Johnson Farm Equipment Company v. Cook

• Decision Date: 24 February 1956
• Docket Number: No. 15312.,15312.
• Parties: JOHNSON FARM EQUIPMENT COMPANY, an Illinois Corporation, Appellant, v. Wayne G. COOK, Charles Blair, Bernard F. Balluff and John E. Nagle, Associated as Cook, Blair & Balluff, a Co-Partnership, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

230 F.2d 119 (1956)

JOHNSON FARM EQUIPMENT COMPANY, an Illinois Corporation, Appellant, v. Wayne G. COOK, Charles Blair, Bernard F. Balluff and John E. Nagle, Associated as Cook, Blair & Balluff, a Co-Partnership, Appellees.

No. 15312.

United States Court of Appeals Eighth Circuit.

February 24, 1956.

COPYRIGHT MATERIAL OMITTED

William D. Johnson, Streator, Ill., for appellant.

Wayne G. Cook, Davenport, Iowa, (John E. Nagle, Walter A. Newport, Jr. and Cook, Blair & Balluff, Davenport, Iowa, with him on the brief), for appellees.

Before WOODROUGH, JOHNSEN and VOGEL, Circuit Judges.

JOHNSEN, Circuit Judge.

This is a suit, under Iowa law, for a recovery in the nature of conversion.¹ The appeal is by the plaintiff, from the entering of a summary judgment for the defendants.

Plaintiff, an Illinois manufacturer of farming equipment, had shipped some items, of the value of $4585, to an Iowa dealer, under an arrangement whereby title was retained by the manufacturer but release would be made by it of such items as the dealer was from time to time able to sell. Defendants were at the time general attorneys for the dealer.

In its aspect most favorable to plaintiff here, the complaint made a general charge that defendants had had their client give them possession and joint control of the equipment; that plaintiff had made repeated demands upon both the client and defendants for a return of the property to plaintiff, but defendants had refused all of these demands; and that defendants thereafter, while thus keeping possession and control of the equipment, had improperly failed to care for it and allowed it to remain exposed to the elements and to deteriorate, with the result that, when they ultimately were willing to surrender it to plaintiff, it had become utterly unsalable and wholly valueless, and was unacceptable to plaintiff, so that what defendants had done had amounted, in its nature and effect, to an appropriation of the property as against plaintiff.

There was explanatory allegation to the effect that defendants had originally come into possession of the equipment by causing a wrongful attachment to be made of it on behalf of their client, through an Iowa state court, and having the sheriff and their client give them possession and control of the property; that about a year later an agreement had been entered into between plaintiff and defendants' client that the equipment would be allowed and should be undertaken to be sold, with the proceeds to be held by defendants until disposition of the attachment suit referred to, and with defendants then to make distribution "in accordance with the order of court or the terms of the settlement agreement"; that, in the carrying out of this arrangement, "defendants agreed to act as agents for both parties in conserving whatever might be realizable from a sale of said property", and some sales were thereafter made "under the direction of defendants", in the amount of $1179, but such sales necessarily ceased when the equipment "became unsalable due to deterioration", (a condition for which, as has been indicated, plaintiff claimed that defendants were responsible); that defendants' client had subsequently directed defendants, and plaintiff also had made demand upon them, to turn over the $1179 to plaintiff, but defendants had wrongfully refused to do so; and that "because thereof plaintiff charges defendants with being guilty of having converted said cash to their own uses, as bailees".

The prayer of the complaint was for a judgment against defendants, "in a sum equal to the full value of said equipment ($4585), which would include any cash items turned over to defendants as bailees for plaintiff, proceeds derived from the sale of a portion of said equipment". Thus, the effect of what has been above set out from the complaint was to make assertion against defendants of a claim in the nature of conversion on their part, as to equipment of the value of $3406, and as to cash in the amount of $1179.

Defendants filed an answer, making denial of any conversion by them, and further denying that they had ever in fact had possession or control of the property, as a basis on which to rest a conversion, or that they had at any time had a responsibility of any nature for the care, condition or effecting of a sale of the equipment, or that, as a matter of fact, any demand ever had been made upon them by plaintiff for a return of the property. Admission was made that they were holding the sum of $1179.11, "as escrow agent", but it was alleged that they could not yet, with impunity, release these funds to plaintiff (although they later paid the money into court in connection with their attempt to get the court to enter a summary judgment for them).

In essence, the defenses made were that defendants had had nothing to do with plaintiff's property, except as attorneys for their client and as escrow agent for the proceeds of the equipment sold; that all of their actions in the situation had been within the scope and proprieties of these relationships; and that, beyond this, there had never been any demand made upon them which could afford the basis for a claim of conversion, either of the equipment or of the money held by them.

Subsequently, as has been noted, defendants filed a motion for summary judgment, alleging that there was no genuine issue as to any material fact in the situation, and that they were entitled to a judgment as a matter of law.

The allegations of the complaint and the denials of the answer gave rise on their face to such seemingly material and normally triable issues of fact, on the conversion of equipment claimed, as whether defendants had in fact taken and held possession and control of the property; whether, if they had, plaintiff was in the situation entitled to its return and had made proper demand upon them therefor; and whether, if defendants had thus held possession and control, they also had irresponsibly subjected the equipment to a lack of protection and caused it to become valueless, so that, at whatever time plaintiff might have had a right to its return, their inability then to restore it, except as worthless junk, could perhaps have amounted, in its effect and circumstances, to an appropriation of the property as against plaintiff. The same would in general appear to be true also as to the question whether defendants' refusal, up to the time of their depositing of the money in court for purposes of their motion for summary judgment, to turn over to plaintiff, on the basis of their client's direction, the $1179 proceeds of the equipment which plaintiff had permitted to be sold, had been one of good faith and warranted precaution in their capacity of holder, so that their refusal had not had the effect of a conversion of the funds and would not leave them with a liability for the payment of interest on account thereof.

And if the issue of conversion could in any way be controlling of plaintiff's asserted right to a recovery, the showing made in support of the motion for summary judgment was not capable, on its nature and substance, as appearing in the printed record, of having transformed the underlying questions of fact which have been referred to above into matters which might, without a trial, be resolved by a court as a matter of law. Thus, any acceptance, for purposes of the motion for summary judgment, of the truth of the statements in defendants' affidavits, that they had never had possession or control of the property, or that their only actions in the situation had been in the capacity and bounds of attorneys representing their client, or that plaintiff had "made no demands upon defendants for a return of said property" as a foundation for a conversion, would, on the issues framed and the showing attempted in relation thereto, have amounted simply to the making of a credibility evaluation, in which, of course, a court is not at liberty to engage for purposes of a summary judgment.

But it is not necessary here to discuss the situation further from this standpoint, because the court did not purport, and apparently did not regard itself as entitled, to enter summary judgment in relation to these conversion questions. Rather, it concluded that, despite the issues which had been framed by the parties on the question of conversion liability, and despite the unabsoluteness in which the facts underlying those issues had been left by the showings on the motion for summary judgment, defendants could not in any event be held to have a possible legal liability to plaintiff in the situation, in view of the provisions of an agreement entered into between plaintiff and an intervener in the suit in which defendants had originally, on behalf of their client, caused attachment to be made of the equipment involved.

This agreement between plaintiff and the intervener was not set up as a defense or bar in the answer of defendants, but it is included in the disorganized miscellany of showing and countershowing, appearing in the printed record, which the parties apparently had placed before the trial court on the motion for summary judgment. None of this miscellany, however, makes wholly clear the circumstances underlying the agreement or the purpose intended to be served by it. There are some fragments of deposition testimony and extraneous correspondence in it, which tend to point to the existence of certain facts, though not in the degree of legal absoluteness necessary for their acceptance on motion for summary judgment. But any implications which they contain favorable to plaintiff are of course entitled to be accepted here in their full, possible significance, in testing whether the court could properly make summary disposition of the suit as a matter of law.

We thus gather that, after the institution of the attachment suit by defendants' client, plaintiff entered its appearance and...