Rathbun v. Berry

• Decision Date: 10 December 1892
• Citation: 31 P. 679,49 Kan. 735
• Parties: E. B. RATHBUN v. W. A. BERRY et al
• Court: Kansas Supreme Court

31 P. 679

49 Kan. 735

E. B. RATHBUN v. W. A. BERRY et al

Supreme Court of Kansas

December 10, 1892

Error from Osborne District Court.

REPLEVIN. Judgment for defendants, Berry and others, at the May term 1889. The plaintiff, Rathbun, brings the case to this court. The important facts are stated in the opinion.

Judgment affirmed.

R.G Hays, for plaintiff in error:

This note being still due and unpaid, the plaintiff, both by his mortgage and by virtue of taking possession of the goods, had acquired a valid and subsisting lien upon the entire stock of merchandise turned over to him by Mrs. Andrews, as agent for her husband. The court sustained the demurrer to the evidence, upon the theory that, because the mortgage provided that it should include all goods thereafter bought to replenish or replace those goods that had been sold, such mortgage was absolutely and entirely void.

We think this to be entirely erroneous. There was no evidence tending to show that any goods had been purchased or placed in the stock from the date of the execution of the mortgage until the time the plaintiff in error took possession thereunder. Nor is there any evidence which in the least tends to show that there were any sales of merchandise by the mortgagor, Andrews, from the date of the execution of said mortgage up till the time the plaintiff took possession thereof; and for that reason alone the demurrer should have been overruled in the case; but even if the theory of the trial court and the attorneys of the defendants is true, that the mortgage provided for a sale, or if it was contemplated that a sale of goods should be made from the stock, by its terms, still we think that, under the decision of this court in the case of Cameron v. Marvin, 26 Kan. 612, such demurrer was erroneously sustained. If there was any evidence proving or tending to prove, all the allegations of plaintiff's petition, the court should not weigh such evidence on the demurrer, but ought to have submittted the same to the jury.

A. H. Ellis, E. S. Ellis, and F. T. Burnham, for defendants in error:

We contend that the trial court committed no error, and that its judgment should be affirmed, for the following reasons, viz.: (1) Because there is not a particle of evidence that the goods replevied in this action were the goods attempted to be conveyed by mortgage by Andrews to Rathbun, and no effort was made by the plaintiff on the trial to identify the goods taken as those included in the alleged chattel mortgage under which the plaintiff in error claims; (2) because the mortgage was void upon its face, in that it specifically provided that all goods thereafter purchased should be subject to the lien of the mortgage, and because it provided for a sale of the mortgaged property by the mortgagor and contained no provision as to the disposition of proceeds, thus allowing the mortgagor to sell the stock and use the money derived therefrom for his own benefit; and there was no verbal agreement that the proceeds of sales should be applied toward the payment of the mortgage debt; (3) because the mortgage, being absolutely void on its face as to creditors, could not be transmuted into a valid pledge unless the property were voluntarily delivered by the mortgagor to the mortgagee for that purpose, and there is no evidence showing that Mrs. Andrews had any authority to act as the agent of the mortgagor, and make a pledge of the goods as security for his debts, nor is there any evidence showing or tending to show that she had any authority to make any disposition of the goods whatever.

As plaintiff did not see fit to introduce evidence identifying the goods, this court will not indulge in any presumptions in his favor, but, on the contrary, it will be presumed that the trial court committed no error. Bainter v. Fults, 15 Kan. 323; Lucas v. Sturr, 21 id. 480, and cases cited.

In support of the proposition that this mortgage is void upon its face, it seems almost unnecessary to cite any authorities, but we call attention to a few out of the many cases which appear to have settled this question emphatically. Robinson v. Elliott, 22 Wall. 513; Leser v. Glaser, 32 Kan. 546; Implement Co. v. Schultz, 45 id. 52; Blakeslee v. Rossman, 43 Wis. 116.

There are some authorities which hold that even where a mortgage is void as to creditors for any reason, still, if before the general creditors of the mortgagor obtain any lien upon the property the mortgagor voluntarily delivers possession of the property to the mortgagee, such a delivery will cure the defects in the mortgage, and will be held to constitute a valid pledge; and this is probably the rule in Kansas, although many respectable authorities hold otherwise. At the trial of the case in the court below, the plaintiff relied solely upon the case of Cameron v. Marvin, 26 Kan. 626, and appears to be still depending on the same case, as it is the only one cited in his brief; but we submit that the facts in that case were entirely dissimilar from those in the case at bar, and that case does not in any degree support the contention of the plaintiff in error herein. There it was admitted, and the court so found, that the mortgagor voluntarily and in person delivered the possession of the property to the mortgagee, and Mr. Justice VALENTINE, in delivering the opinion of this court, was careful to make a distinction between that case, where the possession was voluntarily delivered, and a case like the present one, where the possession was taken by the mortgagee, without the consent or even knowledge of the mortgagor.

Neither does the present case come within the other rule established by this court, in the case of Gagnon v. Brown, 47 Kan. 83, to the effect that, if a mortgagee takes possession of the mortgaged property before any other right or lien attaches, his title under the mortgage is good against everybody, and it is immaterial whether the mortgagee takes possession in invitum, or is voluntarily put in possession by the mortgagor; for this rule applies to those cases, and those cases only, where the mortgage is not void upon its face, but is void as to third parties until possession is taken, by reason of some neglect or laches on the part of the mortgagee, such as, for instance, a failure to file for record. It has never been held that a mortgagee can take forcible or involuntary possession of property covered by a mortgage which is void upon its face, and thereby place himself in any better position than he was in before thus obtaining the custody of the property.

As to the distinction between a voluntary delivery and a taking of possession of mortgaged property, see Jones, Chat. Mortg., § 178.

Had Mrs. Andrews authority to make a voluntary delivery of possession of the goods to the mortgagee, and could she make a valid pledge of the property of her husband to secure his debts? Her agency cannot be presumed; but, on the contrary, the evidence to establish agency of the husband for the wife, or the wife for the husband, must be stronger and more satisfactory than that required between independent parties. Eysho v. Capello, 61 Mo. 578; Mechem, Agency, § 401; McLaren v. Hull, 26 Iowa 297. See also 9 Am. & Eng. Encyc. of Law, p. 839; Benjamin v. Benjamin, 15 Conn. 347-354; Sawyer v. Cutting, 23 Vt. 486; Leeds v. Vail, 15 Pa. 185; Manufacturing Co. v. Morgan, 29 Kan. 519; Butts v. Newton, 29 Wis. 632-638; Savage v. Davis, 18 id. 608; Vescelius v. Martin, 18 P. (Colo.), 338.

In view of the facts in this case and the authorities cited, it seems clear that there was no valid pledge of the goods, for to constitute a pledge there must be an actual delivery of the property to the pledgee, and it goes without saying that this delivery must be made by the pledgor or a person duly authorized by him to make such delivery. Raper v. Harrison, 37 Kan. 243.

E. F. Robinson, for plaintiff in error in reply:

Are the three claims of defendants in error supported by the law under the facts of this case? We think not. When plaintiff found the wife of the mortgagor in possession of the goods, and especially as she often worked in the store, why should he go to the useless expense of legal process in taking possession of the stock? This question has added force, when we remember that his mortgage was of record, and that the party complaining had not only constructive knowledge thereby, but also had actual knowledge of plaintiff's lien, as had also the attorney instituting the suit. As to the right of mortgagor to sell the goods, it is only an implied one, from the exception in the mortgage, that this mortgage should cover any and all goods to replace any sold; and there is certainly no evidence warranting the construction that the mortgagor had any right to sell the goods and appropriate the proceeds to his own use. As supporting the views herein expressed, the following, out of the great list of authorities, are cited: Greeley v. Reading, 74 Mo. 309; Morris v. Swift, 15 Nev. 215; Frank v. Miner, 50 Ill. 444; Chipron v. Fickart, 68 id. 284; Nash v. Norment, 5 Mo.App. 545; Clute v. Steele, 6 Neb. 335; Smith v. Stern, 17 Pa. 360.

VALENTINE, J. All the Justices concurring.

OPINION

VALENTINE, J.:

This was an action of replevin, brought in the district court of Osborne county on November 27, 1888, by E. B. Rathbun against W. A. Berry, The Beloit Milling Company, a corporation George W. Bittman, O. B. Taylor, and W. N. Todd, copartners, doing business as Bittman, Taylor & Co., John Jackson and Andrew Jackson, copartners, doing business as Jackson Bros., to recover certain goods, wares and merchandise alleged to be unlawfully detained by the defendants from the plaintiff, and of the aggregate value of $ 563.98. The plaintiff claimed the property...