Case ID: ohio-st_112/html/0024-01.html
Source: Caselaw Access Project
Author: {"author": "Day, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Katz v. The American Finance Co.
    
      Chattel mortgages — Foreclosure equitable and not jury case— Error proceedings — Findings on facts supported by evidence, not disturbed.
    
    1. A foreclosure of a chattel mortgage is an equitable proceeding and one in which parties are not entitled to a trial by jury.
    2. When the sole issue presented by a record is one of fact, and there is competent evidence to support the findings of the lower courts, this court, not determining the weight of the evidence, will not disturb such findings.
    (No. 18590
    Decided March 3, 1925.)
    Error to the Court of Appeals of Franklin county.
    This case comes into this court upon proceedings in error from the Court of Appeals of Franklin county. The facts incident to the transaction out of which the controversy grows may he stated as follows:
    
      Prior to the 28th day of April, 1923, the Columbus Haynes Motor Sales Company was the owner of a certain Haynes automobile, sport model Haynes motor car 77, motor number 76958. On that day the company claims to have sold the automobile to one L. E. Bender, and to have received as part consideration therefor a promissory note for $2,022.84, to secure the payment of which Bender executed a chattel mortgage upon the machine, which was filed for record on May 3, 1923, in the recorder’s office of Franklin county. Upon the same date, May 3, 1923, the Columbus Haynes Motor Sales Company issued for delivery to the defendant, L. E. Bender, a bill of sale on said automobile, which was also duly entered of record, according to law, on May 4, 1923. On the 28th day of April, the Columbus Haynes Motor Company offered the note and mortgage in ques^ tion to-the American Finance Company of Dayton, Ohio, a concern which was in the business of loaning money on automobiles. A representative of the finance company investigating the parties and the property in question found that no bill of sale had been given by the Columbus Haynes Motor Company to Bender, which, as above related, was accordingly done on May 3, 1923. It also, before purchasing the note and mortgage, required the signature of an additional maker, to wit, A. B. Zimmer, and at the time the note and mortgage were purchased by the finance company the oar appears to have been in the actual possession of Bender, although afterwards turned over to Cooper of the Columbus Haynes Company for the purpose of demonstration.
    
      On the date of May 3d, this particular car, Avhich had been delivered to the possession of the Columbus Haynes Motor Company by Bender, was demonstrated to the plaintiff in error, Leo Katz, and, as a result thereof, the Columbus Haynes Motor Company sold the car to Katz at a consideration of $2,700, and an allowance of $1,200 on an old car which Katz owned, the différence, $1,500, being paid in cash by Katz to the Columbus Haynes Motor Car Company. Katz delivered his old car and took the new Haynes sport model under the sale. A bill of sale dated May 5, 1923, was executed to Katz, but it does not appear to have been placed on record until 45 days later. The Columbus Haynes Motor Company went into the hands of receivers, and the American Finance Company, on July 31, 1923, began an action upon the promissory note of Bender and Zimmer, which it had purchased from the Columbus Haynes Motor Company. As a second cause of action it asked for a foreclosure of the chattel mortgage, averring that the defendant, Katz, was in possession of the automobile and that he refused to surrender the same to Bender, as the owner, or to the plaintiff, as mortgagee. Katz was made a party to the proceeding and the court was asked to require Katz to surrender the automobile in question, a sale was prayed for, and it was asked that the proceeds be applied to the payment of plaintiff’s claim.
    The ansAver of the defendant, Katz, put in issue the good faith of the purchase of the note and mortgage by the finance company, to which answer the plaintiff filed a reply, and upon the issues thus joined a trial was had in the court of common pleas, resulting in a decree of foreclosure in favor of the American Finance Company.
    The matter was taken to the Court of Appeals upon appeal, where a hearing was had and the same decree entered in behalf of the American Finance Company that was entered in the court of common pleas. Error is now prosecuted to this court to reverse that decree.
    
      Mr. Harry Kohn, for plaintiff in error.
    
      Mr. Robert J. Beatty, for defendant in error.
   Day, J.

The paramount question in this case is the good faith of the American Finance Company in acquiring the note and mortgage signed, executed and delivered by Bender to the Columbus Haynes Motor Car Company. Both courts below, upon full hearing, found that the American Finance Company was the holder of the note and mortgage in good faith, for value, before maturity, and that, it was an innocent purchaser in the premises,.

This issue of fraud and bad faith upon the part of the finance company was the chief issue litigated in the courts below, and involves a question of fact; so that, so far as this court is concerned, the question is simply this: Is the finding of the courts below that the American Finance Company was an innocent purchaser, before maturity, for value, sustained by some evidence in the record?

The record shows the note and mortgage were dated April 28, 1923, that the delivery of the ear was made to Bender on May 3d, which was the date of the bill of sale. When the agent of the plaintiff finance company came to inspect the property he was shown the bill of sale and fonnd the machine in the actual possession of Bender. The bill of sale was recorded on May 4th, within the time prescribed by law. The mortgage and its assignment were filed by the finance company with the county recorder of Franklin county on May 3, 1924. The fact is that this chattel mortgage could have been known by Katz by an examination of the record. The bill of sale to Katz, while dated May 5th, was not recorded by him until 45 days later. While sales were made of like character by. the Columbus Haynes Company to other employes, and numerous other evidences of fraud upon the part of the Columbus Haynes Company are shown in the record, the record also discloses some evidence substantiating the finding of the courts below that the fraud, in so far as the Bender car was concerned, was not known to the finance company.

We must take this record as we find it. Had the witnesses appeared in this court, and had testimony been taken from the lips of the witnesses, as was the privilege of the Court of Appeals and the court of common pleas, and were we to weigh such evidence, what this court’s conclusion would have been is not for us to conjecture.

If from the record it appears there was no evidence to sustain the finding of the courts below, this court has the power to set the same aside, but, not undertaking to weigh the evidence and pass upon its sufficiency, we cannot disturb the decree of the courts below unless there is no evidence to sustain their finding. While both courts below found that the Columbus Iiaynes Motor Company acted in bad faith, and was guilty of fraud, we cannot say that the conclusions reached below are not sustained by some evidence in the premises, to wit, that the proceedings were regular on their face, and that the finance company was an innocent purchaser before maturity for value. The record so showing, we cannot disturb that finding.

As to the question of the right of trial by jury, urged by the plaintiff in error, this, in the courts below, was an action for judgment on a promissory note and foreclosure of a chattel mortgage. The plaintiff in error, Katz, was only interested in the foreclosure feature. That being purely an equitable action, we cannot find that he was deprived of any right by being denied a trial by jury.

The rule being that this court is not to pass upon the weight of the evidence and is only permitted to ascertain from the record whether there is some competent evidence therein to sustain the findings of the court below, we are constrained to the conclusion that such evidence does exist and that it is our duty to affirm the judgment of the Court of Appeals rendered herein, which we accordingly do.

Judgment affirmed.

Marshall, C. J., Jones, Matthias, Allen, Kinkade and Robinson, JJ., concur.