Stockyards Nat. Bank v. B. Harris Wool Co.
| Decision Date | 31 December 1926 |
| Docket Number | No. 25031.,25031. |
| Citation | 289 S.W. 623 |
| Parties | STOCKYARDS NAT. BANK OF SOUTH OMAHA v. B. HARRIS WOOL CO. |
| Court | Missouri Supreme Court |
Appeal from St. Louis Circuit Court; Charles B. Davis, Judge.
Action by the Stockyards National Bank of South Omaha against the B. Harris Wool Company. Judgment for defendant, and plaintiff appeals. Affirmed.
S. T. G. Smith and Thos. S. Meng, both of St. Louis, for appellant.
Jones, Hocker, Sullivan & Angert, of St. Louis, for respondent.
This is an action for the alleged conversion of a quantity of wool which was delivered by one Wrathall to defendant, who received the wool, made certain advances thereon to Wrathall, and disposed of the wool in accordance with certain compulsory regulations promulgated by the United States Board of War Industries, which regulations were shown to be in force and effect during the year 1918. The action was tried to a jury, resulting in a verdict and a judgment thereon in favor of defendant, from which judgment plaint ff has appealed to this court. The judgment nisi was affirmed by this division of this court, an opinion, expressing our conclusions, having been prepared by one of the judges of this court, but subsequently a rehearing was granted to appellant. The cause was thereupon reargued and reassigned to the writer hereof for an announcement of the conclusions of this court. From an examination of a voluminous record, we gather the fol owing salient facts:
Plaintif, dining the times herein mentioned, was a national bank with its principal place of business in South Omaha, Neb. Defendant was engaged in buying and selling wool and furs, and had been engaged in such business for many years prior to the transaction herein involved, with its principal office in the city of St. Louis, and maintaining branch offices in Boston, Philadelphia, and Salt Lake City. Tagg Bros. & Moorhead was a corporation with its principal office at South Omaha, Neb., and was engaged in buying and selling live stock on commission and in making loans to stock raisers on live stock security. The Stockmen's Securities Company was a corporation, organized early in the year 1918, for the purpose of making loans on live stock security. The two corporations last named, Tagg Bros. & Moorhead and Stockmen's Securities Company, had their principal place of business in the same room, or suite of rooms located in the Live Stock Exchange building in South Omaha, Neb. The two latter corporations were owned, to a large extent, by the same group of stockholders, although a few of the minority stockholders in Tagg Bros. & Moorhead were not stockholders in the Stockmen's Securities Company. In other words, both corporations were apparently owned and controlled by interlocking stockholders.
In September, 1917, Wrathall, who was a sheep raiser and wool grower in Idaho, was the owner of supposedly 3,000 head of sheep and had contracted with one Warren for the purchase of an additional 5,000 head, more or less. Wrathall did not have the money with which to purchase the sheep which he had contracted to buy from, or through, Warren. In September, 1917, arrangements were made whereby Tagg Bros. & Moorhead was to make a loan of approximately $80,000 (the estimated purchase price of the 5,000 head of sheep) to Wrathall, to be secured by the 3,000 head he supposedly then owned and the 5,000 head to be purchased by him from, or through, Warren. When the sale from Warren to Wrathall was consummated, it was discovered that there were exactly 4,867 head, the purchase price of which aggregated approximately $78,000, which amount Tagg Bros. & Moorhead loaned to Wrathall and with which Wrathall purchased the 4,867 head of sheep.
On September 28, 1917, Wrathall executed and delivered to Tagg Bros. & Moorhead his eight promissory notes in the aggregate principal of $78,000, all payable six months after date, securing the payment thereof by a chattel mortgage of even date on all of the sheep, 7,867 head. The mortgage described the brands upon the sheep, that the sheep were to be ranged in Cassia county, Idaho, and, furthermore, that:
"It is the intention of this mortgage that it shall cover and include all wool growing and to be grown on said sheep during the year 1917 and 1918, together with all the increase from said sheep during the life of this mortgage."
The mortgage also provided:
The mortgage was filed for record in the office of the recorder of Cassia county, Idaho, the county where the sheep were then located and kept, on October 5, 1917. On or about October 2, 1917, Tagg Bros. & Moorhead sold the eight Wrathall notes secured by said chattel mortgage to plaintiff bank, indorsing the notes without recourse.
On March 26, 1918, Wrathall executed and delivered to Stockmen's Securities Company eight new notes, all payable six months after date, aggregating the principal sum of $81,120, being the principal and accrued interest then due on the notes of September 28, 1917. At the same time, on March 26, 1918, he executed and acknowledged a new chattel mortgage in favor of Stockmen's Securities Company, as mortgagee, securing the payment of said notes, which were payable to Stockmen's Securities Company, or order, covering the same 7,867 head of sheep described in the mortgage of September 28, 1917, with the recital that "said sheep are to be ranged about 20 miles south of Rockland, Power county, Idaho, or 35 miles northwest of Malad, Oneida county, Idaho." The new, or later, mortgage contained the recital:
"It is the intention of this mortgage that it shall cover and include all wool growing and to be grown on said sheep during the year 1918, together with all the increase from said sheep during the life of this mortgage."
Subsequently to the execution and acknowledgment of said chattel mortgage, the following recital was inserted in the mortgage:
"The above-described sheep are now in Cassia county on the trail from Burley to the range in Power county, above described."
The mortgage was filed for record in the office of the recorder of Power county on April 4, 1918, and in the office a the recorder of Cassia county on May 10, 1918.
On September 28, 1917, when the first mortgage was executed and acknowledged, the sheep were on the Meadow creek range in Cassia county. In the latter part of December, 1917, they were driven across the Snake river into Minidoka county. Minidoka county adjoins Cassia county on the north, and the dividing line between the two counties is the Snake river. The sheep were kept, ranged, and fed in Minidoka county during the ensuing winter and until March 31 or April 1, 1918, on one or the other of which dates they were started back to the bridge across Snake river, entering Cassia county on April 3 or 4, 1918. Thereafter they were continuously ranged and kept in Cassia county on the Meadow creek range until they were sheared and their wool was clipped in the latter part of June, 1918. Immediately after the shearing was completed, Wrathall drove about 3,750 head, more or less, to Power county, where he sold them,
Certain statutes of Idaho (Revised Code of 1908) were pleaded and put in evidence at the trial as pertinent to the issues raised by the pleadings. These statutes are as follows:
"Sec. 3408. A mortgage of personal property is void as against. creditors of the mortgagor and subsequent purchasers and incumbrancers of the property in good faith and for value, unless:
After the execution of the two mortgages above mentioned, Wrathall continued in exclusive possession of both the sheep and the wool described therein until the wool was delivered to defendant and came into its possession. During all such time neither of the mortgagees named in said mortgages, nor the plaintiff assignee of the notes secured thereby, ever took possession, or attempted to taken possession, of either the wool or the sheep.
Both mortgages and both sets of notes were prepared by one Smith, who was an active vice president of the Burley State Bank at Burley, Cassia county, Idaho. The Burley State Bank was a correspondent of plaintiff National Bank. As notary public, Smith took the acknowledgments of both mortgages. The mortgages and notes were prepared by Smith upon blank printed forms left with the Burley State Bank for that purpose, Smith filling in the blank spaces in the printed forms upon a typewriter. Upon the execution and acknowledgment on March 26, 1918, of the new mortgage and the eight notes secured thereby, the mortgage and notes were sent by Warren, who was a director of the Burley State Bank, to Tagg Bros. & Moorhead, South Omaha, Neb., and shortly thereafter Stockmen's Securities Company, the mortgagee and payee of the new notes, offered the...
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