Kipp v. Goffe & Carkener, Inc.

• Decision Date: 06 June 1936
• Docket Number: 32881.
• Citation: 58 P.2d 102,144 Kan. 95
• Parties: KIPP v. GOFFE & CARKENER, Inc.
• Court: Kansas Supreme Court

58 P.2d 102

144 Kan. 95

KIPP v. GOFFE & CARKENER, Inc.

No. 32881.

Supreme Court of Kansas

June 6, 1936

Syllabus by the Court.

Operator of grain elevator on or adjacent to property of railroad, who had not complied with statute so as to become public warehouseman, had no authority to receive grain for storage or transfer for public, to issue warehouse receipts for stored grain, nor to issue scale tickets for such grain marked with word "storage," or some abbreviation thereof, so as to make them tantamount to valid warehouse receipts (Rev.St. Supp.1933, 34--223 et seq.).

Where operator of grain elevator failed to comply with statute so as to become public warehouseman, transaction between grower and operator whereby grain was delivered to elevator was a "sale," and not a "bailment," and grower could not recover for conversion (Rev.St.Supp.1933, 34--223 et seq.).

1. One who in this state operates a grain elevator on or adjacent to the property of a railroad, but who has not complied with the statute (chapter 194, Laws 1931 [Rev.St.Supp.1933, 34--223 et seq.]) so as to become a public warehouseman within the meaning thereof, has no legal right, power or authority to receive grain for storage or transfer for the public; neither has he authority to issue warehouse receipts for grain which a grain grower claims to have stored with him, nor to issue scale tickets for such grain marked with the word "storage" or some abbreviation thereof so as to make them tantamount to valid warehouse receipts.

2. The transaction described in the opinion between the grain grower and the operator of the elevator, under the law applicable thereto, is held to be a sale, not a bailment.

Appeal from District Court, Pratt County; George L. Hay, Judge.

Action by Roy Kipp against Goffe & Carkener, Incorporated. From a judgment for plaintiff, defendant appeals.

Reversed with directions.

A. M Ebright, P. K. Smith, and Bernard Peterson, all of Wichita and Alfred B. Williams, of Pratt, for appellant.

R. F Crick and M. C. Bucklin, both of Pratt, and C. H. Brooks, Howard T. Fleeson, Fred W. Aley, Carl G. Tebbe, Wayne Coulson, and Paul R. Kitch, all of Wichita, for appellee.

Arthur Hurd, of Abilene, and E. R. Morrison, Homer H. Berger, and D. C. Johns, all of Kansas City, Mo., amici curiae.

HARVEY Justice.

This is an action for the conversion of wheat alleged to have been stored in an elevator, the manager of which sold it through a grain company. A jury trial resulted in a judgment for plaintiff against the grain company. It has appealed.

In 1933, and for several years prior thereto, L. M. Dillon, doing business as the L. M. Dillon Grain Company, operated two grain elevators situated on the right of way of the Missouri Pacific Railroad at Iuka, in Pratt county. One of these had a capacity of 9,500, the other of 10,500, bushels of grain. An average year Dillon took in from 75,000 to 100,000 bushels of wheat; in 1933, from 40,000 to 50,000 bushels. This wheat was delivered to him by wheat growing farmers in the vicinity. He had never complied with our statutes authorizing him to be a public warehouseman. He testified that he received wheat under three types of contract: (1) An outright purchase of the wheat at the time it was delivered, and which was paid for at the market price of that date; (2) under a contract by which he purchased the wheat and became the owner of it, but agreed to pay for it at some future date to be chosen by the seller, and at the market price of that date; and (3) he received wheat for storage for those who preferred to store their wheat rather than to sell it. We pass for the moment his testimony indicating the second and third of these methods were substantially the same. He shipped most of this wheat to Goffe & Carkener, a corporation, at Wichita, engaged generally in the business of buying and selling grain. The evidence indicates there were three types of contract under which those shipments were made: (1) An outright sale by Dillon to Goffe & Carkener; (2) shipments were made on consignment, the wheat to be sold by Goffe & Carkener and the proceeds remitted to Dillon; and (3) by what is spoken of as proposition A. Under this plan Dillon consigned the wheat to Goffe & Carkener, who found a buyer for it willing to advance to within 5 cents a bushel, the then market price, and to make settlement at some future date named by Dillon at the market price of that date. On all the wheat consigned to Goffe & Carkener under plans 2 and 3, just mentioned, that company was paid a commission of one cent per bushel. Without regard to the type of contract under which the shipments were made, Dillon always estimated the amount coming to him, drew a sight draft on Goffe & Carkener for the amount, and attached the bill of lading to it so that Goffe & Carkener had to pay the draft before disposing of the wheat. Differences between the amount of the draft and the final proceeds of the shipment were accounted for later. Dillon received full payment for all the wheat he shipped to Goffe & Carkener.

The plaintiff Kipp contends that he delivered his wheat to Dillon under a contract of storage; that the relation between them was that of bailor and bailee; that the title to the wheat never passed from him; that it was still his wheat when Dillonshipped it to Goffe & Carkener; and that by selling the wheat and remitting the proceeds to Dillon, Goffe & Carkener became liable to him as for conversion. Upon this view of the transaction there is authority to sustain the liability of Goffe & Carkener. See 3 R.C.L. 142; 6 C.J. 1128, 1129, 1147, and cases there cited.

Appellant contends that under the facts disclosed by the record and the law applicable thereto, the transaction between plaintiff and Dillon amounted to a sale of the wheat, with payment to be made at a future date; that the relation between plaintiff and Dillon by reason of that transaction was that of debtor and creditor; that Dillon had title to the wheat, and when he sold it to or through Goffe & Carkener and received payment there was no further liability to Dillon or to Kipp. Appellant further contends that under the facts shown by the record Kipp is estopped to make the contention that Dillon had no authority to sell the wheat. Appellant also contends the record disclosed trial errors which in any event require a reversal for a new trial, but in our view of the case it will not be necessary to examine these.

The principal controversy between the parties is whether the transaction between plaintiff and Dillon was a bailment or a sale. A fuller statement of the record will enable us better to understand it. The amended petition is in two causes of action; the first for the conversion of wheat delivered by the plaintiff Roy Kipp to Dillon; the second for the conversion of wheat delivered by his father, Hiram Kipp, to Dillon, the claim for which was assigned to plaintiff. Dillon was made a party defendant, but he filed no answer, made no defense, and no judgment was rendered against him. He was called as a witness for plaintiff.

Dillon's testimony disclosed that he formerly operated the elevators for one Carlson, who withdrew in 1931, since which time he had been in sole charge; that his method of receiving and shipping wheat had been substantially the same since he had been operating the elevators; when he bought and paid for wheat, as it was delivered to him, no tickets were issued to the person who delivered it; or, if so, they were marked paid. If he bought it to be paid for in the future, a written contract, in duplicate, was signed by the seller and himself. This was dated and recited that Dillon bought and (a named seller) sold certain described grain; the seller acknowledged the receipt of any money paid thereon; the buyer agreed, on presentation of the seller's copy of the contract, at some future date selected by the seller, to pay for the grain the market price at Iuka on that date, deducting sums previously paid, and, "From this price the buyer shall make a further deduction of 1¢ per bushel per month or fraction thereof intervening between the date of this instrument and the date of payment." It further recited that upon the execution of the instrument the grain described became the property of the buyer, and it fixed a date within which settlement must be made. He testified when he bought wheat on such a contract scale tickets were given to the seller, but the price was not marked thereon; these tickets were marked with some abbreviation of the word "storage," as "s," "st.," "stor."; also that he kept a seller's ledger account so as to show each load delivered under the contract and that he marked the ledger entry of each load "storage." This referred to the one cent per bushel per month mentioned in the contract. Sometimes wheat growers did not want to sell their wheat when they delivered it, but wanted to store it. He accepted such wheat for storage, issued scale tickets marked with some abbreviation of that word, but without a price; and he also marked the customer's ledger account with the word "storage," or some abbreviation of it. Thereafter, if the person who had stored wheat with him wanted it back, he came and got it, or part of it; a few wanting wheat to sow had done so. Ordinarily the person came in later and sold him the wheat and he paid or settled for it at the market price of that date. Frequently when a person stored wheat with him he later had the party sign the written sale contract. The matter was handled about the same way whether the sale contract was signed or not; the wheat was paid for on the date the customer or seller selected, at the market price of that date, and one cent per bushel per month storage was deducted. Dillon handled...