Phillips v. Drake Motor Co. , 68 Ga. App. 618 ( 1942 )

1. If an agent who resides in a county different from his principal is in actual possession of personalty which has been illegally converted, a trover action brought against both the principal and the agent is maintainable in the county of the residence of the agent.

2. If, on the trial of such an action as is above stated, it should develop that the principal illegally converted the property and stored it with such agent, if entitled to recover at all the plaintiff would be entitled to recover against the principal and the agent.

3. Consequently, in such an action, it is erroneous for the court to direct a verdict in favor of the agent on the theory that he was in possession only as custodian or storer for the principal, and then subsequently to dismiss the action against the principal on the theory that, since the case had thus failed as to the agent, the court was without jurisdiction of the principal, it being a non-resident. But where, as here, the evidence failed to show a conversion against either the principal or the agent, both would be entitled to a verdict in their favor, and the plaintiff is not in a position to complain.

DECIDED DECEMBER 4, 1942. REHEARING DENIED DECEMBER 17, 1942. J. A. Phillips, the plaintiff, purchased an automobile from Drake Motor Company of Carroll County, Georgia, executing therefor a retention-title contract stipulating monthly payments of $32.76 per month. The provisions of the contract align it with that class of retention-title contracts of sale upon deferred payments as one that does not provide for the accelerating of the maturity of the installments to be at the creditor's option, but the provisions of the contract are to the effect that a default, ipso facto, without any option on the part of the creditor, renders the indebtedness due. (See authority cited in division 3 of this opinion.) Other provisions of the contract stipulate that a default should occur, (a) if the monthly installments were not paid in full when due; (b) if the purchaser used the automobile as a "taxi;" (c) if it became impossible for the parties to the contract to obtain insurance.

The day after the contract was executed the seller transferred it without recourse to Motor Contract Company, a resident of Floyd County. The first deferred payment was made by the plaintiff to the agent of Drake Motor Company, who in turn forwarded the same to Motor Contract Company. The next payment was not made on the due date, June 13, 1940. A partial payment of $20 was made on June 17, 1940. On May 28, 1940, Motor Contract Company notified the plaintiff that the insurance had been canceled. On June 29, 1940, Mr. Dorsey, a representative of Motor Contract Company, went to Carrollton to see the plaintiff with reference to the transaction. Upon arrival he located the plaintiff on the streets, and invited him to go to the Drake Motor Company. This the plaintiff did. The evidence was in conflict as to what then occurred between the two, the plaintiff and the agent of Motor Contract Company. The plaintiff contends, by his testimony, that he tendered the balance of the past-due payment, $12.76, to Dorsey and that Dorsey refused the same. Plaintiff stated that at the time he paid the $20 the agent of Drake Motor Company allowed plaintiff to defer the balance of the payment, $12.76, for a week. Plaintiff testified that when he drove his car to the Drake Motor Company and alighted therefrom Dorsey reached in, obtained the switch key, and took possession of the car, without plaintiff's consent. Dorsey testified that plaintiff did not offer him the $12.76, but that when he informed plaintiff that Motor Contract Company would have to repossess the automobile on account of the default the plaintiff voluntarily delivered to Dorsey the possession of the automobile, which, according to an agreement between them, was to be stored with Drake Motor Company for five days, during which time, the plaintiff stated, he could refinance the automobile and pay Motor Contract Company the balance due. Accordingly, the automobile was stored with Drake Motor Company, and storage receipt (which appears in evidence) was issued by the Drake Motor Company to Motor Contract Company.

It further appears from the record that before the expiration of the five days the plaintiff instituted a bail-trover action in Carroll County against Drake Motor Company as a resident thereof and Motor Contract Company, a resident of Floyd County, Georgia. The defendants gave a replevy bond, and filed no demurrer or special plea at the appearance term, September 8, 1941, but filed an answer, pleading to the merits, denying the allegations of the petition, and further alleging the conditional-sale contract and transfer thereof as hereinbefore stated. The trial resulted in a verdict for the plaintiff. On motion, a new trial was granted. The case was again tried at the March term, 1942. The facts hereinbefore set forth were developed at the latter trial. During the trial, after the evidence for both sides was closed, both parties made a motion for a directed verdict. The judge made the following rulings: (1) He directed a verdict in favor of Drake Motor Company on the ground that the evidence failed to show that Drake Motor Company had any interest in the automobile in question but had the actual possession of it only as an agent for Motor Contract Company. (2) He sustained a motion, termed a general demurrer, on the ground that since the suit had failed as to Drake Motor Company, the resident defendant, it could not be further prosecuted against the non-resident defendant, Motor Contract Company. The plaintiff filed a motion for new trial which was overruled and he excepted. 1. The evidence undisputedly proves that at the time the suit was instituted Drake Motor Company was in actual possession of the automobile as agent for Motor Contract Company, the principal. The court erred in directing a verdict against Drake Motor Company on the ground that it was acting only as an agent for Motor Contract Company. If the conversion of the automobile was illegal as to the principal, it was likewise illegal as to its agent. Trover may be maintained against an agent. Godwin v.Mitchell, 60 Ga. App. 713 (3) (4 S.E.2d 678); Kelley v.Sheehan, 61 Ga. App. 714 (3) (7 S.E.2d 298), and cit. But since the evidence did not show a conversion of the property either as against the principal or the agent, as will be hereinafter discussed, the court did not err in directing the verdict against Drake Motor Company.

2. Under the facts of this case the court obtained jurisdiction of Motor Contract Company, since it appeared and answered without contesting the jurisdiction. The court had jurisdiction of the subject-matter. Bryan v. SouthwesternRailroad Co., 41 Ga. 71; Southern Express Co. v. B. R.Electric Co., 126 Ga. 472 (55 S.E. 254); Berry v.Watkins, 158 Ga. 304 (123 S.E. 102); Waters v. Waters,167 Ga. 389 (6) (145 S.E. 460); Code, § 81-503. This case is different from Warren v. Rushing, 144 Ga. 612 (87 S.E. 775), in that in the instant case the court, by answer of the defendant, obtained jurisdiction of Motor Contract Company and the res, or in lieu thereof a replevy bond. Moreover, the evidence showed that if the plaintiff was entitled to recover at all, he would have the right to recover against Drake Motor Company, the agent of Motor Contract Company, as well as the principal.

3. However, under the facts as revealed by the pleadings and the evidence, the plaintiff was not entitled to prevail. Where the evidence developed that a default had been occasioned by any of the stipulations under the contract, as we construe it, the balance of the purchase price automatically was accelerated and became due. The contract so provided. See Tiedeman Mortgage Finance Co. v. Carlson, 41 Ga. App. 406 (152 S.E. 909). The undisputed evidence showed that no part of the June payment was made before June 17, 1940, and only a portion of the payment was made then. It is true that the plaintiff testified that an agent of the Drake Motor Company agreed to extend the balance of his payment for a specific time, but at the time this agreement was made the contract was already in default. If it be conceded that Drake Motor Company had the authority to make an extension for the Motor Contract Company, the evidence does not show any consideration for this extension, and in the absence of fraud it avails the plaintiff nothing. See Tallant v. Scarratt,51 Ga. App. 577 (181 S.E. 141). The contract provided that the automobile in question was not to be used for hauling passengers. The plaintiff admitted that he was using it for that purpose. He sought to excuse himself on the ground that Drake Motor Company knew he was so using it. There was no evidence to show that in this respect knowledge to Drake Motor Company would estop Motor Contract Company, an innocent purchaser, for value, before maturity. So it would seem that at the time the defendants as principal and agent obtained possession of the automobile the balance had become due under the terms of the contract, regardless of the controversial question as to the cancellation of the insurance.

The facts of this case are different from those in C. I. T.Corporation v. Carter, 61 Ga. App. 479 (6 S.E.2d 409). In that case the court held in effect that if the plaintiff desired to rescind the contract it was bound, before or at the time of such rescission, to return the contract to the purchaser. The court said: "The evidence in this case was sufficient to warrant a finding by the jury that the defendant was claiming not only payment of the March installment, which the plaintiff was tendering to it, but also that it was seizing the car because the plaintiff did not procure instanter another policy of insurance on the car, although the plaintiff then had with it sufficient funds and credit to pay for the required insurance on the car." Such are not the facts or the only facts in the instant case. It was not the intention of the court in C. I. T. Corporation v.Carter, supra, to hold that a seller may not obtain possession of property after a default has been made and dispose of it in accordance with the provisions of the contract and apply the proceeds to the extinguishment of the debt. The effect of the holding of the court in that case was that the evidence showed, under the particular facts of that case, that no default had occurred. The facts in the case at bar are more nearly similar to those in Hargett v. Muscogee Bank, 32 Ga. App. 701 (124 S.E. 541). Hence it is that the defendant's possession of the automobile under the evidence and under the terms of the contract, does not amount to a rescission but should be treated as a lawful possession for the purpose of making disposition of the automobile to extinguish the purchase price therefor in accordance with the terms of the contract.

From what has been said it follows that the court should have directed a verdict for both defendants, but we see no reason for directing that this be done, as it would not ensure to the benefit of any one, or harm any one to adhere to the judgments which the court rendered.

Judgment affirmed. Broyles, C. J., and MacIntyre, J., concur.