McKindley v. Citizens' State Bank of Edgeley
| Decision Date | 03 March 1917 |
| Parties | McKINDLEY et al. v. CITIZENS' STATE BANK OF EDGELEY. |
| Court | North Dakota Supreme Court |
The measure of damages for the conversion of an executory contract for the sale of land is the amount which will compensate the owner for all detriment approximately caused thereby.
Section 7180, Compiled Laws, which provides that the value of a written instrument is presumed to be that of the property to which it entitles the owner, has no application to executory contracts for the sale of land.
Appeal from District Court, Ransom County; Allen, Judge.
Action by J. N. McKindley and the Citizens' Bank of Lisbon, N. D., a corporation, against the Citizens' State Bank of Edgeley, N. D., a corporation. Judgment for plaintiff McKindley, dismissing as to Citizens' Bank of Lisbon, and defendant appeals. Reversed, and cause remanded.Lawrence & Murphy, of Fargo, for appellant. Curtis & Curtis, of Lisbon (Stearns & Hunter, of Duluth, Minn., of counsel), for respondent.
The plaintiff, McKindley, is the owner of a judgment against Frederick Milling Company and A. H. White, rendered August 7, 1911, in Hennepin county, Minn., for $6,384. As collateral to the indebtedness merged in the judgment, plaintiff held two executory contracts for the purchase of certain lands in Nebraska, executed by the Union Pacific Railway Company to one Swallow, and transferred to the plaintiff McKindley from a subsequent assignee by an assignment in blank. McKindley subsequently instituted suit upon this judgment in the district court of La Moure county in this state, and such action was awaiting trial at the February, 1914, term of said court. For the purpose of compromising the indebtedness evidenced by the judgment and certain advances made on the collateral contracts, a written agreement, dated January 28, 1914, was entered into between said McKindley, as party of the first part, Dakota Grain Company, as party of the second part, and A. H. White, as party of the third part, under the terms of which McKindley agreed that the proceedings in the action pending in the district court of La Moure county be stayed for a period of 90 days, and that upon the payment to him of the sum of $7,600 he would dismiss said action without costs, and assign to the said Dakota Grain Company the contracts for the Nebraska land and the judgment in the district court of Hennepin county, Minn., the Dakota Grain Company agreed to pay such sum of $7,600 on or before the 90 days after the date of the contract, and the said White and Dakota Grain Company agreed that the Frederick Milling Company and White would default or confess judgment in the action pending in the district court of La Moure county, and that in case said sum of $7,600 was not paid within 90 days, that then judgment should go by confession or default against said Milling Company and White in the action pending in the district court of La Moure county.
It was further agreed that time should be of the essence of the contract, and that an assignment of the judgment and assignments of the Nebraska land contracts, together with said contracts, should be deposited with the Citizens' Bank of Lisbon, N. D., to be held in escrow for a period of 90 days from the date of the agreement, and in case of payment of $7,600 before the expiration of such time, such papers should then be turned over to the party of the second part, but if the party of the second part failed to pay the money before or on said date, then in such case all of said papers were to be delivered to the party of the first part. The papers were subsequently delivered to, and deposited with, the Citizens' Bank of Lisbon in escrow under the terms of this agreement. On June 17, 1914, the Citizens' Bank of Lisbon, at the request of Curtis & Curtis, attorneys for the plaintiff bank, forwarded the papers to the defendant, Citizens' State Bank of Edgeley, with the following instructions:
The papers were received by the defendant bank, and receipt thereof acknowledged. On June 19, 1914, the defendant bank wrote the forwarding bank that:
“We believe it impossible to make returns as early as July 1st, for the reason that the company is floating a bond of considerable amount, and we do not think it will be completed by that time, so that the money will be forthcoming.”
The forwarding bank thereupon notified the defendant bank that the time in which to collect or return the papers was extended until further notice. On October 17, 1914, the forwarding bank wrote the defendant, demanding that the papers or the cash be transmitted to it by October 19, 1914.
A. H. White and others formed a corporation known as the Interstate Investment & Holdings Company, and tentative arrangements were made with the Central Trust Company of Chicago, Ill., to float a bond issue for the Interstate Investment & Holdings Company to be secured by various properties; and in connection with this matter the defendant bank forwarded the papers involved herein to the Central Trust Company, to be delivered to the Interstate Investment & Holdings Company upon payment of the value fixed thereon. The proposed bond issue for some reason was never floated, and upon the trial it was stipulated as facts in the case:
“That the plaintiff McKindley, at all of the times material in this action set out in the complaint, was aware of the formation of the Interstate Investment & Holdings Company, and that the interests of White in the lands described in the complaint were to be a part of the lands to be turned into the said Interstate Investment & Holdings Company, and used as security for said bond issue, and that said exhibits were subsequently deposited with the Central Trust Company of Illinois, who were to act as trustee in said bond issue, but which said bonds were not issued, and said exhibits are still in the possession of the Central Trust Company of Illinois, the same being done without the knowledge or consent of the plaintiff in this action.”
It was further stipulated:
“That no change has been made in the record title of the lands in question, so far as the plaintiff or defendants know, and that the defendant has not entered into actual occupancy of any of the lands in question at any time, and that the instruments in question, and described in this complaint, have not been placed of record,” and “that the defendants have not asserted or claimed title to any of said lands described in said exhibits.”
It further appears from the stipulation of facts or the evidence in the case that the defendant demanded the papers from the Central Trust Company on December 2, 1914, and that the Trust Company asserts no title or ownership to the property, either for itself or as trustee, but denied possession of the same to the defendant upon the sole ground that an attorney of Chicago had served notice upon the Trust Company that he claimed a lien thereon for work done in connection with said papers.
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