Case Name: GARRIS v. COMMERCIAL CREDIT COMPANY ET AL.
Court: Supreme Court of South Carolina
Jurisdiction: South Carolina
Decision Date: 1929-03-29
Citations: 149 S.C. 498
Docket Number: 12622
Parties: GARRIS v. COMMERCIAL CREDIT COMPANY ET AL.
Judges: Mr. Chiee Justice Watts concurs.
Reporter: South Carolina Reports
Volume: 149
Pages: 498–512

Head Matter:
12622
GARRIS v. COMMERCIAL CREDIT COMPANY ET AL.
(147 S. E., 601)
Messrs. B. H. Henderson, and R. C. Hardwick, for appellant,
Messrs. Wolfe & Berry, and Benet, Shand & McGowan, for respondents,
March 29, 1929.

Opinion:
The opinion of the Court was delivered by
Mr. Justice Carter.
This action by the plaintiff, C. W. Garris, as trustee in bankruptcy of C. A. Asendorf, bankrupt, against the defendants, Commercial Credit Company and J. A. Hartzog, was commenced in the Court of Common Pleas for Bamberg County, September 29, 1926, alleging that three automobiles were wrongfully taken and carried away by the defendant Commercial Credit Company to the damage of the plaintiff in the sum of $4,704, and the defendant Hartzog was made a party for the reason, as alleged in the complaint, that he claimed an interest in the automobiles in question. The defendant Commercial Credit Company, in its answer, alleged that it seized the three automobiles by virtue of trust receipts it held on them. The defendant Hartzog, in his answer, alleged that two of the automobiles in question were covered by a chattel mortgage held by him, and that he had been damaged by the impairment of the security; the amount of dam ages involved, as alleged by Hartzog, being the value of two automobiles covered by the chattel mortgage held by him.
The action came on for trial at the May, 1927, term of Court of Common Pleas for Bamberg County, before Hon. J. Henry Johnson, Circuit Judge, and a jury. At the conclusion of the testimony, all parties to the cause moved for a direction of a verdict. His Honor, Judge Johnson, refused the motion of the plaintiff and also of the defendant Hartzog, but granted the motion of the defendant Commercial Credit Company. From the entry of judgment on the verdict directed, the defendant Hartzog has appealed to this Court, imputing error as set forth under the several exceptions, to which we shall hereinafter advert. The plaintiff did not appeal.
The facts in the case pertinent to the questions involved in the appeal, briefly stated, are as follows:
C. A. Asendorf, a resident of the town of Denmark, County of Bamberg, was engaged in business at the said Town of Denmark, and also operated a place of business at the Town of Orangeburg, County of Orangeburg; the business at each of these places being conducted by C. A. Asendorf under the tráde-name of Asendorf Motor Company, but controlled and owned solely by C. A. Asendorf. On the 16th day of February, 1926, a representative of the defendant Commercial Credit Company, seized and carried away .from the said place of business of C. A. Asendorf, at Orangeburg, for the said Commercial Credit Company, the three automobiles named in the complaint, by virtue of certain trust receipts, which, under the laws of this State, are treated as chattel mortgages. It appears that these automobiles were received from the Knox-Gaines Motor Company of Columbia, S. C., and by agreement the Commercial Credit Company held the trust receipts, or chattel mortgages referred to above, and it was the contention of the representative of the Commercial Credit Company, who testified in the case, that he took possession of the automobiles for the Commercial Credit Company, repossessed them for the company, as he stated, because Mr. Asendorf "had violated his trust agreement when he moved a car off of the floor." There are only two of the automobiles involved in this appeal, a four-cylinder Chrysler coach and a four-cylinder Chrysler touring car. The trust receipt covering the four-cylinder Chrysler coach was recorded in Orangeburg County, and the trust receipt covering the four-cylinder Chrysler touring car, if recorded at all, was recorded in the County of Rich-land. The trust receipt covering the four coach was dated December 12, 1925, and recorded in Orangeburg County December 24, 1925; and the trust receipt covering the touring car was dated January 7, 1926. The receipt, which is printed in the record, does not show when or where it was recorded, but on motion for direction Of a verdict reference was made by counsel for Commercial Credit Company to the paper having been recorded in Richland County. At the time of seizing the four coach and touring car by the Commercial Credit Company, the representative of that company also seized a six-cylinder coach, but the defendant Hartzog made no claim to that car.
The note in the sum of $4,000 and chattel mortgage executed by C. A. Asendorf to the defendant, J. A. Hartzog, and held by J. A. Hartzog, under which he claims, are dated January 12, 1926, and the mortgage was recorded in the office of the Clerk of Court for Bamberg County, January 19, 1926. This mortgage covers certain machinery and "three new Chrysler automobiles at Denmark and Orangeburg, S. C." The evidence is that Mr. Asendorf at the time of the execution of this mortgage had three, and only three, new Chrysler automobiles at the place named, namely, a four-cylinder Chrysler coach, serial No. WR — 666-H, motor No. 68581; a four-cylinder Chrysler touring car, serial No. WR-638-Y, Motor No. 73451; and a model 70 Chrysler'roadster, serial No. WD-793-E, Motor No. G-104050. The last-named car, the roadster, and the tools and machinery covered by the mortgage were taken into- possession by Hartzog and sold, and the proceeds of the sale, $1,239.26, credited on the debt, leaving a balance owing thereon of $2,760.74. It further appears from the evidence that the two automobiles seized by the Commercial Credit Company and claimed by Hartzog had a value of $2,438, and it is the contention of Hartzog that he is entitled to judgment against the Commercial Credit Company for that sum. Mr. Asendorf was duly adjudicated a bankrupt February 26, 1926, and thereafter C. W. Garris was duly appointed trustee for said bankrupt.
As stated above, at the conclusion of the testimony, motions for direction of a verdict were made by all parties. The motion of the plaintiff and the motion of the defendant Hartzog were refused, and the motion of the defendant, Commercial Credit Company was granted, as against the plaintiff and against the defendant Hartzog. The plaintiff did not appeal, and the issue before this Court is between the Commercial Credit Company and Hartzog. His Honor, Judge Johnson, granted the motion of the Commercial Credit Company'against Hartzog for direction of verdict upon the ground "of vague and indefinite description" of the property in question, and it is from this holding and ruling that the defendant Hartzog appeals, as well as from the refusal to direct a verdict for him against the Commercial Credit Company for the amount asked for, $2,438, the value of the two automobiles, seized by the Commercial Credit Company which Hartzog claimed under his chattel mortgage.
Section 5312, Vol. 3, of the Code of 1922, with amendments thereto, requires that chattel mortgage must be recorded in the county where the owner of the property contained in the mortgage resides. Since it is undisputed that Asendorf, the mortgagor, at the time he executed the chattel mortgages in question, the mortgage to Hartzog and the trust receipts to Commercial Credit Company, resided in the County of Bamberg, Bamberg County was the county where the said papers should have been recorded. The Commercial Credit Company did not record its papers in Bamberg County, and the recording of the same in Orangeburg County or Richland County was not a compliance with the law and did not furnish the defendant Hartzog constructive notice; whereas the recording of the Hartzog paper in Bamberg County, which is an undisputed fact, was a compliance with the law. The fact that C. A. Asendorf was doing business under the trade-name of Asendorf Motor Company and the trust receipts were signed, "Asendorf Motor Company," by C. A. Asendorf, does not affect the legal status or requirement. The Asendorf Motor Company was not a corporation, was not a partnership, but simply a trade-name under which C. A. Asendorf was doing business, and he was in control of said business and was sole owner of the same. The residence of Asendorf was in Bamberg County, and therefore Bamberg County was the county in which the law required the papers in question to be recorded; and the fact that Asendorf had two' places of business, one in Bamberg County and another in Orangeburg County, did not change his place of residence, and could not affect the requirement of the law as to where the papers should be recorded.
As to the description of the property covered by the Hartzog mortgage, in our opinion the same was sufficient to put third parties on notice, which, if followed up, would have disclosed the property intended to be covered by the mortgage, which is a sufficient compliance, as we understand the rule.
It is contended by the respondent that the decision by this Court in the recent case of Bank of Williston v. Gamble, 148 S. C., 49, 145 S. E., 626, filed November 7, 1928, is conclusive of this question. We are unable to agree with this contention. As we view the facts involved in the two cases, there are broad distinctions between the case of Bank of Williston v. Gamble and the case at bar. All the description that the mortgage in the Williston Bank case contained with reference to the property in question was "(35) mules," whereas, in the case at bar, there are several descriptive words or phrases that aid in designating the property in question, to wit, "three new Chrysler automobiles at Denmark and Orangeburg, S. C." For the description in the case at bar to be similar to that in the WUliston Bank case, it should read, "3 automobiles." But instead we have three additional words or phrases to aid in the description. For instance, what kind of automobiles? "Chrysler" automobiles. Any further description? New Chrysler automobiles. Any further description to aid a third party? New Chrysler automobiles at Denmark and Orangeburg, S. C. In the WUliston Bank case, the description may well be said not to contain information sufficient to put third parties on such notice which, if pursued, would enable one to know what property was intended to be mortgaged; whereas, in the case at bar the description given in the mortgage is sufficiently definite and certain to put third parties on notice which, if pursued, would enable one to ascertain what property was intended to be mortgaged.
There is still another fact which should be considered in passing upon the question of sufficiency of description. At the time of the execution, of the Hartzog mortgage, January 12, 1929, by Asendorf, he (Asendorf) owned and had in his possession only "three new Chrysler automobiles at Denmark and Orangeburg, S. C.," so that, if a third party had pursued the notice given in the mortgage, it is not reasonable to presume that such person would have been misled.
In support of the view herein expressed on the question of sufficient description, we call attention to the following South Carolina cases: Robinson v. Saxon Mills, 124 S. C., 415, 117 S. E., 424; Brown v. Hughes, 94 S. C., 140, 77 S. E., 730; People's Bank v. People's Bank, 122 S. C., 476, 115 S. E., 736; Livingston v. S. A. L. Railway, 100 S. C., 18, 84 S. E., 303; Kimbrell Co. v. Mills & Young Co., 100 S. C., 443, 84 S. E., 996.
We also call attention to the following cases in other jurisdictions: Gurley v. Davis, 39 Ark., 394; Cooper v. Berney Nat. Bank, 99 Ala., 119, 11 So., 760; Smith v. McLean, 24 Iowa, 322; King v. Howell, 94 Iowa, 208, 62 N. W., 738; Buck v. Young, 1 Ind. App, 558, 27 N. E., 1106; Kaase v. Johnston, 5 Ind. T., 76, 82 S. W., 680; Willey v. Snyder, 34 Mich., 60.
In the case of Smith v. McLean, supra, the Court held that the following description was sufficient: "Five freight wagons, and twenty-five yoke of cattle being on the train now in my possession."
Also, in the case of Kaase v. Johnston, supra, the Court held that, where the description contained in the chattel mortgage is sufficient to put third persons on inquiry from which they can ascertain what property was intended to be mortgaged, there is a compliance with the requirement. Also, in the case of Buck v. Young, supra, the Court held to the same effect.
Respondent cites some cases from other states which seem to sustain the position of the Circuit Judge. For instance, in the case of Commercial Sav. Bank v. Brooklyn Lumber & Grain Co., 178 Iowa, 1206, 160 N. W., 817, cited by respondent, the Court holds that description "One Regal Underslung Model N roadster automobile, now in the possession of the mortgagor and usually kept at his place of business in Brooklyn, Iowa, and owned by the mortgagor," was insufficient. The Court in that case further stated, "The description of the automobile was defective. To say that it was a roadster, or of a particular make as 'underslung,' or of a designated model, would aid in identification no more than the color of a horse or its age or weight, for presumably there are more than one of the kind described."
We cannot agree with the reasoning in. that case. It is common practice, well recognized and approved in this State, in giving a chattel mortgage, to describe a horse by stating the color and age; and we know of no better means of describing a common work horse than by giving the color and age. Usually the name is also given, as well as the sex, and certainly the weight would also aid in identifying a horse. The rule invoked in this case (Commercial Sav. Bank v. Brooklyn Lumber & Grain Co., 178 Iowa, 1206, 160 N. W., 817) does not appeal to this Court, and we think that the rule we have already announced herein more practical.
It is further the contention of appellant, and we think the position well taken, that the Commercial Credit Company is not in position to complain of the description in the Hartzog mortgage not being sufficient, for the reason that the Commercial Credit Company failed to record its papers as required by law, and is estopped to complain of the description in the Hartzog mortgage being vague and indefinite. As the record in the case clearly discloses, the Commercial Credit Company clothed Asendorf with apparent ownership of the property in question, and permitted third parties, including Hartzog, to deal with him (Asendorf) as the absolute owner of the property, unincumbered, and on the strength of this Hartzog advanced his money to Asendorf. Under our view, the Commercial Credit Company is estopped. See Dunlap v. Gooding, 22 S. C., 548; Chambers v. Bookman, 67 S. C., 432, 46 S. E., 39; Quattlebaum v. Taylor, 45 S. C., 512, 23 S. E., 617; Marines v. Goblet, 31 S. C., 153, 9 S. E., 803, 17 Am. St. Rep., 22; McMillan v. Hughes, 88 S. C., 296, 70 S. E., 804; Sullivan v. Moore, 84 S. C., 426, 65 S. E., 108, 66 S. E., 561; McKee v. Mobley, 3 S. C., 242. In 21 C. J., 1172, is found this statement of the rule: "Where the true owner of property holds out another, or allows him to1 appear as the owner of or as having full power of disposition over the property, and innocent third persons are thus led into dealing with such apparent owner or person having such apparent power of disposition, they will be protected." Also: "Where one who owns or has an interest in personal property, with full knowledge of his rights, suffers another to deal with it as his own by selling or pledging it, or otherwise disposing of it, he will be estopped to assert his title or right as against a third person who has acted on the faith of and been misled by his acquiescence." 21 C. J., 1156, 1157. Also see Bigelow on Estoppels, 434.
Furthermore, the Commercial Credit Company was not impaired by the Hartzog mortgage not containing a more definite description of the property mortgaged to Hartzog. The Commercial Credit Company is in no sense a subsequent creditor of Asendorf. As contended by the appellant: "If Asendorf had sold the cars, or had given the most definite mortgage that can be imagined the Credit Company would not have any claim against the purchaser or mortgagee. Its loss comes about not by any insufficiency in the description of the Hartzog mortgage, but by its own negligence in failing to record its instrument as the law required."
It is also a well-recognized rule of law that, where one of two persons must suffer because of the wrongful act of another, that one should bear the loss who made it possible for the third party to do the wrongful act and brought about the situation in which the loss occurred. See Palmetto Bank v. Lexington County, 100 S. C., 452, 84 S. E., 1006; Martin v. Palmer, 115 S. C., 17, 104 S. E., 308; Leaphart v. Selby, 135 S. C., 1, 133 S. E., 451; Land v. Reese, 136 S. C., 267, 134 S. E., 253; and 21 C. J., 1170.
Hartzog had no constructive notice and no actual notice of any claim of the Commercial Credit Company when he advanced money to Asendorf and took as security the chattel mortgage in question. The Commercial Credit Company was duty bound to record its paper in the county of the residence of Asendorf, and, having failed to do so, must bear the loss.
It clearly appears from the transcript of record that there is a balance owing on the Hartzog note and mortgage in the sum of $2,760.74, after giving credit for the proceeds derived from the sale of the tools, machinery, and the automobile, about which there is no question, and that the security of Hartzog was impaired to the extent of $2,438, by the seizure and taking away of the two automobiles in question by the Commercial Credit Company.
The exceptions of the appellant are therefore sustained, and it is the judgment of this Court that the judgment of the Circuit Court be and is hereby reversed, and that judgment in the sum of $2,438 be entered up in favor of the defendant J. A. Hartzog against the defendant Commercial Credit Company, under Rule 27.
Mr. Chiee Justice Watts concurs.
Messrs. Justices BlEase and Stabler concur in result.