Schumacher v. R-B Freight Lines, R-B

• Decision Date: 27 December 1950
• Docket Number: No. 9111,R-B,9111
• Citation: 45 N.W.2d 458,73 S.D. 535
• Parties: SCHUMACHER v.FREIGHT LINES, Inc., et al.
• Court: South Dakota Supreme Court

Page 458

45 N.W.2d 458

73 S.D. 535

SCHUMACHER v. R-B FREIGHT LINES, Inc., et al.

No. 9111.

Supreme Court of South Dakota.

Dec. 27, 1950.

Chas. E. Gorsuch and Elmer Thurow, Aberdeen, for appellants.

Williamson & Williamson, Aberdeen, for respondent.

HAYES, Presiding Judge.

Plaintiff brought suit to recover the value of a truck and trailer against which he held what we will call for the sake of brevity first and third mortgages. He had loaned to the owners of this property the sum of $2,300 which, it is understood from the record here, included the unpaid balance of a first mortgage then held by a bank. Pursuant to an understanding evidenced by a written memorandum, made at the time of said loan by plaintiff, the bank's mortgage was assigned to plaintiff and was received by him as collateral security for the $2,300 loan. The amount then due on the bank's mortgage was approximately $1,300. The same was payable in monthly installments of $100, except a final payment of $193.75. The final payment became due on June 28, 1948. The assignment of the bank's mortgage is dated July 17, 1947.

The mortgage to plaintiff in the sum of $2,300 is dated July 15, 1947, and was payable January 15, 1948. The same, in addition to the truck and trailer mentioned above, mortgages a vehicle described as 'One 1942 Plymouth Four-door Sedan' and, following a description of the chattels, bears the recitation 'Subject to encumbrances of record'. On the date of this mortgage encumbrances of record included a chattel mortgage against said truck and trailer in the sum of $3,000 in favor of defendant R-B Freight Lines, Inc.

During the month of January, 1949, defendant Gorsuch, acting as attorney and agent for the corporate defendant to which we will hereinafter refer as R-B, undertook to foreclose the R-B second mortgage. It is conceded that this attempted foreclosure was not in compliance with the laws of the State of South Dakota. At the foreclosure sales defendant Gorsuch acted also as agent of defendant Johnson in purchasing the mortgaged chattels. Johnson paid $300 for the same and thereafter rented the trailer to defendant Stucker and sold the truck to one Munsch.

Pleading ownership of the first and third mortgages mentioned above, plaintiff's complaint alleges a wrongful foreclosure and a conversion of the truck and trailer by defendants R-B, Gorsuch and Johnson and the subsequent acquisition of the trailer by defendant Stucker with knowledge of plaintiff's mortgage. The balance due plaintiff is alleged to be $932, plus interest. Defendants, except R-B, answered admitting the mortgages as pleaded, the foreclosure and sale under the R-B mortgage, and alleging that the first mortgage had been paid; that the value of the truck and trailer sold at foreclosure sale did not exceed $300, and that plaintiff had not been damaged by the acts of defendants or any of them. Defendants appeal from a decision and judgment in plaintiff's favor awarding damages in the sum of $400. The liability of defendant Stucker under the judgment is limited to $100, the value of the trailer at the time of the alleged conversion.

At the trial of the case it was disclosed that the Plymouth car had been sold shortly after the same had been mortgaged to plaintiff and that plaintiff's son, one of the mortgagors in the third mortgage for $2,300, thereafter executed and delivered to plaintiff a chattel mortgage on a small cement block building. It appears that this structure had been placed upon leased premises, with a reserved right of removal, and that the same had been rented for $25 a month with some rent returns paid over to plaintiff in reduction of the mortgage debt.

The trial court decided that the balance...