Case ID: neb_90/html/0243-01.html
Source: Caselaw Access Project
Author: {"author": "Rose, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

M. S. McIninch, appellant, v. David W. Evans et al., appellees.
    Filed November 14, 1911.
    No. 16,974.
    1. Sales: Bona Fide Purchasers. A verbal lien on personal property is void as to subsequent purchasers in good faith.
    2. -: -: Presumptions. There is no presumption that a stranger to an oral agreement creating a verbal lien has knowledge of its existence.
    
      3. -: -: Burden of Proof. As a general rule the burden of proving that a stranger to an oral agreement creating a verbal lien on personalty has knowledge thereof is on lienor, where that fact is material to his protection.
    4. Replevin: Possession as Evidence of Ownership. While defendant’s possession of a chattel, when replevied, is presumptive evidence of ownership, such possession loses its presumptive character when plaintiff adduces evidence showing that he bought the chattel from the owner, that he paid for it, and that he is entitled to possession.
    5.-: Defenses: Secret Liens: Burden of Proof. After plaintiff in replevin has adduced proof showing that he bought the chattel in controversy from the owner, that he paid for it, and that he is entitled to possession under his purchase, the burden is on defendant, where he attempts to defeat the case thus made and to establish his «own right of possession by proof of a verbal lien to which 'plaintiff was a stranger, to show that plaintiff, before completing his- purchase, had notice of such lien.
    6. Trial: Instructions: Burden of Proof. Where the law imposes on defendant the burden of proving a material fact on which he relies, the plaintiff is entitled -to an instruction so advising the jury.
    Appeal from the district court for Nemaha county: Leander M. Pemberton, Judge.
    
      Reversed.
    
    
      M. 8. Mclnineh and William G. Rutledge, for appellant.
    
      Kelligar & Ferneau and Fred G. Hawxby, contra.
    
   Rose, J.

M. S. Mclnineh, plaintiff, replevied from David W. Evans, defendant, May 19, 1909, a red Oakland automobile. The answer of defendant was a general denial. Harry W. Moore appeared as intervener, answered plaintiff’s petition by a general denial, and in addition pleaded these facts: May 6, 1909, intervener negotiated with the Lininger Implement Company of Omaha for the purchase of two automobiles — the red Oakland replevied and a white Oakland. Not having the funds to make advance payments on the purchase price, defendant furnished the Lininger Implement Company $1,500 for that purpose, and, to secure payment thereof, both cars, with intervener’s consent, were delivered to defendant, who has since held them as security. No part of the sum thus secured has been repaid. Subject to defendant’s interest, intervener is the owner of the red car. When suit was commenced, intervener was engaged in buying, selling and repairing automobiles in Auburn, where the cars described were kept in his garage for defendant under the latter’s directions. The trial court was asked to determine that defendant was entitled to possession of the red car, that he had a lien thereon for $1,500 and interest, that intervener was the owner thereof and entitled to possession, subject to defendant’s lien, that the red car was wrongfully seized by plaintiff under the writ, that it be returned to defendant, and that intervener recover from plaintiff damages in the sum of $1,500. The reply was a general denial.

The proof on behalf of defendant and intervener tended to support the allegations in the latter’s answer. Plaintiff adduced proof tending to show: May 1, 1909, plaintiff agreed to buy and intervener to procure in Omaha, and sell at cost, an automobile like the one replevied. At the time, plaintiff paid $400 on the purchase price. A few days later he was in the garage of intervener at Auburn, looking at a new automobile, and the latter told him that was his car. Part of the equipment not yet having been furnished, plaintiff stated to intervener that he would leave the car there, awaiting the equipment. Plaintiff returned May 8, 1909, found his car covered with mud, and ordered intervener to clean it and leave it in the garage. It remained there a week. May 15, 1909, it was taken to another garage and kept in the possession of defendant until seized by plaintiff in this suit. When it was in the garage of intervener, the latter told plaintiff he was going to Omaha for the white car, and for the purpose of raising money to get it he asked plaintiff to pay the balance due on the purchase price of the red one, saying he would bring the missing equipment back with him. Plaintiff told him he could send his own check to the Nemaha County-Bank for about $1,200 and that plaintiff would take it up. May 12, 1909, the bank received and plaintiff paid intervener’s check for $1,406. The same day intervener credited plaintiff’s account at the bank $200, and the former owed him $40 for supplies. The net result of the transactions, according to plaintiff’s evidence, is that he purchased from intervener the identical automobile replevied, that he paid therefor the sum of $1,566, the purchase price in full, and that the property was delivered to him.

The jury found that defendant was entitled to possession and fixed the value thereof at $400. As between plaintiff and intervener, the right .of property and the right of possession were found to be in plaintiff.- From a judgment on the verdict plaintiff has appealed.

Plaintiff requested, and the trial court refused, the following instruction: “The court instructs the jury that the burden is upon the defendant Evans to establish his lien upon the automobile in question, and that unless you believe from a preponderance of the evidence that said Evans had a lien upon said automobile, and that said Jffc-Ininch had knowledge of such lien before said Mclninch purchased the same, then in that event you will find for the plaintiff as against the claims of said defendant Evans.”

This instruction was not only refused, but there Avas nothing in the entire charge to advise the jury that the burden of proof was on. defendant to show plaintiff had notice or knowledge of the verbal lien. Did the trial court err in failing to give the requested instruction? Defendant’s lien was not evidenced by any writing or public record of Avhich plaintiff was required to take-notice. It was a mere verbal or secret lien, binding only on the parties who created it and on those having actual notice or knoAvledge of its existence. It was void as to subsequent purchasers-in good faith. Ostertag v. Galbraith, 23 Neb. 730. When defendant accepted security in the form of a secret agreement, he allowed the automobiles to be kept by Ms debtor for sale. It should not be presumed that strangers to the oral agreement had knowledge of its terms, when negotiating for the purchase of the automobiles. As a general rule, the burden of proving that a stranger had knowledge of such an agreement rests on the lienor, who is acquainted with its provisions, if that fact is material to his protection. Rogers v. Pierce, 12 Neb. 48. Plaintiff’s proofs showed that he bought the red car from intervener, that it was delivered to him, that he paid the purchase price, and that he was entitled to possession. The testimony showing the purchase and payment by plaintiff was not successfully refuted. The burden was on him to show his right of possession at the commencement of the suit. His proof was sufficient for that purpose, but in making a prima, facie case he was not in addition required to go further and assume the burden of proving that defendant had no verbal lien entitling him to posséssion, or, if he did have such security, that plaintiff had no knowledge or notice of its existence. The 1uav, of course, is that at the commencement of the trial defendant’s possession Avas presumptive evidence of oAvnership, but it lost its presumptive character when plaintiff proved by direct testimony that he bought the red car, oAvned it, and was entitled to possession. First Nat. Bank v. Adams, 82 Neb. 801.

To defeat plaintiff’s case, as made by the evidence already outlined, defendant offered proof of a verbal lien, which was Aroid as to subsequent purchasers in good faith. As to plaintiff, this lien was no justification whatever for defendant’s possession, the right to which had already been disproved, Avithout evidence of notice to plaintiff. Having relied on his verbal lien to defeat the right of plaintiff to possession, as shown by. his evidence, the burden was on defendant to prove that plaintiff had actual notice or knoAvledge of the oral agreement before completing his purchase. Since plaintiff aauls right on his theory of the laAv, he was entitled to an instruction that the burden of proving such notice rested on defendant. Omaha Bottling Co. v. Theiler, 59 Neb. 257.

If the instruction requested, when standing alone, is open to criticism as assuming the fact that plaintiff bought the red car, that feature would not have prejudiced defendant, because other parts of the charge made it clear that plaintiff could not recover, unless the jury found from the evidence that plaintiff was the absolute owner.

Under the peculiar circumstances disclosed by the evidence and the nature of the controversy, it is clear, on the whole record, that plaintiff’s case was prejudiced by the failure to give an instruction advising the jury where the burden of proving notice belonged. The judgment is therefore reversed and the cause remanded for further proceedings.

Reversed.

Fawcett, J., not sitting.

Letton, J., concurs in the conclusion.