Winakur v. Sapourn

Offutt, J., delivered the opinion of the Court. This is an appeal from a judgment on a verdict for the defendant, in an action of replevin for a used automobile brought by Eleazer Winakur, the appellant, against Mildred G. Sapoum, the appellee, in the Baltimore City Court. There is in the record evidence tending to show facts which may be thus stated: Eleazer Winakur is a money lender operating in Baltimore City. Louis Sachs, trading as the “Sachs Auto Exchange” was a “dealer,” trading in automobiles', also in Baltimore City, where he maintained a fixed place of business.

Some time prior to March 18th, 1927, Mildred G. Sapoum bought a used WillysGLnight automobile from Sachs. It proved unsatisfactory, and Sachs agreed to take it back in part payment-for a Peerless sedan, which he agreed to sell her for fifty dollars -more than she had paid for the first car, and he took from her two notes, each for twenty-five dollars, covering the difference in the price of the two cars. Sachs had bought and paid for the sedan with his “own money,” but as soon as he secured the title to it he executed to Winakur a bill of sale on it and other cars in the following form: “Por and in consideration of the sum of twelve hundred fifty 00/100 dollars, the receipt whereof is hereby acknowledged, Louis Sachs, trading as Sachs Auto Exchange, of the City of Baltimore, in the State of Maryland, doth hereby bargain, and sell, assign and transfer under Eleazer Winakur of said City and State, all the following chattels, all contained and being in the premises ETo. 1112 Cathedral Street, in the said City, namely; * * * Peerless Sedan Eng. E"o. 8Y1940, Ser.

Eo. 352092, Md. Title Eb. 804450 — 700. “And the said assignor doth warrant that the same are free of all liens, claims and encumbrances, and ⁶⁶⁵ agrees to warrant the same generally of and from all claims and demands of all persons whomsoever. “Witness the hand and seal of said assignor, this 18th day of March, 1927.” That instrument was properly signed, sealed, and acknowledged by Sachs, contained an affidavit by Winakur as. to the bona fides of the consideration, and, on March 21st, 1927, was recorded among the Chattel Records of Baltimore City. On the same day, Winakur and Sachs, executed the following agreement, which they referred to as a “consignment agreement,” and which, covered the .sedan sold to Mrs. Sapoum: “This memorandum of consignment, between Eleazer Winakur of tbe one part, and Louis Sachs, trading as Sachs Anto Exchange, of the other part, both of the City of Baltimore in the State of Maryland. “Witnesseth, that the said Eleazer Winakur has left and doth hereby leave in the possession of said Sachs, at the premises XTo. 505 and 507 BTorth Howard Street, in said City, the City, the following chattels namely (cost value for purposes of this memorandum) : (Description of chattels.) “And it is agreed, that said Sachs shall be permitted to hold said chattels, and to sell them in the usual course of business and within 90 days from the day of the date hereof either redeliver the same to the consignor or to pay to Eleazer Winakur out of the proceeds of sale the cost value for the purposes of this memorandum as shown in this memorandum, and also to pay him monthly 3Yj per cent, per month thereon from the date of this memorandum, and the balance of the proceeds of sale to be retained by said Sachs, the said Eleazer Winakur to receive said money payable to him. absolutely net to him, and all costs and expenses whatsoever, to he borne by said Sachs, and nothing herein contained to in any manner infer any partnership between tbe parties hereto, the relation being distinctly tbat of consignor and consignee, set ⁶⁶⁶ tlement as above to be made immediately upon sale of said chattels. “And the said Eleazer Winakur reserves the right at any time without notice to take possession of said chattels and terminate said consignment. “And the consignee to keep insured against loss by • fire, at his own expense, all of said chattels and the said chattels to be generally at the risk of the consignee until and unless actually delivered to the consignor. “Said chattels shall not be removed from said premises without the consent in writing of the consignor.” Sachsi also delivered to Winakur a certificate of title isr sued to him by the motor vehicle commissionerfor the sedan, endorsed by him in blank. When he sold the automobile to Mrs. Sapourn, tbe title to it stood on tbe books) of the motor vehicle commissioner in the name of Sachs^ but tbe certificate was in the possession of Winakur. Sachs could not get the certificate from Winakur without repaying him the money which he had loaned on the ear, 'and he could not transfer the title to it to' Mrs. Sapourn unless he produced the original certificate, or accounted for its loss.

He did not want to pay Winakur, but he did want the money which had been •paid for tbe Peerless car by Mrs. Sapourn, and he could not keep that money without giving her a title to- the car. In that situation he went to the commissioner of motor vehicles .and represented to him that the original certificate had been lost, and by that false representation procured a duplicate, which he transferred to Mrs. Sapourn. The record does not indicate that Winakur knew anything of the negotiations between Sacks and Mrs. Sapourn for tbe .sale of tbe Peerless car until after it bad been sold and delivered to her, but, shortly after he did learn of it, he brought this action of replevin for its recovery. The appellee appeared to the action and pleaded (1) non cepit, (2) that the plaintiff had no property in the goods replevined, and (3) that the property therein was in the defendant.

The plaintiff joined issue on the first plea, and •traversed the second and third. The defendant then joined ⁶⁶⁷ issue on the traverse as to each plea, and the case was tried on those issues. The record presents sixteen exceptions. The sixteenth embodies appellant’s objection to the court’s rulings on the prayers as well as to its refusal to strike out certain evidence.

The others relate to rulings upon questions of evidence. Since all of these exceptions involve the conflicting theories of the parties to this appeal as to the plaintiff’s right to recover, before dealing with the exceptions we will state those contentions: Appellant’s contention appears to he that, by virtue of the recorded bill of sale, Winakur at the time of the sale was the technical legal owner of the automobile sold to Mrs. Sapourn,, that she had constructive notice of that fact, that Sachs had no title to it which he could convey to her, and that consequently, as against Winakur, she took no title to it from or through Sachs, and that these conclusions are not affected by the “consignment” agreement. Appellee, on the other hand, contends that the bill of sale was not intended to effect an outright sale of the property, hut was designed to transfer the ownership in it to secure the repayment of a debt, that the consignment agreement operated as a defeasance, and that, since it was not recorded, the recordation of the hill of sale did not, under Code, art. 21, sec. 55, art. 66, sec. 1, afford constructive notice of Winakur’s interest in the property; and that since Winakur, by suffering Sachs to be in possession of apparently valid indicia and muniments of title, made it possible for him to mislead the purchaser into believing that he was duly authorized to sell it, that he should hear such loss as resulted from the transaction. So that the actual issues of fact arising from these contentions, are: (1) Was the transaction under which Sachs transferred to Winakur title to the chattel a loan, or an outright sale ?

(2) If it was a loan, did the “consignment” agreement operate as a defeasance? (3) Had Sachs under the agreement actual authority as Winakur’s agent to sell the car ? And, (4) if he had not, -was Winakur by his conduct estopped from asserting that fact ? ⁶⁶⁸ With these contentions and issues in mind we will return to the exceptions. Irving .Sachs, manager of the Sachs Auto Exchange, was called as a witness by the defendant.

In the course of his examination, in describing the course of business of the Sachs Auto Exchange, he had said that “money was borrowed” with which to buy cars, and he was then asked, “Erom whom did you borrow the money? ” That question was objected to on the ground that whether the “money” was in fact “borrowed” was a question of law. The objection was overruled, and the witness answered “Mr. Winakur.” He was then asked “Just tell us how you got the money from the different people,” and he answered: “Well, in this particular case I bought this Peerless automobile I think I paid seven hundred dollars for it, and I issued a check of the Sachs Auto Company payable to the man I bought the car from. The man I bought the car from assigned the title to the Sachs Auto Company, and I then pledged the car to Mr. Winakur.” Plaintiff then moved to strike out the word “pledged” from the answer. That motion was overruled, and those rulings are the subject of exceptions one and two.

The apparent purpose of the examiner in asking these questions was to show the general course of business of the witness, to show that he had been accustomed to buy cars on borrowed money and pledge them for the loan, on the theory that, if he had pursued that course in other cases, it was more likely that he had followed it in this case. And while the objection to these two questions was based on the proposition that the witness, in using the words “borrow” and “pledge,” stated conclusions of law and not facts, and did not necessarily raise the question of the relevancy of the evidence, it was raised in subsequent exceptions, and may be considered at this time. The exceptions pertaining to that general purpose fall into two groups, one, where the questions were designed to show that in many transactions, similar to that under consideration, Winakur had in fact loaned money to Sachs with which to purchase automobiles, and that in such instances Sachs had pledged them to ⁶⁶⁹ Winakur as security for the repayment of the loan. If, in fact, in suck cases, the form of the transactions was substantially identical with that followed in this case, and each was merely one of a connected series of transactions which were uniformly regarded both by Winakur and Sachs as a pledge of a chattel to secure the repayment of a loan, such a course of business would throw some light on the intention of the parties in respect to the instant transaction, and would be relevant and admissible.

Jones on Evidence, secs. 130, 140, 145. The other group embraces questions intended to show dealings and transactions between Sachs and persons other than the appellant. Such testimony was clearly irrelevant and should not have been admitted, for it had no possible connection with or relation to any issue in the case. Jones on Evidence, sec. 140.

The fact that Sachs had on occasions borrowed money from one person certainly did not prove that on some other occasion he had borrowed money from another person, when such persons had no connection or relation with each other, nor did it prove that Sachs and Winakur intended the bill of sale under consideration to operate as a chattel mortgage. Returning to the first and second exceptions, we find no force in the verbal criticism of the questions and answers involved in them. Por reasons to be presently stated, the true character of the transaction between Winakur and Sachs was open to inquiry in this case, and, when Sachs said that he borrowed the money specified in the bill of sale from Winakur, he was not stating a conclusion of law, but what he alleged to be a fact; nor was the question objectionable on the ground of relevancy. It was one of a series of questions relating to the course of business between Winakur and Sachs in a number of transactions similar in form and substance to that in issue here, which, together, were parts of a general scheme or plan, and which shed some light on the intention of the parties as to the transaction in issue here, and we find no error in the ruling involved in the first exception. ⁶⁷⁰ Por reasons already stated, the answer which is the subject of the second exception was irrelevant, but as the motion to strike it out did not reach that objection, that ruling was also free from error, because in using the word “pledged” the witness was merely stating what he contended to be a fact.

The third, fourth, sixth, seventh, eighth and ninth exceptions present objections to the admission of testimony concerning transactions between Sachs and persons other than Winakur, unrelated to any issue in this case, and with which Winakur had no connection. Por reasons already stated, this testimony was irrelevant and should not have been admitted, and there was error in these rulings. The fifth, tenth, eleventh, twelfth, thirteenth and fourteenth exceptions related either to questions referring to transactions between Winakur and Sachs concerning cars other! than thait under consideration here, but which were nevertheless similar to the transaction involved in this case, and were parts of an alleged general plan or scheme, or to questions relating to this particular transaction. Without referring to them seriatim, it is sufficient to say that, for reasons stated above, we find no error in the rulings as to them.

At the close of the whole case, the appellant moved to strike out “all testimony in the case admitted subject to exception, tending to prove that the car replevined in this case was pledged with the plaintiff merely for the purpose of a loan for indebtedness of Louis Sachs.” The motion was overruled, and that ruling was the subject of the fifteenth exception. A similar motion is embodied in the sixteenth exception, which also presents appellant’s objections to the court’s rulings on the prayers. Whilst it is improperly included in that exception (Harris v. Hipsley, 122 Md. 436 ; Lockerman, Garnishee v. Eastern Shore Trust Co., 146 Md. 347 ), and will not be considered in connection with it, it nevertheless, as presented by the fifteenth exception, raises the principal question in the case, which runs through all of the rulings ⁶⁷¹ on the prayers, and it will therefore he considered in connection with them. The appellant (plaintiff helow) offered seven prayers, of which the fifth and seventh were modified and granted as modified in connection with the defendant’s second and seventh prayers, the sixth was granted as offered, and the others refused.

The defendant offered eight prayers, of which the second was modified and granted in connection with plaintiff’s fifth modified prayer, and the seventh was modified and granted, and the others refused. The plaintiff excepted specially to the second, third, fourth, fifth, sixth, seventh and eighth prayers of the defendant, on the ground that there was no evidence in the case legally sufficient to support the hypothesis of said prayers, and the defendant specially excepted to the plaintiff’s first, second and fifth prayers. For reasons which will he stated in dealing with the general exceptions to the court’s rulings on the prayers, there was no error in overruling plaintiff’s special exceptions, and the defendant’s exceptions were too general to present an issue, and were also properly overruled. Hatton v. McClish, 6 Md. 417 .

As staled above, appellant’s contention is that the bill of sale vested the legal title to the chattel in Winakur, that its recordation charged Mrs. Sapourn with notice of its existence, that the consignment of the chattel to Sachs gave him no right to soil it, that nil evidence of any agreement to the contrary, and all evidence of transactions between Sachs and Mrs. Sapourn, was irrelevant and inadmissible. But these views, while very earnestly and forcibly pressed upon this court, have in our judgment no substantial support either in reason or precedent, and must he rejected. The mere fact that the bill of sale was absolute in form and purported to transfer the complete ownership of the chattel to Winakur did not exclude an inquiry into its real character, if, in fact, it was intended only as a pledge to secure the repayment of a debt (Booth v. Robinson, 55 Md. 450 ; Laeber v. Langhor, 45 Md. 481 ; Grove v. Rentch, 26 ⁶⁷² Md. 379), and that it was so intended may be shown by parol evidence. Booth v. Robinson, supra.

The recordation of snch an instrument in compliance with the recordation statutes affords constructive notice of its contents to all persons who may be affected by it (Finance & Guaranty Co. v. Defiance Motor Truck Co. 145 Md. 94 ), unless its effect is limited, by some other instrument intended as a defeasance which is not recorded, in which case the person for whose benefit it was made takes no benefit from the recording thereof, and such record does not give constructive notice of its contents to a subsequent bona fide purchaser. Owens v. Miller, 29 Md. 159 ; Code, art. 66, sec. 1. That the consignment agreement in this case was intended as a defeasance, as that word is used in the statute, is beyond question, when it is considered in connection with the testimony of Winakur and Sachs. Winakur testified in part as follows: “Did you ever finance a man named Louis Sachs who traded as