The National Bank of Commerce of Kansas City v. Morris

• Decision Date: 04 December 1894
• Citation: 28 S.W. 602,125 Mo. 343
• Parties: The National Bank of Commerce of Kansas City v. Morris et al., Appellants
• Court: Missouri Supreme Court

28 S.W. 602

125 Mo. 343

The National Bank of Commerce of Kansas City v. Morris et al., Appellants

Supreme Court of Missouri, Second Division

December 4, 1894

Appeal from St. Louis City Circuit Court. -- Hon. L. B. Valliant Judge.

Affirmed.

Augustus Binswanger, Charles M. Reber and Edward S. Robert for appellants.

(1) A mortgagor may sell the mortgaged chattel, free from the lien with the oral consent of the mortgagee. Jones on Chattel Mortgages [4 Ed.], secs. 456 and 486; Holloway v Arnold, 92 Mo. 293; Stafford v. Whitcomb, 8 Allen, 518; Pratt v. Maynard, 116 Mass. 388; Brant v. Daniels, 45 Ill. 453; Gage v. Whittier, 17 N.H. 317; Saxton v. Williams, 15 Wis. 292; Perry v. Dow, 56 Vt. 569; Littlejohn v. Pearson, 23 Neb. 192; Bank v. Weed, 89 Mich. 357. (2) First, The mortgagor has the right to sell all of his interest before maturity of the debt, or it may be sold on execution. Jones on Chattel Mortgages [4 Ed.], sec. 454, and cases cited; Gage v. Whittier, 17 N.H. 312; Caldwell v. Pray, 41 Mich. 307; Hathaway v. Braynard, 42 N.Y. 322; Hamill v. Gillespie, 48 N.Y. 556; State v. Carroll, 24 Mo.App. 358; Spaulding v. Mozier, 57 Ill. 148; Porter v. Parmley, 43 How. Pr. 445; Bank v. Metcalf, 29 Mo.App. 384; Keflin v. Slay, 78 Ala. 180. Second, And this though the mortgagor is forbidden by statute to sell without the written consent of the mortgagee. Jones on Chattel Mortgages [4 Ed.], secs. 455, 456; Gage v. Whittier, 17 N.H. 312. Third. Authority in the mortgagor to sell may be inferred. Jones on Chattel Mortgages [4 Ed.], sec. 457, and cases cited. (3) The right to take possession in case of insecurity or sale is an option which the mortgagee may or may not exercise. Bank v. Metcalf, 29 Mo.App. 384; Skiff v. Solace, 23 Vt. 279; Caldwell v. Pray, 41 Mich. 307. (4) First, A purchaser of a mortgaged chattel can not be held liable for a conversion of it without a definite demand by the mortgagee. Jones on Chattel Mortgages [4 Ed.], sec. 491; Ware v. Society, 125 Mass. 584; Hathaway v. Braynard, 42 N.Y. 322; Caldwell v. Pray, 41 Mich. 307-312. Second, The same principle is recognized in Weill v. Tyler, 38 Mo. 545; State v. Mooney, 65 Mo. 494. (5) Plaintiff should have shown what it got from the sale of the bank stock; it being only entitled to recover the balance due on its note. Jones on Chattel Mortgages [4 Ed.], sec. 788 and cases cited; High v. Brown, 46 Iowa 259; Gage v. Whittier, 17 N.H. 312; Bank v. McLaughlin, 1 McCrary, 258.

John C. Orrick for respondent.

(1) The court below did not err in ignoring the defense that Dunn, as agent of the bank, had given Webber and Wilson, the thieves who stole the cattle, oral authority to sell. (2) The court did not err in refusing the first and second declarations of law asked by defendants. (3) A mortgagor may sell the mortgaged chattel free from the lien, with the consent of the mortgagee, as claimed by appellants in their first point. Holloway v. Arnold, 92 Mo. 293. (4) This court, in Bank v. Morris, 114 Mo. 255, decided that a purchaser of a mortgaged chattel can be held liable for a conversion of it without a definite demand by the mortgagee.

OPINION

Burgess, J.

This is an action of trover and conversion of five hundred and seventy head of cattle. The trial resulted in a judgment for plaintiff in the sum of $ 11,979.05 from which defendants appeal. The case was before this court on a former occasion, and will be found reported in 114 Mo. 255, 19 S.W. 484, to which reference is made for a full statement of the facts.

On the last trial an effort was made to show that the cattle were sold by the mortgagors by and with the consent of the mortgagee, Dunn, and that at the time of giving such consent he was the agent of plaintiff.

At the instance of plaintiff, the court, over defendants' objections, declared the law to be as follows:

"1. If the court finds from the evidence that on or about November 5, 1890, the plaintiff agreed with G A. Dunn to accept and did accept the note of Webber and Wilson for $ 15,675, dated October 22, 1890, secured by chattel mortgage in lieu of the mortgage held by it on said cattle given by said Dunn to secure his note to this plaintiff, dated May 2, 1890, for $ 15,000, maturing November 5, 1890, such agreement and acceptance operated as a release in fact of the mortgage given by said Dunn to this plaintiff, and plaintiff could not thereafter enforce the same against the said cattle.

"2. The court declares the law to be that the rights of the plaintiff to the cattle in question must be determined by the laws of the state of Kansas, where the sale by Dunn to Webber and Wilson occurred, and that a mortgage to be valid under the laws of the state of Kansas must be deposited in the office of the register of deeds of the county where the mortgagor resides and there noted in books in said office there kept for that purpose as fully appears by the laws of the state of Kansas and by the testimony of the registers of deeds of Edwards and Stafford counties, in evidence in this case, and if the court finds that Webber and Wilson gave a note for $ 15,675, representing the purchase money for these cattle, and to secure payment of the same executed a mortgage to G. A. Dunn, the owner, and that said Webber and said Wilson respectively resided in said Stafford and Edwards at the said time, and that a true copy of said mortgage was recorded in said counties and that said Dunn to secure a bona fide indebtedness to this plaintiff in the sum of $ 15,000, gave his negotiable promissory note to said plaintiff in renewal therefor and to further secure the same indorsed said note received by him from said Webber and Wilson, and delivered said note secured by said mortgage to said plaintiff, and that said indebtedness to plaintiff has not been paid but remains unpaid in whole or in part, and that plaintiff continues to hold said note given by said Webber and Wilson to said Dunn as collateral as aforesaid, and that said cattle were disposed of without the knowledge or consent of this plaintiff to defendants, then defendants obtained no title to the same and plaintiff is entitled to recover of defendants the fair market value of said cattle at the National Stock Yards, East St. Louis, Illinois, on the day defendants claim to have purchased the same, not exceeding the sum of $ 15,675, with interest from December 10, 1890, at six per cent. per annum on such fair market value to date; and the fact that defendants may have in good faith paid full value for said cattle does not relieve them from liability in this action.

"3. If the court finds from the evidence that G. A. Dunn, on or about November 5, 1890, being justly indebted to plaintiff in the sum of $ 15,000, gave his negotiable promissory note therefor to plaintiff, and as collateral therefor transferred to plaintiff the said note of Webber and Wilson to him for $ 15,675, secured by mortgage here in evidence, and that on December 10, 1890, this plaintiff was the owner thereof, then and in that case any permission given by said Dunn to said Webber and Wilson to sell said cattle does not relieve defendants from liability in this action.

"4. If the court finds from the evidence that George A. Dunn was the owner of the cattle in question, in the state of Kansas that he sold them to W. D. Wilson and B. A. Webber for $ 15,675, and took their notes, at ten months after date, for said sum, secured by the chattel mortgage on same, in evidence; that copies of the said mortgage were, in the month of...