Nelson v. Enders

• Decision Date: 21 June 1960
• Docket Number: No. 8818,8818
• Citation: 353 P.2d 401,82 Idaho 285
• Parties: John C. NELSON, Plaintiff-Respondent, v. Glen ENDERS, Defendant-Appellant, and F. M. Bistline, Henry Parker, W. P. McLelland, and others sued herein as John Doe and Jack Roe, Fred Tripp, and the United States of America, and unknown owners of the following described property, to-wit: 1-1955 Low Boy MM trailer, Serial L. 5551-M25, 1-1953 D8 Caterpillar Tractor, serial number 2U 11540 SP, 1-1949 Kenworth, serial number 48505, motor number 107316, described by F. M. Bistline as serial number 58604 and by a plate on the said property as serial number 59605, the same being correctly identified by the motor number 107316, Defendants.
• Court: Idaho Supreme Court

Page 401

353 P.2d 401

82 Idaho 285

John C. NELSON, Plaintiff-Respondent, v. Glen ENDERS, Defendant-Appellant, and F. M. Bistline, Henry Parker, W. P. McLelland, and others sued herein as John Doe and Jack Roe, Fred Tripp, and the United States of America, and unknown owners of the following described property, to-wit: 1-1955 Low Boy MM trailer, Serial L. 5551-M25, 1-1953 D8 Caterpillar Tractor, serial number 2U 11540 SP, 1-1949 Kenworth, serial number 48505, motor number 107316, described by F. M. Bistline as serial number 58604 and by a plate on the said property as serial number 59605, the same being correctly identified by the motor number 107316, Defendants.

No. 8818.

Supreme Court of Idaho.

June 21, 1960.

Gus Carr Anderson, Pocatello, Robert M. Kerr, Jr., Blackfoot, for appellant.

Johnson & Olson, Pocatello, for respondent.

SMITH, Justice.

Plaintiff-respondent instituted this action for the purpose of determining the ownership of three pieces of heavy construction equipment, i.e., a 1955 Low Boy MM trailer, a 1953 D8 Caterpillar tractor, and a 1949 Kenworth truck tractor.

Only the defendant-appellant Glen Enders appeared in the action by his answer and counterclaim. The remaining defendants not having appeared, their defaults were entered.

The court, after trial without a jury, entered findings of facts and conclusions of law, followed by judgment in respondent's favor. The judgment awarded respondent, as owner, the equipment free and clear of liens, and denied to appellant any relief. Appellant appealed from the judgment.

We shall briefly summarize the facts and circumstances relating to the action.

During early October, 1958, defendant McLelland, as owner, agreed to sell three pieces of equipment, involved in this action, to respondent, who dealt generally in used cars and trailers in Salt Lake City, Utah. Respondent, prior to purchase, had the equipment examined by a heavy equipment dealer, who placed its value from a buyer's standpoint at $9,000. October 10, 1958, upon consummation of the transaction, respondent paid to McLelland and for his use the $9,000 alleged purchase price of the equipment, which sum was used to pay a lien on the caterpillar, a lien on the Kenworth truck tractor, and a small balance owing on a lease, McLelland receiving the balance in cash.

In consummation of the transaction defendant McLelland executed and delivered to respondent a bill of sale to each piece of equipment, warranting it to be free and clear of liens, and delivered to respondent a Wyoming certificate of title to the Kenworth truck tractor, and one to the Low Boy trailer

Respondent, because of his inexperience with heavy equipment, expressed apprehension about the deal; thereupon McLelland suggested that he be given an option to purchase the equipment. Later on October 10, 1958, respondent executed and delivered such an instrument in writing, hereinafter sometimes referred to as the McLelland option, granting to McLelland an option to purchase the equipment for the sum of $10,000, the option to be exercised on or before January 10, 1959. Respondent thereupon took possession of the machines, storing them on his property in Salt Lake City.

December 11, 1958, defendant McLelland entered into a conditional sale and purchase agreement with appellant Enders, covering the three pieces of equipment involved in this action, and three additional machines, i.e., a D8 caterpillar straight blade bulldozer, No. 2U 9601; a 1957 International 4-Wheel drive 3/4 ton pickup, and a 1957 Chevrolet 1/2 ton pickup truck. The same day, December 11, 1958, McLelland executed a bill of sale reciting that in consideration of $1,000 and other valuable considerations, paid to him, he had sold and transferred over to appellant the three machines involved herein; also two additional machines, i.e., a D8 caterpillar straight blade bulldozer No. 2U 9601, and one Woolridge T.C.R. 15 yard capacity pull type scraper.

Thereafter during December appellant caused the equipment to be moved to Pocatello, Idaho, unbeknown to respondent who, about January 6, 1959, after considerable investigation, ascertained its whereabouts and of the dealings had regarding it between defendant McLelland and appellant. On that date, January 6, 1959, appellant indicated that he desired to exercise the McLelland option to purchase and desired delivery of the titles upon exercise of the option. Respondent thereupon agreed to leave the equipment in Pocatello, in view of the outstanding options and appellant's interest in the transaction.

January 10, 1959, respondent and appellant met at the office of a bank official, at which time appellant requested ten days' time beyond January 10, 1959, within which to exercise the McLelland option, which respondent granted. The two men placed in escrow with the bank official the requisite documents relating to the equipment transaction including certificates of title; also, respondent executed and delivered to appellant an extension to January 20, 1959 of the McLelland option, in consideration of the additional sum of $1,050, bringing the total purchase price to $11,050, to be paid.

On January 21st, appellant not having exercised the option, the escrow holder returned to respondent his instruments previously escrowed. On that date, January 21st, respondent learned that defendant F. M. Bistline claimed a lien on the three pieces of equipment involved herein and additional equipment. This was by reason of a promissory note for $5,235, made payable to defendant Bistline, secured by a chattel mortgage encumbering such equipment which defendant McLelland had executed and delivered to Mr. Bistline October 24, 1958.

Defendant Bistline commenced proceedings, during the latter part of January, 1959, to foreclose the chattel mortgage, in which proceeding, on January 30th, respondent interposed a third party claim, (I.C. § 11-203), to the three machines involved in this action. Foreclosure sale of the equipment, noticed to be held February 5th, was not consummated because appellant paid the mortgage debt from $5,500, proceeds received from the sale of a D8 caterpillar tractor, not involved in this proceeding, encumbered by the Bistline mortgage; both appellant and defendant McLelland executed the bill of sale for this machine, delivered to the purchaser.

The United States, February 5, 1959, claimed a lien on the equipment involved herein because of defendant McLelland's nonpayment of certain of his federal income tax, which together with penalty and interest amounted to $2,182.38.

The foregoing related proceedings and transactions precipitated the commencement of this action, by respondent filing his complaint February 6, 1959, seeking to determine the ownership to the three pieces of equipment and to quiet title thereto in himself.

Appellant testified that he paid the delinquent federal tax on behalf of defendant McLelland on February 10, 1959, and the government receipts and release of levy on the equipment are so dated.

Appellant by his assignments of error contends that the transaction of October 10, 1958, between respondent and defendant McLelland (appellant's assignor), relative to the three pieces of equipment, covered by the McLelland option, was a security transaction, and that the trial court erred in holding that it was one of sale and purchase.

Appellant in seeking to uphold such contention urges disparity between the value of the equipment, from $18,000 or thereabout, which he claims to have been its value, and $9,000, respondent's alleged purchase price therefor. Suffice it to say that the record is conflicting concerning the value of the equipment. The record shows, however, that respondent protected himself from the standpoint of a buyer in a buyer's market, in dealing for the equipment, by having a dealer in heavy construction equipment examine the three machines; the dealer placed a value of $9,000 in a buyer's market, which respondent paid therefor to and for the use and benefit of defendant McLelland.

When questioned on cross-examination regarding the transaction, respondent ...