People's Sav. Inst. v. Miles · 761

Court

Circuit Court of the United States for the District of South Dakota

Decided

Oct 5, 1896

Judge

CALDWELL, Circuit Judge

Posture

Judgment entered after jury trial in federal circuit court

Defendant/Plaintiff in errors (2)

People's Savings Institution of Erie County, PA.

S. H. Wright

Plaintiff/Defendant in error (1)

H. M. Miles

Other parties: Brule County — Intervener

Overview

The judgment of the circuit court upon the issues between Brule county, the intervener, and the People's Savings Institution, is affirmed; and the judgment in the main action, in which H. M. Miles, the defendant in error, was plaintiff and the People's Savings Institution, plaintiff in error, defendant, is reversed, and the cause remanded, with instructions to grant a new trial of the issues between these parties.

Case summary

This case involves a replevin action brought by H.M. Miles against People's Savings Institution to recover possession of artesian well machinery and drive pipe. Miles had mortgaged the machinery to secure a debt and executed a bill of sale for the drive pipe. After default on the mortgage, the defendant took possession. Brule County intervened, claiming ownership of the drive pipe. The jury found for Brule County on the drive pipe and for Miles on the other property. On appeal, the Eighth Circuit affirmed the judgment regarding Brule County's intervention and the drive pipe, but reversed the judgment regarding the mortgaged machinery. The court held that the mortgagee was entitled to possession after default under the mortgage terms and common law, and that South Dakota's chattel mortgage publicity act did not alter this right. The court also addressed evidentiary issues, jurisdiction over intervention, and procedural matters.

Abstract

Plaintiff brought a replevin action to recover possession of mortgaged artesian well machinery and drive pipe after defaulting on the mortgage, with the defendant mortgagee taking possession. County intervened claiming ownership of the drive pipe. Jury awarded drive pipe to intervener but machinery to plaintiff; appellate court affirmed intervener's judgment but reversed on machinery, holding mortgagee entitled to possession post-default under mortgage terms and common law, unaffected by chattel mortgage publicity act, and remanded for new trial.

Opinion of the court

Majority
opinionCALDWELL, Circuit Judgejoined by SAMBOES', Circuit Judge, THAYER, Circuit Judge

Federal court jurisdiction over intervention proper
Formal order for intervention not required after trial
Record insufficient to review refusal to direct verdict
Prior affidavits should have been admitted
Stranger may impeach bill of sale
Mortgagee entitled to possession after default despite state publicity act

Jurisdiction

not challenged

Subject matter

Diversity jurisdiction under federal law

Jurisdictional facts

Original action brought in state court by South Dakota citizen against Pennsylvania corporation
Removed to federal circuit court based on diverse citizenship
Intervention by Brule county did not affect jurisdiction as controversy between intervener and defendant also involved diverse citizenship

Procedural posture

Posture at trial

Judgment entered after jury trial in federal circuit court

Posture on appeal

Direct appeal via writ of error

Preserved issues

Admissibility of affidavits
Admissibility of testimony impeaching bill of sale
Refusal to give peremptory instruction
Refusal to give requested jury instruction on mortgagee's right to possession
Charge to jury on mortgage foreclosure requirements

Legal categories

BusinessEstate Planning and Real Estate

Case record

Full case name

PEOPLE’S SAV. INST. OF ERIE COUNTY, PA., v. MILES (BRULE COUNTY, Intervener)

Docket number

No. 761

Court

Circuit Court of Appeals, Eighth Circuit

Trial court

Circuit Court of the United States for the District of South Dakota

Trial court judge

Not specified

Decided

Oct 5, 1896

Opinion author

CALDWELL, Circuit Judge

Opinion type

published

Precedential status

precedential

Judges on panel

CALDWELL, Circuit JudgeSAMBOES', Circuit JudgeTHAYER, Circuit Judge

Issues & holdings

Issues raised

affirmed

reversed

Holdings

Whether federal circuit court had jurisdiction to entertain Brule County's petition of intervention

affirmed

Standard of review

de novo

Disposition rationale

Court had custody/control of property and could entertain intervention without regard to citizenship or amount in controversy; controversy between intervener and defendant involved diverse citizenship

Preservation

Issue preserved for review

Whether petition of intervention sufficiently alleged intervener's ownership of drive pipe

affirmed

Standard of review

de novo

Disposition rationale

Petition sufficiently alleged ownership and right to possession

Preservation

Issue preserved for review

Whether lack of formal order granting leave to intervene was fatal after trial of intervention issues

affirmed

Standard of review

de novo

Disposition rationale

Objection to lack of formal order not entertained after issues tried

Preservation

Issue preserved for review

Whether trial court erred in refusing to give peremptory instruction to return verdict for defendant

affirmed

Standard of review

abuse of discretion

Disposition rationale

Record contained only 'substance' of testimony, not all testimony, so appellate court could not review sufficiency

Preservation

Issue preserved for review

Whether trial court erred in excluding affidavits made by Miles in prior action

reversed

Standard of review

abuse of discretion

Disposition rationale

Affidavits should have been admitted for jury to determine if inconsistent with Miles's testimony or claim

Preservation

Issue preserved for review

Whether trial court erred in admitting Miles's testimony that he told defendant's agent drive pipe belonged to county

affirmed

Standard of review

abuse of discretion

Disposition rationale

County as stranger to bill of sale could impeach it with competent testimony, including from Miles

Preservation

Issue preserved for review

Whether trial court erred in refusing defendant's requested instruction and giving erroneous charge on mortgagee's right to possession after default

reversed

Standard of review

de novo

Disposition rationale

Mortgagee entitled to possession after default under mortgage terms and common law; South Dakota publicity act did not alter this right

Preservation

Issue preserved for review

Holdings of the court

Federal court jurisdiction over intervention

Federal circuit court with custody/control of property may entertain intervention without regard to citizenship in main action or amount in controversy

Court's possession/control of fund/property gives jurisdiction; controversy between intervener and defendant involved diverse citizenship sufficient for original action

unanimousbinding precedent

Formal order for intervention

After petition filed and issues tried, objection to lack of formal order granting leave to intervene will not be entertained

Substantive trial of issues renders formal order requirement moot

unanimousbinding precedent

Review of refusal to direct verdict

Appellate court cannot consider assignment of error based on refusal to direct verdict unless record affirmatively contains all testimony

Record contained only 'substance' of testimony, insufficient for review of evidentiary sufficiency

unanimousbinding precedent

Admissibility of prior affidavits

Affidavits made by party in prior action touching same subject matter are admissible for impeachment or as admissions

Should be admitted for jury to determine inconsistency with current testimony or claim

unanimousbinding precedent

Impeachment of bill of sale by stranger

Stranger to bill of sale may impeach its validity in court of law when rights are affected

County not party to bill of sale could show by competent testimony that it did not invest defendant with title and defendant knew this

unanimousbinding precedent

Mortgagee's right to possession after default

South Dakota 'act to give publicity to chattel mortgage sales' does not affect mortgagee's right of possession after condition broken

Act's purpose is publicity of sales, not alteration of mortgagee's contractual or common law right to possession; mortgagee holds property as pledge until debt satisfied

unanimousbinding precedent

Mortgagee's possession after default

Mortgagee in possession of mortgaged chattels after breach of condition cannot be deprived of possession until mortgage debt is satisfied

Under modern rule, mortgagee holds as pledgee; failure to sell per statute does not make possession wrongful

unanimousbinding precedent

Error analysis

Trial court excluded affidavits from prior action — evidentiary · error foundNot analyzed as error required reversal · not harmless
Trial court refused defendant's requested jury instruction and gave erroneous charge on mortgagee's right to possession — jury instruction · error foundError affected substantial rights regarding central issue of possession · not harmless
Trial court admitted Miles's testimony impeaching bill of sale — evidentiary · no error found

Statutory interpretation

Statute

Section 4889 of Compiled Laws of South Dakota

Question

Whether it authorized intervention in federal court

Court's reading

Supported intervention without regard to citizenship or amount in controversy

Statute

South Dakota 'An act to give publicity to chattel mortgage sales'

Question

Whether it affected mortgagee's right to possession after default

Court's reading

Act only provides publicity for sales, does not alter mortgagee's right to possession under contract or common law

Canons applied

Plain meaning from titleExpressio unius est exclusio alterius

Burden of proof

Prosecution burden

Not applicable (civil case)

Defence burden

Not specified

Standards of review

Jurisdiction and legal issues — de novo
Evidentiary rulings and jury instructions — abuse of discretion

Timeline

Events

608

Days, incident to ruling

Aug 3, 1893 — Apr 3, 1895

Span

Aug 3, 1893factual eventcited in opinion

H.M. Miles executed chattel mortgage to People's Savings Institution on artesian well machinery, engines, boilers to secure $8,130.65 debt

Created security interest that formed basis of defendant's claim to possession

H.M. Miles · People's Savings Institution

May 1, 1894factual eventcited in opinion

Mortgage debt matured and remained unpaid except for $2,000 payment

Default triggered mortgagee's right to possession under mortgage terms

H.M. Miles · People's Savings Institution

Jan 1, 1895trial eventcited in opinion

Jury trial of issues between Miles and defendant and between Brule County and defendant

Outcome: Verdict for Brule County on drive pipe, for Miles on other property

Resulting judgment was appealed

H.M. Miles · People's Savings Institution · Brule County · Jury trial court

Jan 20, 1895factual eventcited in opinion

Defendant took possession of mortgaged property

Peaceable acquisition of possession that was central to replevin action

People's Savings Institution

Apr 3, 1895procedural eventcited in opinion

Brule County filed petition of intervention claiming ownership of drive pipe

Outcome: Petition filed

Raised jurisdictional and substantive issues about intervention in federal court

Brule County trial court

Facts & evidence

Incident

Location

Brule County, South Dakota

Key facts

6 facts

H.M. Miles executed chattel mortgage to People's Savings Institution on artesian well machinery, engines, boilers to secure $8,130.65 debt
Mortgage debt matured May 1, 1894 and remained unpaid except for $2,000 payment
Defendant took possession of mortgaged property around January 20, 1895
Miles also executed bill of sale for 2,800 feet of drive pipe to defendant
Brule County claimed ownership of drive pipe through intervention
Miles brought replevin action to recover possession of all property

Disputed questions

Whether Miles verbally consented to defendant taking possession of mortgaged property
Ownership of drive pipe (disputed between defendant and Brule County)

Procedural history

6 steps

Action originally filed in Brule County, South Dakota circuit court
Removed to U.S. Circuit Court for District of South Dakota
Brule County filed petition of intervention April 3, 1895
Issues tried to jury by consent
Verdict for Brule County on drive pipe, for Miles on other property
Defendant appealed via writ of error

Evidence in the record

Direct

Bill of sale for drive pipe
Chattel mortgage document

Testimonial

Miles's testimony supporting his claim
Miles's testimony that he told defendant's agent drive pipe belonged to county
Conflict in testimony about verbal agreement for possession

Documentary

Affidavits made by Miles in prior Winter action
Chattel mortgage with possession clause

Challenged

Evidence type: Affidavits from prior action · Challenge basis: Relevance and purpose unclear · Trial court ruling: excluded · Reasoning: Unclear whether offered for impeachment or as admission · Challenged on appeal: true · Appellate outcome: reversed
Evidence type: Miles's testimony about telling agent drive pipe belonged to county · Challenge basis: Witness impeaching his own bill of sale; court lacking jurisdiction to inquire into bona fides · Trial court ruling: admitted · Reasoning: County as stranger could impeach bill of sale · Challenged on appeal: true · Appellate outcome: affirmed

Jury

Verdict

For Brule County on drive pipe; for Miles on other property

Jury instructions given

Court's charge on mortgage foreclosure requirements under South Dakota statute

Jury instructions requested

Defendant's requested instruction that mortgagee entitled to verdict for return of mortgaged property

Jury instructions challenged

[object Object]
[object Object]

Objects of relevance

Artesian well machinery, engines, boilers (mortgaged property)2,800 feet of drive pipe (disputed property)Chattel mortgage document

Policy considerations

Promotion of federal court efficiency in handling interventions
Protection of mortgagee's contractual rights
Balance between statutory regulation and common law property rights

Authorities

Cited authorities (5)

Railroad Co. v. Washington, 4 U. S. App. 121, 1 C. C. A. 286, 49 Fed. 347

followedprecedent

Cited for proposition that appellate court cannot review refusal to direct verdict without complete record

Pyeatt v. Powell, 10 U. S. App. 200, 2 C. C. A. 367, and 51 Fed. 551

citedprecedent

Cited for ancient rule that absolute title vests in mortgagee upon breach of condition

Woodside v. Adams, 40 N. J. Law, 417, 427

followedprecedent

Cited for modern rule that mortgagee has legal title for enforcement but mortgagor retains interest until foreclosure

Bradley v. Redmond, 42 Iowa, 452

followedprecedent

Cited for principle that mortgagee's failure to sell does not make possession wrongful

Purdin v. Archer, 4 S. D. 54, 54 N. W. 1043

followedprecedent

Cited for same principle as Bradley v. Redmond regarding mortgagee's possession

Related cases (7)

Railroad Co. v. Washington, 4 U. S. App. 121, 1 C. C. A. 286, 49 Fed. 347

prior appeal

Cited for proposition that appellate court cannot review refusal to direct verdict without complete record

Railway Co. v. Harris, 27 U. S. App. 450, 457, 12 C. C. A. 598, 63 Fed. 800

prior appeal

Cited for same proposition as Railroad Co. v. Washington

Railway Co. v. Shelton, 57 Ark. 459, 21 S. W. 876

prior appeal

Cited for same proposition as Railroad Co. v. Washington

Pyeatt v. Powell, 10 U. S. App. 200, 2 C. C. A. 367, and 51 Fed. 551

prior appeal

Cited for ancient rule that absolute title vests in mortgagee upon breach of condition

Woodside v. Adams, 40 N. J. Law, 417, 427

prior appeal

Cited for modern rule that mortgagee has legal title for enforcement but mortgagor retains interest until foreclosure

Bradley v. Redmond, 42 Iowa, 452

prior appeal

Cited for principle that mortgagee's failure to sell does not make possession wrongful

Purdin v. Archer, 4 S. D. 54, 54 N. W. 1043

prior appeal

Cited for same principle as Bradley v. Redmond

Statutes

Section 4889 of Compiled Laws of South Dakota (intervention)
South Dakota 'An act to give publicity to chattel mortgage sales'

Standards & doctrines

De novo review for legal issues
Abuse of discretion for evidentiary rulings
Modern chattel mortgage rule treating possession as pledge

Legal principles applied

Mortgagee holds mortgaged chattels as pledge until debt satisfied after default
Appellate court cannot review refusal to direct verdict without complete trial record
Substantive trial of intervention issues renders lack of formal order moot

Notable quotes

“The court having the possession or control of the fund or property it had jurisdiction to entertain the petition of intervention and try the issues thereon, without regard to the citizenship of the parties in the main action, or to the amount in controversy under the petition of intervention.”

majority — Discussion of federal jurisdiction over intervention

Establishes broad jurisdiction for interventions when court controls property

“We have several times held that we cannot consider an assignment of error based on the refusal of the court to give a peremptory instruction to the jury to return a verdict for the defendant upon the ground that the testimony is not sufficient to warrant any other verdict where the record contains only the 'substance' of the testimony.”

majority — Review of refusal to direct verdict

Sets procedural requirement for appellate review of evidentiary sufficiency

“Under the modern rule a mortgagee in possession of the mortgaged chattels after breach of condition holds them in the nature of a pledge for the payment of the mortgage debt, and he cannot be deprived of the possession of them until the mortgage debt is satisfied.”

majority — Analysis of mortgagee's right to possession

Clarifies modern chattel mortgage law regarding possession after default

Index terms72

Summary terms

Legal mechanisms

Various actions

Various actors

Legal concepts

Legal outcomes

Legal issues

Legal procedures

Legal remedies

Legal evidence

Legal arguments

Legal defenses

Legal penalties

Legal procedural steps

Geo locations

Judges

Attorneys

Procedural terms

Substantive offenses

Entities and documentation

Legal actions

Action type

affirmed

Target

judgment on issues between Brule County and defendant

Appealed from

Circuit Court of the United States for the District of South Dakota

Context

Affirmed judgment for Brule County on drive pipe ownership

Scope

full

Action type

reversed and remanded

Target

judgment in main action between Miles and defendant

Appealed from

Circuit Court of the United States for the District of South Dakota

Context

Reversed judgment for Miles on mortgaged machinery and remanded for new trial due to erroneous jury instructions on mortgagee's right to possession

Scope

full

Further instructions

Grant a new trial of the issues between these parties

Search facets

Parties

Courts

Locations

Statutes cited