Terry v. Witherspoon

HALD, J. November 23, 1920, defendant in error, Witherspoon, sued W. H. Terry and his two sons, J. G. and R. A. Terry, upon a promissory note, executed by the plaintiffs in error, in the sum of $6,695 dated May 1, 1920, and due six months after date. Defendant in error alleged that as security for said note W. H. Terry gave a deed of trust upon 400 acres of land in Gaines county, and that John G. and R. A. Terry gave a mortgage on certain personal property, consisting of tools, machinery, and fixtures in the Hereford garage; that on October 20, 1920, J. G. and R. A. Terry executed and delivered a bill of sale in form but which was intended as a chattel mortgage, in favor of Geo. Beams, G. E. Webb, and E. W. Kinney, conveying certain personal property, consisting of a stock of merchandise, parts, repairs, arid accessories, for automobiles, Bessemer engine parts, also an acetylene engine outfit and burning-in-stand, all situated in the building of the Hereford garage. He further alleges, that at the time the bill of sale was given plaintiff, defendants and the said Beams, Webb, and Kinney, entered into a written contract which provided that the bill of sale was not to be received in discharge of the note and would not affect other securities, but that the grantees in the bill of sale would take charge of the property described therein and use their efforts in selling it; that they would turn the same into cash and use the proceeds in paying expenses of looking after the property and carrying on the business, the excess, -if any, to be applied to the payment of the note. And it was the purpose and intention of the parties that the bill of sale and contract should create a lien on the property and be regarded as a chattel mortgage, placing plaintiff, Beams, Webb, and Kinney in position to further secure the note. He further alleges that Beams, Webb, and Kinney were part owners of the note with him. The defendants answered by general demurrer, general denial, and impleaded Beams, Kinney, S. E. Webb, and H. B. Webb. By cross-action they charged that, though the note was executed to Witherspoon, it was' owned jointly by Witherspoon, Beams, Kinney, and- G. E. Webb and was executed in part payment for the garage, tools, machinery, etc., used in the repair shop; that W. H. Terry was the owner of said garage and its contents from the date of • purchase to October 20, 1920, when the property was converted by the plaintiffs; that at the time of the conversion and prior thereto W. H. Terry, through his agents and employees, was conducting a garage business selling accessories, and on said last-named date the plaintiff, Beams, Kinney, G. E. and H. B.- Webb, converted all of said property to their damage in the sum of $15,000; that at the time of such conversion the note sued on! was not due. They further prayed for exemplary damages in the sum of $10,000 and for $10,000 for loss and destruction of the good will of the business. Witherspoon and his coplaintiffs replied to the cross-action, alleging that W. H. [301] Terry liad no right to maintain the cross-action because he was not the owner of the property; that the property belonged to his sons. J. G. and R. A. Terry then filed a triaj amendment, by which they adopted the cross-action of their father, W. H. Terry, and prayed that, if it was decided that they were the owners of the property, then that they recover the damages alleged. They further charged that they were induced to execute the bill of sale and the contract delivering possession of the property by the false and fraudulent representations made by Wither-spoon, Kinney, and Webb, in that they were told that their father, W. H. Terry, had said for them to execute the bill of sale and contract. The court directed a verdict that the plaintiff recover the amount of the note and for a foreclosure of the liens and that the defendants recover nothing upon their cross-action. It is insisted that this action of the court was error because the evidence was sufficient to raise the issue of fraud and conversion. We think this contention must be sustained. The facts show th¿t about the 19th day of October, 1920, W. H. Terry was in Clarendon; that he had previously said something to Beams and Kinney about his inability to pay the note when it should mature, and asked them if they could not dispose of the garage business “in bulk,” either sell it or trade it for something which they would accept in lieu of money as payment upon the note; that on said last-named date some of the plaintiffs went to the garage and talked to the sons of W. H. Terry, about selling the property for the purpose of paying off the debt, and suggested that they should have some written authority, showing their right to sell it. They were told by the sons that their father was in Clarendon, and it was suggested that Kinney talk with him over the phone. There is little controversy about the material facts in the ease, and it is extremely questionable whether the plaintiffs were justified by the conversation between Kinney and W. H. Terry, in the course subsequently pursued by them. Kinney reported the conversation to the sons of W. H. Terry, and together they went to the office of an attorney, who prepared a bill of sale of this property, upon which the plaintiffs had no sort of a lien, and at the same time a writing which contains this recital: “It is agreed that second parties will take charge of the property named -in said bill of sale, and will use their efforts in selling said property and turning same into cash or into other property which second parties are willing to accept as cash, and the proceeds of said property are to be used as follows: (1) The necessary expenses of the same are to be paid, including reasonable pay for the services of either member of the second parties who attends the same, then all above what is necessary to pay on said expenses shall be applied to reduce said indebtedness to second parties.” [1] We do not construe this instrument to authorize Witherspoon, or either of his associates, to take charge of even the property described in the bill of sale and to run it indefinitely, conducting a retail business, as it appears was done until this suit was filed. In any event, it cannot be contended that it authorized them to take charge of other property not described in the bill of sale and upon which- they merely had held a chattel mortgage. If W. H. Terry is to be believed, ■ he did not authorize Kinney to inform his sons that they should execute the bill of sale and the contract. If this is true, the plaintiffs fraudulently obtained possession of the property, and their conduct of the business, running it as a retail establishment, buying and selling goods in their own names, would amount in law to conversion. These issues, together with the issue of ownership of the property, at the time the bill of sale was executed, should have been submitted to the jury. Because of the failure of the court to do so, the judgment is reversed, and the cause remanded. Footnotes [1] <§=oFor oilier cases see same topic and KEY-NUMBER m all Key-Numbered Digests and Indexes