Lebrecht v. Union Indemnity Company

• Decision Date: 02 June 1933
• Docket Number: 5940
• Citation: 22 P.2d 1066,53 Idaho 228
• Parties: L. G. LEBRECHT, Respondent, v. UNION INDEMNITY COMPANY, a Corporation, Appellant
• Court: Idaho Supreme Court

22 P.2d 1066

53 Idaho 228

L. G. LEBRECHT, Respondent, v. UNION INDEMNITY COMPANY, a Corporation, Appellant

No. 5940

Supreme Court of Idaho

June 2, 1933

FACTORS-FARM PRODUCE BROKERS-STATUTORY BOND.

1. Statutory bond of farm produce brokers held not to protect brokers' consignees, but only consignors not paid cash for produce delivered to brokers (I. C. A., secs. 22-1002 to 22-1006, 22-1008).

2. To determine legislature's intention, all sections of ambiguous statute must be considered and construed together.

3. Statute held to require farm produce brokers to furnish bonds only for benefit of consignors not paid cash for produce delivered to brokers (I. C. A., secs. 22-1004, 22-1006, 22-1008).

4. Word "person" in statute giving any person injured by licensed farm produce broker's dishonesty, fraud or violation of statute right of action on broker's bond refers to consignors (I. C. A., secs. 22-1004, 22-1006, 22-1008).

APPEAL from the District Court of the Eleventh Judicial District for Jerome County. Hon. Adam B. Barclay, Judge.

Appeal from an order granting a motion for a new trial. Reversed with directions to the trial court to reinstate the judgment.

Order granting a new trial reversed. Costs to appellant.

Walter H. Anderson for Appellant Union Indemnity Company.

The complaint in this case wholly fails to set out any cause of action against this defendant, Union Indemnity Company, for the reason that it shows on its face that the cause of action sued upon is an individual transaction, whereas the bond only secures partnership liability. (Stearns on Suretyship, secs 2, 17, 33; Dolese Bros. Co. v. Chaney & Rickard, 44 Okla. 745, 145 P. 1119; Cremer v. Higginson, 1 Mason, 323, 6 F. Cas. No. 3383.)

Henry M. Hall and Chapman & Chapman, for Respondent.

The complaint states a cause of action against the copartnership existing between Frank J. Fowler and John T. Stanger, and the cause of action sued upon is solely a partnership transaction, both as alleged and as proven, rendering appellant liable therefor under the terms of the bond executed by it for the dishonest and fraudulent breach by the copartnership of a contract entered into subsequent to the execution of the bond. The contract between respondent and the copartnership is not required to be an express contract. (Stearns on Suretyship, secs. 17, 33; 1927 Sess. Laws, secs. 2, 6, 8, chap. 236; Zach v. Pond, 50 Idaho 685, 299 P. 666; Duckwall v. Jones, 156 Ind. 682, 58 N.E. 1055, 60 N.E. 797.)

WERNETTE, J. Holden, J., and Sutphen, District Judge, concur. MORGAN, J., GIVENS, J., concurring in part and dissenting in part.

OPINION

WERNETTE, J.

The essential facts necessary for the determination of this case are substantially as follows: Respondent, L. G. Lebrecht, had been engaged in the potato business at Kansas City for many years. During the year of 1930 Vern W. Hise, of Idaho Falls, acted as his agent in Idaho for the purpose of buying potatoes. Frank J. Fowler and J. T. Stanger were a copartnership, doing business in the vicinity of Jerome, Idaho, under the firm name and style of Fowler & Stanger, hereafter designated as brokers. During the potato season of 1930, respondent purchased from said brokers fifty-five carloads of potatoes at different prices, paying from $ 75 to $ 100 advance on each car, usually paid by Hise with check, who was reimbursed by respondent; when the cars were shipped out the balance would be paid. During the month of September, 1930, Fowler & Stanger made written application to the Commissioner of Agriculture for the State of Idaho for license as farm produce brokers, farm produce dealers and farm produce commission merchants, pursuant to the provisions of chapter 10, Idaho Code Annotated, pertaining to dealers in farm produce, which application was accompanied by a surety bond, executed by the Union Indemnity Company, appellant, as provided for in said chapter. The application was granted and a license issued to said brokers, and the bond and license are in full force and effect. From time to time during the fall of 1930 respondent made further cash advances to said brokers, other than those above mentioned.

In October, 1930, said brokers began to delay deliveries of potatoes to respondent as per agreement, and respondent began to insist upon shipments being made. On November 11, 1930, respondent talked to said brokers at Jerome, Idaho, by long-distance phone from Kansas City, and it was suggested by said brokers that respondent had better come to Jerome to get the matters then pending, between the brokers and himself, straightened out. As a result of such telephone conversation, respondent came to Idaho the latter part of November, 1930. The accounts between said brokers and respondent were checked and found to be correct. Further advance payments were at that time made, by respondent to said brokers, so that respondent then had a credit of $ 4,960 as advance payment for potatoes, for which respondent was to have five carloads of potatoes then in transit, bills of lading to the five carloads of potatoes being delivered to respondent amounting to the sum of $ 1,908, leaving a credit balance in favor of respondent in the amount of $ 3,052, for which the brokers were to ship and deliver eight carloads of potatoes within thirty days. A bill of sale from said brokers to respondent was executed and delivered for the eight carloads of potatoes, the same to be free and clear of all incumbrances. A valid chattel mortgage was then outstanding against part of said potatoes, which fact was not disclosed to the respondent. Respondent received the five carloads of potatoes, which were in transit when he was at Jerome, but the eight additional carloads of potatoes were never shipped or delivered, nor was any part of the $ 3,052 repaid to respondent, although respondent had made demand for both.

Action was instituted by respondent against Fowler & Stanger and the Union Indemnity Company for damages in the sum of $ 3,052.80, on account of failure to deliver said eight carloads of potatoes or to repay said $ 3,052.80; respondent claiming that by reason of the failure of Fowler & Stanger, the copartnership, to deliver said potatoes or repay the sum of $ 3,052.80, they breached and violated the produce dealer's bond furnished by the appellant surety company, and it became indebted to respondent in said amount according to the terms of the bond. Fowler & Stanger made default in said action. Appellant surety company appeared and made answer denying liability. The case was tried before a jury, resulting in a verdict in favor of appellant. Motion for new trial was made by respondent, which motion was granted. This appeal is from the order granting a new trial.

We find the determination of one question is conclusive of this case. Was the statutory bond, furnished by appellant for the brokers, designed to protect a party in the position of the respondent, who was to be the consignee of the brokers? We think not.

The sections of chapter 10, Idaho Code Annotated, relating to dealers in farm produce, pertinent to the issues involved, are as follows:

Sec. 22-1002. "A farm produce broker, farm produce dealer, or farm produce commission merchant, within the meaning of this act is any person who shall contract to purchase, or who shall handle for compensation or promise thereof, for the purpose of resale or sale or who shall handle on account of or as an agent for another, any farm produce as herein defined, or who sells or offers for sale, who buys or offers to buy, negotiates or offers to negotiate the sale or purchase of fruits, vegetables and products of the apiary or any interest therein, either directly or indirectly. The provisions of this act shall not apply to any person who grows or produces farm produce, or purchases farm produce for his own use, nor to any person, who, being the owner of such farm produce, sells, exchanges, or otherwise disposes of it for his own account, nor to any person who makes purchase of such farm produce for the purpose of retail sale within the state, and who does resell such farm produce in less than carload lots and in the retail trade within the state."

Sec. 22-1003. "The term 'farm produce' as used in this act shall mean and include the natural produce of the farm, orchard, garden and apiary, except hay, grain, and livestock."

Sec. 22-1004. "The word 'consignor' as used in this act shall be deemed to be any person who has by contract sold and delivered in car lot or lots other than for cash in hand, any farm produce as the same is defined in this act; to any farm produce broker, farm produce dealer, or farm produce commission merchant, or any person who has by contract delivered in car lot or lots farm produce as the same is defined in this act to any farm produce broker, farm produce dealer or farm produce commission merchant to be sold by such broker, dealer or commission merchant for compensation either as agent or otherwise."

Sec. 22-1005. "No person shall act as farm produce broker, farm produce dealer, or farm produce commission merchant within the meaning of this act without first having obtained a license and given a bond as hereinafter described. Such license shall expire on June 1st of each year and must be renewed yearly."

Sec 22-1006. "Any person desiring to act as a farm produce broker, farm produce dealer, or farm produce commission merchant within the meaning of this act in the state of Idaho, shall make written application for a license therefor to the commissioner of agriculture, stating the name and residence of the applicant, his principal office or place of business in this state, name of the person or persons in charge of his office or business in this state, the names and...