Harkness v. Russell

This is an appeal from the supreme court of Utah. The action was brought in the district court Weber county, to recover the value of two steam-engines and boilers, and a portable saw-mill connected with each engine. A jury being waived, the court found the facts, and rendered judgment for the plaintiff, Russell & Co. The plaintiff is an Ohio corporation, and by its agent in Idaho, on the second of October, 1882, agreed with a partnership firm by the name of Phelan & Ferguson, residents of Idaho, to sell to them the said engines, boilers, and saw-mills for the price of $4,988, nearly all of which was secured by certain promissory notes, which severally contained the terms of the agreement between the parties. One of the notes (the others being in the same form) was as follows, to-wit:

'SALT LAKE CITY, October 2, 1882.

'On or before the first day of May, 1883, for value received     in one sixteenhorse portable engine, No. 1,026, and one      portable saw-mill, No. 128, all complete, bought of L. B.      Mattison, agent of Russell & Co., we, or either of us,      promise to pay to the order of Russell & Co., Massillon,      Ohio, $300, payable at Wells, Fargo & Co.'s bank, Salt Lake      City, Utah Territory, with ten percent. interest per annum     from October 1, 1882, until paid, and reasonable attorney's      fees, or any costs that may be paid or incurred in any action      or proceeding instituted for the collection of this note or      enforcement of this covenant. The express condition of this     transaction is such that the title, ownership, or possession      of said engine and saw-mill does not pass from the said Russell & Co. until this note and interest      shall have been paid in full, and the said Russell & Co. or      his agent has full power to declare this note due, and take      possession of said engine and saw-mill when they may deem      themselves insecure, even before the maturity of this note;      and it is further agreed by the makers hereof that if said      note is not paid at maturity, that the interest shall be two      per cent. per month from maturity hereof till paid, both     before and after judgment, if any should be rendered. In case     said saw-mill and engine shall be taken back, Russell & Co. may sell the same at public or private sale without notice,     or they may, without sale, indorse the true value of the      property on this note, and we agree to pay on the note any      balance due thereon, after such indorsement, as damages and      rental for said machinery. As to this debt we waive the right     to exempt, or claim as exempt, any property, real or      personal, we now own, or may hereafter acquire, by virtue of      any homestead or exemption law, state or federal, now in      force, or that hereafter may be enacted.

'P. O., Oxford, Oneida County, Idaho territory. '$300.

PHELAN & FERGUSON.'

Some of the notes were given for the price of one of the engines with its accompanying boiler and mill, and the others for the price of the other. Some of the note were paid; and the present suit was brought on those that were not paid. The property was delivered to Phelan & Ferguson on the execution of the notes, and subsequently they sold it to the defendant Harkness, in part payment of a debt due from them to him and one Langsdorf. The defendant, at the time of the sale to him, knew that the purchase price of the property had not been paid to the plaintiff, and that the plaintiff claimed title thereto until such payment was made. The unpaid notes given for each engine and mill exceeded in amount the value of such engine and mill when the action was commenced.

The territory of Idaho has a law relating to chattel mortgages, requiring that every such mortgage shall set out certain particulars as to parties, time, amount, etc., with an affidavit attached that it is bona fide, and made without any design to defraud and delay creditors; and requiring the mortgage and affidavit to be recorded in the county where the mortgagor lives, and in that where the property is located; and it is declared that no chattel mortgage shall be valid (except as between the parties thereto) without compliance with these requisites, unless the mortgagee shall have actual possession of the property mortgaged. In the present case no affidavit was attached to the notes, nor were they recorded.

The court found that it was the intention of Phelan & Ferguson and of Russell & Co. that the title to the said property should not pass from Russell & Co. until all the notes were paid. Upon these facts the court found, as conclusions of law, that the transaction between Phelan & Ferguson and Russell & Co. was a conditional executory sale, and not an absolute sale with a lien reserved, and that the title did not pass to Phelan & Ferguson, or from them to the defendant, and gave judgment for the plaintiff. The supreme court of the territory affirmed this judgment.

P. L. Williams, for appellant, Harkness.

C. W. Bennett, for appellee, Russell & Co.

BRADLEY, J.