Kastner v. Andrews

• Decision Date: 18 July 1923
• Citation: 194 N.W. 824,49 N.D. 1059
• Court: North Dakota Supreme Court

194 N.W. 824

49 N.D. 1059

PETER KASTNER, Respondent, v. A. C. ANDREWS, Doing Business as Andrews Grain Company, Appellant

Supreme Court of North Dakota

July 18, 1923

Appeal from the District Court of Burleigh County, Berry, J.

Affirmed.

H. A Libby, for appellant.

Murphy & Toner, McLearn & Gilbertson and Sullivan, Hanley, & Sullivan, filed briefs in support of appellant's position.

"One who merely received from another, who has wrongfully sold the property of a third person, the proceeds of such sale is not guilty of conversion." 28 Am. & Eng. Enc. Law, 2d ed. p 700 and cases there cited.

"A person having merely a limited interest in a chattel, may sell such interest without being guilty of a conversion." 28 Am. & Eng. Enc. Law, 2d ed. p. 700 and cases there cited; Leuthold v. Fairchild, 35 Minn 99; Towne v. St. Anthony & D. Elev. Co. 8 N.D. 200 77 N.W. 608; Citizens Nat. Bank v. Osborne-McMillan Elev. Co. 21 N.D. 335, and cases cited; Plano Mfg. Co. v. N. P. Elev. Co. 53 N.W. 302; Gillette v. Roberts, 57 N.Y. 28; Barrett v. Warren, 3 Hill, 348; Abernathy v. Wheeler, 92 Ky. 320; Parker v. Middleton, 24 Conn. 207; Valentine v. Duff, 34 N.E. 453; Bigelow, Leading Cases, Torts, p. 446; National Exchange Bank v. Wilder, 34 Minn. 142; Ferguson v. Talcott, 7 N.D. 183; Sanford v. Duluth & D. Elev. Co. 2 N.D. 6; Kellogg v. Olson, 34 Minn. 103, 24 N.W. 364; Caldwell v. Pray, 41 Mich. 307; Kohl v. Lynn, 34 Mich. 360; Jones, Chat. Mortg. P 455.

Charles L. Crum, William Langer and S. L. Nuchols, for respondent.

A. G. Divet and McIntyre, Burtness & Robbins, as amici curiae, filed briefs in support of respondent's position.

These "findings of fact," as we understand the rule in North Dakota, are entitled to the same weight in an action at law, as the verdict of a jury, and are to be so treated on appeal; and are not to be disturbed unless they are clearly against the preponderance of the evidence. Bank v. Webber (N.D.) 124 N.W. 952; Dowogiac Mfg. Co. v. Hellekson, 13 N.D. 257; Ruettell Ins. Co. v. Greenwich, 16 N.D. 546.

An agent can be guilty of conversion. The rule is definitely announced in the text in 28 Am. & Eng. Enc. Law. 2d ed. 688 in the following language: "An agent or servant who converts the property of a third person is liable in trover for such conversion and it is no defense that his acts were committed in pursuance of his employment and for the benefit of his employer or master; and this is true though the servant or agent acted under the bona fide belief that his master or principal was the owner of the property and in ignorance of the true owner's rights, since one who interferes with personal property, must at his peril see that he is protected by the authority of the true owner. Thus, where a broker or agent purchases goods from one having mere possession and without authority to sell and delivers such goods to his principal, he is liable for conversion. So, where an agent, such as an auctioneer, broker, factor, etc., sells property for one who has no title thereto, and transfers the possession thereof to a purchaser, he is liable for conversion. It has been held, however, that there is no liability for the conversion on the part of an agent who merely negotiates a sale for his principal without in any way interfering with the property, or who as agent merely collects the purchase money for goods wrongfully sold by his principal."

Under S.D. Rev. Code 1919, §§ 9751, 9753, 9754, 9758 and 9760, relative to grain warehouses, which recognize the inadequacy of warehouse facilities and the necessity of transferring grain to the terminal market and selling it, the holder of the storage ticket is not entitled to restoration of the identical grain stored and cannot demand it at the elevator where it was stored, and the warehouseman is only required to deliver an equal number of bushels of like grade, either at the warehouse or at the terminal market." Nicholson v. Poehler Co. 284 F. 992.

"Defendants, though commission merchants doing business as such, in the matter of the sale of the wheat in question and the appropriation of the proceeds thereof to the payment of the Walbridge indebtedness, acted in their own interest and in their own behalf and not as mere agents for Walbridge, and are liable as for its conversion." Dolliff v. Robbins, 86 N.W. 772.

BIRDZELL, J. BRONSON, Ch. J., and CHRISTIANSON, J., and BURR and COOLEY, Dist., JJ., concur. JOHNSON and NUESSLE, JJ., did not participate; Honorable A. G. BURR, Judge of the Second Judicial District, and Honorable CHAS. M. COOLEY, Judge of the First Judicial District, sitting in their stead.

OPINION

BIRDZELL, J.

This is an appeal from a judgment in favor of the plaintiff in an action for the conversion of grain. The complaint alleges that between the 19th day of October, 1920, and the 1st of March, 1921, certain named persons, plaintiff among them, deposited grain for storage in the elevator of the Glen Ullin Co-operative Elevator Company at Glen Ullin, North Dakota, and that between the 17th day of March, 1921, and the 16th day of June, while the persons storing said grain were owners in common thereof, the defendant without the knowledge and consent of such persons and in violation of their rights did take and convert the same to his own use; that the original holders of the negotiable storage receipts, except the plaintiff, sold and assigned them for value to the plaintiff in this action; that the elevator company issuing the receipts is unable to honor them either by delivery of the grain or the payment of the value thereof; that at the time of the conversion of the grain the defendant knew that the same was stored with the elevator company as bailee and that the storage receipts were outstanding; and that the plaintiff had demanded the grain and redelivery was refused. The answer denies the conversion, puts the plaintiff upon proof as to the quantity of grain stored, for which he claims to hold storage receipts, and, in addition, alleges that the Glen Ullin Co-operative Elevator Company, during the time mentioned in the complaint, also received grain from the producers and shipped it in the usual course of the elevator business, and that from time to time it shipped to the defendant certain consignments to be handled and sold by him on the market; that the consignments were so received by the defendant and were sold for the use and benefit of the Glen Ullin Co-operative Elevator Company; that defendant had paid the elevator company for all the grain so shipped to him; that the defendant had no knowledge or notice that storage tickets were outstanding for any of the grain so handled by him. The case was tried in the district court of Burleigh county before Honorable H. L. Berry, district judge, without a jury, a jury having been waived. The findings of fact are substantially in accordance with the allegations in the complaint, except that the court did not find that the plaintiff had demanded of the defendant the redelivery of the grain. It did find, however, that the plaintiff went to the defendant's office in Minneapolis and demanded a settlement of his claim on the storage receipts and that a demand for the grain would have been futile. It further appears from the evidence, although there are no findings covering the matter, that an agreement was entered into between the defendant and the Glen Ullin Co-operative Elevator Company, dated September 7, 1920, wherein it was recited that the elevator company was desirous of making arrangements with the defendant for the furnishing by the latter of funds from time to time needed in the business. It was agreed the defendant would loan and advance funds to the elevator company upon the understanding that they be used exclusively in buying grain and seed at the elevator and defraying the incidental expenses of conducting the business. The elevator company agreed on its part to ship to the defendant the grain and seed purchased to be handled for the former on commission, as such business is usually done, at Minneapolis, Minnesota,--it being understood that the defendant should make sales either in the form of options or as cash sales according to its best judgment. It was also agreed that the defendant should be entitled to deduct from the proceeds of sales any sum owing by the elevator company. It further appeared that the elevator company had given a warehouseman's bond in the sum of $ 5,000. As to a small portion of the grain in controversy, it appears that the elevator company had deposited it for storage in another warehouse in Glen Ullin and that the defendant had demanded and received the warehouse receipt issued therefor, later disposing of the grain and crediting the elevator company with the proceeds.

The principal, if not the sole, question to be determined upon this appeal is whether or not the defendant, in receiving and selling stored grain, applying the proceeds on its account with the elevator company and later refusing to honor the storage tickets issued by the latter, is guilty of conversion.

Obviously the first and primary matter to be considered in the solution of this question is the relationship between the elevator company first issuing the storage receipt and the holder of the receipt. In the light of our statute and the former decisions of this court, this relationship is firmly established as being that of bailor and bailee. The statute, §§ 3113 and 3114, Comp. Laws 1913, in part reads:

Sec 3113. "Each storage receipt issued in this state shall expressly provide that at the option of the holder of such receipt the kind, quality and quantity of grain for which such receipt was issued shall be, on his demand, delivered back to him, at any terminal point or at the same place...