171 Mo. 307 | Mo. Ct. App. | 1902
This is a bill in equity by the plaintiff as a stakeholder to require the defendants to interplead for the sum of $14,971.03, in its hands, resulting from the sale of 403 head of cattle, which were consigned to it by the defendants, to be sold by it to the best advantage, and the proceeds to be held by it pending an amicable settlement among the defendants of their respective claims. They were unable to agree and therefore the plaintiff filed this bill of interpleader to have the claimants litigate their rights.
The defendants interpleaded for the fund. Pending the determination of the case the parties agreed, that instead of paying-the money into court, the plaintiff might
The abstract of the record embraces five hundred and twenty-five printed pages. The briefs of counsel aggregate two hundred and seventeen pages. It is manifestly impossible, therefore, within the limits proper to be observed in any opinion, to give even an outline of the testimony, documentary evidence, and circumstances, adduced upon the trial. Time and space admit only of a short, clear statement of the ultimate facts disclosed by the record to serve as a basis for the principles of law to be discussed and decided.
Ultimate facts.
Prior to October 3, 1898, Grant G. Gillett, living at Woodbine, Dickinson county, Kansas, was a large stock dealer. Charles H. Baumbaugh, of the same place, was his brother-in-law and for some time had been employed by him as clerk, at a salary of fifty dollars per month. The A. J. Gillespie Commission Company was a corporation, located at Kansas City, Kansas, and engaged in the business of dealing in cattle, and buying and selling notes, secured by chattel mortgages on cattle. Gillett was a stockholder, but not an officer, in the company.
On October 3,1898, E. R. Clark, of Marion county, Kansas, was the owner of, and had on pasturage in Chase county, four hundred and sixteen head of cattle, four years old, called “Westerns” and weighing 1,100 pounds, and branded “ J. M.” or “o,” the latter mark being called, ‘ ‘ circle dot. ’ ’ Clark had mortgaged these cattle to Elmore & Cooper for about fifteen thousand dollars.
On October 3,1898, the Gillespie Commission Company, at the request of Gillett, bought, from Elmore & Cooper, the Clark mortgage on said cattle, and carried it as “bills receivable” until October 5th, when it was paid by the proceeds of the “Baumbaugh” mortgage hereinafter described.
BILL OP SALE.
“Kansas City, October 4, 1898.
“State of Kansas, County of Dickinson, ss.
“This certifies that I have this day sold, assigned and agreed to deliver to Charles H. Baumbaugb, eighty-four native four-year-old steers branded T on tbe left loin; one hundred native four-year-old steers, branded C on tbe left hip; and four hundred and sixteen western four-year-old steers branded J. M. or o on left side. Tbe above cattle are all free, clear and unencumbered. Also 20,000 bushels of com now in crib at Lebanon, Kansas. Tbe consideration paid for tbe above-named cattle and corn is $24,795.99 which includes $300 commission and $495.99 interest,
“G. G. Gillett.”,
Thereupon on tbe same day, Baumbaugb executed a chattel mortgage to tbe Gillespie Commission Company to secure tbe notes aggregating $24,795.99, payable at ninety days. Tbe description of the property
At the time of the execution of the bill of sale and of the mortgage, neither Gillett nor Baumbaugh owned any of the cattle described in those documents. Gillett had an option to buy the Clark 416 head of cattle for $40 a head, but he had not purchased them or paid a farthing thereon. Neither Gillett nor Baumbaugh then owned or had in mind any cattle marked “ T & C ”, nor were there any cattle answering such a description anywhere in existence.
Upon the execution of the notes and mortgage by Baumbaugh they were turned over to Gillett, and by him turned over to the Gillespie Commission Company, and that company on the same day sold the notes and mortgage to the Hocker, Arnold, Woodson Brokerage Company, and after taking out $495.99 for interest and $300 for commissions, passed the balance of the proceeds amounting to $24,000 to the credit of Gillett upon the books of the company. This credit was wiped out by a draft on the company by Gillett, on October 5, 1898, for $16,000 (which was evidently intended to cover what the company had paid Elmore & Cooper for the Clark mortgage on October 3), and by $8,000 cash paid to Gillett on October 10,1898.
Baumbaugh paid Gillett nothing for the cattle, and received nothing out of the proceeds of the notes and mortgages. He acted in the matter solely to oblige Gillett, and upon his promise that he should share in the
At the time the mortgage was assigned to the Gillespie Commission Company, that company knew neither Gillett nor Baumbaugh owned or had in their possession any of the cattle described in the mortgage, but the company understood that cattle were to be bought to fill the description in the mortgage.
On October 5,1898, the Gillespie Commission Company sold and assigned the notes and mortgage to the Hocker, Arnold, Woodson Brokerage Company, and informed that company at the time of the fact that neither Gillett nor Baumbaugh owned the cattle therein described but they expected to buy cattle h> fill the description in the mortgage.
On October 15,1898, the Hocker, Arnold, Woodson Brokerage Company sold and assigned the notes to the Third National Bank of Springfield, Massachusetts, and that company knew nothing of the above recited facts concerning the notes and mortgage, but were innocent purchasers, for value and without notice.
On October 7, Gillett sent his agent, Thomas Kinaban, to Marion county to get the “ J. M.” and “circle dot” cattle from Clark, and he did get the 416 head from Clark, and drove them from the place where they were on pasture, two miles north of Clements, in Chase county, Kansas, which was about thirty miles from Herrington, Dickinson county, and with Clark’s assistance and that of his men the cattle were driven to the Mosier farm, which was about a mile south of Herring-ton, arriving there on Sunday, October 9, 1898, where they were turned over to David Naill. The Mosier farm was owned by Gillett and was leased by him to Naill, and Naill was employed by Gillett to care for
On October 7th, Gillett purchased sixty-three head of cattle from J. L. Thompson. They were delivered to Naill, as agent for Gillett, on October 8th, and were put in what is called the ‘ ‘ Schoolhouse Pasture, ’ ’ which was owned by Naill, and was located about three quarters of a mile northeast of the Hosier farm.
On October 11th, Gillett purchased thirty-seven cattle from St. Amand, of Herrington, Kansas, and they were on that-day delivered to Naill, for Gillett, and were placed in the said schoolhouse pasture.
' On October 13th, Gillett purchased one hundred cattle from Gangwer, of Delavan, Kansas, and they were also delivered on that day, to Naill, for Gillett, and were placed in the said schoolhouse pasture.
When these three lots of cattle were placed in the schoolhouse pasture, the parties have agreed that they were massed as one herd and all branded “T & C.” On October 10th, these “T & C” cattle were taken out of the schoolhouse pasture and placed in pens which lay partly in and partly outside of Herrington, and were known as ‘‘ Gillett’s stockyards, ” or ‘ ‘ Gillett’s feed pens” or “Gillett’s corral.”
Gillett had owned the land and had built the feed pens. He put the paper title in Baumbaugh, but whether Gillett or Baumbaugh was the real owner is not clear, nor is it material, for Gillett used the land and feed pens as he pleased and put cattle in the pens and took them out again, without consulting Baumbaugh.
At the same time, to-wit, October 13th, Gillett moved the J. M. and circle dot cattle (the Clark cattle) from the Hosier farm and put them also in the said stock yards.
On October 14, 1898, G-illett executed to Elmore & Cooper three notes secured by three separate chattel mortgages, as follows:
First. A note for $7,000 due in 150 days. The mortgage securing this note described the property as follows:
“The following described property in said county [DicMnson]: 200 head, 4 year old western dehorned steers, branded © and a heart on left side. These cattle were wintered in Kansas last winter and weighed 1.000 pounds. These cattle are in my feed lot in the town of .Herrington, and will not be removed therefrom until shipped to Elmore & Cooper, Stock Yards, Kansas City, Missouri. These cattle were bought from E. R. Clark, of Marion, Kansas. I also include in this mortgage 8,000 bushels of corn, together with all increase thereof. ’ ’
This note and mortgage was sold by. Elmore & Cooper to the State Bank of St. Louis, before maturity for value and without notice, and that bank is the innocent holder thereof, and this is the claim asserted in its interplea.
Second. A note for $7,490 due in 150 days. The mortgage securing this note described the property as follows:
“The following described property in said county ^[Dickinson]: 214 head, 4 year old western dehorned steers, branded J. M. on left side. These cattle were wintered in Kansas last winter, and' weighed 1,000 pounds. These cattle are in my feed lot in the town of Herrington, and will not be removed therefrom until shipped to Elmore & Cooper, Stock Yards, Kansas City, Missouri. These cattle were bought from E. R. Clark, of Marion, Kansas. I also include in this mortgage 8.000 bushels of corn, together with all increase thereof.”
This note and mortgage was sold by Elmore &
Third. A note for $8,000 due February 11, 1899. The mortgage securing this note describes the property as follows:
“The following described property in said county [Dickinson]: 200 native steers, branded 100 T on left hip and 100 C on left hip; 63 of these cattle were bought from J. L. Thompson, of Herrington, Kansas, weight 1,200 pounds; 37 were bought from L. St. Amand of Herrington, Kansas, weight 1,050 pounds; 100 was bought from Gangwer, of Delavan, Kansas, and weigh 1,050 pounds. These cattle are on full feed in my ¿ot at Herrington and will not be removed from there until shipped to Elmore & Cooper, Stock Yards, Kansas City, Missouri. I also include 8,000 bushels of corn in this mortgage, together with all increase thereof.”
This note and mortgage was sold by Elmore & Cooper to the Northwestern National Bank of Chicago, before 'maturity, for value and without notice, and that bank is the innocent holder thereof, and this is the claim asserted in its interplea.
All three of these mortgages contained a provision that if the mortgagees deemed themselves insecure at any time then the indebtedness should become due immediately, at the option of the mortgagees, and they might take possession of the cattle and sell them. These three mortgages were duly recorded on October 18, 1898.
Thereafter Gillett sent Kinahan, with an order to Naill, to deliver him 216 of the cattle, covered by these mortgages, and Naill delivered them to Kinahan, and he shipped them to St. Joseph, Missouri, where they were sold, and Gillett got the proceeds of the sale and appropriated them to his own use.
On November 1, 1898, Gillett left the country and went to Mexico, leaving obligations amounting to over a million dollars.
It is proper to say further that the Baumbaugh mortgage contained no express provision making the mortgage apply to after-acquired cattle, but purported to operate instantly upon the cattle described in the mortgage.
L
This is a case wherein one of two innocent parties must suffer. The four banks claiming the funds are innocent holders, for value and without notice. The Springfield bank claims under the Baumbaugh mortgage, while the St. Louis, Chicago and Omaha banks claim under the Gillett mortgage. The Baumbaugh mortgage was executed on October 4,1898, and recorded on October 6th. The Gillett mortgage was executed October 14th and recorded October 18. Both mortgages purport to cover the same cattle. The Springfield bank acquired the Baumbaugh mortgage from the Hocker, Arnold, Woodson Brokerage Company, on October 15. The Chicago bank acquired the Gillett mortgage, held by it, on October 20,1898. The St. Louis bank acquired the Gillett mortgage, held by it, on October 19, 1898. The
The Baumbaugh mortgage was executed on October 4th. The effectiveness of that mortgage to bind the property mortgaged is the first question in the case. When this mortgage was made Baumbaugh did not own a single head of cattle in all the world, so far as the record shows, and had no title whatever to any of the cattle described in the mortgage. Indeed, as far as the one hundred and eighty-four head, marked “T & C” are concerned, there were at that time no such cattle in existence. Baumbaugh’s title to the cattle described in his mortgage depends entirely upon the bill of sale from. Gillett to' him. At that time Gillett had no title to a single head of the cattle described in the bill of sale. The four hundred and sixteen head described in the bill of sale as marked “ J. M. ” and “circle dot,” belonged at that time to Clark, and the A. J. Gillespie Commission Company held the mortgage on them for over fifteen thousand dollars, which Clark had given to Elmore & Cooper, and which the Gillespie Company purchased from Elmore & Cooper on October 3d. But Gillett had no title to them whatever. He had an option on them, which required him to pay off the mortgage on them and pay the balance of the agreed purchase price of forty dollars a head, to Clark, but at the time he made the bill of sale to Baumbaugh, Gillett had not paid one cent on account thereof. At his request the Gillespie Company bought the mortgage on October 3d, but that was not Gillett’s purchase, no money of his was used for that purchase, and that company carried the note and mortgage as “bills receivable” due that company. The legal title to' the property and the possession of the property was in Clark at that time. The bill of sale recites on its face, not an intent to presently
Thus it will be seen that neither Gillett nor Baumbaugh ever put a cent of their own money in any of these cattle. On the contrary all of the money that went to pay for the cattle was raised by the Baumbaugh mortgage, and the proceeds of that mortgage arising from a sale thereof to the Hocker, Arnold, Woodson Brokerage Company, paid for all the cattle. It must be observed that when the Brokerage company took the Baumbaugh mortgage it was informed by the Gillespie company that the mortgagor did not have any such cattle as he was attempting to mortgage. The Springfield bank, however, had no knowledge of this state of affairs.
It is a fundamental rule of the common law that nothing could be mortgaged that was not in existence at the time of the mortgage and did not at the time belong to the mortgagor. And this rule obtains in nearly all of the States of the Union. [5 Am. and Eng. Ency. Law (2 Ed.), p. 979, and cases cited in notes.] This is the rule in Kansas where the mortgages in question in this case were made. [Long v. Hines, 40 Kans. 220.] In this case the Supreme Court of Kansas quotes the language of Chief Justice Shaw, in Barnard v. Eaton, 56 Mass. 294, who said: “A mortgage is an executed contract; a present transfer of title, although conditional and defeasible; it can therefore only bind and affect property existing and capable of being identified at the time it is made; and whatever may be the agreement •of the parties, it can not bind property afterwards to be acquired by the mortgagor. ’ ’
The Supreme Court of Kansas, however, pointed •out that in Cameron v. Marvin, 26 Kan. 612, it was said: “The next question is, with reference to the rights of the parties to the property acquired by Patterson after the execution of all the mortgages. Of course this property was not included in the mortgages at the time of their execution. In fact, it could not have been included in the mortgages at that time; for it is not within the power of any person to mortgage property which does not exist or which does not belong to him. He can not mortgage property which is after-
The rule in Kansas is that to affect the after-acquired property the mortgage must contain an express-provision binding such after-acquired property, and even where there is such an express provision in the-mortgage the rights of third persons are not affected thereby unless the mortgagee takes actual possession of the after-acquired property before it is purchased by third persons or seized by creditors, and that if such third persons purchase it or such creditors seize it before the mortgagee takes such actual possession thereof,, the third persons or creditors obtain the better right, thereto. [Dayton v. Bank, 23 Kans. 421; Cameron v. Marvin, 26 Kans. 612; Live Stock Co. v. Guthrie, 50 Kans. 1. c. 474-5.]
- The case of Brittain Dry Goods Co. v. Blanchard et. aL, 60 Kans. 263, is relied on by the Springfield bank.
The case of Alexander Bros. v. Graves, 25 Neb. 453, is also strongly relied on by the Springfield bank. In that case A purchased a team of horses from B, and executed a chattel mortgage on the team to secure the purchase price. The parties to the transaction were unacquainted, and B supposed that A had given his true name. Subsequently A sold the team in his real name to C, who examined the records and found no mortgage on the team, executed in A’s name. B replevied the team from C, and recovered judgment. But it will be observed that this case is not like the case at bar in this important particular, to-wit, at the time A executed the mortgage he was the owner and in possession of the property mortgaged and such property was then in esse. Whereas such is not the case here either as to Baumbaugh or G-illett. It is, of course, conceded, that an owner in possession of personal property may execute a valid mortgage in a fictitious name or may procure a valid mortgage to be executed thereon by some one acting in the name of the other but in reality for the true owner, and such a mortgage is perfectly good as between the mortgagor and the mortgagee. But it is not so clear, notwithstanding the decision cited, that such a mortgage will prevail over a mortgage executed in the real name of the owner in favor of another third person, who examined the records and found no mortgage recorded by the true owner on the property. It
Devlin on Deeds (2 Ed.), section 712, quotes approvingly the language of Duncan, J., in Keller v. Nutz, 5 Serg. & E. 245, who said: “If conveyances from one stranger to another would be notice to all the world, miserable would be the situation of the purchaser. The registering act would afford him no protection, because it could give him no notice.” And in section 713, the same author points out that the record is notice only to purchasers under the same grantor. Cobbey on Chattel Mortgages, vol. 2, section 781, discusses the cases of Mackey v. Cole, 79 Wis. 426, and Alexander Bros. v. Graves, 25 Neb. 453, hereinbefore referred to, and says the Wisconsin case rests upon the better reason, and the author lays down the rule that, “A mortgage under a fictitious name is void as to third parties dealing with the mortgagor by his true name.” [Ib., sec. 781.]
In the case of The Mary, 1 Paine 671, it was held that if the owner of a vessel, after having given a bill of sale in the nature of a mortgage, be allowed to remain in possession and act as absolute owner without any change of her register, and he afterwards sells or
In this case, therefore, the result is the same whether the mortgage under which the Springfield bank claims be treated as the mortgage of Baumbaugh or that of Gillett acting in the name of Baumbaugh. In either aspect of the case that mortgage was outside of the chain of title under which the St. Louis, Chicago and Omaha banks claim title, and the Springfield mortgage not, being made in the name of Gillett, it imparted no notice to Elmore & Cooper when they took the other three mortgages from Gillett. They found Gillett1 in possession of'the cattle. They were not obliged to look for mortgages on Gillett’s interest in the cattle in any fictitious name nor in the name of any one for Gillett. No mortgages on the cattle appeared in Gillett’s name. Elmore & Cooper were required to inquire no further.
It has already been pointed out that at the time Baumbaugh executed the mortgage now held by the Springfield bank, neither Baumbaugh nor Gillett owned the cattle or was in possession thereof, and that the bill of salé and mortgage dealt with the cattle as in praesenti and as in esse, and did not attempt to expressly bind any after-acquired cattle. As between the mortgagor and the mortgagee, or Gillett and the mortgagee, the mortgage was sufficient to convey any title they then had and also such as they might afterwards acquire. But as between the mortgagee and subsequent mortgagees, purchasers or attaching creditors that mortgage was not sufficient to cover after-acquired cattle, and as the cattle in this case were all after-acquired cattle by Gillett (never at any time by Baumbaugh) the mortgage executed by Baumbaugh was not sufficient to bind the cattle as against the claims of the St. Louis, Chicago and Omaha banks under the mortgage executed by Gillett to Elmore & Cooper on October 14, 1898. And even if the Baumbaugh mortgage had contained an express provision making it apply to after-acquired xoroperty, it would not avail the Sxningfield bank anything
Jones on Chattel Mortgages (2 Ed.), sec. 138, says:
'“At common law, a mortgage can operate only on property actually in existence at the time of giving the mortgage, and then actually belonging to the mortgagor, or potentially belonging to him as an incident of other property then in existence and belonging to him. A mortgage of goods which the mortgagor does not own at the time of making the mortgage, though he may after-wards acquire them, is void in respect to such goods as against subsequent purchasers or attaching creditors.” And in speaking of a right to mortgage a potential interest the author in section 140, says: ‘ ‘ Thus, to use illustrations familiar since • the time of Chief Justice Hobart, ‘Land is the mother and root of all fruits. Therefore, he that hath it may grant all fruits that may arise upon it after, and the property shall pass as soon as the fruits are extant. A person may grant all the tithe-wool that he may have in such a year, yet perhaps he shall have none; but a man can not grant all the wool that he shall grow upon his sheep that he shall buy hereafter, for there he hath it neither actually nor potentially.’ ”
It follows that the Baumbaugh mortgage was void as to third persons, subsequent purchasers, mortgagees and creditors, because neither Baumbaugh nor Gillett owned any of the cattle covered by it when it was executed, nor were they apparent owners in possession, nor had they any potential interest therein. It also follows
This conclusion makes it unnecessary to consider the other questions raised. The judgment of the circuit court is reversed and the cause remanded with directions to enter judgment in favor of the interpleaders, the Northwestern National Bank of Chicago, the State Bank of St. Louis, and the First National Bank of Omaha, each for the portion of the fund arising from the sale of the part of the cattle covered by its mortgage, if such proceeds can be followed .into the fund and be distinguishable from the balance of the fund, and if this can not be done, then to enter a decree dividing the fund among these three banks in the proportion that their respective claims bear to the total fund, and to enter a decree against Charles H. Baumbaugh for all costs, with a proviso that if they can not be made out of him, then against each interpleader for the costs incurred by each.