United States Fidelity & Guaranty Company v. Long

• Decision Date: 17 January 1963
• Docket Number: Civ. No. 61-259.
• Citation: 214 F. Supp. 307
• Parties: UNITED STATES FIDELITY & GUARANTY COMPANY, a corporation, Plaintiff, v. Murel LONG, Lawrence F. Gray, Lewis Furber, Hilbert G. Largent, Liskey Farms, Inc., a corporation, Oscar Denault, Leon Andrieu, George Andrieu, Regis Andrieu, Donald Jacobs, State of Oregon, Department of Agriculture, Commodity Credit Corporation of the United States of America, and William P. Adams, doing business as Adams Seed Co., Defendants.
• Court: U.S. District Court — District of Oregon

214 F. Supp. 307

UNITED STATES FIDELITY & GUARANTY COMPANY, a corporation, Plaintiff, v. Murel LONG, Lawrence F. Gray, Lewis Furber, Hilbert G. Largent, Liskey Farms, Inc., a corporation, Oscar Denault, Leon Andrieu, George Andrieu, Regis Andrieu, Donald Jacobs, State of Oregon, Department of Agriculture, Commodity Credit Corporation of the United States of America, and William P. Adams, doing business as Adams Seed Co., Defendants.

Civ. No. 61-259.

United States District Court D. Oregon.

January 17, 1963.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Phillips, Poole & Dooley, William C. Ralston, Portland, Or., for United States Fidelity & Guaranty Co.

William Ganong, Klamath Falls, Or., for Murel Long.

Don Parker, Asst. Atty. Gen. of Oregon, Salem, Or., for State of Oregon, Department of Agriculture.

Victor E. Harr, Asst. U. S. Atty., Portland, Or., for Commodity Credit Corp.

Beesley & Murray, Richard C. Beesley, Klamath Falls, Or., Fitzgibbon & Nichols, John D. Nichols, Portland, Or., for Lewis Furber and Hilbert G. Largent.

Arthur A. Beddoe, Klamath Falls, Or., for Lawrence F. Gray and Liskey Farms, Inc.

J. Anthony Giacomini, Klamath Falls, Or., for Oscar Denault, Leon Andrieu, George Andrieu, and Regis Andrieu.

No appearance for Donald Jacobs.

No appearance for William P. Adams, doing business as Adams Seed Co.

KILKENNY, District Judge.

This is an interpleader action by plaintiff, surety on four warehouseman's bonds, three being issued pursuant to Oregon law, seeking a judicial construction of said instruments and declaratory relief as to the extent of its liability. The individual defendants are depositors of certain grain with defendant, William P. Adams, dba Adams Seed Co., operating warehouses in Klamath County, Oregon at Malone Siding and Midland. Defendant Liskey Farms is a corporation organized under Oregon law. Commodity Credit Corporation is organized under Federal law. Both corporations were depositors of grain in Adams warehouses.

Bonds issued by plaintiff for and on behalf of defendant Adams, and, here in controversy are as follows:

(1) Bond dated August 12, 1958 posted pursuant to ORS Chapter 586¹. This bond being for the sum of $5,000.00 covering the period commencing July 1, 1958 and ending June 30, 1959 covering storage of grain and other commodities in Adams' warehouse at Midland.

(2) Bond dated June 18, 1959 posted pursuant to said Oregon Revised Statutes in the principal sum of $5,000.00 covering the period July 1, 1959 and ending June 30, 1960 on Adams' warehouse at Midland. By rider effective July 30, 1959 this coverage was extended to the warehouse at Malone Siding and by said rider the penal sum of the bond was increased to $9,500.00.

(3) Bond dated June 28, 1960 posted pursuant to said Oregon Revised Statutes in the principal sum of $9,000.00 covering the period commencing July 1, 1960 and ending June 30, 1961 effective on the warehouses at Midland and Malone Siding.

(4) Bond issued by plaintiff on July 1, 1959 for $5,000.00 naming Commodity Credit Corporation as obligee. August 15, 1959 the penal sum of this bond was raised to $6,000.00 and on the same date the bond was extended to cover Adams state grain warehouse No. 210 at Malone Siding. This bond remained in force until cancelled by plaintiff on September 28, 1960. This bond secured performance of the Uniform Grain Storage Agreement between Commodity Credit and plaintiff.

During said year defendant, Adams, operated public warehouses at Midland and Malone Siding under and by virtue of said Oregon Revised Statutes and while so operating had the following transactions:

(1) Defendant, Murel Long, on December 30, 1959 delivered to defendant Adams for storage certain barley and on said day defendant Adams issued to Long a certain public grain warehouse receipt. Certain of said grain was redelivered to Long but the balance of the grain was converted by defendant Adams on or prior to June 30, 1960.

(2) Defendant, Lawrence F. Gray, between September 14th and September 30, 1959, both dates inclusive, delivered certain barley to Adams and on the 14th day of May, 1960 delivered certain wheat to Adams. The reasonable value of the wheat was credited to Gray's account. No warehouse receipt was issued and no written instruction or order was given or furnished by Gray to Adams with reference to said grain.

Between September 10th and September 30, 1960, both dates inclusive, Gray delivered certain oats to Adams. The wheat and barley were delivered to the Malone Siding warehouse and the oats was delivered to the Midland warehouse. No warehouse receipts were issued for any of the grain so delivered and no written order or instructions were given or furnished to Adams by Gray. Although demand was made no part of the grain was returned to Gray.

(3) Liskey Farms, Inc. on September 4th and 5th, 1959 delivered to Adams certain barley at Malone Siding warehouse. No warehouse receipt was issued for the grain. No written instructions or order was received or furnished by Liskey Farms with reference to said grain. On or about October 20, 1960 Liskey Farms made demand on plaintiff for payment of the sum of $1,567.31 based on the sale of the grain to Adams. Prior thereto and on or about the 15th day of May, 1960 Liskey Farms demanded return of the barley and Adams failed, refused and neglected to redeliver the same.

(4) a. Defendants, Regis Andrieu and Denault, between November 24, 1958 and January 12, 1959 delivered certain oats to Adams at the Midland warehouse and deposited the same without any written order or instructions and on December 15, 1958 Adams paid said persons for a substantial portion of said oats on an alleged purchase price of $2,850.00. Prior to June 30, 1959 said defendants demanded payment for the balance or redelivery of the balance of the oats, with which demands Adams failed to comply.

b. Defendant, George Andrieu, between August 18, 1958 and September 25, 1958 delivered certain oats to defendant Adams at the Midland warehouse. That said grain was deposited and delivered without written order on September 5, 1958 and on October 20, 1958 Adams paid for a substantial portion of said oats. Prior to June 30, 1959 Andrieu demanded payment of the balance of the purchase price or redelivery of the balance of the oats. Adams failed to comply with such demand.

c. Defendant, Leon Andrieu, between August 19, 1958 and September 21, 1958 delivered certain barley and certain oats to Adams at the Midland warehouse, which grain was deposited without written order or instructions. Demand has been made for payment of the amount due. That no part has been paid.

d. After Regis Andrieu, Oscar Denault, George Andrieu, and Leon Andrieu had demanded the balance of the said grain from defendant and after defendant had refused to deliver said grain, or to pay therefor, and after said grain had been converted to Adams own use, said persons instituted action against Adams for the value of the grain and recovered judgments thereon. Said judgments remain wholly unpaid and satisfied. In the complaint in each of said actions, each defendant alleged that he had sold and delivered to defendant Adams the grain in question.

e. On September 15, 1960 Adams executed to Regis Andrieu, Oscar Denault, George Andrieu and Leon Andrieu promissory notes in the amount of the value of the grain, together with interest thereon, and executed in favor of said persons Second, Third, and Fourth Chattel Mortgages on certain personal property as security for the payment of said obligations. Said persons have made joint demand upon plaintiff under the bond covering the period July 1, 1958 and ending July 30, 1959 in the penal sum of $5,000.00.

(5) Defendant Largent on August 11th and 12th, 1958 delivered certain barley to Adams at the Midland warehouse. About August 7, 1959 defendant Adams executed and delivered to defendant Largent a check in the sum of $500.00 in payment of 20,000 pounds of the barley so delivered. No written instruction or order was given or furnished by Largent to Adams nor was a warehouse receipt furnished to Largent.

(6) a. Defendant Furber, between September 24th and September 28, 1958 delivered certain oats to defendant Adams at the Midland warehouse. No written instructions or orders were given to defendant Adams with respect to the oats nor was a warehouse receipt issued.

b. Defendant Furber between October 2nd and October 7, 1959 delivered certain oats to defendant Adams at the Midland warehouse with oral instructions and orders for the processing and cleaning of the grain and for shipment for the account of Furber. On October 10, 1959 the grain was sold by defendant Furber to Clark Grain Company of Los Angeles, California. The total price of the grain was paid to Adams but he has refused to account for the balance of said sales price. No warehouse receipt was furnished on the transaction.

(7) On December 5, 1958 Adams entered into a Uniform Grain Storage Agreement with Commodity Credit covering the storage of grain at said warehouses. Beginning July, 1960 defendant Adams in violation of Oregon law and of the provisions of the Uniform Grain Storage Agreement, converted to his own use certain grain which had been stored with him under said Agreement at the Malone Siding warehouse and committed other breaches of the Agreement as set forth in the Pre-Trial Order.

The State Department of Agriculture of the State of Oregon, on account of apparent shortages of grain in the said warehouses operated by defendant Adams, suspended his warehouseman's license as of July 26, 1960.

ISSUES

The principal issues of law and fact raised by the parties are:

I.

The jurisdiction of the Court.

II.

Whether the relationship between Adams and grain depositors was one of warehouseman and depositor, rather than that of vendor and purchaser or principal and factor.

III.

Whether the three state bonds should be construed as one continuous...