Pyle v. Warren

Lake, J. The errors assigned in the petition in this case may — 248 — all be included under two general heads: first, in excluding from the jury certain testimony; and, secondly, in refusing to give to the jury several instructions as requested by the defendant. These alleged errors will be considered in the order of their assignment. To maintain the issues on their part, the defendants called as a witness one John H. Croxton, who testified (the case being tried to a jury) that he was an attorney-at-law and a dealer in real estate; that he kept in his office a set of abstracts of titles, and knew the value of such property. He was then asked this question: “ Upon what do books of abstracts of titles depend for their value?” An objection was interposed on behalf of the plaintiff, without, however, assigning any ground therefor. The Court sustained the objection, and excluded the proposed testimony; to which the defendants duly excepted. It is not customary to consider an objection, when no reason is given, unless the proposed testimony is entirely irrelevant or incompetent. Upon what ground this objection was sustained, we are at a loss to determine: indeed, the record discloses the fact that the defendant Warren had just before testified without objection upon the very subject of this inquiry, — “ that the value of books of abstracts of titles depends upon and consists in their accuracy, and that incorrect books would be worthless.” Testimony had also been given to the jury that these books were very inaccurate and unreliable. It is but a reasonable inference from the import of this question, that the witness Croxton would have given a similar answer had he been permitted to testify. Had he done so, it would, perhaps, have had a tendency to give increased weight to the testimony of the defendant Warren,— “that the books were not worth a hundred dollars.” The question was certainly perti — 249 — nent; and we see no good reason sustaining the objection. But, while the question was proper, the fact should not be overlooked, that, in addition to the .testimony of Warren, we have that of Simeon H. Calhoun to the same effect. That the value of these books depends upon their accuracy was not disputed: there was no conflict in the testimony on this point. The fact having been sworn to by two credible witnesses, and being uncontroverted, I cannot see how a repetition of the testimony by Croxton could have produced any different result. The interest of the plaintiff in the books was but little over two hundred .dollars. This was certainly much less than their fair value. On the part of the defendants, Warren swears in one place that they were not worth a hundred dollars; at another, that they were worth about three hundred dollars, and that he would sell them for that. On behalf of the plaintiff, four or five witnesses (real-estate dealers) testify that they are worth from twelve hundred to fifteen hundred dollars : so that it would not,have been possible for the jury to have valued the property at less than the interest of the plaintiff, even if Croxton had been permitted to answer the question put to him by the defendants. The defendants requested the Court to give to the jury two instructions as to the legal presumptions arising from the retention of the mortgaged property by the mortgagor.. Although differing slightly in form, they present substantially the same question for our consideration. The request was as follows: “ That, if the jury find from the evidence that the chattels mortgaged were left under the control and in the possession of the mort — 250 — gagor, such mortgage was presumptively fraudulent and void; and that, in the absence of evidence on the part of the plaintiff showing the bona fides of such mortgage, such sale by mortgage was conclusively fraudulent and void, and that the plaintiff could not recover. “ That the retention of the mortgaged chattels by the mortgagor is prima-facie evidence of fraud; and that, in the absence of evidence showing the bona 'fides of the transaction, the sale was fraudulent and void, and that the plaintiff coaid not recover.” The Court refused to give the instructions, on the ground that they'were inapplicable to the case; at the same time, admitting their correctness as abstract legal propositions. ' The question presented for our determination calls for a construction of sect. 70, chap, xliii., of the Revised Statutes, which provides that “ every sale made by a vendor of goods and chattels in his possession or under his control, and every assignment of goods and chattels by way of mortgage or security, or upon any condition whatever, unless the same be accompanied by an immediate delivery, and be followed by an actual and continued change of possession of the things sold, mortgaged, or assigned, shall be presumed to be fraudulent and void as against the creditors of the vendor, or the creditors of the person making such assignment, or subsequent purchasers in good faith, and shall be conclusive evidence of fraud, unless it shall be made to appear on the part of the persons claiming under such sale or assignment that the same was made in good faith, and without any intent to defraud such creditors or purchasers.” In the case at bar, it is undoubtedly true that the property described in the mortgage, and which is the subject of the action, was left in the possession of — 251 — the mortgagor; and that, under the section of the statute just quoted as to certain persons, the transaction would be declared fraudulent. But who is entitled to invoke the aid of this provision ? Not every person, most certainly. It is expressly limited by unequivocal language to creditors of the person making the sale or assignment, and subsequent purchasers in good faith. Before a purchaser can invoke the aid of this statute, he must establish his own bonafides. If, at the time of his purchase,, he knew of the existence of the mortgage, he will take the property charged with the just claims of the mortgagee, or in case of an assignment of the assignee of the mortgagee under the mortgage. Looking to the record, we fail to discover any evidence of good faith on their part in making the purchase. They paid only about a hundred and fifty dollars for property, which, from a due consideration of all the testimony, could not have been worth less than eight hundred dollars at that time. This would seem to indicate that they must have known that the property was encumbered. It is true that both of the defendants swear that they had no personal knowledge of the mortgage at the time of making the purchase ; but the mortgage was duly recorded, which gave them at least constructive notice of its existence. Taking all the testimony together, — the fact that one of the defendants is an attorney, and the other a business-man dealing in real estate, both knowing the importance of referring to the records of the county in ascertaining the condition of the property they were about to purchase, — my mind cannot resist the conclusion that the existence of the mortgage was well known to them at the timer of the purchase. Had testimony been offered to the. jury tending to establish the good faith of the defendants, still I would hold the proposed instructions to be* — 252 — erroneous. They, in effect, take from the jury one of the principal issues which they were sworn to try; viz., the want of notice on the part of the defendants. Unless this fact were first found in their favor by the jury, it was quite useless for them to inquire into the good faith of the mortgage sale. For these reasons, I am of the opinion that there was no error in refusing these two instructions. The defendants further requested the Court to instruct the jury, “that the filing of the chattel mortg’age in the office of the county clerk did not rebut the presumption of fraud arising from the continued possession of the mortgaged property by the mortgagor, and that such filing of the chattel mortgage is not a substitute for change of possession.” This instruction is substantially correct: the failure to record the mortgage where there is no change of possession of the things mortgaged ren-' ders it “ absolutely void ” as to the creditors of the mortgagor and subsequent purchasers in good faith. In such case this legal presumption of fraud cannot be overcome by any amount of evidence of good faith in the execution of the mortgage : it is made by the statute an indisputable presumption. If, however, the mortgage be duly recorded, and the mortgagor retain possession of the property, the presumption of fraud is merely prima faeie, and may be overcome by competent testimony ; but, if no evidence of good faith be produced, this presumption becomes conclusive as to creditors and bona-fide purchasers. But there was no error in the refusal to give this instruction, for the reason that the defendants were not in an attitude to defend it. It was not an admitted fact that they were purchasers in good faith, nor had they given testimony that such was the fact. Until they established their own good faith in making the pur — 253 — chase, they were in no situation to complain either because of the property remaining with the mortgagor, or the failure to record the mortgage. We discover no error in the refusal to give the remaining instructions as requested. The plaintiff was not claiming the property as an innocent prirchaser: he was the assignee of the mortgagee, and took by the assignment whatever interest his brother, John W. Pyle, had in the property. It is quite immaterial what he paid for that interest, —whether much or little. There can be no question raised as to the conversion under the pleadings. The defendants allege that they purchased the books from Wilson, the mortgagor, and that they have a good title as against the plaintiff. Possession of property, with a claim of title adverse to the owner, is evidence of a conversion. Maxwell v. Harrison, 8 Geo., 61. In such case no demand need be shown. After a very careful examination of the whole record, we fail to discover any error which calls for a reversal of the case. We believe that substantial justice has been done, and that no different result could possibly be attained by awarding a new trial. The judgment of the District Court is affirmed with costs. Judgment affirmed.