Reese v. Kapp , 82 Kan. 304 ( 1910 )

The opinion of the court was delivered by

Benson, J.:

This action was to recover the purchase money due on a sale of cattle. A counterclaim for damages was interposed by reason of a mortgage on the property. Judgment was given for the defend•ant, and the plaintiffs, Reese & Son, appeal.

At the time of the sale there was a mortgage outstanding on the cattle, held by a commission firm at Kansas City. When the purchase was made a check for $1000 was given by the purchaser, and two days later, when the cattle were shipped, a check for the balance, $5450, was given. Both checks were drawn •on the Linwood State Bank. The cattle were shipped from Fall Leaf, Kan., and were consigned to a firm in St. Louis, Mo., for feed at Kansas City, on account of ■ Cole & Ott, under an arrangement by which the cattle '.might be sold at Kansas City by Cole & Ott with the permission of the defendant. On arrival at Kansas City the cattle were placed in the pens of Cole & Ott at the stockyards to be fed and watered. About the same time a member of the plaintiffs’ firm presented the 1000-dollar check at the bank in Linwood. Previous to shipping the cattle the defendant had drawn a sight draft in favor of the bank on Cole & Ott for $1000, with which to meet this check, and it appears that he intended to provide for the payment of the other check out of the proceeds of the sale of the cattle; but when the first check was presented he did not have sufficient funds in the bank, and the cashier telephoned to Cole & Ott, inquiring whether the sight draft would be paid. At the request of Cole & Ott the defendant, who was then in their office, answered directing the bank to refuse payment of the checks. The reason given by the defendant at the trial for this order was that he had just been informed of the existence of the mortgage and that he had then stated that he would have nothing more to do with the cattle. The plaintiffs, however, testified that the defendant told them that his reason was that parties who were going in with him would not pay up their share of the money. The mortgagee was immediately notified of the refusal of the bank to pay the 1000-dollar check, and calling up the cashier learned that the 5450-dollar check, which the plaintiffs were about to use to satisfy the mortgage, would not be paid. Thereupon the mortgagee notified Cole & Ott of its mortgage. The defendant then refused to have anything more to do with the cattle, and they were sold by Cole & Ott upon the market with the consent of the mortgagee, the defendant saying that he was done with them. An account of the sale was made by Cole & Ott, reciting that the sale was for account of Samuel Kapp. The proceeds were paid over to the mortgagee, and after deducting the mortgage indebtedness the balance was paid to the plaintiffs, who gave the defendant credit for the net proceeds, leaving a balance due to them on the cattle, for which amount this suit was brought.

The plaintiffs’ evidence tended to show that the defendant had been informed of the mortgage before the cattle were shipped and that one of the plaintiffs would take the larger check to Kansas City to use in paying it off. The evidence showed that the mortgagee had given oral permission for the sale of the cattle, but the case was submitted to the jury upon the theory that such oral consent was ineffectual, and upon the request of the defendant, and over the objections of the plaintiffs, the jury were instructed that if the cattle were sold by the plaintiffs to the defendant without the written consent of the mortgagee the defendant had the right to stop the payment of the checks; and that if the mortgagee, after satisfying the mortgage, paid over the balance of the money remaining from the proceeds of the sale by Cole & Ott, without reference to the rights of Samuel Kapp, the plaintiffs should be held to have accepted the abandonment of the purchase by the defendant. This instruction was equivalent to a direction to find for the defendant, as there 'was no claim that any consent in writing had been given and it was not denied that the plaintiffs had received the proceeds. Just what was meant by the expression “without reference to any rights of Samuel Kapp” is not clear, but the statement of the effect of a sale without the written consent of the mortgagee is explicit. The defendant contends that he had the right to rescind the purchase and abandon the cattle at once upon being notified of the mortgage, notwithstanding any oral permission for the sale that may have been given by the mortgagee, and that the instruction was therefore correct. This is contrary to the views of this court in Frick Co. v. Milling Co., 51 Kan. 370. It is insisted, however, that chapter 105 of the Laws of 1901 (Gen. Stat. 1909, § 5239) makes the consent in writing indispensable. This statute provides that it shall be unlawful to sell mortgaged property without the written consent of the mortgagee, and provides a penalty for its violation, but does not affect the question here presented.

A sale of mortgaged property by the mortgagor with the oral consent of the mortgagee will convey the title as against the latter, notwithstanding the statute. (Randol v. Buchanan, 61 Mo. App. 445; Chase v. Willard, 67 N. H. 369; Anderson v. Brewing Co., 173 Ill. 213; White Mountain Bank v. West and Patten & Hamlin, Trustees, 46 Maine, 15; Jones Chat. Mort., 5th ed., §§ 456, 457 ;.2 Cobbey Chat. Mort. § 637.) If the plaintiffs had the oral permission of the mortgagee to sell the cattle, as the evidence shows, the defendant obtained a good title by his purchase; and if he stopped the payment of the check,"which would otherwise have been used to satisfy the mortgage, he can not justly complain of its existence.

The evidence shows that the cattle were sold in Kansas City upon a falling market. The defendant alleged that a higher price could have been obtained in St. Louis, and was allowed under his counterclaim to give evidence of the state of the market in that city, and upon this evidence damages were awarded in favor of the defendant. It is insisted that evidence of market values in St. Louis is immaterial, as the defendant claims to have rescinded the purchase. This question is not fully discussed in the briefs, and may not arise on another trial.

The judgment is reversed and the cause remanded, with directions to grant a new trial.