Sargent v. Chapman

• Decision Date: 13 February 1899
• Citation: 56 P. 194,12 Colo.App. 529
• Parties: SARGENT v. CHAPMAN et al.
• Court: Colorado Court of Appeals

56 P. 194

12 Colo.App. 529

SARGENT v. CHAPMAN et al.

Court of Appeals of Colorado

February 13, 1899

Appeal from district court, La Plata county.

Replevin by W.C. Chapman and another against D.C. Sargent. There was a judgment for plaintiffs, and defendant appeals. Affirmed.

Willis A. Reese, Joseph N. Baxter, and John C Fitnam, for appellant.

C.E. &amp F. Herrington and B.W. Ritter, for appellees.

BISSELL J.

In this suit the mortgagees and attaching creditors are contesting their title to a lot of personal property which belonged to the Strater-Thorp Drug Company, a corporation doing business in Durango and at other points in the state. Up to the early part of July, 1893, the drug company was the undisputed owner and in possession of the property. In stating the facts on which we predicate our judgment, we shall follow the evidence produced by the mortgagees in support of their title, because not only does the verdict of the jury manifestly depend on it, but because we are thoroughly satisfied they maintained their case, and that a verdict finding otherwise could not be supported, and must inevitably have been set aside. In so far as it is attacked by the testimony of Strater, we do not think it is at all shaken. We give little credence to his testimony, and in this respect are evidently in entire accord and sympathy with the jury. The drug company became embarrassed in the summer of 1893. It owed the State National Bank a large debt, contracted at various times and for various purposes in the interests of the corporation. The bank commenced negotiations looking to the execution of a security therefor. They started about the 7th of July, and the propriety of attachment, bill of sale or chattel mortgage was discussed between the parties. It was concluded to give a chattel mortgage, as the shortest safest, and least costly of the various methods which might be adopted. The chattel mortgage was prepared either on Friday or Saturday, the 7th or 8th day of July, and, so far as respects its preparation by the scrivener, was completed on Saturday evening. It was probably signed by the president and secretary of the company on that date, and turned over to a notary to fill out and indorse the acknowledgment. It is quite probable the parties acknowledged its execution when it was handed to the notary. According to the terms of the mortgage as it existed on Saturday, it contained this clause: "Also that until said indebtedness, and every part thereof, and all interest, as aforesaid, shall be fully paid, said party of the first part, its successors or legal representatives, will not sell or dispose of, or attempt to sell or dispose of, the said property, goods, and chattels, nor any part thereof." There was also another clause, found later in the instrument, substantially reciting an agreement that, until default shall be made by the drug company in the performance of some of its conditions or agreements, the said drug company "may keep, retain, and use the said goods and chattels." After this execution of the instrument, and on Sunday, it was turned over to the attorney representing the bank for inspection, and to determine whether in all respects it was legal, regular, and sufficient in form. The attorney made some question about the words "retain and use," and, to avoid any ultimate question respecting the validity of the instrument growing out of that feature, its erasure was requested. The evidence clearly shows that the officers of the drug company assented to their elimination, though whether this was done prior to the time that the instrument was given to the notary for acknowledgment is not clear. It is, however, very evident, from the testimony,--at least, it is clearly established by the weight of it, and, to our judgment, satisfactorily proven,--that the words were erased before the delivery of the instrument. Strater disagreed with the other witnesses respecting some of the pivotal matters which we state. On Monday, the 10th of July, and about noon of the day, the mortgage was returned to the Strater Drug Company, having only been temporarily out of their possession for the purpose of examination, and at that time Strater formally delivered it to the mortgagees. We concede that Strater denied this; denied any consent to the erasure of the words "retain and use"; asserted a prior delivery of the instrument; and insisted that he did not have it in his possession, or deliver it, on Monday noon, to the mortgagees; but he is so completely contradicted by the evidence of every other witness in the case who knew anything about it, and there is such an inherent improbability in the story which he tells, and we are so thoroughly impressed with its inaccuracy, that, like the jury, we do not hesitate to disregard it. We therefore, on the record as it stands, decide that the mortgage was not delivered until the noon of Monday, the 10th; that the words "retain and use" had been erased by consent of the mortgagors before this time; and that on the noon of that day the drug company delivered the instrument to the mortgagees for the purpose of securing their debt. Concurrently with the delivery of the instrument, the mortgagees took immediate possession of the property, and remained in possession for some time, when the appellant here levied his attachments on the goods, and attempted to make his debt by the levy. The mortgagees replevied. The attaching creditors defended on various grounds, and, the verdict of the jury being against them, bring the case here by appeal. So far as we are able to discover, there are no other important matters of fact suggested by the record, and enough has been stated to exhibit the facts in dispute, and to enable us to decide the various propositions on which the appellant relies to reverse the judgment.

The appellant presents many questions of greater or less importance. As we look at it, there are but a very few of sufficient magnitude to justify the reversal of the case, if we should accede to his contentions. We shall therefore only notice those which would, if sustained by proof and warranted by the law, justify a reversal; paying no attention whatever to the minor propositions, which we do not regard as of vital significance. The appellant's counsel have very properly, in a manner which aids the court very much in formulating its opinion, stated the principal propositions on which they rely.

At the time of the trial, the mortgagees produced the instrument through which they derived title. This was the mortgage to which we have referred. They offered no evidence respecting the authority of the president and secretary to execute the instrument by way of proof of a resolution of the directors to that end. The appellant strenuously insists that this is a manifest error. Whatever might be the rule under other circumstances, we are very pronouncedly of the opinion the appellant is in no condition to raise the question, and the matter was never so presented to the trial court as to compel the mortgagees to offer proof of the authority of the officers of the company to execute such an instrument, where what was offered was regular on its face and under the seal of the corporation. There may be some circumstances under which this proof must be made by the party who produces an instrument of this sort, when it covers the entire property of a corporation, and its execution, delivery, and enforcement will result in the absolute destruction of the business of the corporation. It is however, unnecessary to determine when, and under what circumstances, this rule must be observed. It is enough to decide that in this case, and under the evidence as we read it, it is wholly inapplicable. In the first place, we disagree with counsel for the appellant in their conclusion that an issue is raised respecting the execution of the instrument. It is true they deny that the plaintiffs were entitled to the possession of the goods by virtue of any valid chattel mortgage made, executed, acknowledged, or delivered by the drug company to the plaintiffs. If this denial is anything, when viewed with reference to the allegations of the complaint, it is, in any event, a negative pregnant, and does not deny the execution, acknowledgment, or delivery of the instrument by the drug company, although it does deny the execution, acknowledgment, and delivery of a valid chattel mortgage. The denial is in such form that it is very clear the pleader did not attempt to raise an issue respecting the acknowledgment and execution. This is undoubtedly necessary, if the parties intend to question the authority of the officers to execute the instrument sued on, and which is the foundation of the plaintiffs' title. If there be no issue tendered by the defendant, and it is on him to present it, the plaintiffs may rely on the presumption flowing from an instrument regular on its face, signed by the proper officers, and under the seal of the company. 4 Thomp.Corp. § 5029; Bank v. Dandridge, 12 Wheat. 64; Gorder v. Canning Co., 36 Neb. 548, 54 N.W. 830; New England Wiring & Construction Co. v. Farmington Electric Light & Power Co., 84 Me. 284, 24 A. 848; Steel Works v. Bresnahan, 60 Mich. 332, 27 N.W. 524; Salem Bank v. Gloucester Bank, 17 Mass. 1. These and many other authorities which might be cited are clear to the point that an instrument regular on its face, and signed by the proper officers, under the seal of the corporation, presumptively was executed under authority delegated in the proper manner and by the proper powers to the officers. Whenever it is desired to attack the regularity of an instrument of this description, the contestants must tender an issue and support it by competent proof. This was not done by the appellant, and he...