Frick Co. v. Western Star Milling Co.

The opinion of the court was delivered by Horton, C. J.: This was an action in the court below to recover damages for the conversion of a certain quantity of wheat, upon which the Frick Company held a mortgage from Andrew Bachofer. The mortgage was dated November 9, 1887, and covered Bachofer’s two-thirds interest in 77 acres of growing wheat in Saline county, to secure the payment of an indebtedness from Bachofer to the company. The mortgage was filed for record on November 12,1887. In August, 1888, the wheat was threshed, and in September and October following Bachofer sold and delivered 434 bushels to the Western Star Milling Company. The wheat was of the value of $384. On demand, the milling company refused to account to the Frick Company for the wheat or any part of it. It appears from the evidence and findings of fact that the milling company bought the wheat of Bachofer, paid for it, and immediately mixed the same with other wheat of the company in its elevator at Salina. The contention of the Frick Company is, that the sale of the wheat by Bachofer to the milling company was contrary to the provisions of the chattel mortgage and without the knowledge or consent of the Frick Company. If, after the mortgage to the Frick Company was made, that company orally authorized Bachofer, the mortgagor, to sell the wheat, a sale of the latter would convey a good title to the purchaser, the milling company. Whether the Frick Company gave Bachofer, ,the mortgagor, authority to sell the wheat described in the mortgage, was a question of fact for the trial court; -and there was competent evidence in the case which would justify the findings of this fact in favor of the milling company. The authorities are to the effect that a mortgagor may make a valid sale of the mortgaged property [375] with the mortgagee's oral consent. (Jones, Chat. Mortg., §456; Pratt v. Maynard, 116 Mass. 388; Brandt v. Daniels, 45 Ill. 453.) In Frankhouser v. Ellett, 22 Kas. 127, Brewer, J., speaking for the court, said: “We think the rule to be, that where a mortgage is given upon a stock of goods, and by agreement outside the mortgage the mortgagor is permitted to continue the business and dispose of the goods in the ordinary way, and use some portion of the proceeds in the support’ of his family, the transaction will be upheld or condemned according as it is entered into and carried out in good faith, or not. The mortgagor, if he may keep the possession, may as well make the sales as a .stranger. He acts in that respect as a quasi agent at least of the mortgagee.” The claim that the court should have sustained the objection to the introduction of the evidence with reference to the disposition of the wheat at the time the mortgage was executed is not tenable, because it clearly appears that the evidence relied upon by the trial court concerned the statements of the parties after the mortgage was executed. This oral evidence was not received to contradict the written mortgage, but to establish the authority of Bachofer from the Frick Company to sell the wheat. The other claim, that the oral authority from the Frick Company to Bachofer to sell the wheat was revoked prior to' the purchase by the milling company, is founded upon conflicting evidence. The trial court settled this question of fact in favor of the milling company. When James Chase, as agent for the Frick Company, went where the wheat was being threshed to look after it, he should have taken possession thereof, or made complete arrangements to have the wheat stored for his company. He should not have accepted the statement of Bachofer, the mortgagor, if he desired to protect his company, that he would turn over the wheat or pay the debt in a short time. The judgment of the district court will be affirmed. All the Justices concurring.