Farmers' Bank of Weston v. Ellis

• Citation: 126 Or. 602,268 P. 1009
• Parties: FARMERS' BANK OF WESTON v. ELLIS ET AL.
• Decision Date: 11 July 1928
• Court: Oregon Supreme Court

268 P. 1009

126 Or. 602

FARMERS' BANK OF WESTON v. ELLIS ET AL.

Supreme Court of Oregon

July 11, 1928

Department 1.

Appeal from Circuit Court, Baker County; C. H. McColloch, Judge.

Action by the Farmers' Bank of Weston against W. H. Ellis and another, doing business as Ellis Transfer. From the judgment defendants appeal. Affirmed.

This is a second appeal in this action. On the second trial in the circuit court the two causes of action stated in the first amended complaint were consolidated, and allegations were incorporated averring the reconditioning of the potatoes while in the warehouse; the shipment of the potatoes while the two warehouse receipts involved were in the possession of plaintiff without any demand upon plaintiff for them by defendants and without any written assent of plaintiff for the removal of said potatoes from said warehouse or the delivery of the same to said Grafton or any other person that the net amount received for the potatoes represented by said warehouse receipts was $1,357.01, and the reasonable value of the potatoes at the time of the shipment in the market at Baker was $2,097.50. Plaintiff demands judgment against defendants for the latter amount. Defendants in their further and separate answer, in addition to the matter set up in their further and separate answer to the first amended complaint, allege an assignment of the proceeds of the sale of all of the potatoes from the defendants' warehouse including those represented by the two warehouse receipts, to plaintiff, and the acceptance of said assignment, which was on the firm of F. M. Balcom Company at Grandview, Wash. The assignment referred to is set out in full as Exhibit A in defendants' answer. It is a very general assignment, and covers all of the money either due or to become due from F M. Balcom Company during the season of 1925 and 1926 to said Grafton. This assignment is claimed to be a ratification in writing of the unauthorized act of defendants in shipping said potatoes. Defendants' second further and separate answer and defense alleges the same facts set up in their first separate answer as a complete accord and satisfaction of plaintiff's claims and demands against defendants. They set up as a third further and separate answer the same facts as estopping plaintiff from maintaining this action. Plaintiff moved to strike all of said further and separate answers on the ground that they were immaterial and irrelevant. This motion was sustained. For further facts see Farmers' Bank of Weston v. Ellis, 122 Or. 266, 258 P. 186. The issues tried in the circuit court are joined on the second amended complaint and the general denials from defendants' answer. The errors assigned are the order of the court sustaining the motions to the further and separate answers; the ruling of the court on proffered testimony; the giving of certain instructions and refusal to give others requested by defendants. It is also claimed by defendants that there was a failure to prove the corporate capacity of plaintiff and market value of the potatoes at Baker where defendants' warehouse is located.

James T. Donald, of Baker (Nichols, Hallock & Donald, of Baker, on the brief), for appellants.

Wm. Smith, of Baker (Wm. Smith, of Baker, and James A. Fee, of Pendleton, on the brief), for respondent.

COSHOW J. (after stating the facts as above).

The disposition of the motion to strike disposes of practically all of the material issues presented on this appeal. Plaintiff claims that the further and separate answers and defenses are immaterial and irrelevant, because by the former decision in this case defendants are precluded from making the defenses attempted by their answers. Motion to strike is the proper method of testing an answer on the ground that the allegations moved against are immaterial or irrelevant. Hubbard v. Olsen-Roe Transfer Co., 110 Or. 618, 224 P. 636.

It was determined in the former decision that the warehouse receipts involved are negotiable in the full sense of the word. By that decision this court is bound to strictly uphold the law as written. The law is the Uniform Warehouse Act (Or. L. §§ 8009-8068), adopted by most of the states of the Union. Defendants do not claim to have even demanded the receipts from plaintiff or from said Grafton. They shipped the potatoes upon the verbal request of said Grafton, who had negotiated the receipts to plaintiff. The law requires that either the receipts must be taken up or the warehouseman must have written authority of the owner or holder of the receipts before parting with possession of the goods. That plaintiff was the holder and owner of the receipts at the time the potatoes were shipped is not disputed. The substance of the first further and affirmative defense in defendants' answer is that an assignment of all of the money due or to become due from a firm with whom said Grafton was dealing to the bank was a written ratification of the unauthorized act of Grafton in demanding the potatoes. Defendants cannot avail themselves of such a defense, if it is a defense at all. The contractual relations between plaintiff and said Grafton are both immaterial and irrelevant in this action. Plaintiff held the warehouse receipts as security for money loaned to Grafton. The law required defendants not to ship the potatoes nor to deliver them to any one without taking up the receipts or seeing that they were canceled or without written authority from the holder of the receipts. Defendants did neither, and, according to the testimony of one of the defendants, made no attempt so to do. By shipping the potatoes without complying with the law, they assumed the risk of any loss that might result. Public policy requires the strict enforcement of the law in order to prevent loss falling upon innocent owners of property deposited in public warehouses. The purpose of the law was to protect the owners of property...