The National Bank of Commerce of Kansas City v. Morris
| Decision Date | 14 February 1893 |
| Parties | The National Bank of Commerce of Kansas City, Appellant, v. Morris et al |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon. L. B. Valliant Judge.
Reversed and remanded.
John C Orrick and Horton Pope for appellant.
(1) The English doctrine in regard to sales in market overt is not applicable in the United States where no such usage or institution exists. Benjamin on Sales [6 Ed.] p. 37; Tiedeman on Sales, sec. 317; Usher on Sales, sec. 37; 25 American Decisions, p. 609; Fawcett v. Osborn, 32 Ill. 411. (2) The effect and validity of a chattel mortgage is determined by the laws of the situs of the chattel and of the residence of the mortgagor. If it is valid there it will be valid everywhere and will be enforced by the laws of any state to which the chattel may be removed. Bank v Lee, 13 Pet. 110; DeLane v. Moore, 14 How. 270; Beall v. Williamson, 14 Ala. 55; Hall v. Pillow, 31 Ark. 32; Ballard v. Winter, 39 Conn. 179; Mumford v. Canty, 50 Ill. 370; Blystone v. Burgett, 10 Ind. 28; Smith v. McLean, 24 Iowa 322; Ramsey v. Glenn, 33 Kan. 271; Railroad v. Glenn, 28 Md. 287; Langworthy v. Little, 12 Cush. 109; Smith v. Hutchings, 30 Mo. 380; Feurt v. Rowell, 62 Mo. 524; McDaniel v. Bard, 27 Mo.App. 545; Bank v. Metcalf, 29 Mo.App. 384; Bank v. Metcalf, 40 Mo.App. 494.
Boyle & Adams and H. M. Pollard for respondents.
(1) Statutes relating to registry of chattel mortgages so as to affect the rights of purchasers, innocent in fact, are in derogation of the common law and must be strictly construed. Jones on Chattel Mortgages, [3 Ed.] sec. 248; Porter v. Dement, 35 Ill. 478; Funk v. Miner, 50 Ill. 444; Selking v. Hebel, 1 Mo.App. 340. (2) Plaintiff failed to show at the trial of this case that a true copy of any original mortgage was ever deposited with the registers of the counties where the mortgagors or either of them resided in Kansas. (3) The alleged chattel mortgage and the counterpart taken together constituted the contract of mortgage made between the parties; one is as much a part of the contract as the other; both must be treated as making the contract between the parties. Munson v. Ensor, 94 Mo. 504; Brownlee v. Arnold, 60 Mo. 79; Neenan v. Donoghue, 50 Mo. 493; Lewis v. Ins. Co., 3 Mo.App. 372; Railroad v. Atkinson, 17 Mo.App. 484; Railroad v. Levy, 17 Mo.App. 501; Dohm v. Haskin, 88 Mich. 144. (4) The jury had nothing to do with the question as to whether the mortgage had been properly recorded. This was entirely a question for the court. Jones on Chattel Mortgages [3 Ed.] sec. 248; Bailey v. Godfrey, 54 Ill. 507; Durfee v. Grinnell, 69 Ill. 371; Flynn v. Hathaway, 65 Ill. 462; Bullock v. Narrot, 49 Ill. 62. (5) There was a total failure of proof. Lanitz v. King, 93 Mo. 513; State to use v. Martin, 18 Mo.App. 468; Huston v. Forsyth, 56 Mo. 416; Bank v. Campbell, 34 Mo.App. 5; Reed v. Bott, 100 Mo. 62. (6) If the foregoing points are untenable, the laws and policy of the states of Illinois and Missouri are so different from the laws and policy of the state of Kansas as to render the general rule concerning international comity inapplicable to the case at bar, and the just rights of innocent purchasers should be protected. Statutes of Illinois as proved, Revised Statutes, 1889, sec. 5176; Green v. Van Buskirk, 7 Wall. 139; Smith v. Hutchings, 30 Mo. 380; Story on Conflict of Laws [8 Ed.] sec. 323, 327, et seq; Corbett v. Littlefield, 84 Mich. 30; Harrison v. Sterry, 5 Cranch, 249; Boydson v. Goodrich, 49 Mich. 66; Montgomery v. Wright, Mich. 133; Gillilan v. Kendall, 26 Neb. 22; Frizzle v Rundell, 88 Tenn. 396; Obernathy v. Wheeler, 17 S.W. 858; Rogers v. Huie, 2 Cal. 271; Spooner v. Holmes, 102 Mass. 523. (7) Plaintiff is not an innocent holder of the note and mortgage in controversy; but whether he is or not is immaterial for the point raised in this case. 37 Mo.App. 412.
This is an action in trover and conversion for five hundred and seventy head of cattle. The plaintiff claims to have been the owner of the cattle as assignee of a mortgage executed in the state of Kansas on the cattle on the twenty-second day of October, 1890, by B. A. Webber and W. D. Wilson to G. A. Dunn to secure the payment of their note for $ 15,675 payable ten months after the date of the mortgage.
The law of Kansas in relation to chattel mortgages which was in force at the time of the execution of the mortgage under which plaintiff claimed the cattle is as follows:
A copy of the mortgage was prior to the thirtieth day of November, 1890, deposited in the office of the register of deeds of Edwards county, Kansas, the place of residence of W. D. Wilson, and in the office of the register of deeds for Stafford county, the place of residence of B. A. Webber. The mortgage deed among other things provided that possession of the cattle was to remain with the mortgagors until default in payment of the debt or interest, or "in case of sale or disposition or attempt to sell or dispose of the same, or removal or attempt to remove the same" from certain counties in Kansas enumerated in the mortgage, when the mortgagee might take the property into his own possession. Before the maturity of the mortgage debt, the mortgagors, without the knowledge or consent of the mortgagee or his transferee, removed the cattle to the state of Illinois and sold them to respondents through commission men. It is conceded that respondents had no actual notice of the mortgage and paid value for the cattle, and that the mortgage deed was not recorded in the state of Illinois. The identity of the cattle is not disputed.
The answer is first a general denial, and then alleges that defendants were innocent purchasers for value, and contains other allegations, which so far as deemed material will be referred to in this opinion.
The court below sustained a demurrer to the evidence introduced by plaintiff, and directed a verdict for defendants on the grounds that the mortgage had not been recorded in or executed as required by the laws of Illinois, and that the defendants were innocent purchasers. After filing the usual motion for a new trial and the same being overruled, plaintiff prosecutes its appeal to this court.
This is a case where one of two innocent parties must suffer loss, as there seems to have been the utmost good faith throughout the entire transaction so far as the plaintiff and defendant themselves are concerned. In fact there is no intimation by either party to the contrary. The defendants purchased the cattle in open market in the city of East St. Louis, Illinois, a large cattle market, where many are sold, and paid full value therefor. And if the old English doctrine in regard to markets overt was applicable in this case they would evidently be protected in their purchase, and could not be held liable in this action for the value of the cattle in controversy. This is so, even though the vendor, or person claiming to be the owner and in possession, was not in fact the owner. But it is said in the case of Ventress v. Smith, 10 Pet. 175, that the doctrine of markets overt which controls and interferes with the application of the common law has never been recognized in any of the United States, or received any judicial sanction. Fawcett v. Osborn, 32 Ill. 411. The general rule is that no man can acquire title to chattels from a person who has himself no title to them. Wheelwright v. Depeyster, 1 Johns. 478. The only exception being sales of cash and certain negotiable instruments. The purchaser must know that the person from whom he buys is the owner of the property.
At the time of the execution of the mortgage under which plaintiff claims the cattle, Dunn the mortgagee executed and delivered to Webber and Wilson a receipt as follows: "Received of B. A. Webber and W. D. Wilson one note of $ 15,675, secured by chattel mortgage on five hundred and seventy head of three and four year old steers, under the following conditions:
The conditions of this receipt were never complied with by Dunn nor was it ever recorded, and defendant's counsel contend that as it was the counterpart of the mortgage and was not recorded with it, that the recording of the mortgage...
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