202 Ky. 377 | Ky. Ct. App. | 1924
Opinion of the Court by
Sustaining motion for appeal and reversing the judgment.
This is an action brought by the appellee and plaintiff below, Tom Hayes, against the appellant and defendant below, New Domain Oil and Gfas Company, to specifically recover from defendant under an order of claim and delivery certain articles of personal property used in connection with drilling oil wells, and alleged in the petition to be of the value of $320.00. Bond was executed and the sheriff, under the writ, took the property from the possession of the defendant and delivered it to the plaintiff. The answer denied plaintiff’s owner-' ship of the property and alleged that defendant owned it. The court, on motion of defendant and without objection of plaintiff, transferred the cause to the equity side of tlie docket and proof was taken by depositions. The case was then submitted and the court held that the property belonged to plaintiff and rendered judgment
Plaintiff did not testify in the case and his main witness was T. N. Clark, who at the time of the transaction, hereinafter referred to, was a partner with J. B. Coghill and they later organized and he became vine-president and general manager of the Table Bock Oil Company and he was also vice-president of another cor-portion known as Omar Oil and Gas Company. Clark 'and Coghill were the owners of some oil and gas leases in Lawrence county and- after acquiring them and after the commencement of drilling thereon, they incorporated themselves under the name of Table Bock Oil Company, and it finished at least one well and commenced another, when it sold the leases with certain personal property thereon, including that in contest in this action, to the defendant, New Domain Oil and Gas Company. At the time Clark and Coghill commenced to drill on their leases, they borrowed from the Omar Oil -and Gas Company, of which Clark was vice-president as stated, and his father was president, certain articles of personal property necessary for drilling purposes corresponding in kind to those involved in this a'ction with the understanding that they were to use the borrowed property in their drilling operations gratuitously and without limitation of time as to its use. As to the agreement, under which the property -was- borrowed, Clark was asked: ‘ ‘ State fully in your way, under what arrangements the tools, drilling rig, drilling machinery and' the other equipments were procured for such development,” and he answered: “We had an agreement with the Omar Oil and Gas Company, who loaned us the tools and the entire outfit, we were to move it from Louisa, out to the field, and all material worn out or broken during the time we were using them were to be replaced, and we were to replace the tools, machine and entire outfit to Louisa, back to Louisa.” After that the Table Bock Oil Company was incorporated and the specific borrowed articles of property, corresponding to those involved here, were worn out and consumed in their use by the borrowers and they purchased and themselves paid for other articles corresponding to them, all of which was done during the existence of the bailment and before it was in any maimer terminated, and the sale of the lease, together with the property involved, occurred after that purchase and before the termination.
In 3 R. C. L. 74, the text, in defining the character of relationship created under similar facts, says: “Besides a sale or a bailment, the delivery of property by one person to another may create the relation known in the Roman or continental law as a mutuum, or a loan for the consumption or appropriation by the one receiving, or the mutuary, to his own use of the article delivered. In such a case the mutuary is not bound to restore the specific article deposited or loaned but has an option either to return it or another article of the same kind
It will be observed that the excerpt recognizes the creation of a mutuum relationship both as to tangible and intangible personal property, i. e., where the borrower has the right under the agreement either to return the property in specie or to replace it in kind, and with reference to the two characters of properties it is said: “In the one case (tangible personal property) it is a sale, with the right in the purchaser to return the thing delivered or its equivalent in kind, though not in specie. In the other (intangible personal property) it is a deposit of money with the understanding that it is to be surrendered on demand, but with the right in the receiver to use and replace it if he desires;” and that text is immediately followed by the statement, “In either case the risk of loss by accident attaches to the depository or mutuary, since he has the control and dominion over the property ” The only exception as to the title of the parties in such a relationship, as is pointed out on page 75 of the same volume, is the deposit- of grain in warehouses whe're it is commingled with other grain of like quality, and that exception is recognized from the force of necessity, it being stated on page 76 that it “is required by the commercial interests of the country. ” We, therefore, see that the resulting consequences of a mutuum transaction on the title to the property -are the same whether the property involved is corporeal property, such as chattels, or whether it is incorporeal, as
In this case, as we have seen, the lending of the property by the (Omar Oil and Gas Company was gratuitous, and, under the agreement, it was to be returned either in specie or in kind, i. e., if the original articles borrowed should be worn out by the borrower in using them for the purposes contemplated, then the borrower would replace them with other property of a similar kind, which comes strictly within the definition of mutuum, as above defined; and in which case, as stated by Mr. Bouvier, and sanctioned by others, “the property passes to the borrower.” Such consequence is in full accord with settled rules and principals relating to the passing of a title to personal property, one essential element of which is that the one to whom the title is passed should in some manner accept the delivery of it before the title vests in him. Under the proof in this case, the obligation of the borrowers, Clark and Coghill, to the Omar Oil and Gas Company was to return to it replaced property of a similar kind to that borrowed at the termination of the bailment, and there necessarily could be no passing of title of such replaced property Until the lender in some manner accepted it; for, until that time the replaced property might not fulfill the obligation and its acceptance be rejected by the lender; or it might be consumed in its use and become necessary to substitute other property, which, if not done at the time the lender terminated the arrangements and demanded a return of the property, would impose an obligation on the borrower to pay to the lender the value of the borrowed property. It is, therefore, quite clear that the Omar Oil and Gas Company never acquired title to any of the property involved in this action, since all of it was substituted property by the borrowers who wore out the original borrowed articles while using them in drilling operations.
Wherefore, the motion for the appeal is sustained and the appeal granted, and the judgment is reversed with directions to dismiss the petition.