DROVERS'CATTLE LOAN & INVESTMENT CO. v. Rice

• Decision Date: 15 January 1926
• Docket Number: No. 434.,434.
• Citation: 10 F.2d 510
• Court: U.S. District Court — Northern District of Iowa
• Parties: DROVERS' CATTLE LOAN & INVESTMENT CO. v. RICE et al.

10 F.2d 510 (1926)

DROVERS' CATTLE LOAN & INVESTMENT CO. v. RICE et al.

No. 434.

District Court, N. D. Iowa. W. D.

January 15, 1926.

Burgess & Gill, of Sioux City, Iowa, for plaintiff.

Farr, Brackney & Farr, of Sioux City, Iowa, and C. G. Myers, of Chicago, Ill., for defendants.

SCOTT, District Judge.

This is an action commenced by Drovers' Cattle Loan & Investment Company, a Minnesota corporation, on May 7, 1923, against O. A. Rice, J. J. Donohue, and W. J. Downey, as copartners, doing business under the firm name and style of Rice Bros., said O. A. Rice being a resident and citizen of the state of Illinois, and said J. J. Donohue and W. J. Downey being residents and citizens of the state of Iowa, to recover $6,199.44 damages for the conversion of 192 head of cattle, upon which plaintiff alleged it held chattel mortgages. All of the jurisdictional facts were admitted by defendants. Plaintiff's petition contained three counts, the first two of which at the close of the evidence were dismissed by the plaintiff, leaving only the cause of action stated in the third count here for determination, which on the pleading involves the sum of $2,877.60.

Plaintiff alleges and the court finds that on or about April 25, 1922, one Carl E. Tallmadge, of the town of New England, county of Hettinger, and state of North Dakota, executed and delivered to plaintiff his promissory note for the sum of $14,002.83, due October 20, 1922; that said note was a renewal of a previous note dated October 22, 1921, for $13,318.42, the difference in amounts of said notes being accrued interest on the former note; that to secure the payment of said note of $14,002.83, said Tallmadge on the date thereof executed and delivered to plaintiff his chattel mortgage covering 642 head of cattle, all branded T on the right ribs, and located on the T ranch in Slope county, N. D., and Corson county, S. D.; that the original note had also been secured by chattel mortgage on 642 head of cattle likewise located, and being the same general herd, and both mortgages covering all of the cattle owned by said Tallmadge on said ranch.

The court further finds that on the 5th day of August, 1922, and at all times thereafter material to this controversy, said notes and mortgages were in the possession and ownership of the plaintiff, and said latter note unpaid, and the original note and mortgage retained as so-called "collateral security."

The court further finds that both of said mortgages were, at all times material to this case, duly filed with the register of deeds of Slope county, N. D., and Corson county, S. D.; that is to say, the original in one county and a duly and legally certified copy in the other county.

The court further finds that said herd of cattle had been, with mutations not material to this controversy, owned by said Tallmadge and kept on said ranch during the years 1920, 1921, and 1922, and that taxes had been levied in Corson county, S. D., upon the personal property of said Tallmadge during said three years; that shortly prior to the 5th day of August, 1922, a distress warrant was duly issued by the county treasurer of Corson county to the sheriff thereof, and said sheriff levied upon the cattle in controversy here for the purpose of making collection of personal taxes owing by said Tallmadge in the sum of $1,072.31; that in lieu of enforcing said levy by notice and sale in the usual way as provided by the statutes of South Dakota, said Tallmadge and the sheriff of Corson county arranged, stipulated, and agreed that 74 head of cattle should be shipped to the Sioux City, Iowa, stockyards and there sold upon the open market, and the proceeds thereof, so far as necessary, used to liquidate said tax warrant; that about the 5th day of August, 1922, said Carl E. Tallmadge loaded said 74 head of cattle at the town of Wakpala, S.D., upon cars of the Chicago, Milwaukee & St. Paul Railway Company, and consigned the same to the defendants, commission merchants at the Sioux City Stockyards, for sale and account; that said shipments proceeded in the usual course, and said cattle were received by defendants about the 7th day of August, 1922, and were sold upon the open market, freight, yardage, and other expenses of shipment were paid by the defendants, and their commission of $48 deducted. The gross proceeds of the sale were $2,877.60. The net proceeds were $2,582.02. Upon the order of said Carl E. Tallmadge, the total amount of said proceeds were disbursed by the defendants; said amount of $1,072.31 being paid to the sheriff of Corson county to liquidate said tax lien.

The court further finds that said shipment of cattle was without the knowledge or consent, express or implied, of the plaintiff.

The court further finds: That almost immediately after this sale plaintiff sent its agent and representative, one Schwartz, to the Tallmadge range to check up its securities; that about the 10th of August, 1922, Schwartz inspected the cattle at the South Dakota ranch near McLaughlin, S. D., and testifies that he found about 70 head of cattle remaining. That after such inspection he went across the line to New England, N. D., and inspected the balance of the cattle, and testifies he found 135 head of cattle. Schwartz, representing the plaintiff, thereupon returned to Tallmadge's office at New England, and had conversations and transacted some business with Tallmadge on the subject. There is a controversy between defendants' witness Miss May C. Koenig and J. H. Anderson, and the plaintiff's witness Schwartz, as to what occurred at this time and place. The substance of the testimony of Miss Koenig and Mr. Anderson, witnesses for the defendants, is that Schwartz came into the office and in conversation with Tallmadge asked him for security and settlement for the cattle recently shipped to Sioux City upon which the plaintiff held a mortgage. That thereupon Tallmadge asked Miss Koenig to get the account of sale out of the files, and she did so. And after two conversations and considerable negotiations Tallmadge gave Schwartz, for the plaintiff, a sheriff's certificate of sale for a tract of land, and he and his wife executed deeds for other lands and delivered them to Schwartz....