Simpson v. Harris

• Decision Date: 28 January 1893
• Citation: 31 P. 1009,21 Nev. 353
• Parties: SIMPSON v. HARRIS et al., (CHEDIC, Intervener. No. 1,366.)
• Court: Nevada Supreme Court

31 P. 1009

21 Nev. 353

SIMPSON v. HARRIS et al., (CHEDIC, Intervener. No. 1,366.)

Supreme Court of Nevada

January 28, 1893

Appeal from district court, Ormsby county; RICHARD RISING, Judge.

Action by D. C. Simpson against A. E. Harris, the Langley & Michaels Company, a corporation, and Walter H. Chedic, intervener, for the foreclosure of a chattel mortgage. From the judgment plaintiff appeals. Affirmed.

S Summerfield and W. E. F. Deal, for appellant.

J. D Torreyson, for respondent Langley & Michaels Co. R. M. Clark and William Woodburn, for intervener and respondent.

MURPHY C.J.

This is an action commenced by D C. Simpson, in the district court of Ormsby county, to foreclose a chattel mortgage made executed, and delivered to him by A. E. Harris. The Langley & Michaels Company was made a party defendant, it claiming an interest in the property as subsequent mortgagee to Simpson. Walter H. Chedic, by leave of the court first had, filed his complaint of intervention. A. E. Harris failing to answer, his default was duly entered. D. C. Simpson answered the complaint of intervention. We glean from the record the following facts:

On the 12th day of May, 1891, Walter H. Chedic was engaged in the drug business in Carson City, Nev. On that day he entered into an agreement with A. E. Harris to sell the stock of goods at wholesale catalogue price, freight added, the actual cost of fixtures in the store occupied by him, and $500 to be paid for the good will of the business. The goods were invoiced, and on the 4th day of June, 1891, the sale and delivery of the personal property were completed by delivering possession of the same to A. E. Harris; he paying therefor $8,363.50, of which sum Harris paid $4,000 in cash, and gave his note for the sum of $4,363.50, payable in installments of $300 each, with interest at the rate of 10 per cent. per annum; the first payment to be made on the 4th of September, 1891, and each subsequent payment should become due at intervals of three months apart, from the said 4th day of September; and, to secure the payment of this note, A. E. Harris made, executed, and delivered to Walter H. Chedic a mortgage on the merchandise then in the store and store room. This mortgage was not recorded until the 3d day of February, 1892. On the 12th day of May, 1891, D. C. Simpson drew his check in favor of A. E. Harris, for the sum of $4,000, to make the first payment on the goods, when the invoice should be completed and the agreement closed, which said sum of money was paid to Chedic on the 4th day of June, when the property was placed in Harris' possession. At the time that Simpson drew his check, Harris made, executed, and delivered to Simpson his promissory note for the sum of $4,000, payable one day after date, with interest thereon at the rate of 10 per cent. per annum. On the 14th day of November, 1891, Harris, not having paid the amount due Simpson, gave him a new note for the said sum of $4,000, and to secure the payment thereof made, executed, and delivered to Simpson a mortgage on all the goods and personal property in the store, which mortgage was recorded on the day of its execution. On the 25th day of January, 1892, A. E. Harris, being indebted to the Langley & Michaels Company for goods, wares, and merchandise sold and delivered to him after he had taken possession of the store, made, executed, and delivered to said company his promissory note for the sum of $791.19, and to secure the payment of the said note gave a mortgage on the stock of goods then in the store. This mortgage was filed for record on the date of its execution. On the 2d day of February, 1892, Harris not having paid the Simpson note, Simpson demanded and received possession from A. E. Harris of all the personal property then in the store, and on the same day commenced this action to foreclose his mortgage.

The cause was tried by the court with a jury on the complaint of Simpson, who made the Langley & Michaels Company a party defendant; it claiming to have an interest in and claim upon the mortgaged property subordinate and subsequent to the mortgage lien of plaintiff, Simpson. The Langley & Michaels Company answered this complaint, setting out its note and mortgage from Harris to it, and admitting that its mortgage lien, claim, and interest was and is a junior lien, and subordinate to the mortgage lien of plaintiff, Simpson, upon the property described in Simpson mortgage, but claimed that the mortgage lien of Chedic was and is subsequent and subordinate to the mortgage lien of plaintiff, Simpson, and of the defendant the Langley & Michaels Company. Walter H. Chedic, by leave of the court first had and received, filed his complaint of intervention, claiming a prior lien on all the property as against Simpson, or the Langley & Michaels Company mortgage. In the complaint of intervener, Chedic, he alleges, upon information and belief, that the note, as set out in Simpson's complaint, was not made until the 14th day of November, 1891. Chedic also alleges that after his mortgage was made, acknowledged, sworn to, and delivered, and after the payment to him of the sum of $4,000 on account of the purchase of said personal property, and said Chedic well knowing that unless said chattel mortgage was recorded in the office of the recorder of the county where said personal property was situated, and in the county where said mortgagor resided, the same would be invalid as to all persons except the parties thereto intended, and was proceeding to have the same recorded, and the said D. C. Simpson requested and prevailed upon said Chedic not to record the same, and requested and induced the said Chedic to withhold the same from the record of said county, declaring, among other things, "that the purchase of said personal property, and advancing and payment of the sum of $4,000, was a family matter, and that Harris would not be called upon or required to secure or pay the sum of $4,000, or any part thereof, and the whole of said property would be and remain the property of said Harris, and security of said indebtedness of $4,363.50, the balance of said purchase money." And said Chedic alleges that, relying upon the statements, declarations, promises, and assurances of the said plaintiff, Simpson, and at the instance and request of said Simpson, the said Chedic withheld said mortgage from record, and did not record the same until the 3d day of February, 1892. Simpson answered this complaint, and denied every allegation thereof charging deceit, collusion, or fraud on his part.

The jury returned a general verdict in favor of intervener, Chedic, upon which the court rendered its findings as follows: " First. That the mortgage of Langley & Michaels Company was a valid lien upon the goods, drugs, and personal property described therein, and, as to all of said property, was a prior and superior lien to the lien of intervener, Chedic, and, to all of said property not described in the mortgage of D. C. Simpson, was prior and superior to the mortgage of the said Simpson. Second. That the mortgage of W. H. Chedic was a good and valid mortgage, as against A. E. Harris, from the date of its execution and delivery thereof, and, as against all persons, from the date of the record thereof, to wit, the 3d day of February, 1892, and, under and in conformity with the verdict of the jury in this action, was and is a valid and subsisting lien upon the goods, drugs, and personal property described therein, as against the said D. C. Simpson, and as against said plaintiff, D. C. Simpson, is a prior and superior lien to the mortgage and lien of said D. C. Simpson, but is subordinate to the mortgage of said Langley & Michaels Company. Third. That the mortgage of D. C. Simpson is a valid lien, as against A. E. Harris, upon the goods described therein, but, upon the verdict of the jury, is subordinate to the lien of the said intervener, W. H. Chedic, and to the mortgage lien of Langley & Michaels Company." The court ordered the property to be sold by the sheriff, and the proceeds of such sale to be applied as follows: (1) Payment of all costs and expenses of the sale; (2) payment of the Langley & Michaels Company claim; (3) payment of the Walter H. Chedic demand; (4) payment of Simpson's claim.

The appeal is taken from the judgment and order of the court denying plaintiff Simpson's motion for a new trial, and the errors assigned are as follows: (1) That the evidence is insufficient to justify the verdict, judgment, or decree; (2) said verdict, judgment, and decree are against law; (3) errors of law occurring at the trial, and excepted to by plaintiff, Simpson.

In the complaint of intervener, Chedic, it is alleged, and upon the trial it was sought to be established, that the $4,000 advanced by Simpson to A. E. Harris on the 12th day of May 1891, was a matter of favor, or, in other words, a gift, and not a loan. In support of this position, Chedic testified that Harris was Simpson's son-in-law. In a conversation he had with Simpson, Simpson said: "Harris being a young man, it would impair his credit to have the mortgage recorded against him, and he (Simpson) said that I had the only mortgage against the store, and the money he had put up for Harris was a family matter, and that Harris would not have to pay him back, and if he did pay him, it was all right, and if he did not pay, it was all right." Dr. Guion testified that he had a conversation with Simpson in which Simpson said that he had put up or advanced the sum of $4,000 for Harris to purchase the business, and Harris would have time to work the debt out. Simpson in his answer denies that the money was a gift. In his testimony he denies that it was advanced as a matter of favor or gift, but that it was a loan to Harris,...