Larson v. Archer-Daniels-Midland Co.

• Citation: 226 Minn. 315,32 N.W.2d 649
• Decision Date: 21 May 1948
• Docket Number: No. 34651.,34651.
• Parties: LARSON et al. v. ARCHER-DANIELS-MIDLAND CO., Inc.
• Court: Supreme Court of Minnesota (US)

32 N.W.2d 649

226 Minn. 315

LARSON et al. v. ARCHER-DANIELS-MIDLAND CO., Inc.

No. 34651.

Supreme Court of Minnesota.

May 21, 1948.

Appeal from District Court, Lyon County; Albert H. Enersen, Judge.

Action by Chris S. Larson and others against Archer-Daniels-Midland Company, Inc., to recover for alleged conversion of flax straw. From a judgment for plaintiffs, the defendant appeals.

Judgment reversed.

Hall & Forbes, of Marshall, for appellant.

Ostensoe & Ostensoe, of Canby, for respondents.

FRANK T. GALLAGHER, Justice.

Appeal by defendant from a judgment of the district court. The action was for alleged conversion of flax straw grown upon plaintiff's farm during the years 1941, 1942, 1944, 1945, and 1946. Whether there was a conversion as claimed depends upon whether plaintiffs had title to the flax straw at the times of the alleged conversions, and that question in turn depends upon the relationship which existed between plaintiffs, Chris S. Larson and Martin Larson, as owners of the land upon which the flax was grown, and one Clifford Gaard, their brother-in-law, who was in possession of and worked the farm under an oral agreement with plaintiffs. Defendant is a corporation engaged in processing flax straw into materials and fabrics. During the years 1942 to 1946, inclusive, with the exception of the year 1943, defendant purchased straw from Gaard valued at $246.89. Defendant contends that the relationship between plaintiffs and Gaard was that of landlord and tenant, and that Gaard therefore had title to the straw at the times he sold it to defendant. Plaintiffs claim that the relationship between them and Gaard was one of tenancy in common, under which plaintiffs had legal title to at least one-half the straw. The court found that the plaintiffs and Gaard entered into an oral agreement whereby the latter was to work plaintiffs' land for the consideration of one-half of everything raised thereon, and also pay cash for hay land and fodder corn; that during the period of the oral lease certain amounts of flax straw, of a total value of $246.89, were raised and harvested on the premises, of which amount one-half belonged to Gaard and one-half to the owners; that Gaard, without authority or consent of the owners sold all the flax straw involved to defendant, and received payment therefor; that plaintiffs made due and repeated demands upon defendant and its agents for their share of the straw or its value, but that defendant failed either to deliver the straw or pay plaintiffs for it; that before defendant purchased the straw plaintiffs notified it of their ownership. The court concluded that plaintiffs owned and were entitled to the immediate possession of one-half of the straw or its value, in the sum of $123.44, and that there was a conversion of plaintiffs' share of the straw by defendant. In a note to its conclusions of law, the court stated that in its opinion it was unimportant whether plaintiffs and Gaard were tenants in common or landlord and tenant, since defendant had ample notice of the claim of plaintiffs that they owned the straw.

The two essentials of a cause of action for conversion are property in the plaintiff, either general or special, and a conversion by defendant. 2 Dunnell, Dig. & Supp. § 1937. Conversion has been defined as an act of wilful interference with a chattel, done without lawful justification, by which any person entitled thereto is deprived of use and possession. Prosser, Torts, 95.

Unless plaintiffs had title to the flax straw under their oral agreement with Gaard, their action must fail, for it is obvious that such title could not have been acquired by a mere claim of ownership made to defendant. As a general rule, the intent, knowledge, or motive of the converter is immaterial except as affecting damages. 2 Dunnell, Dig. & Supp. § 1928; 53 Am.Jur., Trover and Conversion, § 58. The effect of the notice referred to herein would be to preclude application of the rule that conversion does not lie where the taking is with the knowledge and consent of the owner. The factor of notice, then, as going to the issue of good faith, could be material only on the issue of damages, and even in that regard this court has said that actual notice of the adverse claim of the rightful owner is not necessarily inconsistent with honesty of intention. Whitney v. Huntington, 37 Minn. 197, 33 N.W. 561; King v. Merriman, 38 Minn. 47, 35 N.W. 570.

We proceed, therefore, to a determination of the issue of whether title to the flax straw at the times of the alleged conversions was in plaintiffs and Gaard as tenants in common or in Gaard as a tenant under a landlord-and-tenant relationship. Under an oral agreement made in the fall of 1938, plaintiffs and Gaard agreed that Gaard should assume exclusive possession of a certain quarter section of land owned by plaintiffs in Lincoln county, Minnesota, and farm the same, with one-half share of the grain and corn raised each year going to plaintiffs. In addition, under the agreement, Gaard was to pay plaintiffs four dollars per acre for alfalfa, fodder corn, and pasture acreage, and one dollar per acre for hay land. There was no agreement regarding the flax straw.

There is a conflict in the cases as to construction of contracts between the owner and occupant of land for its cultivation on a share basis, and as to the rights of the owner and the occupant in the land and in the crops. In Strangeway v. Eisenman, 68 Minn. 395, 398, 71 N.W. 617, 618, decided in 1897, Mr. Justice Mitchell said: "* * * No general rule can be laid down, applicable to all cases of agreements of this kind, because the precise nature of the interest or title between the contracting parties is largely a question of their intention, as expressed in the language they have used, and hence must depend upon the particular provisions of the contract itself. But it may be stated generally that the present tendency of the authorities is to hold that whenever there is a provision, in whatever form, for dividing the specific products of the premises, a tenancy in common arises in the products which are to be divided." (Italics supplied.)

The question of the construction of the relationship created by a contract to farm on shares is discussed in 15 Am.Jur., Crops, § 48, which states: "* * * The general rule is that the question whether the relation of the parties is that of landlord and tenant, landowner and cropper, participants in a common venture, or some other relationship must turn upon the actual intention of the parties as gathered from the entire contract, the language in which it is cast, and the circumstances surrounding its execution. If the import of the agreement is doubtful, the actions of the parties to it may furnish a satisfactory guide for its interpretation."

The matter of the intention of the parties appears to prevail in all cases brought to our attention. In the case of Mutual Benefit Life Ins. Co. v. Canby Inv. Co., 190 Minn. 144, 149, 251 N.W. 129, 132, this court, under the facts there, said that "it appears certain that the parties intended that the relationship of landlord and tenant should exist."

The contending parties have advanced strong arguments in their respective briefs. We have scrutinized the testimony of the only witnesses in the case, namely, Chris S. Larson, one of the owners, and Clifford Gaard, the tenant, to ascertain what was the intention of the parties to the oral agreement. Larson said he regarded Gaard as his tenant. When asked on direct examination as to the terms of the lease, he testified:

"Q. Tell us just when Mr. Gaard went on your place * * * with the intention of renting from you what was the conversation between you and Mr. Gaard as to the terms of the lease? A. Well, that was on a half and half basis.

* * * * * *

"A. * * * half of everything. Grain and straw wasn't mentioned but he paid half of the thrash bill and half of the twine and I paid half."

Questioned on cross-examination as to the contract relationship between Gaard and the owners, Larson testified:

"Q. You figured you were in a landlord and tenant relationship? A. Yes.

"Q. And what he paid you was rent? A. Yes, with the cash rent.

"Q. A share of the grain he gave you and with the cash rent was rent to you— paid to you? A. Yes."

There was some conflict in the testimony as to when Gaard moved onto the farm. Larson thought it was about March 1, 1940, while Gaard said March 2, 1939. With reference to the tenancy, Larson testified:

"Q. In your own mind now, in your own understanding of this matter, was he in there for a year then as a tenant of yours? A. Yes.

"Q. You consider all the rest of the time he was in there as a tenant from year to year? A. Yes, he was a tenant from year to year.

"Q. That was your agreement with him? A. Yes.

* * * * * *

"Q. But that was your understanding of the matter—he was a tenant from year to year, from approximately March 1st to March 1st? A. Yes.

* * * * * *

"Q. But the agreement you had you considered a rental agreement? A. Yes.

"Q. If at any time during one of the years from March 15th to March 15th or March 1st to 1st you had wanted Mr. Gaard to get off would you have considered March 1st the end of his term if you had wanted to ask him to leave? A. Well, he just started farming another year and didn't ask if he could stay or not.

"Q. But you considered him a year to year tenant? A. Yes.

"Q. My question was that if you had wanted to during that period you figure in your own mind you could have told him before March 1st and had him move off—his term was up each March 1st, wasn't it? A. Yes."

With reference to possession, Larson testified:

"Q. Now, during the time of his tenancy each one of these cropping years did you regard him as being in exclusive possession of the land? A. Yes.

* * * * * *

"Q. But Clifford Gaard, as your tenant, had exclusive possession and use of the land during each one of the cropping...