Kelly v. Lang

Decision Date18 August 1953
Docket NumberNo. 7366,7366
PartiesKELLY v. LANG et al.
CourtNorth Dakota Supreme Court

Syllabus by the Court.

1. A marketing agency licensed under the Federal Packers and Stockyards Act, 7 U.S.C.A. Secs. 181-229, who receives property from a consignor and sells it under his instructions and pays him the proceeds is guilty of conversion if the consignor had no right to sell the property even though it had no actual knowledge of the consignor's defective title.

2. The Federal Packers & Stockyards Act was not intended to disturb or supersede state laws respecting valid chattel mortgages on livestock delivered to a marketing agency at the stockyards operating in conformity to the Federal Packers & Stockyards Act. The record of chattel mortgages properly filed constitutes a valid constructive notice to a marketing agency acting under the act.

3. Property held in common cannot be divided by one co-owner without the consent of the other co-owner unless the property is of a nature and quality so it can be divided by count, measurement or weight. Ordinarily spring lambs are not property of that kind and cannot be divided by one co-owner by count without the consent of the other co-owner.

4. The damages suffered by a mortgagee on account of the sale of some of the property on which he holds a mortgage are fully mitigated when the evidence shows that he could recover the full amount of his mortgage out of the remaining mortgaged property.

5. The evidence in the instant case is examined and it is found, for reasons stated in the opinion, that there is no evidence to show that Mrs. Longie, the Weiller & Weiller Company's consignor, was an agent of the plaintiff or authorized by him to sell in her own name the property involved in this action and further that the evidence does not show that there was any ratification of the sale by the plaintiff or that his action created any waiver or estoppel on the part of the plaintiff.

Wattam, Vogel, Vogel, Bright & Peterson, Fargo, with Myers & Snerly, Chicago, Ill., for appellant.

Duffy & Haugland, Devils Lake, for respondent.

GRIMSON, Judge.

This is a suit for the alleged conversion of 39 feeder lambs. There is very little conflict in the evidence. The plaintiff and Clarence and Francis Longie entered into an agreement in the fall of 1949 for the raising of sheep on shares. The Longies and plaintiff each owned one-half of the sheep and were to share equally in the proceeds of sale of wool and sheep. To raise their share of the purchase price the Longies mortgaged their one-half interest in the sheep together with some other property they owned to the Northern Investment Corporation of North Dakota of which Kelly was an officer and in which he was financially interested. At different subsequent times, when the Longies needed cash, advances were made to them by the Northern Investment Corporation of North Dakota. Such advances were included in the renewal mortgages. These mortgages were duly filed with the Register of Deeds of Benson County where the sheep ranch was located and where the Longies lived. Clarence Longie withdrew from the enterprise in 1950 after which it was carried on by his wife, Francis Longie. She afterwards renewed the mortgage. Sales of wool and sheep were made in the names of Kelly & Longie and the proceeds divided one-half to Kelly as owner of an undivided one-half interest and one-half to the Northern Investment Corporation of North Dakota to apply on the Longie mortgages.

On Oct. 5, 1951, the defendant, Weiller & Weiller Company, accepted and sold a consignment of the sheep of the joint enterprise and issued a check in payment thereof to Kelly & Longie in accordance with their agreement. On Dec. 3, 1951, Mrs. Longie engaged the defendant, Fred Lang, who defaults, to truck 39 feeder lambs of the joint enterprise to the stockyards at Fargo, North Dakota, where the lambs were consigned to, and on Dec. 4th sold by the defendant, Weiller & Weiller Company and net payment of $787.40 was made to Francis Longie. Except as inference might be drawn from the previous sale and the constructive notice of the mortgages as filed, the defendant company had no knowledge of Mrs. Longie's defective title. When the plaintiff learned of this last sale he notified the defendant, Weiller & Weiller Company of his interest in the lambs and made demand upon it for said lambs which was refused. It further appears that at the time of this shipment and sale of the 39 lambs there were at least 44 lambs of the same kind as those sold left on the ranch.

Defendant company made motions both at the close of the plaintiff's testimony and at the close of the case for a dismissal and for a directed verdict on the grounds that the evidence showed defendant company was a marketing agency immune from liability; that the evidence showed a waiver of any lien made under the mortgage and that Mrs. Longie was an agent of plaintiff in making the sale. The motions were denied.

The plaintiff also, at the close of the case made a motion for a directed verdict in favor of the plaintiff which was denied. Thereupon, instead of submitting the case to the jury for a general verdict the court submitted only the following questions to determine the disputed facts:

'No. 1, What was the unpaid balance on the note, Exhibit 3, on Dec. 4, 1951? The jury answered '$3751.35.'

'No. 2, What was the value of the remaining property described in the mortgage, Exhibit 1, on Dec. 15, 1951? The jury answered '$4156.50.'

'No. 3, Did the plaintiff, D. W. Kelly, constitute Francis Longie his agent with authority to sell sheep in their joint names? The jury answered, 'Yes.'

'No. 4, Did the plaintiff, D. W. Kelly, constitute Francis Longie his agent to sell the sheep sold to Weiller & Weiller Company on Dec. 4, 1951 in her name? The jury answered, 'No."

Based upon these answers the court ordered judgment for the plaintiff for $401.49, damages and interest for plaintiff's undivided one-half interest in the sheep and $29.65 costs, amounting in all to $431.14. Thereafter defendant made motions to set aside the Order for Judgment in favor of the plaintiff and for an Order for Judgment for the defendant for a dismissal of the action, which motions were denied.

The defendant appeals from the judgment and from the orders denying his motion to set aside the Order for Judgment in favor of the plaintiff and his motion for judgment of dismissal on the special verdict.

As specifications of error defendant alleges error in the denial of his motions before and after verdict and the insufficiency of the evidence to support the decision of the court.

The defendant, Weiller & Weiller Company's first contention is that it is a marketing agency licensed and operating under the federal law; that under said law and the federal regulations it is required to serve all comers and does not have the opportunity to examine the title of the consignor; that it had no knowledge at that time of any defect in Mrs. Longie's title. On these grounds it is claimed that said defendant is immune from liability for conversion of the property passing through its hands.

That question has been before the courts on numerous occasions. The rule at common law was that a factor or commission merchant who receives property from the consignor and sells it under his instructions and pays him the proceeds is guilty of conversion if the consignor had no right to sell the property even though he acted in ignorance of the consignor's want of title.

The question is whether the Federal Packers & Stockyards Act of 1921, 7 U.S.C.A. Sec. 181 et seq., which makes it the duty of the marketing agency to furnish, upon reasonable request without discrimination, reasonable stockyard services, operates to relieve such agencies from the common law rule of liability. The rule adopted by the majority of the courts is that it does not. See Anno. 2 A.L.R.2d 124 and cases cited.

In Mason City Production Credit Association v. Sig Ellingson and Company, 205 Minn. 537, 286 N.W. 713, 717, the liability of the marketing agency was sustained and it is further held that the 'Packers and Stockyards Act was not intended to and does not disturb or supersede local or state law in respect to chattel mortgages'. The Supreme Court of the United States twice denied the petitions for a writ of certiorari in that case. That case has been followed in First National Bank of Pipestone v. Siman, 67 S.D. 118, 289 N.W. 416, and Moderie v. Schmidt, 6 Wash.2d 592, 108 P.2d 331. See also Citizens State Bank of Dalhart v. Farmers Union Livestock Cooperative Co., 165 Kan. 96, 193 P.2d 636; Birmingham v. Rice Bros., 238 Iowa 410, 26 N.W.2d 39, 2 A.L.R.2d 1108. This decision is also in harmony with the holdings of this court in cases involving marketing agencies engaged in interstate commerce. See Kastner v. Andrews, 49 N.D. 1059, 194 N.W. 824; Carson State Bank v. Grant Grain Co., 50 N.D. 558, 197 N.W. 146; Hovland v. Farmers Union Elevator Co., 67 N.D. 71, 269 N.W. 842.

Defendant next contends that the lambs were severable property and that either co-owner could separate his share of the lambs without the consent of the other as long as he did not take to exceed the one-half rightfully belonging to him.

'The general rule of common law is that property held in common can be divided only by the consent of the owners or by a proceeding in a court of equity; and it appears that this rule still prevails where the common property embraces several things of different warrants and values, or consists of but a single object that cannot be divided without destroying its character or identity. But where...

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  • Billey v. North Dakota Stockmen's Ass'n
    • United States
    • North Dakota Supreme Court
    • June 4, 1998
    ...held the Packers and Stockyards Act was not intended to preempt state laws governing brand inspection. See also Kelly v. Lang, 62 N.W.2d 770, 771, 773 (N.D.1953) (the Packers and Stockyards Act was not intended to preempt state laws governing chattel mortgages on livestock); Sig Ellingson &......
  • In re Frosty Morn Meats, Inc.
    • United States
    • U.S. District Court — Middle District of Tennessee
    • November 25, 1980
    ...intended to supersede or disturb state law respecting valid chattel mortgages on livestock delivered at public stockyards, Kelly v. Lang, 62 N.W.2d 770 (ND 1954); Mason City Production Credit Assn. v. Sig Ellingson & Co., 205 Minn. 537, 286 N.W. 713 (1939) cert. denied 308 U.S. 599, 60 S.Ct......
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    • North Dakota Supreme Court
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    ...with the person who commits the negligent act in question.' North Dakota recognizes both a doctrine of 'joint adventure'--Kelly v. Lang, 62 N.W.2d 770 (N.D.1954); Brudvik v. Frosaker Blaisdell Co., 56 N.D. 215, 216 N.W. 891 (1927); Gehlhar v. Konoske, 50 N.D. 256, 195 N.W. 558 (1923)--and o......
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    • April 10, 2018
    ...¶ 17. Thus, property can be owned by a joint venture, much as property can be owned by a partnership. See id. ; see also Kelly v. Lang , 62 N.W.2d 770, 774 (N.D. 1953) ; Gehlhar v. Konoske , 50 N.D. 256, 195 N.W. 558, 561 (1923). Because the rights of a joint venture are akin to a partnersh......
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