Nohrnberg v. Boley

• Decision Date: 01 June 1925
• Citation: 42 Idaho 48,246 P. 12
• Parties: OTTO NOHRNBERG, Respondent, v. M. B. BOLEY and MRS. O. J. BOLEY, His Wife, Defendants, And R. J. DAY, D. B. MOORMAN and FIRST NATIONAL BANK OF TWIN FALLS, a Corporation, Appellants
• Court: Idaho Supreme Court

246 P. 12

42 Idaho 48

OTTO NOHRNBERG, Respondent, v. M. B. BOLEY and MRS. O. J. BOLEY, His Wife, Defendants, And R. J. DAY, D. B. MOORMAN and FIRST NATIONAL BANK OF TWIN FALLS, a Corporation, Appellants

Supreme Court of Idaho

June 1, 1925

BANKS AND BANKING-COLLECTIONS-AUTHORITY TO APPLY DEPOSITS-TROVER AND CONVERSION - CHATTEL MORTGAGES - EXECUTION - ACKNOWLEDGMENT - VALIDITY - VENDOR AND VENDEE-CONTRACTS FOR SALE OF REAL PROPERTY - EXECUTED CONTRACTS, ORAL AND WRITTEN - PLEADING AND PROOF - FARM LABORERS' LIENS - PROCEEDINGS TO PERFECT-APPEAL AND ERROR-NECESSITY OF FINDINGS OF FACT ON MATERIAL ISSUES.

1. Where a bank holds for collection notes given by a third party to one of its customers, it is without authority to apply to their payment funds deposited with it by a fourth party for other specific purposes, or to apply such funds in any way contrary to the instructions given at the time they were deposited.

2. Under C. S., sec. 6375, a mortgage of personal property executed but not acknowledged by both husband and wife is valid against the mortgagors and all persons not creditors of the mortgagors or subsequent purchasers or encumbrancers of the property in good faith and for value.

3. An amendment to a complaint which sets out the oral agreement incorporated in a written contract for the sale of real property, and evidence to establish such oral agreement, are properly received where it is apparent that all the terms of both the oral and written agreements were complied with by the parties, so that the contract was fully executed.

4. Farm laborers' liens being entirely of statutory creation, a person claiming the benefit of such lien must substantially comply with the statute, one of the essential requirements of which is that a claim of lien shall be filed within the prescribed time.

5. Failure of the lower court to find upon all the material issues in a case is ground for reversal on appeal.

ON REHEARING.

6. Deposit with bank by another than parties to notes which bank held for collection, being made with such direction that it did not constitute payment on notes, namely, that bank should pay out the money as and when rights of parties holding mortgages or claiming liens were ascertained, its return to depositor did not constitute breach of contractual duty to owner of notes.

7. Bank not having aided or abetted in unlawful sale of seed was not guilty of conversion merely because proceeds of sale were deposited with it for specific purpose and afterwards withdrawn by depositor, as he had right to do as against it.

8. Under C. S., sec. 7372, construed with section 7373, there is no farm laborers' lien during the sixty days allowed by the latter section for filing claim therefor conforming to section 7362, but only an inchoate right thereto, lost by claim not being filed.

9. As against plaintiff, second mortgagee of seed, first mortgagee who had assigned his mortgage, and so had no interest in the seed or its proceeds, and one aiding and abetting him, were guilty of conversion by taking the proceeds of sale of the seed, made without knowledge or consent of plaintiff, of whose mortgage they knew, and distributing it among farm laborers who might have acquired lien on the seed by filing claim, but failed to do so.

APPEAL from District Court of Eleventh Judicial District, for Twin Falls County. Hon. Wm. A. Babcock, Judge.

Action for damages for conversion of mortgaged personal property. Judgment for plaintiff. Reversed and remanded.

Reversed and remanded with instructions. Costs awarded to appellants.

Walters & Parry, for Appellant First National Bank.

Respondent can maintain this action in conversion only if he has a valid mortgage; respondent's chattel mortgage is invalid because of the defective acknowledgment. (C. S., secs. 6374 6375, 6920; Myers v. Eby, 33 Idaho 266, 193 P. 77 12 A. L. R. 535; Lemesnager v. Hamilton, 101 Cal 532, 35 P. 1054; Homan v. Wayer, 9 Cal.App. 123, 98 P. 80, 41 L. R. A., N. S., 1173, note, and cases cited; Wilson v. Wilson, 6 Idaho 597, at 604, 57 P. 708; Alferitz v. Scott, 130 Cal. 474, 62 P. 735; Butte Hardware Co. v. Sullivan, 7 Mont. 307, 16 P. 588.)

Respondent waived the lien of his chattel mortgage, if he ever had one, and therefore cannot maintain an action in conversion for the crops covered by the chattel mortgage. (5 R. C. L. 458, 459; Knollin & Co. v. Jones, 7 Idaho 466, 63 P. 638; Utah-Idaho Livestock Loan Co. v. Blackfoot City Bank, 290 F. 588; 43 L. R. A., N. S., 306, 307, note; Adams v. Caldwell Milling Co., 33 Idaho 677, 680, 197 P. 723.)

The only connection of appellant bank with the proceeds of the seed crop was to temporarily hold the same as a special deposit; therefore, it is in no way liable to the respondent. (Zane, Banks and Banking, pp. 282, 284; Harrison v. Smith, 83 Mo. 210, 53 Am. Rep. 571; 7 C. J. 630, and cases cited, People v. California Safe Deposit & Trust Co., 23 Cal.App. 199, 137 P. 1111; 3 R. C. L. 558.)

Even if appellant bank held the notes upon which respondent's action is founded, for collection, it was guilty of no such breach of duty to respondent as would render it liable to him. (7 C. J. 609; 3 R. C. L. 610, 611; Ward v. Smith, 7 Wall. (U.S.) 447, 19 L.Ed. 207; Carpenter v. National Shawmut Bank, 187 F. 1, 109 C. C. A. 55; Wood v. Merchants Trust Co., 41 Ill. 267; Ridgley National Bank v. Patton & Hamilton, 109 Ill. 479.)

Since the testimony affirmatively showed that the agreement of the parties as to the real estate transaction had been completely reduced to writing, the trial court erred in allowing testimony as to the preliminary negotiations between the parties. (Jacobs v. Shenon, 3 Idaho 274, 29 P. 44; Stein v. Fogarty, 4 Idaho 702, 43 P. 681; Newmyer v. Roush, 21 Idaho 106, Ann. Cas. 1913D, 433, 120 P. 464; Jarrett v. Prosser, 23 Idaho 382, 130 P. 376.)

The only connection of the appellant bank was to temporarily hold the proceeds as agent of appellant Day; it returned this money to its principal before the suit was filed; therefore it cannot be held liable in conversion. (26 R. C. L. 1139, 1140; Leuthold v. Fairchild, 35 Minn. 99, 27 N.W. 503, 28 N.W. 218.)

The trial court failed to find on any of the real issues of the case upon which there was conflicting evidence. (Brown v. Macey, 13 Idaho 451, 90 P. 339; Lorenzi v. Star Market Co., 19 Idaho 674, 115 P. 490, 35 L. R. A., N. S., 1142; Turner Agency v. Pemberton, 38 Idaho 235, 221 P. 133.)

Sweeley & Sweeley, for Appellants Day and Moorman.

By consenting to the sale of the property covered by his mortgage respondent waived his lien and cannot maintain an action against the purchaser for the conversion of the crops. (Bellevue State Bank v. Hailey Nat. Bank, 37 Idaho 121, 215 P. 126; Moore v. Jacobucci, 70 Colo. 171, 197 P. 1015; Luther v. Lee, 62 Mont. 174, 204 P. 365; United States Nat. Bank v. Great Western Sugar Co., 60 Mont. 342, 199 P. 245.)

Bothwell & Chapman, for Respondent.

Since the defendants Boley and wife admit the execution of the chattel mortgage, the appellants, who are not immediate parties to that conveyance cannot impeach or attack the certificate of acknowledgment; and in view of the admissions of the appellants, as to the execution of the chattel mortgage as contained in their several separate answers, the court was bound to disregard and could not consider any evidence contrary to such admissions. (1 C. J. 891-893; Holland v. Webster, 43 Fla. 85, 29 So. 625; Colonial Building & Loan Assn. v. Griffen, 85 N.J. Eq. 455, 96 A. 901; Crabb v. Bell (Tex. Civ. App.), 220 S.W. 623; 31 Cyc. 676-678; Hall v. Polack, 42 Cal. 218; Shaffer Bros. v. Warren (Iowa), 102 N.W. 497; Rawitzky v. Louisville & N. R. Co., 40 La. Ann. 47, 3 So. 387; Traitel v. Dwyer, 61 N.Y.S. 1100; Ratliff v. Ratliff, 131 N.C. 425, 42 S.E. 887, 63 L. R. A. 963; Charlton v. Markland, 36 Wash. 40, 78 P. 132; Veasey v. Humphreys, 27 Ore. 515, 41 P. 8; Los Angeles Pressed Brick Co. v. Higgins, 8 Cal.App. 514, 97 P. 414, 420; Capeze v. Hathaway, 153 Ky. 519, 155 S.W. 1155; Harper v. Clear Fork Coal & Land Co., 80 W.Va. 246, 92 S.E. 565; Greenless v. Chezik, 68 Colo. 521, 190 P. 667; Lee v. Little, 81 Okla. 168, 197 P. 449; Jones on Evidence, sec. 274.)

The judgment of the trial court will not be disturbed upon appeal merely because there is conflicting evidence as to whether respondent consented to a sale of the mortgaged property and as to whether he had knowledge of the existence of labor claims against it. (Stuart v. Hauser, 9 Idaho 53, 72 P. 719; Morrow v. Matthew, 10 Idaho 423, 79 P. 196; Robbins v. Porter, 12 Idaho 738, 88 P. 86; Later v. Haywood, 15 Idaho 716, 99 P. 828; Snowy Peak Mining Co. v. Tamarack & Chesapeake Min. Co., 17 Idaho 630, 107 P. 60; Blackfoot State Bank v. Crisler, 20 Idaho 379, 118 P. 775; Weeter Lumber Co. v. Fales, 20 Idaho 255, Ann. Cas. 1913A, 403, 118 P. 289; Miller v. Mitcham, 21 Idaho 741, 123 P. 941; Wittenberg v. Northern Idaho Pine Lumber Co., 23 Idaho 66, 131 P. 1.)

Respondent can maintain an action in conversion against the prior mortgagee for his reversionary interest in the mortgaged property. Upon the payment and satisfaction of the prior mortgage respondent's right to the remainder of the mortgaged property, or to its proceeds, and to maintain an action in conversion therefor, became absolute as against all of these appellants. (11 C. J. 605; 5 R. C. L. 446; Martin v. Holloway, 16 Idaho 513, 102 P. 3, 25 L. R A., N. S., 110; First Nat. Bank v. Steers, 9 Idaho 519, 108 Am. St. 174, 75 P. 225; Googins v. Gilmore, 47 Me. 9, 74 Am. Dec. 472; Citizens' Nat. Bank v. McKinley, 118 Minn. 162, 136 N.W. 579; Clendening v. Hawk, 8 N.D. 419, 79 N.W. 878; Schmittdiel v. Moore, 120 Mich. 199, 79 N.W. 195; DeLuce v. Root, 12 S.D. 141, 80 N.W. 181; ...