Page images



ural course of human conduct, especially of the payment of the same, executed, acknowl. those who kuew or believed themselves the bona fide owners of property. Failing to do to plaintiff L. A. Byrne as trustee, wherein, so, their conduct was tantamount to an ad- for that purpose, he sold and conveyed to mission of the rights of appellant to the pos- said trustee the following property, to wit: session of the property. The proof by sev- "His entire bar and saloon fixtures and outeral witnesses that the land was known as fit, located in the Ghio corner building, on the appellant's land; that it claimed it, and Broad and State streets, in Texarkana, Tex., had exercised acts of ownership, such as cut- consisting mainly of the following items: ting timber, making staves, etc., for five or All the bar and lunch counters, looking glasssix years,-would tend to show that appellant es, billiard and pool tables, all glass and itself was not a trespasser, but had the right bar ware, all office chairs, all gas fixtures, to the timber of the land. If the appellant, tables, iron safe, cooking apparatus, and all as this proui tended to show, was or had property of every character or kind in said been in the possession of this land for five building; also all his entire stock of wines, or six years, for the purpose of cutting tim- whiskies, brandies, and all other spirits lober, and claiming the land as its own, the cated in said building.” It was provided in presumption would be that it was the true said deed of trust that, upon the execution owner, until the contrary was shown. Barry and delivery of the same, the possession of all v. Otto, 56 Mo. 177; Smith v. Lorillard, 10 of the said property was to be absolutely Johns. 353; Crockett v. Morrison, 11 Mo. 3; given to said trustee by said Zucchini for the Dale v. Faivre, 43 Mo. 556. Certainly, these purpose aforesaid, Zucchini being then in facts, taken in connection with appellees' possession of the same. It was further proown conduct, were sufficient to make a prima vided in said deed of trust that "the said facie case of appellant's ownership and right Ernest Zucchini is by the said L. A. Byrne to the possession of the logs in controversy. appointed as special agent, and for the fol

The objection to the instructions given was lowing purposes only: that is, he shall be in gross, and we have only examined them permitted to make sales of the stock of goods to the extent of ascertaining that some one above set forth, and conduct the daily sales of them is correct, which we find to be the thereof, but with the express and unqualified

For the error indicated the judgment understanding that all daily receipts arising is reversed, and cause remanded for new from said business shall be by said Zucchini trial.

deposited in the Gate City Bank of Texar.

kana, Tex., for the satisfaction of the debt RIDDICK, J., did not sit in this case, hav. and obligation hereinafter set forth; and ing presided in the trial below.

this condition shall be strictly pursued, without regard to the maturity of the debt, until the same is fully satisfied." In other respects

this deed of trust is substantially as such inGHIO V. BYRNE et al.

struments of writing usually are. This deed (Supreme Court of Arkansas. June 16, 1894.)

of trust was immediately delivered by Byrne COATTEL MORTGAGE-NOTICE TO PURCHASER

to the recorder for registration, and was filed TROVER BY MORTGAGEE.

and recorded, and the original returned to 1. A person who takes a bill of sale of Byrne, who sent back at once to the recorder, property, which states that it is subject to a calling his attention to the error in the manprior mortgage on the same property, is charged

ner of registration, when the error was corwith notice of the mortgage, though it is not recorded.

rected, and the instrument properly regis2. Under the law of Texas, a mortgagee en

tered. The defendant, in his answer, distitled to possession may maintain an action for claims all knowledge of the execution and conversion of the mortgaged property.

delivery of plaintiff's said deed of trust and Appeal from circuit court, Miller county; note; denies that plaintiff trustee took posRufus D. Hearn, Judge.

session as alleged in his complaint, or that Action by L. A, Byrne, as trustee, and the the property was delivered to him or his coGate City National Bank, against A. L. Ghio, plaintiff by said Zucchini, for the purposes for conversion. Judgment for plaintiffs, and of said trust, or for any other purpose. He defendant appeals. Affirmed.

denies that he took possession without right. This is an action by appellees against the Defendant alleges that the property was and appellant, instituted in the Miller circuit continued to be in Bowie county, Tex.; and court on the 18th day of November, 1890, in that the same consisted of a stock of goods, which the plaintiffs claim damages against wares, and merchandise; and that the same defendant for the unlawful taking and con- continued to be exposed to daily sale in version of certain personal property named course of business by the mortgagor, the in the complaint, alleged to be of the value said Zucchini, who was then a resident of of $5,000, and for which sum they ask judg- Bowie county, Tex., and was in active and ment. One Ernest Zucchini, a saloon keep- exclusive possession and control of said bus. er in the city of Texarkana, Tex., being in- iness for his own use and benefit; and that debted to the plaintiff, the Gate City Na- on the 5th day of November, 1890, Zucchini, tional Bank, in the sum of $1,181.59, as for a valuable consideration, sold, conveyed, evidenced by his promissory note, to secure and delivered to defendant all of said propercontrol of said business

same; and that he has since on near the same by said o sner, shall be deemed fraudulent

that the consideration of said sale and pur- and void." The case was tried by the court, chase was the payment of a valid and sub- sitting as a jury, upon the deed of trust and stantial indebtedness due from Zucchini to note and evidence of witnesses on the part defendant, exceeding in amount the value of plaintiffs, and the bill of sale and evidence of said property. Defendant further alleg. of witnesses on the part of defendant, and es that the laws of the state of Texas pro- upon the agreement that the property was vide as follows (Sayles' Civ. St. art. 3190b): worth $5,000. The bill of sale from E. Zuc

"Section 1. Every chattel mortgage, deed chini to A. L. Ghio is in words and figures of trust, or other instrument of writing in- following: "The State of Texas, Bowie Countending to operate as a mortgage of or a lien ty. Know all men by these presents, that upon personal property, which shall not be 1, Ernest Zucchini, of the county and state accompanied by an immediate delivery and aforesaid, for the consideration hereinafter be followed by an actual and continued stated, have this day sold and delivered to change of possession of the property mort- A. L. Ghio, of Bowie county, all my stock gaged or pledged by such instrument, shall of liquors, goods, wares, and merchandise; be absolutely void as against the creditors of

also all of the bar fixtures, gas fixtures, mirthe mortgagor or person making same, and rors, two billiard tables, all office furniture, as against subsequent purchasers and mort- iron safe, ice chest, etc., now situated in the sagees or lien holders in good faith, unless brick building on lot 12 in block No. 28, Texsuch instrument or a true copy of same shall arkana, Texas. The said stock of liquors, be forth with deposited with and filed in the goods, wares, and merchandise, and other aroffice of the county clerk of the county where ticles are to be promptly invoiced, each and tlie property shall then be situated, or if the every article at its original cost, and the mortgagor or person making the same be a consideration to be paid by said A. L. Ghio resident of this state, then the county of for said stock of goods, wares, and merchanwhich he shall at the time be a resident. dise is eighty per cent. on each dollar invoice

"Sec. 2. Upon the receipt of any such in- value of goods, and the said total amount strument the clerk shall endorse on the back paid and to be paid is as follows: Said A. L. thereof the time of receiving it, and shall Ghio is to receipt me for fifteen hundred and file the same in his office, to be kept there forty-six dollars, which I am now owing for the inspection of all persons interested: him, and the said A. L. Ghio assumes and provided, that if a copy be presented to the agrees to pay L. C. De Morse thirty-seven clerk for filing, instead of the original in- hundred and fifty ($3,750) dollars, evidenced strument, he shall carefully compare such by five (5) promissory notes, as follows: One copy with the original, and the same shall for $1,000, one for $1,500, one for $1,000, and not be so filed unless it is a true copy there- two for $125 each,-and to assume and pay of; and a copy can be so filed only when two of my notes held by the Texarkana Nathe original has been acknowledged."

tional Bank, one for $250, and one for $200, "Sec. 4. The county clerk shall keep a book indorsed by L. C. De Morse and John May. in which shall be entered a minute of all her, with interest and costs on same. Said such instruments, which shall be ruled off Ghio also assumes and agrees to pay A. P into separate columns with heads as follows: Ghio the sum of $500, which I owe him; Time of reception, name of mortgagor, name also one note for $600, now in the Gate City of trustee or mortgagee and cestui que trust, National Bank, indorsed by L. C. De Morse date of the instrument, amount secured, when and A. L. Ghio. This sale is made subject to (lue, property mortgaged, and remarks, and a mortgage lien now subsisting on the abovethe proper entry shall be made under each described property in favor of the Gate City of such beads. Under the head of property National Bank, for the sum of eleven hun. mortgaged it will be sufficient to enter a dred and eighty-one dollars. Witness my general description of the property pledged hand, this 5th day of November, 1890. Erand the particular place where located, and nest Zucchini. Witness: H. C. Hynson. L. an index shall be kept in the manner as re- C. De Morse.” The possession of Byrne conquired for other records."

sisted in the stipulation in the deed of trust, And the defendant alleges that none of the and the immediate delivery to him by Zucrequirements of said laws have ever been chini of one of the front-door keys,-the only complied with, and therefore said deed of one had at the time,--and an effort to protrust was and is absolutely void as against cure the others from clerks and other emthis defendant. Defendant further alleges ployés who happened to be away at the time, that the laws of Texas provide as follows, to the house having been closed on account of wit: “Art. 65r. Every mortgage, deed of a pending election, Byrne had directed the trust, or other form of lien attempted to be bookkeeper of the bank, Mr. John Ownly, tu given by the owner of any stock of goods, go to the saloon morning and evening, and wares or merchandise daily exposed to sale receive the proceeds of the sales of the night in parcels in the regular course of business and day previously, which he did in the of such merchandise, and contemplating a morning of the 5th November, and inquired continnance of possession of said goods and for the night clerk, but found that he was not on watch. He returned that evening, the detriment of the beneficiary in the mortand found defendant Ghio in possession. On gage.

Throckmorton v. Price, 28 Tex. 605; that day the saloon had been open and busi- Wade, Notice, 88 152-162, and anthorities ness transacted as usual, and the barkeepers cited; Case v. Hagardine, 43 Ark. 144; state that they delivered the receipts to Zuc-Weise v. Barker (Colo. Sup.) 2 Pac. 919; chini, and had never heard of any change Mims v. Mims, 35 Ala. 23; Merrick v. Waluntil Ghio took possession, on the evening of lace, 19 Ill. 486. In this case no duty in this the 5th of November, immediately after Ghio respect was imposed by law upon Byrne. No had purchased from Zucchini, at 5 o'clock; fault is attributed to him, and he delivered and it appeared in evidence that appellees' the instrument to the proper officer in due mortgage was at this time on file for record, time to precede the purchase of Ghio, and but not yet recorded. It seems from his the mistake was solely that of the recorder statement that Ghio had formerly owned the in not inspecting the instrument, and from property, or perhaps an interest in it, and a its character determining the place and man: part of the consideration of his purchase was ner of its registration, as the law directs. the satisfaction of the balance of the pur- Again, the bill of sale of appellant contains chase money thus due him from Zucchini.

a recital to the effect that the sale to him It is evident from the foregoing abstract and his purchase from Zucchini, Byrne's that the controversy between the parties to mortgagor, were made subject to the mortthis suit turns upon the solution of the ques- gage to Byrne. This kind of notice is now tion which of the two has the superior title, generally held to be constructive notice, and the solution is to be arrived at mainly such as devolves upon the holder of the inby determining the effect which the peculiar strument containing it the duty of following statutes of Texas have upon the evidences up the information thus furnished by proper of title, and, finaily, as to the right of action inquiry, as in other cases where the duty of in the plaintiffs. The court below sustained

inquiry is imposed. Gaines v. Summers, 50 plaintiff's' right of action and deed of trust, Ark. 322, 7 S. W. 301, and authorities cited; and rendered judgment accordingly.

Wade, Notice, $$ 307–309, and authorities cit

ed; Frye v. Partridge, 82 Ill. 267; Corbitt v. Scott & Jones and C. S. Todd, for appel

Clenny, 52 Ala. 480; Peto v. Hammond, 30 lant. S. A. Byrne, for appellees.

Beav. 495. Not only do the authorities make

such to be constructive notice, but there is BUNN, C. J. (after stating the facts). In another reason why appellant in this case Brothers v. Asundell, 60 Tex. 210, to which we must be held bound by the recital in his bill have been referred by appellant's counsel, of sale. That recital is a condition upon the supreme court of Texas, in construing the which the sale was made to him. That apstatute of that state, noted in the statement pellant should accept the muniment of his of this case, providing for the registration of title with that condition was a part of the chattel mortgages, held that such a mort- consideration accruing to Zucchini, his vengage, filed for record and recorded, furnishes dor. Appellant accepted the property on that no notice to third parties, since the statute re- condition. He ought not to hold on to the quires the instrument in such a case to be fruits of his purchase, and yet be unwilling filed, abstracted in the appropriate book, and to observe its conditions. He should aban. kept on file for the inspection of all con- don his purchase in toto, or stand by all its cerned. Such is the settled law of that state, terms. The plea that, the mortgage of Byrne ani, besides being conclusive on or as being being invalid, Ghio was not bound to observe the construction put upon one of its statutes the recital of its existence in his bill of sale, by its highest court of judicature, it is the is not well founded, for the reason that a only construction of which the statute ad- failure to register at all does not render a mits, if we are permitted to say as much. mortgage invalid. The act of registration is Upon the application of this law to the facts for the benefit of persons in the situation of of this case,-namely, that the deed of trust appellant, in this: that it furnishes them noof appellees, by mistake of the clerk and tice of the existence of prior inconsistent recorder, was not properly filed and abstract- claims to their own. In this case, had there ed until after appellant's bill of sale was de- been no registration and nothing in lieu therelivered and recorded, and appellant had taken of, still the appellant was affected with nopossession of the property involved,-he tice otherwise of this mortgage, and that is bases one of his contentions, that is to say, all the benefit that registration could have that bis purchase is superior to the mort- afforded him. gage of appellees. We do not think this There is still another reason why this concontention can be sustained, for several rea- tention of appellant cannot be sustained. It sons, among which are the following: It is is this: In our argument heretofore we quite generally settled that, where no duty have given the appellant the benefit of the with reference to the act of the registration is rule which governs in this state,-that is to imposed by law upon the holder of a mort- say, that the registration of a mortgage is gage except to deliver the same to the proper the only notice by which persons, other than officer for that purpose, no default of the parties to the mortgage, can be affected; registering officer is to be made to inure to that third parties are not bound by actual

notice of the existence of an unrecorded gages, as well as assignments) makes inmortgage; for such is the rule here. Main valid a mortgage of merchantable goods, daiV. Alexander, 9 Ark. 112; Jacoway v. Gault, ly exposed to sale in parcels in the regular 20 Ark. 190; Hannab v. Carrington, 18 Ark. course of business, and contemplating a con105; and the later decisions of this court tinuance of possession and control of the on the subject. The rule grows out of the business by the owner, and declares such to peculiar language of our statute giving effect be fraudulent and void. This statute has reto the registration of mortgages and similar ceived a construction from the supreme court instruments, which, taken from Mansfield's of Texas, about the real meaning of which Digest, is as follows, to wit: “Sec. 4743. Ev- there may be room for controversy. In othery mortgage, whether for real or personal er words, to some it appears clear that the property, shall be a lien on the mortgaged making of the mortgagor the agent of the property from the time the same is filed in mortgagee in such cases, to carry on the the recorder's office for record, and not be- business in his name and for the benefit of fore; which filing shall be notice to all per- the mortgage debt, renders the transaction sons of the existence of such mortgage.” fraudulent and void. To others, however, no The preceding section provides that all mort- such meaning is to be attributed to these degages shall be proved or acknowledged in cisions. Happily, we are not driven in this the same manner as deeds are proved or case to the necessity of entering into an inacknowledged, and, when so proved or ac- quiry so unsatisfactory, if not unseemly, in knowledged, shall be recorded, if for lands, its nature. The mortgaged goods consisted of in the county where they are situated, and, two classes,--one consisting of articles for if for personal property, in the county where daily use in that line of business, and the the mortgagor resides. It is evident that one other consisting of furniture and other furdealing with property, under this peculiar nishings of the house, not intended for sale statute, cannot be affected by actual notice, in the usual course of business. Whatever simply because constructive notice of record may be the settled construction of the secis made the only notice effectual in such tion of the Texas statute under consideration, cases. Now, our statute giving effect to the it can only affect the mortgage as to the first registration of deeds and other absolute con- class of goods according to our law. Land veyances, digested in Mansfield's Digest as v. Fletcher, 39 Ark. 325. Thus, eliminating section 671, as affects the argument, is al. from the controversy this particular subject most in' the language of the section of the of controversy, as did the court below, the Texas statute to wbich we have referred in only thing remaining to be done by the court our statement of the case, which gives effect below was to determine the value of the to the registration of chattel mortgages, such property not affected by this legal question, as that we have under consideration. The and therefore, upon the basis of $5,000 being construction given to this, our statute, is that the then present value of all the property, as constructive notice of registration is not the agreed upon, the court finding from the testi. only notice by which a purchaser may be mony that, about two years previously thereaffected; for, if he have actual notice of the to, all the property was valued at $15,000, existence of an unrecorded deed, he is bound of which the furniture constituted one-half by it. Byers v. Engles, 16 Ark. 513; Sisk v.

in value, or was worth $7,500, and reasoning Almon, 34 Ark. 391. The Texas statute on that naturally the salable goods would be the subject does not, in our opinion, confine more apt to undergo change in quantity, and the holder of a chattel mortgage to the bene- therefore in value, than those not intended fit of the notice of registration; but, as for sale, and there being no suggestion that against a subsequent purchaser in good there had been any special loss, addition, or faith, the mortgagee may claim the benefit changes in value since that time, concluded of this actual notice. This being true, and that the furniture had at least retained its appellant having actual notice of the mort- relative proportion of the whole value, and gage, by the very terms of his bill of sale, upon that theory found the value thereof to there does not appear to be any very great be at least $2,500, thus, for all that appears, utility in this discussion of the effect of the giving every advantage of doubt to the ap. registration laws of Texas as applied to this pellant. The court would have had a right case. Sparks v. Pace, 60 Tex. 298; Brothers to withhold its judgment, and had present V. Mundell, Id. 240.

and definite proof taken of the wines, wbisAnother contention of appellant is this: ky, etc., on hand, but it would doubtless lave The mortgage of Byrne conveys to him cer- been a delay for nothing. We see no real tain articles of merchandise, such as are kept objection to the process by which the court for daily sale, and the stipulation is that Zuc- ascertained the value of the property, and, chini, the mortgagor, as Byrne's agent, was as none is suggested, we will not disturb the to continue to sell these goods, turning in the finding. proceeds daily to Byrne, and the same were Finally, the appellant contends that, under to be credited on the mortgage debt. The the peculiar laws of Texas, appellees have serenteenth section of the general assignment no right of action in this kind of procedure, act of that state (which section the supreme and several decisions of the supreme court court of Texas holds as applicable to mort- are cited in support of this view: Wright v.

Henderson, 12 Tex. 43; Gillian v. Hender- Sour-Mash Whisky. E. H. T., Jr., Distiller.'” son, 12 Tex. 47; Wooten v. Wheeler, 22 Tex.

That filed by S. was "O. F. C., *


connection with the words, 'Handmade Sour338; Belt v. Ragnet, 27 Tex. 471; Osborn v.

Mash Whisky. E. H. T., Jr., Disti.ler,'" but Koenigheim, 57 Tex. 91; and Sparks v. Pace, stated that some of these words might be omit60 Tex. 298. There is no proof of the exist- ted or transposed, "the essential feature * ence of a statute on the subject, but we will

consisting of the letters 'O. F. C.'” The spe

cification of trade-mark, as filed by the E. H. treat the law as enunciated in the decisions

T., Jr., Co., was substantially the same as that referred to. From them we gather the law filed by S. Acll, that the symbol "O. F. C." of that state to be that a mortgage is a mere

alone constituted the trade-mark of the com

pany. security; that the interest of a morgagor in a

2. On the organization of the E. H. T., chattel mortgage is the subject of the levy of Jr., Co., it erected another distillery, the Caran execution and sale to satisfy the judgment "lisle, and adopted for its product the brand, of his creditor; but that such sale is made

"Carlisle Standard Sour-Nash Whisky. E. H.

T., Jr., Distiller." T. was distiller for both subject to the mortgagee's rights; and, final

plants, and held out to the public as such by adly, that a mortgagee out of possession, and vertisements. The words, "E. H. T., Jr., Co., one not entitled to possession, cannot protect

Distiller," in his autograph, were then substihis rights by a resort to the special statutory

tuted for the printed designation, "E. H. T.,

Jr., Co., Distillers," with a caution to the trade proceeding in vogue in that state to try the that such script was a test of the genuineness rights of property. We do not find, bow- of 0. F. C. and Carlisle whiskies in the marever, that these decisions sustain the broad ket, but nothing was paid him for the use of

his signature. Held, that such script was no proposition of appellant that “in Texas a sim

part of the trade-mark, and that it consisted ple mortgagee, as such, has no right of pos- merely of the symbol "O. F. C." and the word session, and cannot maintain trespass, trover,


3. The E. H. T., Jr., Co. purchased the J. or conversion, nor the statutory remedy of

S. T. Distillery. and operated it under that trial of the right of property, which is sub- name for several years, and then conveyed it stantially the same remedy." On the con. to T. in consideration of his release of all intrary, we find in Focke v. Blum, 82 Tex. 436,

terest in the E. H. T., Jr., Co. A year after,

the 0. F. C. and Carlisle Distilleries closed 17 S. W. 770, that "a mortgagee or lien hold- for two years. The E. H. T., J., Co. at that er may sue for the conversion of the mort. time advertised the fact that it had gone out gaged property, or for a trespass upon it."

of business, and had conveyed all its property,

trade-marks, etc., to the S. Co. Hell, that the It would be strange if there were not such a

S. Co. had no right to use the autograph sig. remedy for the mortgagee.

nature of T., as it might appear in the corWe deem it unnecessary to prolong this porate name of E. H. T., Jr., Co., nor advertise discussion by a more extended notice of pos

him as the distiller of their O. F. C. and Car

lisle whiskies, and that the assupmtion by T. session of Byrne, for much of the difficulty and his sons of the partnership name E. H. T., connected therewith seems to have been oc- Jr., & Sons, though similar to the corporate casioned by the immediate interference of ap

name E. H. T., Jr., Co., was not a violation of

the rights of the S. Co. pellant. Nor do we deem it necessary to in- 4. Though the 0. F. C. and Carlisle whisquire further into the attitude of appellant in kies were frequently called "0. F. C. (Taylor)" this transaction. Suffice it to say that he and "Carlisle (Taylor)" by dealers, it appearing does not seem to be a "creditor," in the mean

that the parties having the right to name the

whiskies had never so called them, the S. Co. ing of the particular statute to which he ap- cannot complain of the use of the trademark peals; nor does be seem to be a bona fide Old Taylor Whisky by the E. H. T., Jr., & purchaser (an innocent purchaser) for value,

Sons Co. since the consideration be paid consisted

Appeal from circuit court, Franklin county. largely of the satisfaction of a pre-existing

"To be officially reported." debt owing to him by Zucchini, and proba

Action by E. H. Taylor, Jr., & Sons against bly the assumption of other debts of Zucchini, the George T. Stagg Company to enjoin deof the actual payment of which, before he

fendant from using E. H. Taylor's autograph had knowledge of appellees' mortgage, we

signature as a trade-mark, and from using have no evidence. The judgment of the Mil

certain other brands. From a judgment for ler circuit court is affirmed.

plaintiffs, defendant appeals. Affirmed.

D. W. Lindsey, John W. Rodman, and Humphrey & Davie, for appellant. Wm.

Lindsay and George C. Drane, for appellees. GEORGE T. STAGG CO. V. TAYLOR et al. (Court of Appeals of Kentucky. June 16, 1891.) HAZELRIGG, J. In January, 1887, the TRADE-MARKS-What WILL BE PROTECTED -Evi- appellees, E. H., J. S., and Kenner Taylor, DESCE.

formed a partnership under the name of E. 1. E. H. T., Jr., owned the O. F. C. Distillery, and placed on all labels the brand. "0.

H. Taylor, Jr., & Sons, and began the manuF. C. Handmade Sour-Mash Whisky. E. H. facture of whisky at what had theretofore T., Jr., Distiller." S. subsequently became the been known as the J. S. Taylor Distillery, in owner, T. continuing to operate it under a lease. The E. H. T., Jr., Co. was formed, of

Woodford county. Ky. They at once chanwhich S. was president, and T. vice president; ged the name of this distillery to the "Old and S. conveyed to the company the property, Taylor Distillery," and before the end of the and assigned it the trade-mark. The specifi

year had discontinued the use of the name cation of the trade-mark, as filed by T., was that it consisted of "the letters '0. F. C. and

J. S. Taylor in connection with the distillery, is used with or without the words, 'Handmade or the whisky manufactured there; branding,

« PreviousContinue »