24 S.D. 203 | S.D. | 1909
This case is before us on an appeal by the defendant J. R. Smith, receiver of the W. H. Walling Mercantile Company, from a judgment rendered in favor of the plaintiff, and from an order denying a new trial. It is alleged in the complaint -in effect that the defendant J. R. Smith was the duly appointed receiver of the W.' H. Walling Mercantile Company, which had become the successor of W. H. Walling, in an action instituted by the Custer County Bank, a corporation; that on the application of the plaintiff for leave to sue the said defendant, the court by its order authorized and granted the plaintiff’s application. It is further alleged that the plaintiff has a special ownership in certain personal property described in • a chattel mortgage executed and delivered by Warren H. Walling to the plaintiff to' 'secure a promissory note for $2,689; that by the terms of said mortgage the said Walling was to pay to the said plaintiff the sum of $25 in monthly payments until the same should be fully paid, copies of which said mortgage and note are annexed to and made a part of the complaint; that the plaintiff is entitled to the possession of the property described in the complaint by reason of the fact that the mortgagor was in default, not having paid the monthly payments stipulated in the mortgage, and also for the reason that a receiver had been applied for and appointed; that the said Smith as such receiver was in the possession of said property, and, though the same was demanded from him, he had refused to’ deliver the same ho the plaintiff; that the said property mortgaged consisted of a stock
The defendant Smith in his answer admitted that he was the duly appointed, qualified, and acting- receiver of the said Walling- Mercantile Company, appointed in an action at the suit of the Custer County Bank, but denied that he had, at the time of the commencement of this action, any goods, wares, merchandise, fixtures, or property described in, or covered by, the mortgage annexed to said complaint and made a part thereof; denies that any of the property in his hands as receiver is, or was at any time, the subject of said mortgage, or subject to lien thereof or described therein. And the defendant alleges that- the mortgagor, with the consent of the mortgagee, sold and offered for sale, and continued to sell off, tlie mortgaged property; that he, with the consent and knowledge of the mortgagee therein named, bought other goods not covered by said mortgage, and comingled them with those mortgaged; that, he with the consent and full knowledge of the mortgagee, conducted and carried on a general merchandise business at places other than that described in the mortgage as the location of the mortgaged property, and purchased additional stock on credit, for which he has not paid, and added same to said stock of goods from time tó time; that he sold goods, wares, and merchandise of the stock mortgaged in excess of the amount of said mortgage, in his general business of merchandising converting the proceeds of the sale of said mortgaged property, with the full knowledge and. consent of the mortgagee, to his own use and benefit, whereby the mortgage debt hás been fully paid and become fraudulent and void; that there are a large
At the conclusion of all the evidence, on motion of plaintiff’s counsel, the court directed a verdict in favor of the plaintiff upon all the issues, except as to the value of the property, and the jury in its verdict found the value of the property to be $6,642. A judgment was thereupon rendered in favor of the plaintiff for the amount of $2,669.30, found by the court' to be due- the plaintiff upen her note and mortgage.
Numerous errors are assigned in the record, nearly all of which are claimed by the respondent to be unavailable for the reason that they were not presented to or discussed in the motion for a new trial; but, as the verdict in this case was directed, a pure question of law is presented to this court, and a motion for a new trial was therefore not necessary, as in such a case this court is required to examine the evidence as presented by. the bill of exceptions, assuming, for the purposes of a decision, that the evidence on the part of the defendants was uncontradicted; hence a decision of the question as to whether or not the assignments of error are sufficient will not be necessary for the purposes of this opinion.
It -is disclosed by the evidence that the plaintiff was the owner of a stock of goods, wares, and merchandise and fixtuers in Cus-ter City, and sold and transferred the same to the defendant W. H. Walling for the consideration of $3,689, $1,000 of which was paid in cash, and the balance by note, upon which the sum of $25 was to be paid. monthly until paid; that said note was secured- by a chattel mortgage upon the said -stock of goods and
At the close of all the evidence the plaintiff moved the court to direct a verdict in favor of the plaintiff upon all the issues, except as to the value of the property, for the reasons: (1) That the undisputed evidence shows that the mortgage executed
The property described in the chattel mortgage consists of: “All the goods, wares, merchandise, chattels and effects mentioned and set forth in Schedule A and Schedule B, marked ‘Schedule A’ and ‘Schedule B’ hereto annexed and made a part hereof, said Schedule A covering and embracing all the goods, wares, chattels, fixtures and effects particularly set forth in bill of sale dated July-29, 1901, signed by Anna A. Albien and delivered to said Warren H. Walling, said Schedule B embracing all the goods, wares and merchandise now ordered by said Walling to be added to said stock in Schedule A, and of the estimated value of $500.” As printed in the abstract, in giving a copy of the chattel mortgage the value of the additional property was fixed at $1,500, but upon turning to- Schedule B, which is also printed in the abstract, it appears that the value of the property was $500, and the $500 is inserted twice in the Schedule, B, and we, therefore, assume that $500 was the correct value of the property. Schedules A an-d B were annexed to and made a part of the chattel mortgage at the same time it was executed, and were filed for record as a part of the chattel mortgage.
Nineteen days subsequently to the execution of the mortgage,
It is contended by the appellant that the mortgage is void
It is contended by the appellant that the mortgage itself does not cover after-acquired goods; but we are of the opinion that, as between the plaintiff and the. mortgagor Walling, the mortgage taken in connection with the written permission to Walling, authorizing him to sell the goods in the usual course of trade, and to apply -the proceeds to the purchase of goods to keep up the stock in its then present condition, clearly shows that it was the intention of the parties to. include .and-cover by the mortgage all goods that might be thereafter purchased and subsequently added to the stock. The court, therefore, .in construing the mortgage will carry out, as. far as possible, the. intention of the parties, as disclosed by • the instruments executed between ■them, and we are of the opinion,. therefore, that the . court was clearly right in construing the jnortgage in this case as covering after-ácquired' 'goods, and that it committed no error in denying
The defendant as receiver occupied the place of Walling, and succeeded to his rights- only, and he is not therefore in any position to make any defense that Walling could not have made had he remained in possession of the property. 23 Am. & Eng Enc. of Law, 1091-1093; Bell v. American Protective League, 163 Mass. 558, 40 N. E. 857, 28 L. R. A. 452; Ellis v. Boston, etc., Ry. Co., 107 Mass. 1; American, etc., Bank v. McGettigan, 152 Ind. 582, 52 N. E. 793; Bates v. Wiggin, 37 Kan. 44, 14 Pac. 442; Ward v. Healy, 114 Cal. 191, 45 Pac. 1065; Pelletier v. Greenville Lumber Co., 123 N. C. 596, 31 S. E.,855; Chicago, etc., Co. v. Smith, 158 Ill. 417, 41 N. E. 1076; Totten Foundry Co. v. Munsey Nail Co., 148 Ind. 372, 47 N. E. 703; Central, etc., Co. v. Buchanan, 90 Fed. 454, 33 C. C. A. 598.
In 23 Am. & Eng. Ency. of Law, supra, the law as to the rights of receivers is stated as follows: “The appointment of a receiver for property does not affect pre-existing liens upon the property, or vested rights or interest of third persons therein. * * * A receiver, it is held, succeeds to only such right, title, and interest in the property as the individual or corporation for which he is appointed receiver had at the time the appointment was made. The receiver takes his title to the property subject to all the equities to which it was subject in the hands of tne debtor.” As neither the.receiver nor the creditors had acquired a lien upon the property, the only defenses available to the receiver -are such as might 'have been interposed by Walling, • .the mortgagor. So far as the 'record discloses, neither of the creditors of Walling or the mercantile company had attached or levied upon the mortgaged property; and, without in-some manner obtaining a lien upon the property, they were not in a position to question the character of the mortgage, exeept to make such defenses thereto as the mortgagor might have made had the, action been against him personally, prior to the appointment of a receiver. Hewett v. Usher et al., 11 S. D. 512, 78 N. W. 993;
In the case of Alexander v. Mercantile, etc., Deposit Co., supra, the Supreme Court of Georgia says: “Thus it will be seen that no creditor, without a lien at the filing of the petition, can obtain one after it is filed in preference to any other creditor; but a- creditor who has a valid lien when the petition is filed is not interfered with. His lien is not displaced, but preserved. He occupies the same place, as far as the lien is concerned, as if no petition had been filed and no receiver appointed. The priority and dignity of his Men stand upon the same plane they occupied before the commencement of the proceedings. * * * The defendant in error in this case, before the filing of this bill, had a valid subsisting mortgage lien on the property of the railroad company. That lien, we have seen, must, under the Code, be preserved. It cannot be displaced by creditors who have no legal Hen, but who rely solely upon what they call a ‘preferential equity.’ ” It is clear, therefore, that neither the receiver nor any of the creditors of Walling or of the mercantile company were in a position to question -the validity of .the mortgage in this case, and hence the court was clearly right in disregarding all the evidence on the part of the defendant proving, or tending to prove, the invalidity of - the mortagage. The mortgage being clearly sufficient and presumptively valid as between the parties thereto, neither the receiver nor the creditors ai;e in a position to question its validity, or to interpose any defense, except such as might have been interposed by the mortgagor. The court was clearly right, therefore, in denying defendant’s motion to submit the validity of the mortgage to the jury.
The proceedings of the court in directing the jury to find the value of the property, and thereafter ascertaining the amount due the plaintiff, and rendering -the proper judgment therefor, were not in our opinion erroneous. The amount due the plaintiff seems to have been undisputed, and, the action being one in claim and delivery, it wa-s necessary for the jury to find the value of the property, and it was perfectly proper for .the court, the evidence being undisputed as to the amount due the plaintiff, to enter a judgment to recover that amount in case the property could not be delivered. This question was discussed in the cáse of the National Bank v. Feeney, 9 S. D. 550, 70 N. W. 874, 46 L. R. A. 732. In that case the court directed the jury to- find the value of the property to be $800, and entered judgment for the return of the property of the value thereof, whereas it appears that the sum due the plaintiff on the note and mortgage was $510.50. The jury did not determine by their verdict what was due the plaintiff, but it appeared from the undisputed evidence; as in the case at bar. The court, in discussing this question, says: “The judgment of the circuit court should be so modifie.d. therefore, that it shall be for the recovery of the mortgaged property, or, in case a delivery cannot be -had, for the amount
It is contended by the appellant that the court erred in making its order permitting the plaintiff to bring the action against the receiver upon an ex parte motion. No motion was made, however, to vacate the order, and the proofs or affidavits upon which the order was made are not before us. We must presume therefore, in the absence of such proof, that the order was properly made by the trial court.
At the commencement of the trial a motion was made by the appellant that the plaintiff, being a non-resident of the state, should give security for costs, -which motion was denied by the court, and he now contends that the court erred in denying this motion. It appears, however, from the abstract that there was a conflict in the evidence before the court as to whether or not the plaintiff was in fact a non-resident of the state; and, in the absence of such evidence from the record, this court will presume that the decision of the trial court upon that question was justified by the evidence.
We have discussed all the questions that we deem of sufficient merit to be entitled to a -separate discussion, but we have not overlooked the other points made in the case by the appellant.
Finding no error in the record, the judgment of the circuit court and order denying a new trial are affirmed.