Lorie v. Adams

The opinion of the court was delivered by Horton, C. J.: Upon the trial, the plaintiff took several exceptions. The more important concerned the instructions given to the jury. It appears from the testimony that Joseph [697] Lorie, the mortgagee, is the brother of Moritz Lorie, the mortgagor. The chattel mortgage was dated July 28, 1888, and was properly deposited for record with the register of deeds on the same day, at 2 o’clock p. M. At the date of the mortgage, Moritz Lorie resided at Cedar Vale, where for some years he had been engaged in merchandising. Joseph Lorie is very wealthy, and lives at Kansas City, Mo. At the date of the mortgage, he was with his family at the hot springs at Las Vegas, N. M. About that time he received notice from his brother Moritz that his creditors were pressing him, and he notified his brother Nathan Lorie, who also resides at Kansas City, Mo., of that fact, and asked him to go to Cedar Vale and look after his interest. After the mortgage was taken it was delivered to Nathan Lorie, who handed it to J. Milton, the attorney of Joseph Lorie. It was then filed for record. Milton claims that he immediately took possession of the stock of goods for Joseph Lorie; that he put Wra. McKeehan in charge thereof. When the chattel mortgage was executed the goods were at Cedar Vale, in Chautauqua county, and soon after they were taken to Elgin, in the same county. They were advertised and sold under the mortgage, Nathan Lorie buying the same for $1,175. It is claimed that they were afterward turned over to Bertha Lorie, the wife of Moritz Lorie. When the goods were levied upon under the orders of attachment, at the instance of the creditors of Moritz Lorie, on the 10th of August, 1888, Wm. McKeehan and Moritz Lorie were both in the store unpacking and arranging them. The claim of the plaintiff is, that the chattel mortgage was executed and delivered in good faith, to secure an actual existing indebtedness of $2,000, upon a stock of goods worth about $1,200. Defendant, representing attaching creditors, insists that the chattel mortgage was given and accepted with the fraudulent purpose of hindering, defrauding and delaying the creditors of Moritz Lorie — not to secure $2,000 or any other debt. On the part of the defendant, it is urged that the exception to the instruction of the court was not suf [698] ficiently explicit, and also, that the petition in error does not point out any specific error therein. Neither of these contentions is substantial. After the court had concluded its instructions, the plaintiff excepted in the following language: “Whereupon the said plaintiff duly excepts to said charge and to each and every part thereof.” While a general objection to the instructions of the court, without specifying wherein they are objectionable, is unavailing, yet this court has ruled that, “where the record of the exception reads as follows, to wit, ‘ To the giving of which instructions, and to each and every portion thereof, said defendant, by its counsel, then and there duly excepted/ the exception goes to each and every part of the charge separately.” (Railway Co. v. Nichols, 9 Kas. 235; Railroad Co. v. Retford, 18 id. 245.) ' to be appiicaThe petition in error alleges that “the charge of the court to the jury was erroneous in many divers particulars, to the substantial prejudice of the rights of the plaintiff;” and in the brief the specific errors are pointed out and commented upon in great detail. We therefore have the instructions presented to us for examination. We think in many respects the instructions were misleading and erroneous.' The mortgage was delivered and filed for record before the orders of attachment were levied. There was no issue over the delivery of the mortgage, and the instructions of the court concerning the delivery were wholly inapplicable, and must have necessarily confused the minds of the jury as to the issues for their determination. (Raper v. Blair, 24 Kas. 374; Railway Co. v. Peavey, 29 id. 169.) 2' [699] 3. Chattel mortIstolittaching necmslnstruc-’" [698] The instruction “that the plaintiff could not recover unless he satisfied the jury that he took possession of the stock of goods after he recorded his mortgage ” was erroneous, because it assumed that, if he had not taken possession, the mortgage, although recorded, was of no validity. If, after the filing of the mortgage for record, Moritz Lorie, the mortgagor, had been permitted to [699] hold possession of the property, with the power to sell and dispose of the proceeds in the regular course of trade, and there was no understanding as to what should be done with the proceeds of the sales, then the court might have instructed the jury that such a mortgage would be void as against creditors. (Leser v. Glaser, 32 Kas. 546.) But the court seems to assume as a fact, in a part of its instructions, that such a mortgagor was in possession, and was also permitted to sell the mortgaged goods for his own benefit, in the regular course of trade, after the mortgage was filed. Upon no other ground could it have given the instructions concerning the possession of the goods. The evidence as to the possession & ^ °* goods at the time of the levy was con-dieting, and the court had no right to assume before the jury that, if the plaintiff failed to take possession of the goods after he recorded his mortgage, it was invalid. (Frankhouser v. Ellett, 22 Kas. 127; Cameron v. Marvin, 26 id. 612; Tootle v. Coldwell, 30 id. 125.) Again, a debtor in failing circumstances may execute a chattel mortgage to one of his creditors by way of preference, and deliver the same to him or his agent; and, if the chattel mortgage is accepted to secure an actual existing indebtedness, such mortgage, if properly recorded, or if possession is. taken thereunder before any levy on an attachment or execution, is valid. (Tootle v. Coldwell, 30 Kas. 125, and cases cited.) The giving of such a chattel mortgage, in accordance with the provisions of the statute, places the property of the debtor beyond the reach of his creditors, and, in the nature of things, hinders and delays them from the collection of their claims, because it appropriates the property embraced in the mortgage to satisfy the debt of the preferred creditor; but if the mortgage is given for a bona fide indebtedness and properly recorded, although it does hinder or delay other creditors, it is not thereby fraudulent or void. The jury in this case retired on the 25th of November, 1889, and did not return their verdict until the afternoon of November 27. Evidently the instructions, (some of which [700] were contradictory, several misleading, and erroneous,) affected the substantial rights of the plaintiff. The judgment of the district court will be reversed, and the cause remanded. All the Justices concurring.