Wolf & Son v. Shannon

Opinion of the Court, Waterman, J. Edwin Strevell, a farmer, residing in Albion, Iowa, being indebted to A. Wolf & Son of that State, to secure them, gave a chattel mortgage for $8,000 upon certain cattle in Iowa. About the first of August, 1889, Strevell agreed with A. Wolf & Son that he would take a portion of the cattle and ship them in the name of Wolf & Son to B. Strahorn & Co. at Chicago, for .sale. August 4th Strevell took the cattle to the railroad station, told the agent they'were the property of Wolf & Son, and were to be shipped in their name. The agent declined to issue a shipper’s pass to any one save the parties in whose name the cattle were shipped; and to obtain such passes, Strevell, without communicating with Wolf & Son, shipped two cars of the cattle in his own name and one car in the name of a Mr. Bailey, who accompanied him to Chicago., Strevell and Bailey arrived in Chicago on the morning of August 5th, and went immediately to the place of business of Strahorn & Co., where, at about 9 a. m., they informed Mr. Prescott, the bookkeeper for Strahorn & Co., that the cattle belonged to A. Wolf & Son, and told him that the proceeds were to be credited toWolf & Son. Strevell also gave to the bookkeeper a written order from Wolf & Son, stating where the proceeds of the cattle were to be deposited, and Strevell and Bailey also signed a written order, directing that the proceeds be paid to Wolf & Son. . Appellees, Shannon & Co., in the forenoon of August 5th, sued out an attachment against Strevell, who was indebted to them, summoning Strahorn & Co. as garnishees; the attachment writ was delivered to the sheriff at 10:30. Some time in that forenoon this writ was served on Jesse Sherwood, a member of the firm of Strahorn & Co., and he Sherwood, was personally informed at the same time that the proceeds of the cattle were to be sent to Wolf & Son. The cattle, being shipped, in the names of Strevell and Bailey, were sold by Strahorn & Co. as belonging to Strevell. The net proceeds of the cattle were $2,111.69; of this sum Strahorn & Co. paid to Wolf & Son $2,161.69, retaining the sum of $550, to await the result of the attachment proceedings. Judgment for $445.95 was obtained by appellees against Strevell. Upon the trial of the attachment issue, the court gave the following instructions to the jury: 1. “ The court instructs you, gentlemen of the jury, that fór a person claiming goods or cattle under a chattel mortgage, to permit them to remain in the hands of the mortgage debtor, after the mortgage debt becomes due, is a fraud in the eye of the law upon the creditors of the mortgage debtor, and will render the property liable to be taken as that of the debtor by his creditors. And if you believe from the evidence in this case that the intervening creditor, Wolf, permitted the cattle in question to remain in the hands of Strevell, the mortgage debtor, for several months after the mortgage debt became due, and that Strevell dealt with them as his own, then they are liable to be" taken as his own by his other creditors; and if you find from the evidence that Strevell so dealt with the cattle, and that the plaintiffs, Shannon & Co., here garnisheed the proceeds of cattle so dealt with by Strevell in the hands of his consignee, then if you so find all these circumstances from the evidence, you must find the issue for the plaintiff.” 2. “ The court instructs you, gentlemen of the jury, that it is a fraud for a mortgage creditor to permit his mortgage debtor to deal with the mortgaged cattle as his own, and sell and dispose of them; and by so permitting the mortgage debtor to sell and dispose of them, the mortgage creditor loses the right to control the property, or its proceeds; and if you find from the evidence that the mortgage creditor, Wolf, thereby was guilty of fraud, which subjects the cattle and proceeds of such sale to the claims of Strevell’s creditors; and if you find that the plaintiffs, Shannon & Co., being creditors of Strevell, attached the proceeds of such sale, you must find the issue for the plaintiff.” 3. “ The court instructs you that by the law of Illinois, in order to make good his claim under a chattel mortgage, the person seeking to enforce the same must proceed with diligence, to seize the property and subject it to his claim, within a reasonable time after the same becomes due; and a failure to exercise such diligence by the mortgagee, is a waiver of his rights under the mortgage as against the attaching creditors of the debtor. And the court further instructs you, that if you believe from the evidence that the mortgagees, Wolf, for an unreasonable length of time after the mortgage became due, failed to seize and subject the property to his lien (and what is an unreasonable delay, is for you to say from the evidence), such delay would be a waiver of the mortgagee’s rights under the mortgage as against the attaching plaintiff and if you so find from the evidence, then the issues are for the plaintiffs.” There was a verdict and judgment for appellees, from which judgment Wolf & Son prosecute this appeal. The principal objection to these instructions is, that, not being applicable to this case, they directed the attention of the jury to issues not involved in this litigation. Wolf & Son’s claim to the proceeds of these cattle is not dependent upon the fact that they had a chattel mortgage thereon. Their right to such proceeds can not, therefore, he lost because they failed to exercise the diligence required by the laws of this State, of mortgagees of chattels. Where chattel mortgages of chattels are executed in another State, the rights of the mortgagees, when the property is brought into this State, are not determined entirely by the law of this State; on the contrary, when contracts are made in another State, and hence are governed by the law of that State, if an enforcement of the laws of such foreign State will not contravene our criminal laws, or sanction vice or immorality, such laws may be enforced in this State. Mumford v. Canty, 50 Ill. 370; M. C. Ry. Co. v. The Chicago, M. & Lake Shore Ry. Co., 1 Brad. 399-410; Clough v. Kyne, 40 Ill. App. 234. The question of within what time Wolf & Son were, under their chattel mortgage, bound as against creditors of Strevell to take possession of the cattle, does not, as before said, arise in this case, because Wolf & Son are not compelled to claim under their mortgage. If they were, had the laws of Iowa been introduced in evidence, they might have had an important bearing upon such question. Treating, therefore, Strevell as the absolute owner of these cattle when they were shippéd, what are the rights of the parties to this suit ? Being indebted to Wolf & Son, Strevell had a right to place these cattle in the custody of Strahorn & Co., to be sold for the benefit of Wolf & Son; this, so soon as he arrived in Chicago, he did; thereby Strahorn & Co., by receiving the cattle with such knowledge and direction, became bailees, holding the cattle for the use of Wolf & Son. Jones on Liens, Secs. 59, 60, 61. Hot only was it the right of Strevell to do as he did, but as'an honorable man, he could not have done otherwise; he had obtained the cattle for shipment by Wolf s consent, had agreed with him that they should be shipped in his, Wolf’s name, and sold for his, Wolf’s benefit; the beneficial ownership of the cattle was in Wolf & Son, and it was in the highest degree right and proper that Strevell should fulfill his promise. It is immaterial that Sherwood, of Strahorn & Co., sold the cattle as Strevell’s, or if he, Sherwood, did not learn of the direction to pay the proceeds to Wolf & Son, until at the same time he was served with the attachment suit. The bookkeeper received the consignment, and with it the information that the cattle belonged to Wolf & Son; and also an order from Strevell and Bailey to pay the proceeds to Wolf & Son; to receiving the cattle under such order, no objection was made; thenceforth the cattle were in the custody of Strahorn & Co. for the use of Wolf & Son. Strevell’s control over them or their proceeds was gone. Jones on Liens, Sec. 61; McCausland v. Wheeler Bank, 43 Ill. App. 381; Hall v. Bank, 133 Ill. 386. If, after giving this information and making this order, Strevell had changed his mind and directed the proceeds to be paid to appellees, Strahorn & Co. would not thereby have been released from their obligation to pay to Wolf & Son in accordance with the notice of ownership and direction previously given. Morton v. Naylor, 1 Hill, 583; Israel v. Douglass, 1 H. Black, 239-242; Lowery v. Steward, 25 N. Y. 239; Jones on Liens, Sec. 60. The question presented in this case is not what the rights of appellees would have been had they attached these cattle when they were in the custody of Strevell, but what they are; the attachment writ not having been issued until the cattle were in the possession of Strahorn & Co. under notice that they belonged to Wolf & Son, and with orders from the consignor to sell and pay the proceeds to Wolf & Son. Appellees introduced in evidence the judgment obtained by them against Strevell; this was proper, but counsel then, against the objection of appellants, proceeded to read the record of the same to the jury; this should not have been permitted; thereby not only was valuable time of the court wasted, but such reading tended to confuse the jury as to the issue before them. Strevell had been personally served and a judgment had been rendered against him; whether there was a judgment against him and consequently whether the court had jurisdiction to proceed against the garnishees was not a question to be submitted to the jury, but the court, if such facts had been disputed, should have instructed the jury that judgment had been obtained against Strevell, and that the court had jurisdiction to proceed against the garnishees. Aor should conversations between Strevell and appellees or their agents, had in the absence of appellants, have been permitted to be given in evidence. Whether at some previous time Strevell had promised to ship these or other cattle to appellees, or had promised to pay his note to them, was immaterial. Appellees acquired neither interest in, nor right to these cattle or their proceeds, because of any conversation by them had with Strevell before their shipment; they had in September, 1889, obtained judgment against him upon his note, and this having been had, upon what theory the court admitted evidence of the promise of Strevell, made in May of that year, to pay such note, it is difficult to understand. The judgment of the Superior Court is reversed and the cause remanded.