Harvey v. Stephens

ROBINSON, J. This is a suit for'the possession of a stock of goods of the alleged value of $3,100 instituted by the plaintiffs against J. W. Stephens, sheriff of Audrain county, on April 17, 1896. It appeared by the evidence, at the trial, that the defendant, as sheriff of Audrain county, levied upon and seized the goods in question, and was holding same at the time of the institution of this suit, under several writs of attachment issued in'behalf of the partnership creditors of the firm of Medley & Morgan, engaged in the retail mercantile business in the town of Vandalia in this State. That while in business the firm of Medley & Morgan, composed of Roy Medley and J. H. Morgan, became indebted to a number of wholesale houses for goods purchased, and also to the Vandalia Banking Association for $500 borrowed money. In addition to ithe copartnership indebtedness of the firm, it appears that each of the individual members thereof had also become indebted on his personal account for considerable sums. When the wholesale house began pressing Medley & Morgan for settlement, Roy Medley for himself, on the thirty-first day of March, 1896, executed a chattel mortgage on, “the undivided one-half part of the stock of goods, wares, merchandise, furniture and — 489 — fixtures belonging to the firm of Medley & Morgan now in their store building in the city of Vandalia,” etc., to his sister, Effie Medley, to secure a past due note of $500, which he owed to her. On the same day said Roy Medley, on behalf of Medley & Morgan, executed a chattel mortgage covering the entire stock of goods and merchandise, etc., belonging to them, to W. H. Morgan and W. O. Harvey, the plaintiffs herein, subject, however, to the chattel mortgage theretofore given by said Roy Medley on his interest in the, stock of goods to his sister Eifie Medley, conditioned to indemnify the said W. H. Morgan and W. O. Harvey as securities on a note of the firm of Medley & Morgan for $500 previously given to the Vandalia Banking Association. Other mortgages were given by the individual members of the firm of Medley & Morgan, to secure individual indebtedness, the details of which are of no concern to the consideration of the case in hand. These mortgages were all filed for record in Audrain county, April 1, 1896, and they each provided that Medley & Morgan should remain in possession of the stock of goods until default in the payment of the obligations secured. No right of disposition of the property by the mortgagors was contained in either of the mortgages. Nor did either contain a provision for an accounting to the mortgagees in the event of a sale or disposition of any part of the goods by the mortgagors; and no actual sale of any particular part of the mortgaged property is definitely shown in the meager record before us, but the general statement is made therein that the mortgagors kept their store open and continued to conduct their business, after the execution of the mortgages, just as they had always done, until the store was taken charge of and closed by the defendant herein, as sheriff, under several writs of attachments issued in behalf of the copartnership creditors of Medley & Morgan. That the debts of the firm of Medley and Morgan at this time amounted to about $3,000, — 490 — and that their assets were about $2,000; that the plaintiffs on the fifteenth of April, 1896, paid off the note to the Vandalia Banking Association which they as securities had signed with Medley & Morgan, and on account of which one of the chattel mortgages under which they now claim was given; that they took up and had assigned to them the notes and mortgage given to Effie Medley, and on the seventeenth of April, while the defendant as sheriff, was in possession of the stock of goods in controversy, under the several writs of attachment above set out, caused this suit to -be instituted for the possession of the entire stock of goods and other property in the hands of the sheriff, gave bond, took the possession thereof, and sold same for $1,950. Testimony was offered tending to show that Medley & Morgan had made false statements as to the amount of their assets and liabilities to their wholesale creditors for the purpose of enlarging their credit. Testimony was also offered, with the evident purpose of trying to show that the plaintiff W. C. ITarvey, had in some way attempted to exaggerate the credit and standing of the firm of Medley & Morgan, to some of the wholesale houses with whom they were dealing •and thus assisted Medley & Morgan in their fraudulent scheme. At the close of all the testimony, however, the court at the request of plaintiffs gave the following instructions: “The court instructs the jury to find the issue for plaintiffs Harvey and Morgan, and assess their damages at the sum of one cent.” From the judgment rendered upon the verdict so ordered, defendant after the usual steps has brought the case here on appeal. Upon what theory the trial court based its action in giving the peremptory instruction herein we are not informed, and no brief has been filed by respondent attempting its vindication. — 491 — Under no possible consideration of tbe facts developed by tbe record, however, could tbe instruction as given be sustained, or tbe judgment upon the verdict so rendered be upheld. Granting that the testimony offered on tbe part of tbe defendant, attempting to connect tbe plaintiff Harvey with tbe fraud of tbe attachment defendants, Medley & Morgan, was wholly insufficient to justify tbe submission of that question to tbe jury, and that tbe facts shown were inadequate to authorize the submission to tbe jury of tbe question as to whether tbe mortgages given by Roy Medley for himself and for Medley & Morgan (under which tbe plaintiffs claim tbe property in controversy) was not invalidated as against tbe co-partnership creditors of tbe mortgagors, Medley & Morgan, on account of their retention of possession of tbe goods mortgaged and selling same in tbe usual course of business without being required to account to tbe mortgagees for tbe proceeds of such sales, tbe two mortgages offered -in evidence (under which alone plaintiffs claim tbe right to tbe possession of tbe property in suit) upon their face show,, that plaintiff’s interest under them in no circumstance could exceed tbe sum of one thousand dollars, while tbe facts show that plaintiff in their petition allege tbe goods to have been of tbe value of $3,100 at tbe time they were replevied, and that after getting tbe possession thereof they were sold by plaintiffs .for tbe actual sum of $1,950 in cash. As against tbe defendant, who held tbe goods in controversy at tbe time of tbe institution of this suit, under writs of attachment against tbe mortgagees Medley & Morgan, tbe plaintiff’s interest therein, was no greater than it would have been, had suit been instituted against tbe -mortgagees direct, and tbe interest in that suit was being adjusted after the goods bad been sold by tbe mortgagees since obtaining possession uhder their writ. Tbe mortgagees’ rights to tbe proceeds of -the sale of tbe property taken, is no greater than tbe money value of tbe — 492 — obligation secured by the mortgage or mortgages under which they claim, and when that is a definite or ascertainable sum, that should mark the limits of their right to a judgment against one having the lawful custody of the property at the time of the institution of this suit, and the direction of a general judgment in favor of the mortgagees, as if they were the absolute and unconditional owners of the property, and defendant a mere stranger, was erroneous, and must result in the reversal and remanding of the cause for new trial. Under our statute for the claim and delivery of personal property, provision is ample to meet all the exigencies that may arise in a given case, as under the old action of replevin, where the equity of its provisions embraced all those modifications of the forms in which judgment should be entered, to protect the rights and interests of all parties involved. When plaintiff’s interest in the property upon their own ‘representation, was shown to have been special and limited, and since reaching their hands had been sold and converted into money, that interest should have been assessed and determined and the excess of money above that determination with the costs of the suit, ordered returned to defendant, to the amount as his interest therein might appear. What we have said above has been predicated upon the assumption that we were dealing with two valid mortgages, entitling plaintiff as against Medley & Morgan or their creditors, to the possession of-the property named therein, to the extent of the value of their secured obligations. Such, however, is not the real fact of the situation. The first mortgage (under which plaintiffs claim by assignment from Effie Medley) made by Eoy Medley for himself upon his undivided one-half interest in the stock of goods in controversy then belonging to the firm of Medley & Morgan, to secure his individual indebtedness, was clearly void as against the copartnership — 493 — creditors of Medley & Morgan (for whom the defendant as sheriff was holding the property in controversy at the time plaintiff instituted these proceedings). The individual partner has no several right to a specific part of the co-partnership property, or interest therein, but is confined to what remains of the property after the co-partnership debts have all been paid, and the equities of the parties among themselves have been adjusted. The assets of the copartnership are joint property, and as such can only be disposed of by the joint action of the copartners or by one copartner for and in behalf of the copartnership. At best the plaintiffjs first mortgage could have no greater effect than to operate as a transfer to them all the right that Roy Medley would have had to whatever surplus there might remain after the firm debts were all paid and the equities of his copartner adjusted and settled. The first mortgage given by Roy Medley to Eifie Medley and under which plaintiffs in part are claiming the right to the possession of the property in controversy, is shown upon its face to be void as against the sheriff, the defendant herein, holding the property under writs of attachment issued in behalf of the copartnership creditors of Medley & Morgan, and the trial court should have so instructed the jury upon that issue. Since this case is to be reversed and remanded for a new trial, for the reason indicated, it will serve no good purpose now to discuss the probative force and effect of the testimony offered by defendant upon the question of the plaintiff W. C. Harvey’s .alleged fraudulent conduct, or upon the question as to whether the mortgagors were permitted by the plaintiffs, ■after the execution of the mortgages, to sell and dispose of the property left in their possession without the requirement of an accounting to them of the proceeds of such sales or not. Suffice it to say, however, where substantial testimony is offered upon — 494 — ■a given issue, its determination should always be left to the jury, and never passed up'on. by the court. The judgment of the circuit court is reversed and the cause remanded for a new trial. All concur.