Parks v. Yakima Valley Production Credit Ass'n

• Decision Date: 14 April 1938
• Docket Number: 26846.
• Citation: 78 P.2d 162,194 Wash. 380
• Court: Washington Supreme Court
• Parties: PARKS v. YAKIMA VALLEY PRODUCTION CREDIT ASS'N.

78 P.2d 162

194 Wash. 380

PARKS v. YAKIMA VALLEY PRODUCTION CREDIT ASS'N.

No. 26846.

Supreme Court of Washington

April 14, 1938

Department 2.

Appeal from Superior Court, Yakima County; Dolph Barnett, Judge.

Action by Marvin F. Parks, as executor of the estate of Pollia Ann Parks, against the Yakima Valley Production Credit Association, a corporation, for the conversion of hops mortgaged to defendant by plaintiff, wherein defendant sought to recover the balance due on the debt secured after the sale. From a judgment for plaintiff, defendant appeals.

Affirmed.

Hugo F Luhman, of Yakima, for appellant.

H. A La Berge, of Yakima, for respondent.

BEALS, Justice.

Plaintiff Marvin S. Parks, has for some years been acting as executor of the will of his deceased mother, Pollia M. Parks, and as such executor was, during the years 1934 and 1935 cultivating a hop ranch belonging to his mother's estate. Defendant, Yakima Valley Production Credit Association, a corporation (hereinafter referred to as the company), was organized under the farm credit act of 1933, for the purpose of financing its members in their farming operations. The company advanced plaintiff money to help him raise his 1934 crop of hops; plaintiff, to secure such advances, executed to the company a chattel mortgage on the crop of hops and certain farm implements. The price of hops being low, the hops were placed in storage, and a warehouse receipt was issued therefor, which plaintiff indorsed and delivered to defendant, according to plaintiff's contention, as additional security for the money loaned. The company again financed plaintiff during the growing season of 1935, taking another mortgage on that crop. The 1934 hops grown by plaintiff were good, but the 1935 crop was of poor quality, only about one-half thereof being marketable. The 1935 hops were at first stored upon a neighboring ranch.

Plaintiff was unable to finance farming operations for 1936, and left his home about April 15th of that year, seeking work in the grain fields, and remaining absent until the first of August. The hop market remained stagnant until June, 1936, when, because of rumors that the California hop crop would be short, the demand for Washington hops increased. Shortly thereafter, an offer of 10 cents a pound for plaintiff's 1935 hops was made, and defendant sold the hops at this price, also selling the 1934 hops for 11 cents a pound. The price of hops continued to rise, and after his return to Yakima, plaintiff sued defendant, alleging that defendant had converted his hops, and demanding judgment for the difference between the sale price and the market price within a reasonable time after the date of sale, less, of course, the amount due defendant upon its mortgages.

Defendant answered, alleging that it was authorized to sell the hops, both by the express terms of the chattel mortgages and by oral authority from plaintiff, and asked for judgment against plaintiff for the balance of the mortgage indebtedness which remained unpaid after the application of the proceeds of the hops. At plaintiff's request, the court called a jury to assist in determining questions of fact, the jury finding that plaintiff had given defendant no authority to sell either the 1934 or the 1935 hops; that when the 1934 hops were sold, the market price was 10 cents a pound, at which figure the hops were sold; and that when the 1935 crop was sold the market price was also 10 cents a pound, 11 cents a pound being realized therefor. The jury also found that the defendant did not sell the hops believing in good faith that it had the right to do so, and that it had willfully converted the property; that the highest market value of the 1934 crop within a reasonable time after July 1st was 15 cents per pound, and that of the 1935 crop, 20 cents per pound. It was admitted that after applying the proceeds of the sale on defendant's mortgages, there remained a balance due from plaintiff to defendant of $1,689.08, with interest from January 1, 1937. The only question to be determined was whether or not defendant was liable as for conversion of the hops.

The trial court expressly adopted the findings of the jury, held that defendant had been guilty of converting both crops of hops, and allowed plaintiff judgment for the difference between the sale price and the highest market value of similar hops within a reasonable time after the conversion, which value the trial court fixed at 15 cents for the 1934 crop and 25 cents for the 1935. After giving defendant credit for the balance due upon its chattel mortgages, judgment was entered in plaintiff's favor for something over $600, from which judgment defendant has appealed.

Error is assigned upon the ruling of the trial court holding appellant guilty of conversion and awarding respondent damages therefor, and upon the refusal of the trial court to award appellant judgment against respondent for the balance of respondent's indebtedness remaining due after the application thereto of the amount which appellant received for the hops.

Each of the chattel mortgages executed by respondent to appellant provided that it should be lawful for the mortgagee, '* * * with the aid and assistance of any person or persons, to enter the premises or such other place or places as the said goods and chattels are or may be situated, to take possession thereof and dispose of said property by due process of law or the mortgagee may take the said chattels and sell and dispose of the same at the place of taking or elsewhere, at either private or public sale for the best price obtainable as a whole or in parcels and at the same or different times and out of the money arising therefrom, retain and pay the sums hereby secured and interest thereon as aforesaid, and all expenses or charges touching the same, including reasonable attorney's fees, rendering the overplus, if any, unto the said mortgagor,' and appellant contends that, under the facts as disclosed by the evidence, the trial court erred in holding that appellant, under the facts in the light of the stipulations contained in the mortgages, did not have the right to sell the hops, but on the contrary was guilty as for conversion thereof.

The evidence clearly indicates that during the years 1934 and 1935, and until June, 1936, the market price of hops was very low, and that at no time during the period mentioned could respondent's hops have been sold for an amount sufficient to pay appellant's advances.

Appellant claimed the right to sell the hops, relying, not only upon the terms of its chattel mortgages, but upon certain evidence which tended to show that respondent had orally authorized appellant to sell the hops.

It clearly appears that appellant made the sales without advising respondent of its intention so to do. Appellant contends that it did not know respondent's address, but the evidence indicates that his address might have been ascertained, had any effort been made to locate him. Appellant, of course, because of its possession of the negotiable warehouse receipt issued for the 1934 hops, could take possession of that crop at any time. The 1935 hops were stored in a barn on a ranch near that operated by respondent. During the month of May, an agent of appellant went to this ranch and demanded the hops, delivery of which was refused, as the owner of the ranch claimed a lien thereon. Later, the owner of the ranch was persuaded to permit appellant to take possession of the hops, which did.

The memorandum opinion filed by the trial court commences as follows: 'Upon conflicting evidence, the jury in this case has decided all factual matters presented adversely to the defendant and the court accepts the findings of the jury in that respect.'

As to whether or not respondent had authorized appellant to take possession of the hops and sell them, the evidence is in conflict. On these questions the jury found against appellant, and its finding was accepted and thereby approved by the trial court. While the findings of the jury were advisory only, the trial court adopted them, save as to one finding hereinafter noted, and in the judgment which was rendered, it is expressly stated that the court adopted the findings of the jury to the effect that the conversion of the hops by appellant amounted to a willful trespass.

The jury fixed the highest market value of the 1935 hops at 20 cents a pound, while the court fixed this value at 25 cents a pound, holding that there was no evidence to support the value returned by the jury. Appellant argues that the valuation of this crop of hops fixed by the jury indicates that all the jury desired was to cancel the balance which respondent owed appellant on the mortgages, but this argument weighs little against the jury's findings, in view of the fact that the trial court expressly accepted and approved the same.

Appellant argues that this court should hold that it appears from the preponderance of the evidence that respondent did give appellant oral authority to sell the hops, but we cannot hold with appellant on this phase of the case, in view of the findings of the jury and the adoption thereof by the judge who presided at the trial, and whose duty it was, aided by the jury, to find the facts upon conflicting evidence.

The disputed questions of fact, then, have been determined in favor of respondent, and it has been established that respondent did not make any agreement with appellant to the effect that the latter could, in the exercise of its discretion, sell the hops at any price it deemed reasonable and apply the proceeds upon the amount due it from respondent, and that in doing what it did, appellant acted under no authority from respondent, save the terms of the chattel...