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B. JAMES AND ANOTHER v. JOHN R. PETTIS

Minnesota Supreme Court1916-11-17No. Nos. 20,071—(155)
134 Minn. 438

Summary

Holding. The judgment in favor of plaintiffs was affirmed. The prior judgment does not operate as a bar or estoppel because it involved different legal theories and did not address whether defendant directly converted the mortgaged hogs; moreover, plaintiffs properly bore no burden of proving lack of consent, and the evidence supported recovery of the full value of the converted animals.

Plaintiffs holding a chattel mortgage on hogs sued defendant for converting the animals to his own use. Defendant claimed that a prior judgment in a different lawsuit between the same parties should bar this action. In the earlier case, plaintiffs had alleged that defendant wrongfully converted the proceeds from a sale of the hogs rather than the hogs themselves, and the jury found in defendant's favor. The trial court rejected defendant's bar and estoppel defense, finding that the earlier judgment did not address the specific issue of whether defendant directly purchased and converted the mortgaged property, which was the gravamen of the present complaint.

Defendant raised several arguments on appeal, including that plaintiffs bore the burden of proving he did not have consent to purchase the hogs, and that recovery should be limited to half their value since the mortgage covered only a half interest. The court rejected each argument. No legal presumption of consent arises in favor of a mortgagor's sale of mortgaged property, placing the burden on defendant to prove consent was given. Additionally, the evidence showed that the converted animals came from the mortgaged half interest, with the other half-owner receiving his share and defendant paying all proceeds to the mortgagor.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether a prior judgment on different facts constitutes res judicata or estoppel by verdict
  • Who bears the burden of proving consent to sale of mortgaged property
  • Whether recovery is limited to the mortgagor's fractional interest or extends to all converted animals

Procedural posture

Defendant appealed from the trial court's judgment in favor of plaintiffs and the denial of his motion for a new trial in a conversion action involving mortgaged hogs.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Bunn, J.

The complaint in this action alleged that plaintiffs were the owners of a chattel mortgage made by one Kannemann, covering, among other property of the mortgagor, a one-half interest in certain hogs; that the mortgage was filed in the office of the register of deeds of the proper county October 11, 1913, and that defendant, on January 13, 1914, converted to his own use the hogs covered by the mortgage, of the value of $285. After alleging demand and refusal to return, judgment is asked for $285, with interest and costs. The answer admitted the ownership of the chattel mortgage by plaintiffs, the demand and refusal to comply therewith, and, after a general denial, as a further defense, pleaded a verdict and judgment in favor of the defendant in a former action for the same cause. The issues were tried before the court and a jury, but after the evidence was in, by agreement of counsel, the jury was discharged, and the case submitted to the court for decision. The decision afterwards filed was in favor of plaintiffs, the trial court finding a conversion as alleged, and that the judgment in the former action was not a bar or estoppel. Defendant appeals from an order denying his motion for a new trial.

We treat the amended assignments of error as sufficient to present the questions raised. The first of these questions, is as to the effect of the judgment in the former action as a bar or an estoppel by verdict. The complaint in the former case, instead of alleging a conversion by defendant of the hogs covered by plaintiffs’ chattel mortgage, as does the complaint in the present case, charged that the mortgagor, without the consent of plaintiffs, sold a part of the hogs for the sum of $302.50, and delivered this money to defendant; that defendant, though knowing that the money came from the sale of the mortgaged hogs, converted it to his own use. The answer was a general denial. The evidence tended to show that the mortgagor sold the hogs to defendant, and received payment therefor. Plaintiffs endeavored to prove that the money from this sale was delivered back to defendant and converted by him. The case was submitted to the jury. One of the important questions litigated and submitted for decision was whether plaintiffs had consented to the sale of the mortgaged property. The court instructed that if there was no such consent, and defendant, with knowledge that the money was the proceeds of the sale of property covered by themortgage, converted it to his own use, the verdict should be for plaintiffs. Near the close of its charge, the court, after referring to the fact that the evidence showed that defendant himself purchased the hogs, gave this instruction: "I will charge you that you. cannot bring in a verdict, against defendant in this case on the ground that he purchased this mortgaged property, that is not what this suit is for.” In other words, the jury, to find for plaintiff, must find that defendant received and converted to his own use the proceeds of the sale. No exception was taken to this instruction. The verdict was for the defendant, and judgment was entered thereon.

It is thus seen that a vital issue in the present case, made by the pleadings, litigated and decided by the court, was not involved in the former action. This is the issue of whether defendant converted the hogs to his own use, that is, purchased them from the mortgagor with knowledge that they were mortgaged property. This issue was not made by the pleadings, litigated or submitted to the jury in the former case. On the contrary, the jury was explicitly instructed that such issue was not in the case. It follows clearly enough under our decisions that the former judgment was not a bar. Leonard v. Schall, 132 Minn. 446, 157 N. W. 723, and cases cited.

It is urged, however, that the former judgment operates as an estoppel by verdict on the other issue in the case, the question of fact as to whether plaintiffs consented to the sale of the mortgaged property. This contention is also disposed of by Leonard v. Schall, and the cases referred to therein. The language quoted from Neilson v. Pennsylvania C. & O. Co. 78 Minn. 113, 80 N. W. 859, and from Irish American Bank v. Ludlum, 56 Minn. 317, 57 N. W. 927, need not be repeated here. It is sufficient to say that a decision of this question was not necessary in the former case, as a verdict for. defendant would necessarily result from a finding that he did not convert the proceeds of the sale, without reference to how the question of consent should be determined. As a finding on this issue was not necessary to support the judgment rendered, such judgment does not operate as an estoppel by verdict on such issue.

The .next question arises from the contention of defendant that his motion to dismiss should have been granted, on the ground that the evidence did not show that the mortgagees had not consented to the sale of the mortgaged property. In other words, the claim is that the burden of proof was upon plaintiffs to negative consent. This position is untenable. There is no presumption that a mortgagee has consented to a sale of the mortgaged property by the mortgagor. The burden of proof on this issue was upon defendant. McNeil v. Finnegan, 33 Minn. 375, 23 N. W. 540; Partridge v. Minnesota & D. El. Co. 75 Minn. 496, 78 N. W. 85; Herrick v. Barnes, 78 Minn. 475, 81 N. W. 526.

Finally it is contended that the amount of the recovery should in any event be limited to one-half the value of the hogs converted, because the mortgage covered only an undivided half interest in the hogs described therein. But the court found that the animals converted by defendant were part of the one-half interest owned by the mortgagor and covered by the mortgage. There was evidence that the owner of the other half interest received his share of the animals, and it is undisputed that defendant paid all the money from the sale to the mortgagor. The finding is sustained by the evidence.

We have covered all of the assignments of error that are sufficient to raise any questions, with the result that we find no ground for reversal.

Order affirmed.