Paine v. Bank of Ceres

WARD, J.

This is an action for conversion, based upon the sale by defendant bank of plaintiff’s cattle under a chattel mortgage. Judgment was rendered in favor of plaintiff and defendant appeals therefrom. The main question for decision is whether the plaintiff mortgagor was in default at the time possession of the cattle was taken under the mortgage.

On November 6, 1940, the plaintiff, Joe Paine, borrowed sixteen hundred dollars from defendant bank, for which he gave his note secured by a chattel mortgage on property, consisting, among other things, of fifty-eight head of dairy cattle and one hundred eighteen tons of hay. The note was payable on demand, with interest, but the parties agreed orally that payments of principal should be made thereon at the rate of $100 a month.

In January of 1941 the bank, at the request of the purchaser of the milk from the Paine herd, agreed to postpone plaintiff’s February payment of $100. Early in February, plaintiff, his mother and step-father came into the bank and advised its vice-president and cashier, Arthur L. Harris, that plaintiff had sold some of the mortgaged cattle. Three cows had actually been sold, and plaintiff testified that he so advised Mr. Harris. The latter testified that plaintiff gave the number as two. The bank agreed that it would not take any action in the matter if plaintiff would thereafter “tend to business” and properly look after the cattle. On February 11, 1941, plaintiff’s mother advised Mr. Harris that plaintiff could not be located and that the cattle were without feed.

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Mr. Harris immediately made a personal inspection of the herd. He testified that ten head had disappeared, and that those remaining were muddy, uncared for, and poor and emaciated for lack of food. He remained on the premises until six o’clock in the evening awaiting plaintiff’s return for the milking. When he did not return, Mr. Harris furnished feed and engaged plaintiff’s step-father to care for the cattle. Plaintiff testified that he learned that evening through an acquaintance that the bank had taken over the cattle. Mr. Harris testified that on the following day, he made a personal demand upon plaintiff, who had returned, for the* payment of the note, advising him that the mortgaged cattle would be sold if the note were not paid. Plaintiff denied that payment of the note had ever been demanded of him, but there is evidence that between the date when his step-father was put in charge and the date of the sale of the cattle, he had made unsuccessful attempts to secure a loan elsewhere. On March 7, 1941, the cattle were sold to the highest bidder, the bank receiving therefor the total sum of $1,810. Prom this it paid itself the full amount due, $1,556.37. While the balance was held by the bank for plaintiff, several attachments were levied thereon. Plaintiff came into the bank shortly thereafter with the constable, and there is testimony that Mr. Harris handed plaintiff a check for the amount due him; that plaintiff endorsed it; Mr. Harris cashed it,. and that plaintiff turned over to the constable cash in the amount of the attachments. Plaintiff testified that he knew he was signing certain checks in favor of creditors but that Mr. Harris told him to sign and pay off the claims.