Odegard v. Haugland

• Decision Date: 25 September 1918
• Citation: 40 N.D. 547,169 N.W. 170
• Parties: ODEGARD v. HAUGLAND.
• Court: North Dakota Supreme Court

40 N.D. 547

169 N.W. 170

ODEGARD

v.HAUGLAND.

Supreme Court of North Dakota.

July 16, 1918.

Rehearing Denied Sept. 25, 1918.

Syllabus by the Court.

Where personal property is subject to the lien of a chattel mortgage, and such chattel mortgage is foreclosed, and the personal property covered by such chattel mortgage is sold upon such foreclosure sale, and a purchaser at such sale agrees with the owner of the personal property sold at the chattel mortgage sale that the purchaser would purchase the personal property at such sale and pay for the same, and that the owner might, within five days, repay the purchaser the amount paid out by him at such sale, such purchaser, under such an agreement, is the agent of the owner of the property, and upon the payment or tender to the purchaser by the owner of the purchase price of said property, for which the property was sold at said foreclosure sale within the time stipulated, the purchaser must deliver such property to the owner, and, failing and refusing to do so in accordance with the terms of the agreement, he is liable for conversion for the value of the property purchased at such sale and converted.

An executory agreement to act as agent for another is ordinarily not binding on either party, unless based on sufficient consideration; but where one gratuitously agrees to act for another, and enters upon the performance of the undertaking, he must complete performance according to his promise, even though there is a lack of consideration.

The question of agency was submitted to the jury under proper instructions, and it found the agency existed, and its verdict is conclusive in this regard.

Additional Syllabus by Editorial Staff.

In action for breach of contract to purchase at chattel mortgage foreclosure and to permit owner to repay purchase price, conversations between the parties, after the sale, as to defendant's agency, were admissible.

A contract of agency to purchase at a chattel mortgage foreclosure and to permit owner to repay purchase price was not within the statute of frauds.

Appeal from District Court, Benson County; C. W. Buttz, Judge.

Action by Andrew Odegard against I. C. Haugland. Judgment for plaintiff, and defendant appeals. Affirmed.Cowan & Adamson and H. S. Blood, all of Devils Lake, for appellant. Flynn & Traynor, of Devils Lake, for respondent.

GRACE, J.

This appeal is one where the defendant appeals from the judgment of the district court of Benson county, and from an order denying a motion for a judgment notwithstanding the verdict. The plaintiff, Odegard, also appeals from a portion of the judgment, being a portion thereof which denies the right of Odegard, the plaintiff, to recover approximately $700 in addition to the amount of the verdict rendered by the jury, basing his right to recover such additional amount on the alleged error of the court in instructing the jury to deduct from the value of the machinery involved in the action the amount of the liens of the Avery Manufacturing Company and John W. Orchard. The action is one where the plaintiff seeks to recover from the defendant the value of a certain threshing machine and engine, the value of which is alleged to be $4,000, subject to a mortgage lien in favor of the Minneapolis Threshing Machine Company for $662, which was foreclosed and the property sold on the 1st day of August, 1913. The plaintiff pleads and relies upon the contract alleged to have been entered into between plaintiff and defendant just prior to the sale of such property at such foreclosure sale.

Plaintiff further alleges that the terms, in short, of such contract being that the defendant was to be at such sale, and bid in and purchase the said threshing machine and engine, and pay for the same, and that plaintiff was to repay the defendant within five days after the day of sale; that the defendant was to have the use of the threshing machine and engine for two days of the five days as compensation for his services in purchasing the threshing machine and engine on behalf of plaintiff. Plaintiff further alleges that the defendant appeared at the time of sale, bid, and purchased the threshing machine and engine for $750; that within five days plaintiff tendered the defendant the sum of $750 with interest, which was refused by defendant, which amount plaintiff deposited in the Farmers' & Merchants' Bank at Warwick, together with $2 interest, payable to the order of the defendant, and served notice on defendant of such deposit. The answer of the defendant is a general denial, except that it admits the mortgage to the Minneapolis Threshing Machine Company, and that the defendant bought the threshing machine and engine at the sale for $750.

Some considerable period of time prior to August 1, 1913, Odegard purchased a certain Minneapolis threshing machine and engine complete, and had possession thereof until about August 1, 1913. In the spring of 1913 Odegard became bankrupt, filed his petition in bankruptcy, and a trustee was appointed. The Minneapolis Threshing Machine Company had a chattel mortgage lien on the machine. Default having occurred in the mortgage, the same was foreclosed, and the machinery covered by said mortgage was advertised for sale on August 1, 1913, at the village of Warwick. The sale occurred at about 2 o'clock in the afternoon of that day. Odegard attended the sale. It is claimed by Odegard that a short time before the sale, and in the afternoon of the day of sale, Haugland came to Odegard, who claimed to be then standing near the machinery on the street, and asked Mr. Odegard if he intended to redeem the rig, and Mr. Odegard claims and testifies that Haugland said to Odegard: “I will bid it in for you, and you can come in and settle afterwards.” Odegard testifies: “I thought that would be good enough, but I don't know as I said anything.” This was just a few minutes before the sale. Haugland, in his testimony, denies any such agreement.

[4] There were two conversations which may be considered as throwing some light upon whether the contract, which, if a contract at all, was one of agency. Such conversations are testified to by the plaintiff and are as follows, the first conversation having taken place in the bank shortly after the sale:

“Q. Was there some conversation between you and Mr. O'Hare and Mr. Haugland in the bank there at this time with reference to this sale? A. Yes, sir. Q. Just go ahead and state the conversation, or the substance of it, as near as you can. A. With O'Hare? Q. Tell it all. A. Mr. O'Hare told me I had five days within which to redeem the rig, if I wanted to. Court: Was Mr. Haugland there when Mr. O'Hare was talking to you? A. Yes, sir. Court: Right close, so that he could hear you? A. Yes, sir; if he wanted to. Mr. Cowan: I move to strike out the answer. Court: Denied. Witness: Mr. O'Hare told me I had five days within which to redeem if I wanted to. Twice he said that to him, and Mr. Haugland stood right there, and he says: ‘You have five days, exclusive of to-day, in which to settle for the rig. All I want is a couple of days threshing.”’

The second conversation testified to was on the 6th day of August, 1913. The testimony is as follows:

“Q. On the 6th day of August, 1913, did you have a conversation with Mr. Haugland about settling for the machine? A. Yes, sir; I did. Q. Where was that conversation? A. At his own home. Q. Who was with you at that time? A. Mr. Orchard. Q. Just state to the jury the conversation you had down there with Mr. Haugland at that time. Tell the conversation as near as you can. What was said by you and by Mr. Orchard and by Mr. Haughland? A. Mr. Orchard first spoke up and said he had come to settle for that rig, and Mr. Haugland said the time had expired at 4 o'clock, banking hours, this afternoon, and he spoke up again, and they quarreled a while. They talked loud, and I don't remember just what was said. Then I said, ‘I didn't come here to quarrel with you; I come to settle for that rig;’ and he said, ‘You are too late.”’

All of the testimony, with reference to such conversations, was admitted over the objections by defendant's counsel, which objections, we are of the opinion, were properly overruled, and are equally clear there was no error in the admission of such testimony for the purpose for which it was intended.

[1] The appellant claims, in order for the plaintiff to recover, he must prove three things: (1) That he was the owner of the property; (2) that the contract which he alleges in his complaint was made; and (3) that there was an equity of value in the property over and above the mortgages there against it, available to plaintiff, of which he was wrongfully deprived by the refusal of the defendant to perform the contract alleged. The appellant further claims that, if the plaintiff fails to prove any one of these three things, he cannot recover in this case. We do not agree with this contention of the appellant, and we hold that the only one of such propositions necessary to establish is the contract set out in the plaintiff's complaint. Such contract, if it were in fact made, was one of agency. As we view this case, it is immaterial whether the plaintiff was either the owner or had any equity in the property in question at the time of the sale thereof. It may be taken into consideration, however, that the plaintiff at one time was the owner of this threshing rig, having become bankrupt and filed his petition in a voluntary bankruptcy proceeding; and, the trustee having been appointed, the legal title of all his property would vest in the trustee for the benefit of the creditors, subject only to the plaintiff's right of exemption. From the testimony, the property in question was not set off to the plaintiff as an exemption.

Whether the plaintiff considered he still had an interest in such rig, or had a right of redemption from such sale, or was at the sale merely to make a bid on the property and try to get his...