#### N. T. Burroughs v. Butler-Ryan Company, Appellant.

Chattel Mortgage: sale of property, consent .op mortgagee: con-1 version. An action for the conversion of mortgaged personal property will not lie where the property has been acquired with the consent of the mortgagee, and where the mortgage by implication authorizes the mortgagor to sell the property and ' ■ there is evidence of the mortgagee’s consent, that qnestion should be submitted to. the jury, and an instruction that as a matter of law there was a conversion, is error.

*216Sale of Mortgaged Property; consent of *mortgagee : evidence.*2 Where a contract for the sale of mortgaged property is signed by the mortgagor, and it is shown to contain the agreement nnder which the property was transferred and also a gnaranty by the mortgagee of its performance, it is admissible in an action by the mortgagee for conversion to show his knowledge of the disposition of the property'.

Contract of Mortgagor; liability os’ mortgagee. Consent by the 3 mortgagee to a sale of part of the mortgaged property will not render him liable for a breach of the mortgagor’s contract in respect to the sale. .

*Appeal from Cherokee District Court.*— HoN. William Hutchinson, , Judge.

Monday, October, 12, 1903.

Action at law to recover the value of brick sold to the defendant by one J. M. Starbuck. Starbuck manufactured the brick in question, and, in advance thereof, borrowed money of the plaintiff, and executed to him a mortgage thereon as security for his loans. The mortgage gave the plaintiff the right to sell the brick so manufactured, and provided that no sale should be made by Star-buck without the consent of the plaintiff; and, further, that the plaintiff should have the right to collect all accounts due for sales made by either party. Starbuck .contracted with the defendant to furnish it a large quantity ,of brick at an agreed price. He furnished a part thereof, ¡but failed to fully perform his contract. The plaintiff ■sued for the value of the brick so furnished to the defendant, alleging his lien thereon, and a conversion by the defendant. There was a trial to á jury, arid a verdict and judgment for the plaintiff. The defendant appeals.—

*Reversed.*

*William Mulvaney*and *How db Butler*for appellant

*K C. Herrick*for appellee.

*217SbeRWIN, J.

sale of gtgeef am?" version. The plaintiff’s claim is based upon an ■•alleged conversion of property upon which, he held a lien by virtue of a chattel mortgage, and such was the theory of the trial in the district court. It is ele-that there is no conversion of property where it has been acquired and used wjth the consent of the owner or pledgee. The brick in controversy were undoubtedly covered by the plaintiff’s mortgage, but the mortgage itself, by implication at least, provided that they might be sold by Starbuck with the consent of the plaintiff; and, if he did in fact give his consent to their sale to the defendant, there was no conversion, and an action therefor could not be maintained upon the theory presented by the pleadings and upon which the case was tried. The question of plaintiff’s consent to the sale was a material one, and the court ^should have instructed the jury thereon, instead of instructing as a matter of law that there was a conversion. It is true that forms of action have been abolished by statutory ■enactment, but this does not aid the plaintiff in his contention that he was entitled to recover at any rate, or under a different theory. The defendant was entitled to instructions correctly covering the theory of the case presented by the pleadings and the evidence, and upon which .•it was tried, and, if the court failed to so instruct, it is reversible error.

2 sale of property':'1 mortgagee; evidence. The contract drawn for the signature of Starbuck and t e defendant should have been admitted in evidence. It was signed by Starbuck, and, while not signed by the defendant, the testimony clearly shows that it in fact contained the agreements under which the brick were furnished by Starbuck ^ ¿efen¿an^ and it was competent for the purpose of showing the plaintiff’s knowledge of what Starbuck was proposing to do with the brick manufactured *218by him, and as tending to show the plaintiff’s consent to-the sale, and the terms thereof. If the plaintiff consented tó a sale under an express contract providing for the payment of damages by Starbuck in case he failed to perform, it is clear that he cannot now recover the contract price-of the brick regardless of the damages suffered by the defendant by reason of Starbuck’s failure.

3. Contract 01 iiabiifty’of' mortgagee. The mere fact that the plaintiff consented to the sale-of the brick to the defendant would not, in our judgment,, render him liable for the breach of Starbuck’s contract,, the record contains no evidence, which would warrant a finding that he is so liable., j^or js there evidence to sustain the contention that the contract between the plaintiff and Starbuck created the relation of principal and agent, instead of' that o"f mortgagor and mortgagee. Hence we conclude that the liability of the plaintiff under the defendant’s contract with Starbuck was properly withdrawn from the consideration of the jury.

What has already been said disposes of the plaintiff’s appeal from the order denying his motion for a judgment, for a sum in excess of the verdict.

For the reasons stated, the judgment is reversed on. the defendant’s appeal. —Ebvbesed.