Agric. Bond & Credit Corp. v. Courtenay Farmers Co-Op. Ass'n

• Court: North Dakota Supreme Court
• Writing for the Court: BURKE
• Citation: Agric. Bond & Credit Corp. v. Courtenay Farmers Co-Op. Ass'n, 66 N.D. 122, 262 N.W. 453 (N.D. 1935)
• Decision Date: 17 September 1935
• Docket Number: No. 6344.,6344.
• Parties: AGRICULTURAL BOND & CREDIT CORPORATION v. COURTENAY FARMERS CO-OP. ASS'N et al.

66 N.D. 122

262 N.W. 453

AGRICULTURAL BOND & CREDIT CORPORATION

v.COURTENAY FARMERS CO-OP. ASS'N et al.

No. 6344.

Supreme Court of North Dakota.

Aug. 26, 1935.

Rehearing Denied Sept. 17, 1935.

Syllabus by the Court.

1. In an action to foreclose liens upon grain, where the warehouse receipts for said grain are deposited in court to abide the further orders of the court and for the purpose of final disposition of said grain and the payment of the liens in the order of their priority, such warehouse receipts, and the grain they represent, are in the custody of the court and cannot legally be withdrawn and sold without an order of court.

2. The withdrawal of storage receipts for grain deposited in court and the sale of the grain without an order of the court is a conversion of the grain.

3. Where storage receipts for grain, in the custody of the law, have been unlawfully withdrawn, an order denying a motion made after judgment to restore and bring into court property taken therefrom after it was legally deposited therein is a final order affecting a substantial right upon a summary application in an action after judgment, and is appealable under subdivision 2 of section 7841, Comp. Laws 1913.

4. Where property, in the custody of the court, is unlawfully withdrawn, a motion to compel its restoration is a proper remedy.

Appeal from District Court, Stutsman County; R. G. McFarland, Judge.

Proceeding by the Agricultural Bond & Credit Corporation against the Courtenay Farmers Co-operative Association and others, wherein motions were filed by the Larson Oil Company and others for relief against the Courtenay Farmers Cooperative Association and the Atlantic Elevator Company. From orders denying their motions, movants appeal.

Reversed and remanded, with directions.

M. W. Duffy, of Cooperstown, for Larson Oil Co.

Nilles, Oehlert & Nilles, of Fargo, for Union Central Life Ins. Co., Oliver Farm Equipment Co., and S. M. Posey.

Buck & Buck, of Jamestown, for Matt Burkhard.

Coffey & Strutz, of Jamestown, for Courtenay Farmers Co-operative Ass'n and Atlantic Elevator Co.

BURKE, Chief Justice.

During the farming season of 1930, S. M. Posey, Carl Engle, Ben Engle, and John Doyle raised large quantities of wheat, flax, and barley, and after threshing, the said grain was stored in the warehouses of the Courtenay Farmers Co-operative Association and the Atlantic Elevator Company in Courtenay, N. D. There were many claims, such as seed liens, labor liens, and mortgages, against this grain, and the Agricultural Bond & Credit Corporation, claiming to have a thresher's lien upon all of said grain, brought an action to foreclose such lien, making all others claiming liens on the said grain parties. From the judgment entered in said action, there was an appeal to this court. Agricultural Bond & Credit Corporation v. Courtenay Farmers Co-op. Ass'n et al., 64 N. D. 253, 251 N. W. 881, 889.

The Courtenay Farmers Co-operative Association and the Atlantic Elevator Company did not join in the appeal, but their attorneys filed briefs and appeared and made oral argument before this court in behalf of said parties. The appeal demandeda trial de novo, and the rights of all of the parties were considered and fully determined.

On October 30, 1930, the Courtenay Farmers Co-operative Association and the Atlantic Elevator Company, in which all of the grain involved was stored, applied to the district court for an order to deposit the storage receipts in the office of the clerk of the district court under section 7593, Comp. Laws 1913, and under an order duly made the storage receipts, issued by the said elevator companies, were duly deposited in the office of the clerk of the district court, in which the action was pending, and it was further ordered that none of the grain be sold until the further order of the court.

On appeal it was held that the deposit was legal, and the storage of the grain from the date of said order was a part of the costs of said action and a first lien upon the said grain for the payment of the storage of the grain from and after the date of said order until the legal sale of said grain together with interest thereon at 6 per cent.

It was further decided on appeal “that the claims herein established are liens upon all of the grain grown upon the said lands during the year and the lien holders are entitled to judgment against S. M. Posey, Carl Engle, Ben Engle and John Doyle for the amount of their claims and for a foreclosure of their liens and a sale of all the grain on deposit raised upon said land during said farming season and for costs.”

Judgment on the remittitur was duly entered as directed by this court, and thereafter a special execution was issued and returned unsatisfied by the sheriff, which return states that the sheriff was unable to find any of the grain described in said execution, or any of the original storage receipts therein described; that the clerk of the district court reported that the storage receipts were delivered by him in 1932 to the firm of Coffey & Strutz, attorneys for the defendants Courtenay Farmers Co-operative Association and Atlantic Elevator Company, and have not been returned, though a return thereof has been demanded; that the execution was served on J. A. Coffey, member of the firm of Coffey & Strutz, and upon the defendants and a demand was further made for the value of the grain represented by each of said storage receipts, less legal storage charges, and the managers of the defendant companies stated that none of said grain was in the possession of said defendants, but had been sold by its attorney J. A. Coffey.

Thereafter and on the 25th day of September, 1934, notice of motions to require the said elevator companies to restore and bring into court the grain represented by the original storage receipts, issued by said defendants and deposited with the clerk, describing the grain represented by the storage receipts, were served upon the said defendant elevator companies.

In support of the motion in each matter is the return of the sheriff and the affidavit of L. H. Oehlert; said affidavit, in each matter, stated that “a few days prior to the 8th day of August, 1932, said J. A. Coffey caused the storage tickets mentioned and described in the attached Motion and Notice of Motion to be removed from the office of the Clerk of the District Court, * * * and that said storage tickets cannot now be found. That affiant has heretofore and since the time of said removal of said storage tickets personally demanded of said J. A. Coffey that he and his said clients return said storage tickets to said office of the clerk of the district court, and that he and his said clients have failed, neglected and refused to return the same.”

In opposition to the said motion, J. A. Coffey filed an affidavit stating that he is the attorney for the elevator companies; “that there were many claimants to said grain * * * and the said two defendants did avail themselves of the deposit statute of this state and make deposit of the storage tickets, representing said grain, with the court, the said storage tickets being left with and deposited with the clerk of this court until the further order of the court; that after said case was tried this honorable court rendered a decision in said cause and the same was filed, and a judgment duly entered upon the order and decision of the court on the 7th of June, 1932; that said judgment directed the grain so deposited by these two defendant elevator companies be sold; * * * that an appeal was taken; that the two defendant elevator companies were asked to join in the said appeal but refused to do so; * * * this affiant, representing the said defendant elevator companies consulted with the court upon three different occasions with reference to the provision of the said judgment requiring a sale of the said grain; that the court informed this affiant that the parties herein named were appealing and had asked for a stay or supersedeas and that a stay had been denied and refused unless the said defendants, the parties now before this court on this motion, should furnish a bond as required by law; that the court informed this affiant that said defendants refused to furnish a bond staying proceedings; that thereafter the court informed this affiant that the stay had been denied because of such refusal to furnish such bond; that thereafter with full knowledge, consent and authority of the court this affiant and Alvin C. Strutz, his associate at that time, came to the custodian of said tickets, the clerk of this court, and the said storage tickets were delivered up to the attorneys for the said elevator companies for the purpose of selling the grain represented by the said storage tickets; that the said grain was accordingly sold according to the terms of the said storage tickets and the proceeds thereof deposited with the clerk of said court in lieu of the storage tickets; that thereafter the clerk of this court informed the defendant, including the defendants now appearing upon this motion, of the sale and that the proceeds of said sale were on deposit with him for them; that said sale was made on or about the 8th day of August, 1932, at a time when the price of grain was higher than for a long period of time. That the said defendants have at all times undertaken in good faith to comply with the orders of the court in handling and disposing of said grain.”

[1][2] Upon this record the court denied each motion; the order in each case being identical and as follows, to wit:

“Motion for an order requiring defendant Courtenay Farmers Co-operative Association, and/or its attorneys, Coffey & Strutz, to restore and bring into court the grain represented by and/or the original storage tickets issued by defendant, and which were deposited with the clerk of this court pursuant to order of this court, dated October 30th, 1930, duly coming on for hearing at the chambers of this...