Nathan v. Sax Motor Company, a Corp.
| Decision Date | 23 August 1934 |
| Docket Number | 6265 |
| Citation | 256 N.W. 228,64 N.D. 773 |
| Court | North Dakota Supreme Court |
Appeal from a judgment of the district court of Stark County Berry, J.
Affirmed.
C H. Starke, for appellants.
When a party having a lien stands by and remains silent when the mortgagor sells the grain covered by the lien it amounts to a waiver of his lien. Branthover v. Elevator Co. 33 N.D. 454, 156 N.W. 927; Mohall Bank v. Elevator Co. 35 N.D 619, 161 N.W. 287.
A creditor cannot deny that he has received a mortgage in part payment, where he has exercised acts of ownership over it. Bulen v. Burrows (Mich.) 19 N.W. 147.
Where payment is made to a third person by direction of the creditor, the debt is extinguished pro tanto. Bedford v. Kissick (S.D.) 67 N.W. 609; Helgeson v. Farmers Co-op. (Minn.) 199 N.W. 821.
Damages may be mitigated by the deduction of any lien on the property in controversy, or of any claim against the plaintiff connected therewith. 38 Cyc. 2103 g.
A defendant in trover is entitled to a deduction from the value of the converted property, of all sums received by the owner thereof from defendant or defendant's vendor on account of same. 38 Cyc. 2103 f.
In an action of conversion the measure of damages is the reasonable value of the property at the time and place of conversion, with interest, or when prosecuted with reasonable diligence the highest market value without interest. Lamoreaux v. Randel, 53 N.D. 697, 205 N.W. 722; First State Bank v. Osborne, 53 N.D. 551, 207 N.W. 37.
J. W. Sturgeon, for respondent.
Conversion is any unauthorized act of dominion or of ownership exercised by one person over personal property belonging to another in denial of, or inconsistent with, his right. 65 C.J. 11; Willard v. Monarch Elevator Co. 10 N.D. 400; Tuttle v. Hardenberg (Mont.) 38 P. 1070.
Where some other independent act of conversion can be shown, there is no necessity for a demand for personal property by the person claiming the ownership or right to possession, and a refusal by the original taker thereof to deliver it, in order to show a conversion of the property. 65 C.J. 42; Rolette State Bank v. Minnekota Elevator Co. 50 N.D. 141, 195 N.W. 6.
Where a person with knowledge of the owner's rights receives property into his possession by purchase or otherwise from one without title or authority to dispose of it, he is liable for its conversion without a showing of demand and refusal. Employers' F. Ins. Co. v. Cotten (N.Y.) 156 N.E. 629; Anderson v. Sutherland (Wis.) 65 N.W. 365; 65 C.J. 46; Wyman v. Carrabassett Hardwood Lumber Co. (Me.) 116 A. 729; Graham v. Purcell, 110 N.Y.S. 813; Bank of Commerce v. Gaskill (Okla.) 145 P. 1131.
A demand and refusal are not essential to a conversion when it is clear that a demand would have been useless or unavailing, if it had been made. 65 C.J. 47; Citizens Nat. Bank v. Osborne-McM. Elevator Co. 21 N.D. 335, 131 N.W. 266; More v. Burger, 15 N.D. 345, 107 N.W. 200.
Plaintiff brought action to recover damages in conversion. Motions for directed verdict were made, the jury discharged, and the court found for the plaintiff. From the judgment entered the defendants appeal.
Plaintiff had a chattel mortgage upon the 1932 crops of one Mischel to secure the payment of a promissory note for $ 312.00 and interest at 9%. The defendants, with actual knowledge of this chattel mortgage, but with the consent of the mortgagor, took three loads of the wheat in January, 1933, sold the grain, and applied the proceeds on a debt from the mortgagor to the Motor Company. On demand they failed to return the wheat.
This action was commenced June 21, 1933, and the court permitted the plaintiff to recover for the highest market value of the grain, entering judgment for the amount due on the note with interest.
Defendants say the court erred in permitting the plaintiff to recover for the highest market value; that there is no proof of the highest market value of the grain taken; that the court should not have allowed the plaintiff to recover interest on his note; and that the undisputed evidence shows plaintiff should be required to credit on the indebtedness due from Mischel the sum of $ 167.55, the proceeds of some wheat tickets which they say the plaintiff received.
Section 7168 of the Compiled Laws provides: "The detriment caused by the wrongful conversion of personal property is presumed to be:
It becomes important to determine the time of conversion. According to the record the plaintiff did not know of the taking of this mortgaged property until two or three weeks before the action was commenced. On June 19, 1933, demand for return was made and the action was commenced on the 21st.
But demand is not always necessary in order to prove conversion. In this case before the defendants took any of the grain both the mortgagee and the mortgagor told them the grain was mortgaged. The record shows that with full knowledge of this mortgage they took from the mortgagor a bill of sale for three loads of grain, stating in effect they would take their chances on the mortgage. The grain was sold immediately and the proceeds appropriated by the Sax Motor Company, the other defendant being its agent. As stated in Weigel v. Powers Elevator Co. 49 N.D. 867, 194 N.W. 113: "When property is taken subject to a lien, a conversion thereof does not take place until some affirmative act on the part of the defendant, like tortious detention thereof from the owner, or the party entitled to the possession thereof, or an exclusion or defiance of such party's rights, or the withholding of possession under a claim of title inconsistent with that of the plaintiff or owner." Defendants had no lien on the grain they took. The taking was tortious. Hence demand was unnecessary. Company A, First Regiment v. Hughes, 49 N.D. 626, 630, 193 N.W. 144.
It is clear in this case the conversion took place when the grain was taken and sold. Defendants deliberately put it beyond their power to return the property taken. What they did they did in defiance of plaintiff's rights. Demand therefore became immaterial. The defendants could not have returned this particular grain nor did they want to do so. They are not warehousemen who may return grain of like quantity and quality.
Conversion taking place in January, 1933, and the action having been commenced June, 1933, it becomes important to determine whether the action was "prosecuted with reasonable diligence." The commencement of the action within two or three weeks after the plaintiff knew the grain had been taken and sold is certainly reasonable diligence under all the circumstances in this case. This question of reasonable diligence became a question of law. See First Nat. Bank v. Red River Valley Nat. Bank, 9 N.D. 319, 83 N.W. 821.
The record shows the highest market value for No. 1 Northern wheat between January, 1933, and the time of trial was $ 1.01 per bushel.
It is said there is no proof of the highest market value of the grain of the quality...
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