German-American State Bank v. Seattle Grain Co.

• Decision Date: 24 January 1916
• Docket Number: 12851.
• Citation: 89 Wash. 376,154 P. 443
• Court: Washington Supreme Court
• Parties: GERMAN-AMERICAN STATE BANK v. SEATTLE GRAIN CO.

154 P. 443

89 Wash. 376

GERMAN-AMERICAN STATE BANK v. SEATTLE GRAIN CO.

No. 12851.

Supreme Court of Washington

January 24, 1916

Department 2. Appeal from Superior Court, Adams County; O. R. Holcomb Judge.

Action by the German-American State Bank against the Seattle Grain Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Wakefield & Witherspoon, of Spokane, for appellant.

G. E Lovell, of Ritzville, for respondent.

MORRIS, C.J.

Respondent was the holder of two chattel mortgages upon the wheat crop of one Setters, an Adams county farmer, the amount secured by these mortgages being $9,500. After the wheat was harvested Setters delivered approximately 1,000 bushels of the grain to appellant in payment of an indebtedness of $666.40 for sacks furnished the previous year. Appellant, upon receiving the grain, placed it in its warehouse in a common mass with other grain of like quality purchased by appellant from other farmers. This fact coming to the knowledge of respondent, it began a foreclosure of its mortgages, making Setters only defendant. A decree of foreclosure was entered, the property in Setters' possession sold, and a deficiency judgment entered against Setters in the sum of $1,656.60. Thereupon respondent commenced this action against appellant to recover the value of the wheat obtained by it from Setters claiming a conversion. Judgment was entered in its favor, and the grain company appeals.

It is contended first that the foreclosure action is a bar to this action. The argument supporting this claim is that, it appearing that respondent knew prior to the commencement of the foreclosure proceeding that appellant was in possession of a portion of the wheat, it was a necessary party to the foreclosure proceeding if respondent intendent to hold it liable for the value of the wheat in its possession. This contention is not sound. Appellant was a proper, but not a necessary, party to the foreclosure suit. The mortgages gave respondent a lien upon the wheat, of which appellant had notice through the public records. When, therefore, it took the wheat from Setters and commingled it with its own, it was an act of conversion. The lien of the mortgages still existed, and these liens were not lost when the bank sought judgment on its debt together with a foreclosure of its security. The foreclosure proceeding resulted in a deficiency judgment against the mortgagor, and when the security...