10,196.84 to their own use by retaining it and giving the Whitworths credit on obligations due and owing by them to the said banks; that the said defendant banks refused to account to the plaintiff for this money; and that the defendant banks were jointly and severally indebted to the plaintiff for this sum, with interest at seven per cent per annum from November 18, 1920, for which plaintiff prayed judgment.

The three banks answered, denying specifically these allegations. The defendant First Savings Bank filed a cross-complaint seeking to foreclose two mortgages, one of realty and the other of personalty, executed by George A. Whitworth, Agnes Whitworth, George D. Whitworth and Clara M. Whitworth, who, together with plaintiff in the main action and the defendants Consolidated Wagon & Machine Company and Alexander Kittle, were made cross-defendants.

The cause was tried to the court, sitting without a jury. All the defendants except the three banks, and all the cross-defendants except Peoples, failed to appear, and their default was entered. The court made findings of fact and conclusions of law, and rendered judgment foreclosing the four mortgages in the complaint, in accordance with the prayer thereof, but dismissing the action as to the three defendant banks. The court also made findings of fact and conclusions of law in the cross-action, and decreed the foreclosure of the two mortgages described in the cross-complaint, in accordance with the prayer thereof. The appellant, plaintiff below, appeals to this court from that portion of the judgment dismissing the action as against the three defendant banks.

The court's findings on the feature of the case concerning the alleged conversion of the proceeds of the sale of the cattle by the three defendant banks, were, substantially, that the defendants George A. Whitworth and George D. Whitworth did not, "without right and in violation of the terms of" the chattel mortgage referred to, sell 239 head of cattle to Clay, Robinson & Company for $ 10,196.84; that the said sale "was not unlawful or in violation of the" mortgage, "but was made with the consent of the plaintiff herein"; that the three defendant banks did not convert the said sum or any part thereof; that the receipt and retention of the said money by the banks were lawful; and that the three defendant banks were not liable, either jointly or severally, to the plaintiff for the said sum or any part thereof.

The assignments of error may be considered in the following classes:

(1) That the court erred in finding that the banks did not convert the money, and in concluding that the plaintiff was not entitled to any judgment against them.

(2) That the court erred in failing to find whether or not the Whitworths had agreed with the plaintiff that, in consideration of his consenting to the sale of the cattle, they would hold the proceeds of the sale subject to his order, and whether or not the defendant banks had knowledge of this agreement.

(3) That the court erred in failing to find whether or not the defendant banks had knowledge of the fact that the cattle sold were covered by a mortgage to the plaintiff.

The first assignment is purely general in character, and is disposed of by our conclusions regarding the other two.

The defendants George A. Whitworth, Agnes Whitworth, George D Whitworth and Clara M. Whitworth executed and delivered to appellant the chattel mortgage in controversy, which covered one...