Teigen v. Occident Elevator Company, a Corp.

• Court: North Dakota Supreme Court
• Writing for the Court: BRONSON, Ch. J.
• Citation: Teigen v. Occident Elevator Company, a Corp., 200 N.W. 38, 51 N.D. 563 (N.D. 1924)
• Decision Date: 21 July 1924

200 N.W. 38

51 N.D. 563

MARTIN TEIGEN, Respondent, v. OCCIDENT ELEVATOR COMPANY, a Corporation, Appellant

Supreme Court of North Dakota

July 21, 1924

Rehearing denied September 15, 1924.

In District Court, Ward County, Moellring, J.

Action for the conversion of grain by a chattel mortgagee against an elevator company. Plaintiff recovered a judgment.

Defendant has appealed from an order denying a motion for judgment non obstante or in the alternative for a new trial.

Reversed and action dismissed.

Judgment of the trial court reversed and action dismissed.

Young Conmy & Young and Emanuel Sgutt, for appellant.

"A description of property in a chattel mortgage is generally considered sufficient if it enables a third person, aided only and directed by such inquiries as the instrument itself suggests, to identify the property. But, in determining the sufficiency of description of mortgaged personal property the character of the property must be considered. A description sufficient as to ordinary personal property may be insufficient as to growing crops or crops to be grown. Such crops can be identified only by a description of the particular property upon which they are growing or are to be grown." First State Bank v. Kellogg Commission Co. 41 N.D. 276, 170 N.W. 635; Commercial State Bank v. Interstate Elevator Co. 14 S.D. 280, 85 N.W. 219; Muir v. Blake (Iowa) 11 N.W. 621.

"A description of land such as is contained in these chattel mortgages upon which the crops are mortgaged may be good as between the original parties to the mortgages, but it is too indefinite and uncertain to constitute notice to innocent purchasers for value." First State Bank v. Kellogg Commission Co. 41 N.D. 274, 170 N.W. 635.

The mortgage was therefore indefinite and uncertain, and we think the better rule is that before a mortgage on crops to be sown or planted can be regarded as valid as against third persons, the year or term the crops are to be sown must be stated. Pennington v. Jones, 10 N.W. 274; Eggert v. White, 13 N.W. 426; Shields v. Ruddy, 28 P. 405; Barr v. Cannon, 28 N.W. 412.

It will be noted that in all of these cases from Iowa the description is insufficient to raise an inquiry that would result in identification. Merchants Nat. Bank v. Mann, 2 N.D. 456.

Public records are only constructive notice of what one would discover by examining the recorded instruments, and not of what he might ascertain by following an inquiry suggested by inspecting them. Adams v. West Lumber Co. (Tex. Civ. App.) 162 S.W. 974.

A chattel mortgage made by one not the owner of the property, or by the owner in a fictitious name, and recorded is not constructive notice to a third person. L. Fish Furniture Co. v. Reliable Storage & Van Co. 187 Ill.App. 6.

A chattel mortgage signed under an assumed name, or a name by which the grantor is not customarily known, imputes no knowledge to a third person. New England Nat. Bank v. N.W. Nat. Bank, 171 Mo. 307, 71 S.W. 191; First Nat. Bank v. Haconda Merc. Co. (Ala.) 53 So. 802; Smith's Appeal, 47 Pa. 128; Bradford v. Lembke (Tex.) 118 S.E. 159.

The plaintiff in grain conversion cases must clearly and definitely establish the identity of the grain alleged to have been converted as grain to which he had a right. It is elementary that such proof is essential. Martin v. Hawthorne, 5 N.D. 66, 63 N.W. 895; Russell v. Amundson, 4 N.D. 112, 59 N.W. 477.

The respondent having neglected to show the value of the grain as on the date of conversion, and only at the dates of delivery and sale, some weeks prior to the demand, had not made a prima facie case when it rested, and the appellant submitted its motion for a directed verdict. Hence it was error to deny such motion. Citizens Nat. Bank v. Osborne-McMillan El. Co. 21 N.D. 339, 131 N.W. 266.

If the conversion was the act of the pledgeor or one claiming under him the pledgee will be limited to recovery of the amount due him from the pledgeor. Bowers, Conversion, § 684.

By taking the property and holding it for more than two years (the plaintiff) must be held to have elected to take the property so far as its value would go in satisfaction of his claim, and if the value was greater than the amount of the claim he would hold the balance for the mortgagor. Marselles v. Perry (Neb.) 87 N.W. 544.

A defendant in an action to recover unliquidated damages for a tort may generally introduce evidence in mitigation of damages, except in actions for slander or libel, under a general denial in his answer. United States v. Homestake Min. Co. (C. C. A. 8th) 117 F. 481.

Matters in mitigation of damages merely should be given in evidence under the general issue, for by that plea, the defendant puts upon the plaintiff, not only the proof of his injury, but its extent. Grayson v. Brooks, 64 Miss. 410, 1 So. 482.

Palda & Aaker, for respondent.

Then the year was inadvertently omitted, and appellant urges this as fatal. This contention is effectively answered by the case of Gorder v. Hilliboe, 17 N.D. 281, 115 N.W. 843.

Where a description in a recorded instrument is erroneous, but the error is apparent on the face of the instrument, and the understanding of the plain import of the record is not defeated, the record is constructive notice. 23 R. C. L. 220.

The rule is, that wherever the defendant has a legal or equitable interest in or claim upon the specific property for the conversion of which he has sued, the recovery against him is limited to the actual net amount of the plaintiff's interest, although the possession is wrongfully assumed or retained. This fully indemnifies the plaintiff and leaves the balance of value in the hands of him who is entitled to it, thus settling the whole controversy in one suit. And if the plaintiff be only the claimant of a lien against the property for its conversion by one a total stranger to it, yet as against the owner his recovery will be limited to the amount recovered by his lien. Bowers, Conversion, § 635.

A mortgagee having the right of possession may recover the full value of the property even in excess of his debt, in an action against a stranger who shows no right to the property. Adams v. Peterson (Minn.) 29 N.W. 321.

BRONSON, Ch. J. JOHNSON and NUESSLE, JJ., concur. BIRDZELL, J., Mr. Justice Christianson, (dissenting).

OPINION

Statement.

BRONSON Ch. J.

This is an action for the conversion of about 115 bushels of spring wheat. Plaintiff received a verdict in his favor. Defendant has appealed from an order denying judgment non obstante or in the alternative for a new trial. Defendant is a corporation engaged in the business of purchasing and storing grain. On December 10th, 1917, one Shong, a cropper, farming certain land in Ward County, gave to plaintiff a chattel mortgage to secure a note for $ 1910.00 dated November 1st, 1917, and due November 1st, 1918. This mortgage, in addition to mortgaging certain farm machinery, horses, mules and cows, also mortgaged "all that certain personal property free from all encumbrance described as follows, to-wit: all crops of every name, nature and description, which have been or may be hereafter sown, grown, cultivated and harvested during the year A. D. -- and for each and every succeeding year until said debt is fully paid, undivided one-half of crop raised on the S 1/2 of SW 1/4 of Sec. 13, etc." In 1918 the cropper raised certain spring wheat and crops on this land. In November, 1918, he hauled two loads of wheat to defendant's elevator for which he received payment from defendant. The cropper's indebtedness to defendant was not satisfied. Plaintiff instituted this action in conversion against defendant on account of its special interest in the grain by virtue of said chattel mortgage.

Upon this appeal, the defendant, among other things, contends that the chattel mortgage involved is void for uncertainty by reason of the failure to insert in such chattel mortgage the year therein left blank.

On the other hand, the plaintiff maintains that the chattel mortgage involved is valid for the reason that the inadvertent omission of the year created no uncertainty since in this state a chattel mortgage upon crops is valid only for the crop next maturing after the delivery of the mortgage, quoting the statute, Comp. Laws, 1913, § 6707, and otherwise, citing Gorder v. Hilliboe, 17 N.D. 281, 115 N.W. 843.

Opinion.

We deem the chattel mortgage involved, so far as it afforded constructive notice to defendant, as a subsequent purchaser, to be void for uncertainty. Consequently, this is the only issue upon this appeal that requires discussion since it is determinative of the action.

It is not claimed that defendant had any actual notice of the chattel mortgage. It is bound thereby only through the constructive notice given by the record thereof.

The rule generally recognized is that a description of property in a chattel mortgage is generally considered sufficient if it enables a third person, aided only and directed by such inquiries as the instrument itself suggests, to identify the property. But, in determining the sufficiency of description of mortgaged personal property, the character of the property must be considered. A description sufficient as to ordinary personal property may be insufficient as to growing crops or crops to be grown. See First State Bank v. Kellogg Commission Co. 41 N.D. 269, 276, 170 N.W. 635. In that case a chattel mortgage covered "all crops which have been or may be hereafter sown, etc., upon land in Sec. 25 Twp. 134, Range 91." The description was held to be too indefinite. This court said that the description of the land, crops upon which are mortgaged, should be sufficiently definite, in order to be notice to purchasers of such crops for...