Partridge v. Minnesota & Dakota Elevator Co.

78 N.W. 85, 75 Minn. 496, 1899 Minn. LEXIS 507

• Court: Supreme Court of Minnesota
• Decided: February 2, 1899
• Docket: Nos. 11,412—(233)
• Status: Published

Opinions

START, 0. J.

Action for the alleged conversion by the defendant of certain wheat, upon which the plaintiff had a mortgage. Defense that the defendant purchased the wheat, in the usual course of business, from the mortgagor, who was then authorized by the mortgagee to make the sale. At the close of the evidence, the defendant requested the trial court to direct a verdict in its favor, which was refused; and thereupon the court directed a verdict for the plaintiff for the amount claimed. The defendant appealed from an order denying its motion for a new trial.

The only assignment of error we find it necessary to consider is the one to the effect that the trial court erred in so directing a verdict. It was admitted on the trial that the plaintiff had a mortgage on the wheat; that the defendant had notice thereof; and,that it purchased the wheat of the mortgagor, and refused to deliver the same, or to account therefor to the plaintiff. It follows that the instruction of the trial court was correct, unless there was evidence in the case tending to show that the plaintiff expressly or impliedly authorized such sale; but, if there was such evidence, it was error for which a new trial must be granted. A purchaser of chattels from the mortgagor, upon which there is a mortgage, takes his title free of the lien of the mortgage, if the sale was made with the authority or consent of the mortgagee. Such authority need not be in writing. It may be express or implied from the conduct of the mortgagee with reference to the mortgaged property. Hogan v. Atlantic El. Co., 66 Minn. 344, 69 N. W. 1; Jones, Chat. Mort. § 465; 5 Am. & Eng. Enc. (2d Ed.) 996.

After an attentive consideration of the record, we have readied the conclusion that there was evidence tending to support the contention of the defendant that the plaintiff authorized the mortgagor to sell the wheat in question, and pay the debt secured thereby from the proceeds of the sale, sufficient to take the case to the jury.

The chattel mortgage was made by James Shea to the plaintiff upon the crops growing and to be grown upon a certain farm in his possession, to secure the payment of $8,000. The wheat in controversy was a. part of such crop. The plaintiff employed an agent, Mr. Nye, to look after the harvesting, threshing and putting the wheat in a granary or elevator. There was evidence tending to show that the mortgagor, the latter part of September, 1897, with the knowledge and consent of the agent, placed the wheat in the defendant’s elevator, taking tickets or receipts therefor in his own name; that a part of the tickets were marked “Mortgaged,” and the whole thereof was left.in the possession of the defendant’s agent, in charge of the elevator, at the request of the mortgagor. In reference to this transaction, Mr. Nye testified that it did not make any difference to him whether the mortgagor turned over the tickets, or whether he sold them, and turned over the money. The mortgage debt matured October 7, 1897, and on October 27 the mortgagor wrote to the plaintiff that he had wheat enough in the elevator to settle his claim, but stated that he did not like to sell then, as he expected a better price, to which the plaintiff replied to the effect that he believed the wise course was for the mortgagor to close out the property at once, and pay his debts. November 2 the mortgagor wrote tó Mr. Nye, plaintiff’s agent: “I will sell this crop when the price is where I think it is right.” This letter was forwarded to the plaintiff, who, November 4, wrote to the mortgagor, stating among other matters:

“We must insist upon your disposing of sufficient wheat at once to take care of the pool matter [the mortgage debt], or else secure the money from some other source, as we will not under any circumstances permit the matter to continue as it has any longer. * * * We shall expect to hear from you at once, and trust that you will see fit to authorize Mr. Nye to dispose of sufficient of the crop to make a complete settlement with your creditors.”

December 14 the mortgagor wrote the plaintiff that he could not pay more than $2,000 of the debt, and asking that the balance be extended until the next year. The correspondence shows that the plaintiff at first declined to entertain any proposition for an extension of the time of payment of any part of the debt.- But .there was evidence tending to show that negotiations were subsequently pending for the present payment of $2,000 of the debt, and an extension until the next year of the remaining $1,000, to be secured by the mortgagor’s note, with indorsers, and that Mr. Nye, *n re" sponse to an inquiry from the defendant’s elevator agent, told him that a settlement had been virtually made on that basis; that thereupon the elevator agent paid the mortgagor $1,000 in cash, and a check for an amount sufficient, with a check previously given to him, and then in his possession, to make $2,000, in settlement of the purchase price of the wheat; that, in fact, the wheat had been sold some three days before this conversation with Mr. Nye and subsequent payment of the balance of the purchase price. The mortgagor did not turn over the checks aggregating $2,000 to the plaintiff or his agent, but died February "21, 1898, leaving the mortgage debt unpaid. There was also other evidence given on the trial tending to controvert or explain some portions of that to which we have referred; but, upon the whole evidence, it was a question of fact for the jury whether the mortgagor was authorized to sell the wheat in question, and the trial court erred in directing a verdict for the plaintiff.

Order reversed, and a new trial granted.