Anita Valley, Inc. v. Bingley

• Decision Date: 30 May 1979
• Docket Number: No. 62016,62016
• Citation: 279 N.W.2d 37
• Parties: 26 UCC Rep.Serv. 722 ANITA VALLEY, INC., Appellant, v. Park E. BINGLEY, d/b/a Bingley Auction Company, Appellee.
• Court: Iowa Supreme Court

Page 37

279 N.W.2d 37

26 UCC Rep.Serv. 722

ANITA VALLEY, INC., Appellant, v. Park E. BINGLEY, d/b/a Bingley Auction Company, Appellee.

No. 62016.

Supreme Court of Iowa.

May 30, 1979.

Harry T. Watts and Ronald L. Anderson of Dickinson, Throckmorton, Parker, Mannheimer & Raife, Des Moines, for appellant.

James A. Giles and Robert M. Holliday of Wasker, Sullivan & Ward, Des Moines, for appellee.

Considered by REYNOLDSON, C. J., and UHLENHOPP, McCORMICK, ALLBEE, and McGIVERIN, JJ.

ALLBEE, Justice.

This is an appeal from the grant of a summary judgment in favor of defendant, Park E. Bingley, doing business as Bingley Auction Company. Plaintiff, Anita Valley, Inc., is attempting to recoup funds paid to Bingley for the purpose of purchasing cattle which were never delivered.

At the time of the transaction in question, Anita Valley was owned by four stockholders: Gene Bessire, a veterinarian who served as the corporation's president; Joyce Bessire; Jack Bertelson, who served as secretary-treasurer; and Eloise Bertelson. Bingley had done business with Doctor Bessire on previous occasions through a sale barn in which Bessire was involved. Bingley testified in his deposition, however, that he had not previously done business with Anita Valley and was not familiar with that corporation.

On April 10, 1975, Doctor Bessire told Jack Bertelson that Bingley had 322 head of cattle available for Anita Valley to purchase and that the corporation could make a significant profit on a quick resale. On the basis of that representation, Bessire obtained a check from Bertelson which was drawn on the corporation's account for $51,117.50. Bessire took the check to Bingley, who was the payee, and told Bingley that he, Bessire, had 322 head of cattle which he desired to sell to Anita Valley. Bessire also told Bingley that Anita Valley would not purchase the cattle from Bessire. He proposed that Bingley pay Bessire and that Bessire himself would deliver the cattle to Anita Valley. Bingley accepted the Anita Valley check and paid Bessire $50,916.25, a sum that was $201.25 less than Bingley received. Bingley heard nothing more about the transaction and assumed that Bessire had delivered the cattle.

In fact, however, Bessire never delivered any cattle to Anita Valley. He instead used the money received from Bingley to pay down notes from another of his business ventures, Anita Auction Company. This fact was concealed from Bertelson when Bessire told him that the cattle had contracted "red nose" and were quarantined for sixty days. Bertelson discovered the fate of the Anita Valley funds only after Bessire declared bankruptcy two months later, in June of 1975. Bingley was informed of what had transpired nearly two years later.

In the spring of 1977, Jack Bertelson, acting through his attorney and on behalf of Anita Valley, made demand upon Bingley for return of the funds. That demand was rejected, and this action, which plaintiff characterizes as being for money had and received, ensued. After discovery had occurred, Anita Valley moved for summary judgment. Defendant also filed such a motion, contending that if the district court found the material facts to be uncontroverted, Bingley was entitled to judgment rather than Anita Valley. The court entered an order which stated simply that no material facts were in dispute and that the equities were with the defendant. Therefore, Anita Valley's motion was overruled and Bingley's was sustained. Anita Valley then brought this appeal.

I. In order to obtain a summary judgment, the moving party is required to show that there is no genuine issue of material fact involved in the case and that he is entitled to a judgment as a matter of law. Iowa Department of Transportation v. Read, 262 N.W.2d 533, 536 (Iowa 1978). In considering such a motion, a court is required to examine the record in the light most favorable to the party opposing the motion to determine whether the movant has met his burden. Id. Thus, if a genuine issue of material fact exists in this case, neither party can obtain a summary judgment.

II. To establish a claim for money had and received, it is necessary to prove that defendant has received money which in equity and good conscience belongs to plaintiff. Although it is ordinarily an action at law, money had and received is governed by equitable principles and is favored by the courts. Key Pontiac, Inc. v. Blue Grass Savings Bank, 265 N.W.2d 906, 908 (Iowa 1978). While a motion to transfer this case from equity to law was denied by another district judge, nothing appears to except this case from the usual rule. Because an action for money had and received is favored, the tendency is to expand, rather than restrict, its application. See generally 58 C.J.S. Money Received § 1, at 911 (1948).

Such an action is appropriate where money is given for a special purpose which is not carried out. Key Pontiac, Inc., 265 N.W.2d at 908. But it generally will not lie against one who has not been personally enriched by the transaction. Trevor v. Fuhrmann, 338 Mich. 219, 224, 61 N.W.2d 49, 51 (1953); Restatement of Restitution § 142 (1937); See Hulme v. Stumma, 204 N.W.2d 632, 633 (Iowa 1973) (circumstances must make it inequitable for defendant to Retain money). See generally D. Dobbs, Handbook on the Law of Remedies § 11.9, at 767-71 (1973) (restitution may be denied where benefits have been passed on); 58 C.J.S. Money Received § 23 & n.82 (1948). But see Federal Employees Credit Union v. Capital Automobile Co., 124 Ga.App. 144, 145, 183 S.E.2d 39, 41 (1971). This general requirement of personal enrichment means that this case presents two different situations raising two different substantive issues. The first is, What must plaintiff show in order to recover the funds which Bingley has retained? The second is, What is required for plaintiff to recoup the funds which Bingley passed on?

Recovery of the $201.25 which Bingley retained would be possible merely on a showing that the purpose for which the funds were delivered was not fulfilled. Key Pontiac, Inc., 265 N.W.2d at 908; Restatement of Restitution § 142, Comment f (1937) (partial restitution; "change of circumstances is a bar to restitution only to the extent that such restitution would cause loss to an innocent and nontortious recipient."). Because there is no dispute that Bingley retained these funds, and that Anita Valley did not receive the cattle for which its money was given, summary judgment for plaintiff would have been proper on this issue. Iowa R.Civ.P. 237(d).

But, as noted above, Bingley paid the great bulk of Anita Valley's funds to Bessire for the stated purpose of permitting Bessire to deliver the cattle. In order for Anita Valley to recover those passed-on funds from Bingley, it must show that Bingley's payment to Bessire was unreasonable. That is, there is a question of whether Bingley could reasonably expect that Bessire would actually deliver the cattle to Anita Valley. Restatement of Restitution § 142(3) (1937) (change of circumstances is not defense if the recipient's conduct was tortious); Cf. Hiskey v. Williams, 40 Iowa 499 (1875) (one who deals with an agent as though he is the principal, when the agency is known, is responsible for any losses, as having created the situation).

In his deposition, Bingley indicated that he had done business with Bessire on previous occasions and that he expected Bessire to be "plumb honest." But he also admitted that Bessire had told him that Anita Valley would not buy the cattle from Bessire. Further, Bingley acknowledged having had no prior dealings with, or knowledge of, Anita Valley. These facts could permit reasonable minds to draw different inferences and reach different conclusions regarding the reasonableness of Bingley's actions. For that reason, neither party was entitled to summary judgment. Daboll v. Hoden, 222 N.W.2d 727, 733 (Iowa 1974) (summary judgment is rarely appropriate in negligence actions, even on undisputed facts, because determination of existence of negligence requires a judgment as to the reasonableness of conduct under the circumstances). When the record is viewed in a light most favorable to plaintiff, that record would support an inference that defendant's actions were unreasonable. Conversely, when considered in a light most favorable to defendant, the record would support an inference that his actions were reasonable. Trial court erred in granting defendant's motion, but was correct in denying plaintiff's.

While this holding disposes of the case on appeal, comments upon several of the...