Healy-Owen-Hartzell Co. v. Merricourt Equity Exch.
| Decision Date | 19 June 1925 |
| Docket Number | No. 24694.,24694. |
| Citation | 164 Minn. 1,204 N.W. 527 |
| Parties | HEALY-OWEN-HARTZELL CO. v. MERRICOURT EQUITY EXCH. |
| Court | Minnesota Supreme Court |
Appeal from District Court, Hennepin County; E. F. Waite, Judge.
Action by the Healy-Owen-Hartzell Company against the Merricourt Equity Exchange, on judgment rendered in North Dakota, in which the Tenney Company was garnisheed, and in which the assignor of tickets for wheat stored in defendant's elevator intervened. From an order denying plaintiff's motion for amended findings or new trial, it appeals. Affirmed.
H. V. Mercer, of Minneapolis, for appellant.
W. H. Stutsman, of Mandan, N. D., for respondent.
Action on a North Dakota judgment, the contest being between plaintiff and intervener over an admitted indebtedness of the garnishee to defendant. The intervener prevailed below. Plaintiff appeals from the order denying its motion for amended findings or a new trial.
Defendant, Merricourt Equity Exchange (to be referred to herein as the Exchange), is a North Dakota corporation which formerly conducted an elevator at Merricourt in that state. It became insolvent not later than September 22, 1922. All of its property, including its elevator, bills, and accounts receivable and excepting only the grain on hand, were sold under the foreclosure of mortgages in plaintiff's favor. There was a deficiency, now represented by the judgment to recover on which, in this state, this action was instituted. The amount remaining due plaintiff is $2,024.91.
On September 23, 1922, when the Exchange was put out of business by the foreclosure, there was in its elevator, either stored or its property, barley, wheat, and rye of the aggregate value of about $12,800. Thereafter and before November 17, 1922, all that grain was shipped to the Tenney Company at Minneapolis and there sold in the usual manner, the net proceeds being $12,842.99. Remittances were made currently to the Exchange, and the money applied to the redemption of outstanding storage tickets until on or about October 26, 1922, when plaintiff garnisheed the Tenney Company. The balance then in its hands, due the Exchange was $5,159.87. The Exchange was selling the grain for the benefit of the holders of its storage tickets, and the balance due from the Tenney Company would have been applied to the further redemption of storage tickets, had not remittances been stopped by the garnishment.
1. Intervener is the assignee of the outstanding storage tickets representing grain of the agreed value of $6,311.08. His intervention, simultaneously or nearly so with the garnishment, raised the issue, the only one before us, as to whether plaintiff, a judgment creditor of defendant, or the holders of the storage tickets, are to have a prior right to the fund in the hands of the garnishee. As between the ticket holders and the Exchange, the property rights in the grain, at the time of its shipment to Minneapolis, had been fixed by section 3114, Comp. Laws N. D. 1913, which provides that the storage of grain in an elevator in that state shall be a bailment and not a sale; that in no case shall stored grain be liable to seizure in an action against the bailee, except by owners of warehouse receipts to enforce them; that stored grain in case of insolvency of the bailee shall "be first applied exclusively to the redemption of outstanding warehouse receipts"; and, finally, in the event of insolvency of the bailee, that "grain on hand * * * shall first be applied to the redemption and satisfaction of receipts issued" by the insolvent concern.
Intervener takes position squarely upon that statute as construed in Kastner v. Andrews (N. D.) 194 N. W. 824, and argues that the grain in question, before it left North Dakota, had been subjected to a trust for the benefit of ticket holders; that by force of the statute the grain had become their property, was sold for their benefit, and that the proceeds now belong to them as against attaching creditors, such as plaintiff. Plaintiff's rejoinder is that the North Dakota statute has no extraterritorial effect and that it gives to ticket holders a new, special, and local remedy, which cannot be enforced by the courts of Minnesota.
On that issue, we hold with the intervener. The insolvency of the Exchange was ascertained...
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