Fowler v. Courtemanche

• Decision Date: 15 September 1954
• Citation: 274 P.2d 258,202 Or. 413
• Parties: Irwin W. FOWLER, Plaintiff-Appellant, v. L. A. COURTEMANCHE, an Individual, L. A. Courtemanche, an Oregon corporation, Automotive Equipment Company, an Oregon corporation, and The Courtemanche Acceptance Corporation, an Oregon a corporation, Defendants-Cross Appellants.
• Court: Oregon Supreme Court

Page 258

274 P.2d 258

202 Or. 413

Irwin W. FOWLER, Plaintiff-Appellant, v. L. A. COURTEMANCHE, an Individual, L. A. Courtemanche, an Oregon corporation, Automotive Equipment Company, an Oregon corporation, and The Courtemanche Acceptance Corporation, an Oregon a corporation, Defendants-Cross Appellants.

Supreme Court of Oregon, Department 2.

Argued and Submitted May 19, 1954.

Decided Sept. 15, 1954.

C. X. Bollenback and Elton Watkins, Portland, for plaintiff-appellant.

Hugh L. Biggs, Portland, Cleveland C. Cory, Hart, Spencer, McCulloch, Rockwood & Davies, Portland, on the brief, for defendants-respondents and cross-appellants.

Before WARNER, Acting C. J., and LUSK, BRAND and PERRY, JJ.

BRAND, Justice.

This is an action at law for compensatory and punitive damages on account of the alleged wrongful and malicious conversion of a number of logging trucks and trailers and certain other logging equipment. The plaintiff is Irwin W. Fowler. The defendants named in the complaint were L. A. Courtemanche, an individual, L. A. Courtemanche, a corporation, Automotive Equipment Company, a corporation, and The Courtemanche Acceptance Corporation. The case against L. A. Courtemanche, an individual, was dismissed. There was a verdict for plaintiff in the sum of $9,240.69 as general damages and $35,000 as punitive damages against the three corporations and judgment was entered on the verdict. Thereafter the defendants moved for judgment notwithstanding the verdict and in the alternative for an order setting aside the judgment and entering one in favor of plaintiff for the amount of the compensatory damages only. In event the foregoing motions should be denied, defendants moved for a new trial. The court found that the defendants' motion for a directed verdict, made at the trial, should have been granted and that the motion for judgment n.o.v. should be allowed. Judgment to that effect was entered. The court also found that the alternative motion to eliminate the verdict for punitive damages was well-taken and would have been allowed if it had not granted the motion for judgment n.o.v. The plaintiff appeals.

We shall refer to the three corporations collectively as 'the defendants.' L. A. Courtemanche, a corporation, will be referred to as 'Courtemanche'; Automotive Equipment Company as 'Automotive'; and The Courtemanche Acceptance Corporation as the 'Acceptance Corporation'.

We deem it unnecessary to review the pleadings at this time. The defendants-respondents very properly state in their brief that 'Appellant's statement of the case and the facts is substantially accurate.' We turn to the facts thus stated.

Early in 1950 the plaintiff negotiated for the purchase of certain personal property which is described, together with other property, in the complaint. It appears that some of the property belonged to Courtemanche and some to Automotive, but the rights between these two defendants were adjusted among themselves. The property was purchased by plaintiff from Courtemanche and plaintiff executed a note and chattel mortgage to Courtemanche for the full purchase price which was stated to be $102,177.78. In order to give to the mortgagee additional security the plaintiff included in the mortgage certain personal property owned by him in addition to that purchased from Courtemanche, which additional property was of the reasonable market value of $24,000, according to the testimony in behalf of plaintiff. Particularly included was a 1947 Peerless trailer, the property of plaintiff. The note provided for 10 per cent interest per annum and the mortgage provided for payments in instalments of $5,700 monthly, beginning on 25 May 1950 until principal and interest were paid. The sum of $102,177.78 which is recited in the mortgage as the amount owing included substantial financing charges and prepaid interest until maturity. Courtemanche, the mortgagee, assigned the note and mortgage to the Acceptance Corporation, which pledged both to a bank, taking a loan thereon sufficient to cover its payment to Courtemanche. The amount which became due and owing between the execution of the mortgage and the alleged conversion of the property on 6 October 1950 was $28,500. The payments which were made by the plaintiff prior to 6 October 1950 amounted to $26,667.87. It follows that on the latter date plaintiff was in default unless he was entitled to a further credit sufficient to cover the apparent default of $1,832.13. The plaintiff contends that he was entitled to such an additional credit and the defendants in their brief say:

'* * * the decisive question was whether or not appellant on that date was in default under the terms of the note and chattel mortgage given to secure the total purchase price of all the equipment and accessories.

'While respondents' amended answer set up three separate grounds of default, and appellant's second amended reply to these defenses was based on three separate theories, both parties agree that only one of the grounds of default is material to appellant's appeal from the judgment notwithstanding the verdict.

'This ground of default was that on or prior to October 6, 1950, appellant had failed to make the payments due as provided by the said note and mortgage. * * *'

The facts on which the plaintiff relies as proof that he was not in default on the date of the seizure relate to a certain Peerless trailer which was owned by the plaintiff and included in the mortgage to Courtemanche as additional security along with the property purchased by the plaintiff. The trailer was unsuitable for the operations in which plaintiff was engaged and it was agreed by the mortgagor and the mortgagee that the trailer might be sold.

During the latter part of April or early in May, the plaintiff left the trailer with the Pierce Trailer Company with instructions to sell it for not less than $2,500, and it was sold some time in June according to the testimony of Louis Courtemanche. Some time later the plaintiff inquired of Mr. Louis Courtemanche, who was vice president of all three of the defendant corporations, as to what disposition had been made of the trailer. We quote the plaintiff's testimony:

'A. Later I was talking to him in Portland, and I was in his office, and I asked him, I says, 'What become of that trailer?' It was quite a while after that I had taken it up to Pierce Trailer. And he says, 'Pierce sold it,' and I says * * * and Mr. Hansen spoke up, and he says, 'We had to give Pierce $250 commission for selling it.' And I said * * * I asked Mr. Courtemanche what he done with the $2,250 that was left then, and he said, 'Well, you'll get credit for that in time.'

'Q. Did he say on what account you would get credit for it? A. Pardon?

'Q. Did he say on what account you would get credit for it? A. No, no, no. He just said, 'You'll get credit for it in time.'' The Acceptance Corporation was the only one of the defendants which had any right to deal with the property covered by the mortgage or to authorize its sale. The Acceptance Corporation received the proceeds of the sale in the sum of $2,500. According to the testimony of plaintiff, Mr. Hansen who was vice president and manager of Automotive stated that they had to pay a commission of $250 to the Pierce Company. Louis Courtemanche testified, 'we paid the L. H. Pierce Company $125 commission for selling it.' He also said, 'We paid our salesman $125 and paid the Pierce Company $125.' He also admitted that in a previous deposition he had stated that he had paid the Pierce Company $250. The salesman who received the $125 commission was an employee of Courtemanche. The three defendants were separately incorporated but in the dealings with the plaintiff they appear to have acted as one and we think that under all of the evidence the jury could find that all three defendants through their common vice-president, Louis Courtemanche, cooperated in the alleged conversion. The defendants' brief makes no contention that we should consider the issues as to each defendant separately.

Although the Acceptance Corporation, as mortgagee, was the one who authorized the sale of the trailer, the net proceeds of the sale were turned over to Courtemanche, a separate corporation. The defendants contended that Courtemanche had installed air scales on two of the trucks which were covered by the mortgage and that the plaintiff owed that corporation $1,502.85 as payment therefor. The plaintiff testified that he had a conversation with Louis Courtemanche concerning two International trucks which he ultimately bought from Courtemanche, the corporation. We quote:

'A. * * * he says, 'What about these Internationals?' And I says, 'No, I don't want the Internationals,' I said, 'They are in too bad a shape, and I would have to overhaul them, and it would cost me a lot of money, and there's no tires on them either, so--' 'Well,' he said,--he led me to believe that I wouldn't get any more if I didn't take those, anyway, and I think they had it figured that those two were included in the fleet of trucks that I was going to have. So he says, 'I will put these air scales on them free,' he says, 'if you will take these two Internationals.' So the way it looked, I wasn't going to get any other trucks, so I agreed to take them.'

There is additional evidence supporting plaintiff's testimony. The agreed amount to be paid to Courtemanche by the plaintiff was stated in the mortgage to be $102,177.78, which did not include the $1,502.85 item for the air scales.

The defendant, in a letter dated 25 April, wrote the plaintiff that in rechecking the account they had failed to include the item of $1,502.85. Clearly there was evidence from which the jury could find that the plaintiff did not owe Courtemanche for the air scales and we presume from its verdict that they did so find. It was the claim of the defendants that they were entitled to apply the net proceeds from the sale of the plaintiff's...