Opinion ID: 1165768
Heading Depth: 1
Heading Rank: 8

Heading: conversion of mortgaged vehicles

Text: Motions for nonsuit and directed verdict were made jointly on behalf of both defendants and separate motions on behalf of Heider. They were denied and the rulings are assigned as error. It is contended first, in support of the joint motions, that seizure of the mortgaged vehicles  a remedy preserved by the mortgage in case of a default  was justified because of violation by the plaintiff of a provision of the mortgage that if any attempt should be made to remove, injure or dispose of the mortgaged property or if the same should not be safely or properly kept, cared for and protected by the mortgagor the mortgagee might declare the whole sum of both principal and interest due and payable without notice to the mortgagor and proceed at once to foreclose the mortgage. We have already, in another part of this opinion, set forth some of the evidence respecting the alleged abandonment of the mortgaged vehicles and their condition when repossessed. There was conflict concerning these matters and the question whether the provisions of the mortgage just referred to were violated was for the jury. 20, 21. The mortgage contained a covenant that the mortgagor would not, without the written consent of the mortgagee, remove said property from the state of Oregon. Such a provision in a chattel mortgage is held to be for the benefit of the mortgagee and may be waived by him. Globe Grain and M. Co. v. DeTweede N. & P. Hypotheekbank, 69 F2d 418 (9th Cir.1934); Hardwick Bank & Trust Co. v. McFarland, 43 F2d 807 (5th Cir.1930). See, generally, 56 Am Jur 106, Waiver § 5. The evidence in this case is such as to have authorized a jury to find a waiver of the condition by the defendants. 22. It is further urged that defendants are justified because the plaintiff violated a provision of the mortgage which required him to keep the property insured. The evidence shows that the plaintiff failed to have liability insurance as required by ORS 767.195. The stipulation in the mortgage does not cover that type of insurance but only, as therein stated, insurance of the mortgaged property against damage by fire, theft, collision and transportation, and wrongful conversion, and embezzlement   . Plaintiff's failure to have liability insurance did not constitute a breach of any covenant of the mortgage. 23. Next it is contended that the oral agreement extending the time of payment of the installment due July 10, 1959, was not valid or binding because there was no consideration for it, and that the mortgagee could lawfully exercise the right preserved in the mortgage to declare the whole sum of principal and interest due and payable without notice to the mortgagor and foreclose the mortgage by seizure and sale. We concur in the view that there was no consideration since Gowin himself testified that he was not bound to defer making the payment until expiration of the extended time. See 1 Williston on Contracts (3d ed) § 122. Nevertheless, we think that the court should not sanction a forfeiture for a default in the face of such an agreement, at least in the absence of a demand by the creditor. In Reinkey v. Findley Electric Co., 147 Minn 161, 163, 180 NW 236, the court said: There was no consideration for the extension. None was necessary. The defendant is seeking to enforce a forfeiture of the payments made and absolute title to the property sold. It cannot make nonpayment which it induced by an agreement to extend time, though the agreement is without consideration, a ground of forfeiture. The doctrine may be rested upon the ground of estoppel or of waiver. See, also, McCarron v. Com. Credit Trust, 167 Minn 322, 209 NW 15; National Cash Register Co. v. Richards, 159 Mich 128, 123 NW 587; Laird v. Byrd, 177 Ark 1114, 9 SW2d 571; Albert v. Grosvenor Investment Co., 3 LR 123, 127 (QB 1867); Staunton v. Smith, 6 Pa (22 Del) 193, 65 A 593; Paine v. Bank of Ceres, 59 Cal App 2d 242, 138 P2d 396; Carmichael v. Guenette, 61 Ga App 460, 6 SE2d 365; Calhoun v. Universal Credit Co., 106 Utah 166, 178, 146 P2d 284; Estrich, Instalment Sales 628, § 311. The case is not greatly different from Kaller v. Spady, 144 Or 206, 10 P2d 1119, 24 P2d 351, in which we held that the conduct of the mortgagees in a chattel mortgage inducing the mortgagor not to make payments of installments when tendered, the mortgagees stating that they did not need the money and to let the matter ride, estopped the mortgagees to avail themselves of the provision of the contract which permitted them to declare the entire balance due, when an installment had been omitted, without first making a demand and affording the plaintiff a reasonable opportunity to pay the two omitted installments. 144 Or at 219. 24. Finally, it is urged that the extension agreement was obtained by misrepresentation by the plaintiff of his financial condition. Evidence of the plaintiff's receipts from his trucking business during the month of July 1959 is relied upon, but there is no evidence as to his expenses and we cannot say that the alleged false representation was proven as a matter of law. 25. Defendants contend that the plaintiff failed to produce sufficient evidence of damages. Plaintiff testified that the value of the mortgaged vehicles at the time and place of conversion was $22,000, less a reasonable amount to be deducted for the cost of necessary repairs, leaving a net value of $18,770. The argument for the defendants is directed to the weight rather than the competency of the evidence, save in one particular. It is suggested that under the recent decision of this court in Highway Com. v. Assembly of God et al, 230 Or 167, 368 P2d 937, the plaintiff was not qualified to testify as to the value of the property. We said in that case that a rule permitting an owner so to testify simply because of the fact of ownership is of doubtful wisdom. We also said that we did not propose to disturb that rule, but were of the opinion that it should not be extended to cases where the owner is a corporation. In this case the plaintiff was not an owner of property which he had never seen and knew nothing about. He had bargained for and purchased the mortgaged equipment, used it in the business of hauling logs, bought new parts for it, had it repaired, and by reason of his experience may be assumed to have acquired a knowledge of the value of logging trucks and trailers. In addition, his testimony came in without objection. The jury fixed plaintiff's general damages on the second cause of action at $2,000, which, under the instructions of the court, would represent the reasonable market value of the mortgaged equipment, as found by the jury, less the amount owing by the plaintiff under the mortgage. See 89 CJS 643, Trover and Conversion § 164; Crutcher v. Scott Publishing Co., 42 Wash 2d 89, 102, 253 P2d 925; Goldberg v. List, 11 Cal2d 389, 393, 79 P2d 1087, 116 ALR 900. There was no error in submitting this question to the jury. The joint motions under consideration were properly denied. 26. The ground of the separate motions of the defendant Heider is that there is no evidence of his participation in the repossession of the mortgaged vehicles. For the reasons stated in our consideration of Baird's agency for Heider in commencing the criminal prosecution against Gowin, the court did not err in denying these motions.