Kingsland & Douglas Manufacturing Co. v. Board Bros.

GriLL, J. This is an action in replevin brought to recover the possession of a steam thresher, separator, etc., which plaintiff had sold to the defendants and on which defendants had. executed a chattel mortgage or deed of trust, to secure certain notes given for the purchase price. Before this suit was commenced, plaintiff had sold and assigned one of the notes to the Water-town Steam Engine Company, but still held the other, and both said notes were then past due. The petition was in the usual form and the answer a general denial. At the close of the evidence the court peremptorily instructed the jury to find for the plaintiff, and, from a verdict and judgment accordingly, the defendants have brought the case here by writ of error. I. The first contention is that plaintiff can not maintain this action for the possession of the mortgaged property, because one of the notes secured had been transferred to the Watertown Company; that such partial assignment of the debt had the effect to transfer an interest, pro tanto, in the mortgage, and that the plaintiff was not, therefore, entitled to the exclusive possession of the property sued for. We do not think this objection well taken. It, of course, must be conceded that an assignment of the debt carries the mortgage security along with it; and that a sale and transfer of a portion of such debt ( as, for example, the sale and assignment of one of a number of notes secured) will take along with it a pro tanto interest in the mortgage security. But, strictly speaking, this interest in the mortgage so taken by the assignee of the entire debt, or portion thereof, is merely equitable in its nature — the legal title remains in the mortgagee. Jones on Chattel Mortgages [2 Ed.], secs. 503, 504. The instrument we have here is not in the usual — 666 — form of a chattel mortgage. Nor can it hardly be denominated a deed of trust, though it purports to convey the property to the Kingsland & Douglas Manufacturing Company “in trust to secure to said Kingsland & Douglas Manufacturing Company, or the holders thereof, the payment of the following promissory notes” etc., and authorizes said trustee (K. & D. Mfg. Co.), in ease of a default in payment of the notes, to take possession of the property, sell the same and pay the debt. But, whether we call it a chattel mortgage with power of sale, or a deed of trust, the legal effect is the same. Bartlett v. Teak, 1 Fed. Rep. 770. By the instrument the plaintiff here was invested with the legal title of the property, to be held and used for the security of the notes, whether owned by said mortgagee or trustee, or other persons. When the Kingsland Company transferred one of the notes to the Watertown Steam Engine Company, a beneficial or equitable interest to that extent was thereby assigned to said engine company, but yet the legal title to the whole and the beneficial interest to the extent of the note retained, remained with the plaintiff. It was all the time the trustee of an express trust. It was formerly the rule that the assignee of the mortgage debt could not maintain replevin for the mortgaged property — that such action could only be maintained by the.mortgagee, or by the assignee in the name of the mortgagee. Jones on Chattel Mortgages, sec. 503. Under our practice act, however, this rule has been broadened. It is first provided that every action shall be prosecuted in the name of the real party in interest, Revised Statutes, 1889, section 1990, except, however, the trustee of an express trust “may sue in his own name, without joining with him the person for whose benefit the suit is prosecuted. A trustee of an — 667 — express trust within the meaning of this .section shall be construed to include a person with whom, or in whose name, a contract is made for the benefit of another.” R. S., sec. 1991. Applying this statute to the case in hand, the holder of the notes secured by the mortgage might sue, as being the real party in interest (Kingsland v. Chrisman, 28 Mo. App. 308) or the plaintiff, as mortgagee, or trustee, of an express trust, might maintain the action. And, in such case, a judgment in either case would bar the other. See Barton v. Martin, and authorities cited ante,-. We have no concern here as to the relative rights between the Kingsland and Watertown Companies in the mortgaged property. If they fail to agree as to the proper disposition of the funds that may arise from a sale of the property, that contest must be settled in an action wherein the Watertown Company may be a party. This is a matter that does not concern these defendants. The point now decided is, that the plaintiff, as trustee of an express trust, is authorized, under the terms of the mortgage, or deed of trust, to sue for and recover possession of the mortgaged property. II. Defendant’s counsel can hardly be serious in the claim that this action ought not to be sustained against J. W. Board, on the alleged ground that he was not shown to be in joint possession with his brother, T. N. Board. The evidence conclusively proves the contrary of counsel’s contention. The testimony stands without contradiction that, while the machinery in dispute was on the farm of T. N. Board, yet he held it for and in behalf of the two defendants. They were copartners in ownership and the use thereof and jointly withheld its possession from the plaintiff. III. The sale and purchase of the machinery in — 668 — question was evidenced by a written order signed by the parties, and, as part thereof, appeared a warranty, the material portions thereof being as follows: “As a condition of this order, the above articles are warranted to be of good material, well made, and with proper management, capable of doing as good work as similar articles of other manufacturers. If said machinery or any part thereof shall fail to fill this warranty, within ten days of its first use, written notice shall be given to Kingsland & Douglas Manufacturing Company and agent through whom the machinery was purchased, stating wherein it fails to fill warranty, and time, opportunity and friendly assistance given to reach the machine and remedy its defects.” “If the defective machinery can not be made to fill the warranty, it shall be returned by the undersigned to the place where received and another furnished on the same terms of warranty, or money and notes to the amount represented by the defective machinery shall be returned, and no further claim shall be made on Kingsland & Douglas Manufacturing Company. “Continued possession and use of the machine after the expiration of the time above, shall be conclusive evidence that the warranty is fulfilled to the full satisfaction of the undersigned, who agree thereafter to make no other claim on Kingsland & Douglas Manufacturing Company under warranty.” Defendants received the machine at Urick, Bates county, on July 9, 1890. A few days thereafter (July 15), they complained to the agent that it did not work well in flax. Thereupon, on defendant’s request sent by telegraph to the plaintiff at St. Louis, an expert was sent to Bates county to put the machine in order. This expert changed the riddles, started the machine, and on July 19, four days after the first complaint was — 669 — sent in, the machine was in good running condition and defendants signed a written certificate that it worked entirely satisfactorily. One of the defendants testified that when this first trouble arose (about July 15,1890), he suggested to the agent that they return the machine. This was, however, before the substitution of the new riddles and before the defendants’ certificate that the machine was then operating satisfactorily. Defendants kept the machine for three years thereafter, during the seasons of 1890, 1891, 1892 and 1893, operating it continuously, and no pretense is made that they made any offer to return the thresher until the fall of 1893, when the plaintiff was threatening suit on the notes. During this time, too, the defendants, in March, 1893, renewed some of the notes given for the purchase price. At the trial, defendants sought to recoup the plaintiff’s claim by an alleged breach of warranty in that the machine did not at first clean flax satisfactorily; that defendants lost intime and patronage, by reason of the delay in substituting the' zinc riddles, when the machine was first started. Evidence to that effect being offered,was excluded, and of this the defendants now complain. We fail to discover any merit in defendants’ position. The substance of the warranty agreement is this: Defendants had ten days after beginning work with it to try the machine. If it proved defective, or failed to fill the terms of the warranty, then defendants were required to serve written notice on plaintiff, stating the defect complained of; and then plaintiff had a reasonable time to remedy said defect. But if the plaintiff failed to make the machinery comply with the warranty, then the defendants might return the same to the place where they received it and another machine would be furnished in its stead, or money or notes returned, etc., and “no further claimshall be made on” — 670 — plaintiff. The parties, too, stipulated in their agreement, that continued possession and use of the machine after the expiration of said ten days, in which they were allowed to test the same, shall be conclusive proof that the warranty was fully complied with, to the full satisfaction of the defendants, who agreed thereafter to make no other claim on plaintiff under the warranty. This contract clearly intended that before defendants could claim any breach of the warranty in the construction or operation of the machine, plaintiff should have notice of any alleged defect and an opportunity to repair or remedy the same. And defendants were obliged to test the thresher within ten days after beginning work with it. . They had only said ten days within which to detect any infirmities; beyond that time, they could not complain. If they kept and used the machine beyond the said ten days, this was to be deemed an agreement on defendants’ part that said thresher was all the warranty required. Defendants now are clearly shut out by the above stipulations. They did complain of a defect within the ten days; the plaintiff company promptly answered thereto and cured the defect to the entire satisfaction of the defendants. The contract gave the plaintiff a reasonable time to remedy the defect after being notified. They were advised by telegraph on July Í7, of of the machine’s failure to clean flax, and on the nineteenth, an expert was sent from St. Louis to Bates county, who at once substituted the zinc riddles and the thresher thence on worked satisfactorily. Unquestionably this remedy was applied in a reasonable time. The defendants have no action for damages because of these four days delay in putting in the zinc riddles. This was contemplated by the contract. We discover no error in the action of the circuit court and its judgment will be affirmed. All concur.