265 N.W. 452 | Mich. | 1936
Among the assets taken over by plaintiff Money Corporation from another loan and investment company were two notes of defendant, dated August 13, 1932. Each contained a clause stating that it was secured by an automobile fully described; that the title therein was in the payee of the note; that upon default, the payee had the right to retake the property; that "the said property shall not be removed from S.G. Draggoo in the city of Muskegon," etc. Each note was filed in the office of the city clerk of Muskegon and had annexed to it the affidavit required by 3 Comp. Laws 1929, § 13424, in order to file a chattel mortgage. Defendant retained the certificate of title. We need not decide what type of transaction this was except to state that security was its purpose. *529
It is conceded that, in accordance with the agreement of the parties, each automobile was left with defendant under the floor plan arrangement giving him the absolute right to sell the car described in the note without gaining the permission of the loan company, and in that event he was either to pay the note or else substitute another automobile to secure the indebtedness. Some time prior to January 1, 1933, he sold one car in Detroit and the other in Muskegon. He, however, did not pay the notes or give any new security. Although, in August of 1933, plaintiff was told that both cars had been sold, it continued to accept small payments on the interest from defendant, he promising that he would pay the balance in full. On June 8, 1934, a little more than one week after defendant had made his last payment on interest, he was adjudicated bankrupt. Plaintiff, after an unsuccessful reclamation proceeding in the bankruptcy court, brought the present suit in which it sought judgment solely for the wrongful conversion of the two cars. Defendant contended that there was no conversion and also that he was legally discharged from liability by the bankruptcy court. He has appealed from the judgment rendered by the trial judge in favor of plaintiff.
We shall not lay down any general rule covering what factual situations constitute conversion. See, however, Globe RutgersFire Ins. Co. of New York v. Fisher,
"But a wilful and malicious injury does not follow as of course from every act of conversion, without reference to the circumstances. There may be a conversion which is innocent or technical, an unauthorized assumption of dominion without wilfulness or malice. * * * There may be an honest, but mistaken belief, engendered by a course of dealing, *531 that powers have been enlarged or incapacities removed. In these and like cases, what is done is a tort, but not a wilful and malicious one. Turning to the findings here, we see that wilfulness and malice have been unmistakably excluded. * * * The trial court made a special finding as follows: 'The court finds that the defendant in this case was not actuated by wilful, malicious or criminal intent in disposing of the car in question.' * * * The discharge will prevail as against a showing of conversion without aggravated features."
In the instant case, although one of the automobiles was driven to and sold in Detroit contrary to the agreement set out in the note and defendant was guilty of misleading plaintiff by stating that the cars had not been sold, nevertheless defendant was given the absolute right to sell the cars without plaintiff's consent. In Probst v. Jones, supra, the plaintiff's security was sold without any authority, and the case, therefore, is not in point. The burden of proving wilful and malicious injury is upon the one seeking to avoid the discharge in bankruptcy (Kreitlein v. Ferger,
The judgment is reversed, with costs to defendant.
NORTH, C.J., and FEAD, WIEST, BUSHNELL, EDWARD M. SHARPE, POTTER, and TOY, JJ., concurred. *532