Lincoln National Bank & Trust Co. v. Parker ( 1941 )

ON PETITION FOR REHEARING. Appellant, in its petition for a rehearing, claims that we did not consider the issues joined on the second paragraph of complaint, and that we did not consider the sufficiency of the evidence on the theory that appellee obtained possession of the cattle by virtue of the criminal act of the mortgagor.

It is appellant's contention that the mortgaged cattle were removed from Allen County in violation of the criminal 20, 21. laws of Indiana and the provisions of the chattel mortgage, and were sold at a community sale at Ligonier, in another county; and that under such circumstances the appellee cannot defend on the ground that he is an innocent purchaser for value. Appellant is assuming that the cattle purchased by appellee at the community sale at Ligonier were the identical cattle that were covered by the chattel mortgage assigned to appellant. As we stated in the original opinion, this was one of the questions of fact for determination by the jury. Since there was conflicting evidence concerning such question, the verdict of the jury is conclusive upon appeal. If the jury determined that the cattle purchased by appellee at the community sale at Ligonier were not the identical cattle described in or covered by the chattel mortgage assigned to appellant, any contentions concerning the rights of a purchaser of personal property covered by a chattel mortgage, which property had been sold in violation of statute or the terms of the mortgage, are of no importance. The fact that a plaintiff in replevin is claiming title to personal property by virtue of a chattel mortgage, and that the plaintiff is further claiming that the property has been removed from the county where it was located at the time of the execution of the mortgage and sold to the defendant, without the consent of the assignee of such mortgage, in violation of the terms of the mortgage and in violation of criminal law, does not prevent the defendant at the trial from establishing the fact that the personal property purchased by him was not described in or covered by the chattel mortgage.

Appellant, also, earnestly insists that the undisputed evidence shows that the cattle purchased by appellee were the identical cattle covered by the chattel mortgage assigned to 22. appellant, and that there is no substantial evidence that shows otherwise. We cannot conceive how any evidence concerning the identity of mortgaged personal property could be more substantial than the description contained in the chattel mortgage itself. This description specifically described the mortgaged cattle as "Branded-L." The cattle purchased by appellee at the community sale were not "Branded-L." Not a single item of evidence shows that they were. It is true that appellant at the trial sought to prove that the description of the mortgaged cattle as "Branded-L" was a mistake, or that the same was inserted in the chattel mortgage merely for the purpose of the record of the original vendor and mortgagee, and not for the purpose of describing the mortgaged property, but the fact remains that notice to a purchaser concerning the existence of a chattel mortgage upon the property purchased must arise from the language used in the mortgage itself and such purchaser is not bound by any secret intention in the mind of the mortgagee who has falsely described the mortgaged property.

An eminent author on "Chattel Mortgages," in discussing 23. the description of the mortgaged property, says:

"If the falsity of the description be a mistake, this may be cured by reforming the instrument in equity; but as against others acquiring interests in the property, such reformation is ineffectual after their interests have attached. Thus, if a mortgage of growing crops describe them as being upon land in a certain section, township, and range, and the description is a mistake in the number of the township and range, the mortgage is invalid as against a creditor who levies an execution on the crops which the parties intended to embrace in the mortgage." Jones on "Chattel Mortgages and Conditional Sales" (Sixth Ed.) Vol. 1, § 63, p. 127.

In the case of Tindall, Administrator, v. Wasson (1881),74 Ind. 495, 501, the Supreme Court quotes from Burns v. Harris (1879), 66 Ind. 536, concerning the sufficiency of a chattel mortgage, the following:

"``in such a mortgage the property ought to be described with reasonable accuracy, certainty, and particularity, so that the property intended to be mortgaged may be readily ascertained and identified. Indeed, the main object of the description is the identification of the property; for where the description is doubtful or uncertain the property may be identified beyond all doubt by the ownership and possession thereof by the mortgagor. It must be regarded as settled law in this State that parol evidence is admissible to identify the particular property in a chattel mortgage.'"

After quoting the same the Supreme Court says:

"This we deem a correct statement of the law, but it does not mean, as appellant seems to think, that any description, no matter how slight, will be sufficient. The language quoted conveys no such meaning. It means that parol evidence may aid, not make, a description. In cases where the instrument suggests and indicates proper inquiry, parol evidence is always admissible to aid, but not to supply, a description. Properly understood, the language we have quoted is in entire harmony with the rule declared by the eminent author we have quoted from. Says this author, in speaking of the admissibility of parol evidence: ``It can not be used to supply what the parties have omitted, or to reject a reference in the description which is true.' Jones Chattel Mortgages, sec. 64."

We might add that the conflict in the evidence, as to whether the property purchased by appellee was a part of the property covered by the chattel mortgage assigned to appellant, does not arise solely from the fact that the cattle purchased by appellee were not "Branded-L," while the cattle described in the chattel mortgage, assigned to appellant, were described as "Branded-L." Joy Smith, the original purchaser and the mortgagor of the cattle, answered the following questions in the following manner:

"Q. At the time you signed your mortgage you knew that the description in that mortgage was correct, didn't you?

"A. Yes, supposed to be.

"Q. You knew they were branded with an ``L', you had seen the ``L' hadn't you?

"A. On some of them.

"Q. You read this chattel mortgage over before you signed it?

"A. Yes.

"Q. You read before you signed it these sixty head of Hereford heifers were branded ``L'?

"A. Yes, sir.

"Q. As a matter of fact they were branded ``L'?

"A. I think so."

When the E. M. Cattle Company, consisting of Mary F. Souers and E.E. Souers, who were the original owners and mortgagees of the heifers, assigned their chattel mortgage to the appellant, they included in their assignment the following:

"For value received we hereby sell, assign and set over all our right, title and interest in and to a certain chattel mortgage covering 60 Hereford Heifers Branded -L given by Joy Smith to E. M. Cattle Company, and filed . . ."

Appellant, in its brief in support of its petition for a rehearing, objects because we did not give particular and detailed consideration to instruction No. 7 given by the 24. trial court of its own motion. Appellant contends that this instruction was inconsistent with instructions Nos. 8, 9 and 10 given by the court of its own motion and with instruction No. 4 tendered by appellant and given by the court. It also contends that the instruction was erroneous because it permitted the jury, in arriving at its verdict, to consider the question as to whether the cattle purchased by appellee were actually branded with a hot iron; and that it was erroneous because it limited the inquiry that the appellee was required to pursue to ascertain the identity of the property mortgaged, to such inquiry "as was available to the defendant."

Without setting forth all of these instructions in full it may be stated that instruction No. 7 permitted the jury to determine whether the words "Branded -L" were used in the mortgage to describe the mortgaged heifers, and also permitted the jury to consider whether the heifers purchased by the appellee had any mark or marks of identification on either or any of them and whether they had in fact been branded. And, the court told the jury that they could consider such facts, if they were facts, along with the other language of the mortgage and further information disclosed by the evidence, that the appellee might have ascertained by pursuing the inquiries suggested and directed by the language of the mortgage, in determining whether the heifers purchased by the appellee were included in the sixty head of heifers mentioned in appellant's mortgage.

By instruction No. 8 the court told the jury that if it found from a preponderance of all the evidence that the appellee could have ascertained, upon inquiry which the mortgage indicated and directed, by the exercise of ordinary diligence and care, that the heifers he purchased were the identical heifers mentioned in the mortgage; and that if the evidence disclosed that the heifers bought by appellee were in truth and in fact a part of the heifers mentioned in the mortgage, that such was a sufficient identification of the heifers purchased as being a part of the heifers mentioned in the mortgage.

Instruction No. 9 told the jury that the description of mortgaged chattels contained in a mortgage need not be free from all inaccuracy, and that it was not necessary that it, in itself alone, contain a full and positive and complete identification of the chattels themselves.

By instruction No. 10 the court told the jury that the burden was upon the plaintiff to establish by a fair preponderance of all the evidence that the heifers purchased by the defendant were a part of the sixty head of cattle referred to in the mortgage; and that if the description of the sixty head of heifers as set out in the mortgage was in fact incomplete and in part erroneous, still if by rejecting the erroneous part, enough of the description remained therein, which aided by information available to the defendant upon inquiry, was sufficient to identify the heifers purchased by the defendant as being part of the sixty head of heifers mentioned in the mortgage, then such mortgage was valid so far as the identity of the mortgaged property and the description thereof in the mortgage was concerned.

By instruction No. 4, tendered by appellant and given by the court, the court merely informed the jury that the sufficiency of the description in the chattel mortgage was a question for the court and not for the jury; that such description was reasonably accurate and was sufficient to enable third persons to identify the mortgaged property.

We find no inconsistency or conflict in these instructions that would mislead or confuse the jury.

The chattel mortgage was a part of the evidence in the cause. The language of such mortgage described the covered heifers as "Branded-L." The jury had a right to consider whether such 25. words were used in such chattel mortgage for the purpose of describing the heifers. The fact that the mortgagee, who prepared the chattel mortgage, testified that she did not place the words in the mortgage for such purpose would not prevent the jury from determining that the same were so placed. It was within the province of the jury to determine whom it would believe or disbelieve. There is no validity to appellant's objection because the trial court limited the inquiries that appellee was required to make to ascertain the identity of the mortgaged property to such inquiry "as was available to the defendant."

The court did not err in giving its instruction No. 7.

The petition for a rehearing is overruled.

NOTE. — Reported in 37 N.E.2d 5.