Payne v. Parker

| Miss. | Mar 15, 1909

Lead Opinion

Eletcher, J.,

delivered the opinion of the court in response to the suggestion of error.

The learned circuit judge gave a peremptory instruction to find for the appellee upon the following state of facts: One Little, late in thé year 1906, became Payne’s tenant, and moved upon his plantation. At the time Little owned two mules, upon which a third party held a trust deed for about $135. It appears that Mr. Payne had been advised by his attorney that personal property could be sold conditionally and the title thereto reserved to the vendor, and that the lien so reserved would be superior to any subsequent incumbrance by the conditional purchaser. Payne testifies that he acted in the transaction upon the idea that such an arrangement was a convenient, safe, and economical method of securing his debt, since it would obviate the need for recording fees and other expenses. Little was anxious for his landlord to take up the debt, and desired a further advance of $50 in cash. Thereupon Payne and Little entered into an agreement by 'which Little was to sell Payne the mules for $185 and Payne was to immediately resell the property to Little and reserve the title. This was done; the entire transaction resting in parol. Subsequently Little mortgaged the property to W. M. Thompson & Son by a trust deed, in which Parker is substituted trustee. The former trust deqd, which was paid by Payne, was satisfied, so that, when Thompson & Son took their security, no incumbrance against the property appeared of record. It is shown that Little, with Payne’s knowledge, obtained supplies from Thompson & Son throughout the year, and, indeed, Payne admits that he encouraged Little to buy from Thompson all the supplies he needed; that, to use his own phrase, he said to Little that “he missed it in not going and loading up on him.” '

We have no disposition to depart from the rule, now thoroughly established in this state, that personal property may be sold with verbal retention of title, and that the claim of the vendor to the purchase money will prevail over the claim of subsequent grantees. But we cannot hold as a matter of law that Payne ever actually owned the mules here in controversy. The whole transaction must be examined. The mules were not purchased from Payne in the first instance. They were bought from one Lawson. The sole purpose of the alleged sale to Payne was that title might momentarily vest in him for the purpose of an instantaneous resale, in order that the relation of the vendor and conditional purchaser might exist. The whole transaction might well be considered as nothing more than a verbal mortgage — an effort to substitute for a trust deed a pretended sale and resale, whereby innocent purchasers and incumbrancers would be defrauded. If this transaction is to be upheld, chattel mortgages will disappear. All borrowers upon personal property as security will simply agree with the lender to make a sale, accompanied by constructive delivery of the property, and buy the property back in the same transaction. We bare here an illustration of a most flagrant wrong committed to tbe manifest injury of an innocent supply merchant. It is true that, under tbe previous decisions of this court, one taking a trust deed upon personal property must see to it that tbe person from whom tbe property was purchased has not reserved tbe title, or that be has been paid; but be cannot be defeated by constructive sales and resales, bad between persons who in reality sustain no other relation than that of creditor and debtor. We will not push tbe doctrine one inch further than it has already gone. In order for tbe seller to enforce bis claim, be must be in fact tbe owner of tbe property, and make a bona fide sale thereof to a bona fide purchaser, by which sale tbe actual possession of tbe property shall be in truth changed. Tbe peremptory instruction should have been given for tbe appellant, and not for tbe appellee.

Tbe suggestion of error is sustained, tbe former judgment vacated, and tbe cause reversed and remanded.

Reversed and remanded.

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Dissenting Opinion

Whiteielu, O. J.,

delivered the following dissenting opinion, in response to tbe suggestion of error.

Tbe judgment originally rendered in this case was, in my opinion, manifestly correct, and tbe suggestion of error should be overruled. Indeed, I think a simple statement of tbe facts is an end to tbe argument, and I propose to state those facts fully. There was a mare sold to a negro, Little, by appellee, about three •years before this transaction, and a trust deed given by Little to secure tbe payment of tbe purchase money in 1906; Little at mules. When Little came back to the place of appellee in 1907, Little moved back on appellee’s place. At this time be, being-unable to pay for tbe mare, let appellee take her back, and tbe trust deed was by appellee canceled on tbe record January 10, 1907.

We come, now, to tbe two mules in controversy. Those mules bad been sold by one J. N. Lawson to Little, on tbe 24th -clay of August, 1905, and Little had given Lawson on that date a note, due October, 1905, at 10 per cent, interest from maturity, for $220, and the trust deed of same date, August 24, 1905, to secure said note; said trust deed covering the two said mules. When Little came back to the place of appllee in 1907, being unable to pay for the mare appellee had sold him, as stated, that mare was delivered back to appellee, and that trust deed canceled, January 10, 1907. At the same time Little brought the two mules he had bought from Lawson onto the appellee’s place, and had them there is his (Little’s) possession. The note and trust deed, executed by Little on the 24th of August, 1905, to secure J. N. Lawson in the purchase money of these mules, had been, on October 30, 1905, transferred and delivered to one John D. Payne, and at the time Little moved back on appellee’s place, in January, 1907, there was still remaining due on these two mules, under this note and trust deed, the sum of about $135. The appellee, having canceled his trust deed on the mare above referred to, on January 10, 1907, bought from Little the two mules, and resold them to Little, reserving the title in himself until the purchase price of the mules should be repaid to him by Little.

There is only one witness to the terms of this sale, and that is P. S. Payne, the appellee in this case. He testifies1 in the most positive and explicit manner that Little sold him these mules, and he resold them, and also the mare, for $325, and that he was to pay off the trust deed of Lawson, which had been assigned to John D. Payne in October, 1905. Here is what he says “In 1906 he [Little] moved to my place just a few days before' Christmas. There was a deed of trust on these two mules he had, and he came to me and told me that if I would pay the deed of trust off, and let him have $50, that he would let me have' the mules. We counted up that and the interest on it, and it made it something a little over $145; but I put it all at $175, and when I let him have the $50, with interest on that, that made it $55, and that made $200 in all. And I said, 'All right, I will take the mules at $200 on this, and I will sell them back to yon at $200and then I sold him a mare for $125. The agreement then was that I take the deed of trust on the mare in 1906, and he was to live on my place that next year, and when he moved back to my place, I told him that we would do away with the deed of trust [that is, appellee’s deed of trust on the mare], and that he would fix it up with notes, or a note, binding all the stock. And I also let him have a mare for $125, and we fixed up the three in the same note.” lie again and again, repeatedly, testifies expressly, in the most positive terms, that this sale and resale was made.

Now, let us see whether he carried out, on his part, the terms of this sale. He paid the negro the $50. He paid John Payne, who held, by transfer, the Lawson note and trust deed on the mules, $135.40, the balance due under that trust deed, on the 16th day of January, 1907, and canceled that trust deed. As stated, he had already canceled the trust deed on the mare on the 10th of January, 1907. The negro, Little, seems to have disappeared from the scene. On January 1, 1908, a year later, for the first time the appellants, Thompson & Son, took a trust deed from Jim Little, some little while before his disappearance, to secure an indebtedness of $182, only $48 or $49 of which was for supplies furnished Little during the year 1907; all the balance being an indebtedness antecedent to all these other transactions — antecedent to- the year 1907, as shown by W. M. Thompson’s testimony. This sale of the two mules by Little to appellee, and the resale by appellee to Little, was reduced to writing, and a note given by Little, and that note was in pursuance of that sale. Appellee testifies as follows: That he “told Little that he was on the John Payne place, and that he [appellee] would pay the trust deed of John Payne off on the mules, and that he [appellee] would furnish him [Little] $50 and would take the mules, and would then sell them back to him [Little] at the same price, reserving title, if Little would move on his [appellee’s] place; and that that was the express contract — that he bought the mules from him in that way, and sold them back to him at the same time and under the same agreement.”

Now, a few months later this contract was reduced to writing, and was signed by Jim Little, and is as follows, being a note for the purchase money of these mules:

“325.00 On or before the 17th day of June, 1907, I promise to pay R. S'. Payne, or order, the sum of three hundred and twenty-fire dollars, same being for the purchase money for the following described property bought of said B. S. Payne, viz.: One black horse mule, about six years old, name Joe, and would furnish him [Little] $50 and would take the mules, and would then sell them back to him [Little] at the same price, one black mare mule, about six years old, name Hat, and one Texas mare, about six years old, name Emer, all said stock now in my possession; and it is hereby expressly understood and agreed by me that the title and ownership to said stock is to be and remain in the said B. S. Payne until this note 'is fully paid and satisfied. This 17th day of June 1907.

“James X. Little.”

In view of the fact that this note, reserving title, is in writing, the statement of the majority that “the entire transaction rests in parol” is misleading. What the majority meant to say was that the part of the transaction, the original agreement, was in parol; but it is absolutely due to be stated, that the case may be put as it is, that this transaction was subsequently reduced to writing. This is very important, in view of another statement in the opinion, that the “whole transaction might well be considered as nothing more than a verbal mortgage.” If there be any mortgage in this case, it is not a verbal mortgage, but a ■written mortgage; and it is inconceivable how a mortgage can be worked out of the four comers of this simple promissory note. There is not a particle of evidence in the case about a mortgage of any kind. The appellee expressly states that there was a sale of these mules by him to Little. There is not a hint anywhere in his testimony, or anywhere else in any other testimony, that there was any mortgage dreamed of. There is no verbal mortgage, according to the testimony; but the best evidence of what the transaction was, in the eyes of the law, was the note, and, of course, it 'is too plain for discussion that that note is nothing but a simple promissory note, without the semblance of a mortgage in its terms. I dismiss, 'therefore, the suggestion that there was in this case any mortgage with simply this other observation that the very case cited by appellant (Klien v. McNamara, 54 Miss. 90" court="Miss." date_filed="1876-10-15" href="https://app.midpage.ai/document/klein-v-mcnamara-7984894?utm_source=webapp" opinion_id="7984894">54 Miss. 90) states three tests as between a mortgage and conditional sale: First. Was the treaty in reference to a borrowing and lending of money, and was the obligation to repay incurred? The record shows nothing of this sort. Second. Did the relation of creditor* and debtor exist before the conveyance, and did- that relation continue ? If appellee told the truth, and he is the only witness, the record completely negatives this test. Third. Was there great disparity between the price of the property and the loan? No reason for this test exists in the record. In short, the mere reading of the note ends at once any suggestion of a mortgage.

But, turning aside from that, we have here the positive and express testimony of the appellee that this transaction was a sale, and nothing but a sale; that it was made in pursuance of legal advice1 — perfectly sound advice, too, be it remarked; and there was a note taken showing the terms of the sale, and corroborating in every detail the verbal statement of the appellee as to the terms of the sale. Now, let it be noted and emphasized that there is not in the record a scintilla of testimony, written or oral, as to the terms of the sale of these mules. Absolutely the appellee’s testimony, as stated, is corroborated entirely by the note, and is not contradicted in the least degree by any testimony of any kind whatsoever; and yet the majority hold that, not only the suggestion of error must be sustained, but that the court below should have charged the jury to find for the appellant. The court below, in my judgment, most properly charged the jury to find for the appellee, because there was no other testimony than that I have given as to the terms of the sale. And, as to this transaction being a sale with reservation‘of title, the court below had at least to support its instruction the positive and uncontradicted testimony of Payne and the note. My Brethren have not only no testimony as to what this transaction was to support their conclusion that a peremptory instruction should be given for the appellant, but they assume the jury’s function of passing upon the truthfulness of Payne, even when supported absolutely in every respect, by the note. This, it seems to me, is entirely beyond the province of the court; for, if the court were right in any possible view, most clearly and indubitably it could do no more than reverse the case for the determination of the facts of this case by the jury.

But this is not all. The argument of the learned counsel for appellant is self-destructive plainly. Pirst, he argues that appellee never at any time had any title to these mules; and, when that does not work out satisfactorily, he then proceeds to argue that he did have title to the mules, because he must have had it to take the mortgage on the mules, which he says the transaction amounts to. In other words, he strenuously argues, in the first place, that there never was any sale, and that is the whole burden of his argument in this suggestion of error, citing many authorities to show it — that is to say, that there never was any sale by Little to appellee — and then proceeds immediately thereafter to insist that appellee did have title, but simply mortgaged the mules to Little, instead of selling them to him. Another most striking thing in this record is that, to my mind, at least, it is clearly shown that the appellants were guilty of the grossest negligence in not making inquiry of the appellee as to what claim he had on these mules. Surely it was the duty of these supply merchants, knowing, as they admit they did know, that Little was appellee’s tenant, living on appellee’s place, and necessarily needing supplies, to inquire of appellee what claim he had on these mules, or what security he had, both for the mules and for supplies. What does the evidence show in this respect? Mr. Thompson testified that he did ask the negro whether this stock was under any incumbrance whatever, and that he said he didn’t owe Mr. Payne a cent, and, further, that he never took a mortgage unless he asked if there was any incumbrance on the stuff or stock. That is his express testimony. Think of this man asking a negro, instead of asking Payne, the appellee, on whose place the negro lived; and it further appears that he knew the negro lived on Payne’s place throughout the year 1907, yet never asked Payne’s permission'to supply him, and never asked Payne if he was supplying him, or what claim he had On this stock. Thompson actually embraced in his trust deed the mare, and the only singular thing on his part is that he did not claim the mare. Again, appellee testifies that he told Parker, the trustee, when he came to get the stock, that he ha.d a claim on the stock sufficient to hold them, and that he thinks he told him of the note. Now, the appellant attempted to contradict this by showing that the claim appellee mentioned to the trustee, Parker, was that he had a landlord’s lien for supplies; and appellant introduced two witnesses to thus contradict appellee, to wit, the trustee, Parker, and one Pope Tanner, white. But Parker testified that he went to see appellee twice about getting possession of the mules, and that the second time he went back, about two hours after the first time, the appellee did tell him that he had some papers by virtue of which he claimed these mules, and that they (the papers) were good against the stock; and Tanner testified positively that the appellee told him he did have papers under which he claimed this stock. I mention this merely to show that the effort to break down appellee entirely failed, and that the two witnesses, the trustee and Tanner, corroborated the appellee, instead of contradicting him.

One other curious obliquity of vision to me in the opinion of the court: That opinion states: “We have here an illustration •of a most flagrant wrong committed to the manifest injury of an innocent supply merchant.” I think the testimony which I have quoted fails to disclose any particular innocence on the part of this supply merchant. He knew this negro, Little, lived on the appellee’s place throughout the year 1907. He knew the negro had to be supplied. He himself, at that time, held a past indebtedness from the negro to himself, unsecured, and which he was naturally very anxious to get. He does the ■curious thing of asking the negro, and not asking the appellee, whether the appellee had any claim on these mules, either for supplies to be advanced, which must be advanced, or for the purchase price of these mules; and all, absolutely all, even the cost of the trust deed, which this innocent supply merchant is out, so far as this transaction is concerned, is $56.07, according to his own testimony. And yet the appellee, who first sought legal advice, and got sound legal advice, and acted on that legal advice, actually paid $135.40 to John Payne, and $50 to this negro, making $185.40, all of which he loses, without the court being at all concerned about this innocent farmer’s loss. So far as the “flagrant wrong” is concerned,' doubtless one has been committed; but it has been to the injury of the appellee, the landlord.

Once more, and finally, I refer to another expression in the opinion. It is there stated that the “sole purpose of the alleged sale to Payne was that title might momentarily vest in him for the purpose of an instantaneous resale, in order that the relation of the vendor and conditional purchaser might exist.” My Brethren have used great felicity of expression in this sentence. The momentary vesting, and the instantaneous resale, are the very extremes to which language can be pressed, in the effort to make, out of mere language, a transaction which the facts in the case do not show. One can almost see the “verbal mortgage” rising into being, out of the mere intensity of the phrasing. But, besides, are not sales and resales on the same day, aye, in the same hour, of every-day occurrence in the bush ness world ? I think we are on far safer ground when we interpret this plain, simple, promissory note to mean what it says it means; and then, if the court was not right in charging the jury to find for the appellee, we should simply hold that there should have been no charge to find for either party peremptorily, but that the case should be left to be tried by the jury. The court not only sustains a suggestion of error to a charge, not only in perfect harmony with all the testimony in the case as to the sale and resale, but then absolutely proceeds to hold that the jury should have been charged, in the face of all the evidence, to find for the appellant — something which passes my comprehension.

One other observation: The court,stresses an expression of the appellee to the effect that appellee told Little that “he missed it in not going and loading up on him.” Presumably the court thought there arose an implication from this statement that there was a fraudulent combination between Little and appellee to enable appellee to get supplies from appellant. It is singular my Brethren did not notice that in the redirect examination of appellee he -explained this statement, and said positively that that conversation occurred after this lawsuit was begun, and had no reference whatever to the year 1901 and the transactions of that year, which last statement makes it manifest, as it seems to me, that the implication that the court would work out of the first statement does not fairly arise out of the testimony of the appellee.

But I must repeat, in closing, that I think the case ought to have been taken from the jury, and was properly taken from the jury, and the peremptory instruction for the appellee was correct, as we first held, because the testimony of Payne is absolutely without any contradiction, and is, in addition, supported by the written note. Beally this is an exceedingly simple case, with absolutely nothing in it, except the long-established doctrine that the vendor of personal property may retain title ■thereto by parol, which title would be good against innocent purchasers for value without notice, subsequently purchasing. The real trouble with appellant’s counsel is not so much the fact that the case made by this record does not plainly show he has no case, but that he entertains the view that these secret reservations of title are iniquitous and ought not to be tolerated. He is struggling against what he thinks is an unwise law. On this ground I can stand with him without the least hesitation. But who shall change this law, this court or the legislature? Manifestly, as long as the secret reservation of title is the law, we have nothing to do but enforce it. I sincerely trust an act will be passed by the next legislature, requiring that all reservations of this character be recorded. But that is another story.

It seems to me, with all deference ,to my Brethren, that their holding is erroneous, manifestly, in two respects: Certainly, in not limiting their holding to mere reversal, so that the jury,, and not this court, may pass upon the facts of this case; and, second, because their holding, so far as the light to reserve title to personal property is concerned, absolutely abolishes that right.

For these reasons, I dissent m toto from the opinion and judgment in this case.