Chicago Great Western Railroad v. Lowry

The opinion of the court was delivered by Marshall, J.: This is an action in replevin for a gasoline motor truck. Judgment was rendered for the defendants, and the plaintiff appeals. The case was tried by the court on an agreed statement of facts, in substance as follows: The truck was shipped over the plaintiff railroad by the Attebury Motor Car Company under a bill of lading, which with sight draft attached was sent to the First National Bank of Kansas City, Mo., for collection. The bill of lading designated the Attebury Motor Car Company, at Kansas City, Mo., as consignee, and was marked “Notify Denmo-Kansas Sales Company.” The draft was not paid, and the bill of lading was not received by [337] the Denmo-Kansas Sales Company, but was returned to the Attebury Motor Car Company. After the truck arrived in Kansas City the plaintiff notified the Denmo-Kansas Sales Company as directed in the bill of lading, and one of the employees in the freight department of the plaintiff railroad delivered the truck to Louis S. Frith without receiving or asking for the bill of lading. Frith when he received the truck was acting either for himself or as the representative of the Denmo-Kansas Sales Company. Neither Frith nor the Sales company ever paid for the truck. Frith executed to the Sales company a series of notes secured by a chattel mortgage on the truck. The notes and mortgage were subsequently negotiated and were purchased by the Empire Security Company for value and in good faith in the ordinary course of business. Frith and the Sales company sold the truck to F. H. Grippen, who paid $1,250 for it, but at the time he paid for the truck it was not delivered to him. It remained in the possession of Frith and the Sales company. Later, upon Frith driving the truck to Kansas City, Kan., the defendant Wolfe, as sheriff of Wyandotte county, levied an attachment on the truck, issued in the case of Grippen v. Denmo-Kansas Sales Company and Louis S. Frith. The Empire Security Company intervened, setting up the notes secured by the mortgage on the truck. In that case the court ordered the truck sold and the proceeds applied first to the lien in favor of the Empire Security Company in the sum of $2,148.44, and second to the judgment of F. H. Grippen for $1,250, the amount he had paid for the truck. The plaintiff railroad was not a party to the action of Grippen v. Denmo-Kansas Sales Co. et al. The truck was in the possession of the defendants Lowry and Miller in the Elgin Garage, under the attachment levied by defendant John A. Wolfe, the sheriff of Wyandotte county, when this action was commenced by the plaintiff. The plaintiff urges that it had a special ownership in or title to the truck as against any other person, “which would have sustained an action for damage to the property or an action to recover possession wrongfully withheld from it”; but the defendants argue “that a bona fide purchaser in such a case for value and without notice will be protected is established by the authorities generally.” In 10 C. J. 269 the writer says: “A carrier who has negligently delivered, goods to a vendee of the shipper without collecting the purchase money as should have been done, or without requiring the production of the bill of lading, cannot recover them from a bona fide purchaser of the vendee.” [338] A footnote to the above quotation refers to Railroad v. Barnes, 104 N. C. 25, where that court said: “A sold to B a buggy, and delivered it to a common carrier to be delivered to B upon the payment of the price; the carrier negligently permitted B to obtain possession without paying the price; and while in possession, B sold to C, who- was a purchaser for value without notice: Held: “1. That as soon as the vehicle was delivered to the carrier the right of property passed to the vendee, but the right of possession remained in the vendor until the price was paid. “2. That by the negligent conduct of the vendor and his agent, the carrier, the right of property and the right to possession became united in C, and neither the vendor nor the carrier could maintain an action to recover the property. “3, But if the original contract had been one in which no title passed, a purchaser for yalue and without notice would not have been protected.” (Syl.) In Luzadder v. Hale, 118 Kan. 85, 233 Pac. 1046, this court said: “A purchased an automobile in his own name with money furnished by B. B permitted A to have possession of the automobile, with all indicia of title indicating absolute ownership in A. Held, B was estopped from denying A’s authority to mortgage the automobile to C, who acted in good faith upon A’s possession and indicia of title.” (Syl.) The plaintiff, through its negligence, wrongfully delivered the car to Frith. Frith then mortgaged it to the Denmo-Kansas Sales Company, which afterward transferred the mortgage and the notes it secured to an innocent purchaser. Thereafter Frith and the Sales Company sold the truck to a person who did not have any notice or knowledge of the manner in which Frith obtained possession of the truck. The plaintiff desires to be relieved from the consequences of its negligence and place those consequences on the innocent holder of the notes and mortgage and the bona fide purchaser of the truck. As between the plaintiff and the holder of the mortgage and as between the plaintiff and the purchaser of the -truck, the plaintiff should suffer the loss, because by the negligence of the plaintiff it became possible for the holder of the mortgage and for the purchaser of the truck to assume those relations innocently. This brings the case within the principle that where one of two innocent parties must suffer, he whose conduct made it possible for the injury to occur should sustain the loss occasioned. (10 C. J. 269; Savings Bank v. A. T. & Santa Fe Rld. Co., 20 Kan. 519; Kohn v. Watkins, 26 Kan. 691, 701; Sawyer v. Symns, 39 Kan. 148, 17 Pac. 799; Rose v. Douglass Township, 52 Kan. 451, 453, 34 Pac. 1046.) The judgment is affirmed.