Schleiff v. McDonald

• Decision Date: 25 February 1928
• Docket Number: 4752
• Citation: 264 P. 866,45 Idaho 620
• Parties: HERMAN SCHLEIFF, Appellant, v. C. R. McDONALD and JOSEPH A. DEMAI, Defendants, and MARY RICE, Administratrix of the Estate of W. L. RICE, Respondent
• Court: Idaho Supreme Court

264 P. 866

45 Idaho 620

HERMAN SCHLEIFF, Appellant, v. C. R. McDONALD and JOSEPH A. DEMAI, Defendants, and MARY RICE, Administratrix of the Estate of W. L. RICE, Respondent

No. 4752

Supreme Court of Idaho

February 25, 1928

BILL OF SALE AND OPTION TO REPURCHASE - MORTGAGE OR PLEDGE - QUESTION FOR JURY-DISCHARGE OF LIEN.

1. In action for claim and delivery of automobile where bill of sale was given for car, question of whether bill of sale was mortgage or sale with option to repurchase held for jury.

2. In action for claim and delivery of automobile where bill of sale contained option to repurchase and question arose as to whether transaction was mortgage or sale with option to repurchase, evidence held sufficient to support conclusion of jury that transaction was mortgage and not intended to transfer ownership of car.

3. Where bill of sale for automobile containing option to repurchase was executed and jury determined bill of sale was mortgage, tender of amount named in instrument held to release lien on car.

APPEAL from the District Court of the Fifth Judicial District, for Bannock County. Hon. Robert M. Terrell, Judge.

Action in claim and delivery. Judgment for defendant. Affirmed.

Judgment affirmed. Costs to respondent.

William Edens, for Appellant.

It needs no authorities to support the proposition,--that if the bill of sale and contract constituted and were intended as a sale, with option to repurchase, then no other conclusion could be drawn, except that the plaintiff was entitled to judgment. If the transaction was a mortgage, the terms and conditions thereof were contained in the bill of sale, given by DeMai to Schleiff and the agreement to repurchase, which latter instrument limited such right to thirty (30) days. ( Schleiff v. McDonald, 37 Idaho 423, 237 P. 1108.)

If the transaction constituted a chattel mortgage and the terms of the chattel mortgage were violated by a failure to pay within thirty (30) days, and the terms of the instrument constituting a chattel mortgage gave the right of immediate possession to the mortgagee under breach thereof, then unless the lien on the automobile has been lost by refusal of the tender, the plaintiff was entitled to possession. (Schleiff v. McDonald, supra; Blackfoot City Bank v. Clements, 39 Idaho 194, 226 P. 1079.)

In general a tender of the amount due on a chattel mortgage before maturity and before the mortgagee has taken possession, in order to discharge the lien, must be fairly made, absolutely unconditional and of a sum sufficient to cover the whole amount due.

"Where a refusal of tender is made and this is based on a bona fide claim of right, which is believed in by the mortgagee, such refusal, it is held, does not discharge the security." (5 R. C. L. 457, 458.)

In support of this proposition see Moore v. Norman, 43 Minn. 428, 19 Am. St. 247, 45 N.W. 857, 9 L. R. A. 55; Moore v. Norman, 52 Minn. 83, 38 Am. St. 526, 53 N.W. 809, 18 L. R. A. 359; Reynolds v. Price, 88 S.C. 531, 71 S.E. 51.

"If a mortgagee acting in good faith refuses a tender through any mistake as to his legal rights, the lien or the mortgage is not discharged. A mere stranger has no right to tender money to discharge an encumbrance on property or redeem it, but one who has an interest in the property is not a stranger." (2 Jones on Mortgages, sec. 895.)

Merrill & Merrill, for Respondent.

A transfer of property with a contemporary agreement to purchase it back at a certain figure may be shown to have been given merely as security for a deal. (C. S., secs. 6358 6359; Bergen v. Johnson, 21 Idaho 619, 123 P. 484; Keane v. Kibble, 28 Idaho 274, 154 P. 972.)

This rule applies to personal property as well as to real estate and when personal property is involved the transaction may be shown to be a chattel mortgage or a pledge. (Schleiff v McDonald, 41 Idaho 50, 237 P. 1108; Rairden v Hedrick, 46 Mont. 510, 129 P. 498; Murray v. Butte-Monitor Tunnel Min. Co., 41 Mont. 449, 110 P. 497, 112 P. 1132.)

Where a debt is secured by a chattel mortgage or a pledge of personal property, a proper tender of the amount due to the mortgagee and a refusal thereof by the mortgagee or pledgee will discharge the lien. (11 C. J. 679; 31 Cyc. 852; Loughborough v. McNevin, 74 Cal. 250, 5 Am. St. 435, 14 P. 369, 15 P. 773; Schleiff v. McDonald, supra; Casady & Co. v. German Sav. Bank, 159 Iowa 149, 140 N.W. 401.)

"In jurisdictions which consider a chattel mortgage simply as a lien, an unconditional tender of the amount due, after default and before foreclosure, discharges the mortgage and revests title in the mortgagor and such tender need not be kept good or brought into court." (5 R. C. L. 458; Moore v. Norman, 43 Minn. 428, 19 Am. St. 247, 45 N.W. 857, 9 L. R. A. 55; Thomas v. Seattle Brewing Co., 48 Wash. 560, 125 Am. St. 945, 15 Ann. Cas. 494, 94 P. 116, 15 L. R. A., N. S., 1164; Maxwell v. Moore, 95 Ala. 166, 36 Am. St. 190, 10 So. 444; Smith Wogan Hardware Co. v. Bice, 34 Okla. 294, 125 P. 456.)

The verdict of the jury will not be set aside if the evidence is conflicting. (C. S., sec. 7170; State v. Shepherd, 39 Idaho 666, 229 P. 87; Herculith Co., Ltd., v. Gustafson, 22 Idaho 537, 126 P. 1050; Watkins v. Mountain Home Co-op. Irr. Co., 33 Idaho 623, 197 P. 247.)

BUDGE, J. Wm. E. Lee, C. J., and Givens, Taylor and T. Bailey Lee, JJ., concur.

OPINION

BUDGE, J.

This action, in claim and delivery, was instituted by appellant in February, 1919, to recover possession of a certain automobile, alleged to be of the value of $ 350, appellant claiming to be the owner and entitled to the possession of said automobile. The action was dismissed as to two of the defendants, and respondent answered. The answer denied that appellant was the owner of the car or entitled to its possession, and alleged affirmatively that if appellant had any interest in the car it was by virtue of a mortgage, and that on February 8, 1919, respondent tendered to appellant $ 215, claimed to be owing by one DeMai to appellant, and that appellant refused the tender.

The cause was removed from the probate court to the district court and came on for trial. A motion for nonsuit, made by respondent, was granted, and judgment dismissing the action against respondent was entered. An appeal was taken to this court by appellant, and the judgment was reversed and the cause remanded for a new trial. (Schleiff v. McDonald, 37 Idaho 423, 216 P. 1044.) Upon the new trial a verdict was returned for respondent, and appellant perfected another appeal to this court, which again reversed the judgment and remanded the cause for a new trial. ( Schleiff v. McDonald, 41 Idaho 50, 237 P. 1108.) The last trial resulted in a verdict in favor of respondent for a return of the automobile, and fixing its value at $ 350. Judgment was entered on the verdict, decreeing that appellant return the automobile to respondent, and if delivery thereof could not be had that appellant pay to respondent the sum of $ 350 with interest. This appeal is from the judgment. It appears that after the action was brought, appellant obtained possession of the car and disposed of it, so that the controversy involves payment of the $ 350, fixed by the jury as the value of the car. Since the cause was tried the last time, respondent died, and his administratrix has been substituted in his stead.

Appellant claims that he became the owner of the car and entitled to its possession by reason of a bill of sale delivered to him by one DeMai, dated January 8, 1919, in consideration of the payment to DeMai of $ 190. On the same day of the execution and delivery of the bill of sale, appellant entered into a written agreement with DeMai by the terms of which DeMai was given the right to the return of the car upon the payment to appellant of $ 215, said option to be exercised by DeMai on or before the expiration of thirty days.

Appellant's assignments of error resolve themselves into two propositions, the first of which is whether the transaction between appellant and DeMai constituted a sale of the automobile to appellant with an option to repurchase, or amounted to a mortgage or pledge of the property. In the opinion handed down by this court on the first appeal it was stated that without oral proof to show that the automobile was delivered into the possession of appellant to secure any debt, the contention that the two instruments executed by and between appellant and DeMai constituted a mortgage must be so decided from the construction of those instruments, and the court declined to say that the two instruments standing alone, that is, the bill of sale and the agreement by which DeMai could repurchase the car within thirty days, were intended to...