Perry v. Thomas

• Decision Date: 11 February 1953
• Citation: 197 Or. 374,253 P.2d 299
• Parties: PERRY v. THOMAS et al.
• Court: Oregon Supreme Court

Page 299

253 P.2d 299

197 Or. 374

PERRY v. THOMAS et al.

Supreme Court of Oregon.

Argued and Submitted Jan. 21, 1953.

Decided Feb. 11, 1953.

John H. Carson, of Salem, Gordon A. Ramstead, of Eugene, on the brief, for appellants.

John D. Galey and Earl McFarlan, Sweet Home, Galey & Galey and Earl McFarlan, of Sweet Home, on the brief, for respondent.

Before WARNER, Acting C. J., and ROSSMAN, BRAND, TOOZE and PERRY, JJ.

TOOZE, Justice.

This is an action for the conversion of a logging motor truck and trailer, brought by F. L. Perry, as plaintiff, against Walter Thomas, Charles Thomas, and Albert Yankus, copartners, dba Thomas Brothers Loggin Co., as defendants. The case was tried to a jury, and a verdict was returned in favor of plaintiff for $8,500 compensatory damages and $5,000 punitive damages. Judgment was entered accordingly, and defendants appeal.

Prior to and at the time of trial, plaintiff was engaged in the log hauling business, using motor trucks and trailers for the purpose. He operated several such trucks and trailers, some of which he owned, and others of which he rented.

Defendants are engaged in the logging business. They use their own equipment to haul a part of their logs, but most of them are hauled by others under contract. From September 1, 1949, to January 1, 1950, plaintiff hauled logs for defendants under a written contract for such hauling, furnishing his own logging trucks and trailers, with drivers.

On and prior to August 31, 1949, defendants were the owners of two 1947 model Autocar log trucks, one 1947 model Walker log trailer, and one 1948 model Fruehauf log trailer. These trucks and trailers had been mortgaged by defendants to The First National Bank of Portland. On August 31, 1949, there was a balance of $16,000 due on said mortgage indebtedness.

On August 31, 1949, by and with the consent and approval of the bank and of Oregon Truck Sales, Inc. (which had an interest in the transaction as a guarantor of the payment of the mortgage indebtedness to the bank), defendants sold and transferred to plaintiff all their right, title, and interest in and to said trucks and trailers, for the consideration of $16,000. The sale and transfer by defendants were evidenced by a written 'Transfer of Equity', the important portions of which read as follows:

'1. The Mortgagor does sell, assign, transfer and set over unto the Purchaser the motor vehicle hereinabove described and does warrant that the same is free and clear of all incumbrances except the Chattel Mortgage held by the Mortgagee upon which the installments to and including the month of _____ have been paid, leaving a balance now owing in the sum of $16,000.00, less payment in the amount of $3,000.00 leaving balance of $13,000.00 to be paid in manner called for in note signed by Purchaser this date.

'2. The Purchaser does assume and agree to pay the indebtedness secured by said Mortgage and to do and perform each and every act and thing in and by said Chattel Mortgage on the part of the Mortgagor required to be kept or performed in the same manner and with the same effect as though he had originally joined in the execution thereof.

'3. The Mortgagee does hereby consent to said transfer, it being understood, however, that the Mortgagor shall remain bound by the terms of said promissory note and Chattel Mortgage in the same manner as though the Mortgagor and the Purchaser had joined in the execution thereof and were jointly and severally liable thereon.

'4. The Mortgagor does consent to any and all renewals or extensions of said promissory note or of any of the terms or conditions of said Mortgage, and does waive presentment, protest, notice of protest or of nonpayment and any other notice to which he might otherwise be entitled.'

Contemporaneous with the execution of the foregoing transfer of equity and as a part of the same transaction, plaintiff paid the sum of $3,000 cash to the bank and executed and delivered to Oregon Truck Sales, Inc., his certain promissory note in the principal sum of $14,053.14, representing the balance due upon the original indebtedness, which sum, with interest, was to be paid in monthly installments of $780.73 each. At the same time, to secure the payment of said promissory note, plaintiff executed and delivered to Oregon Truck Sales, Inc., his certain chattel mortgage covering the two logging trucks and trailers in question. On the same day, Oregon Truck Sales, Inc., assigned said note and mortgage to the bank by written assignment.

Plaintiff took immediate possession of the two trucks and trailers and used them, along with other trucks and trailers, in fulfilling his contract with defendants to haul logs for them. After three or four days of hauling during the forepart of September, 1949, the motor truck to which was attached the Fruehauf trailer broke down, and it was taken to Aberdeen, Washington, for repairs. It is this equipment which is involved in the instant litigation. The repairs were completed, and the truck and trailer were put back in operation during the latter part of September. Plaintiff continued to haul logs for defendants until logging operations were compelled to close about December 31, 1949, because of snow.

Payments to plaintiff by defendants for the log hauling done were somewhat delayed, and because of this, and for other reasons which it is unnecessary to mention, plaintiff refused to renew his work for defendants in the spring of 1950, when logging operations were resumed. On or about the 1st of May, 1950, plaintiff commenced hauling logs for Firchau Brothers. On May 15, 1950, a log fell on the Fruehauf trailer, crushing it, and the truck and trailer were taken to the garage of Emert Brothers in Sweet Home, Linn county, Oregon, for repairs.

Resulting from the cessation of logging operations and from other causes, plaintiff was unable to make his monthly payments upon his indebtedness to the bank, and he became delinquent in the payment of several installments. In fact, up to June, 1950, his payments to the bank aggregated only $1,100.

Although representatives of the bank and Oregon Truck Sales, Inc., frequently talked with plaintiff about the delinquent payments and requested that something be done about them, nevertheless, neither the bank nor the Oregon Truck Sales, Inc., ever made a firm demand upon plaintiff to bring the payments up to date, nor did either threaten to repossess the property because of the delinquency. According to Walter A. Thomas, one of the defendants, he also discussed the delinquent payments with plaintiff and upon one or two occasions requested plaintiff to park the equipment at defendants' place of business until the payments were made. Thomas testified that plaintiff refused to accede to that request, stating that he was dealing with the bank and would do nothing except upon the bank's demand. These conversations, according to Thomas, occurred in April or May, 1950.

In the meantime and about May 1, 1950, plaintiff, with the cooperation of representatives of the bank and Oregon Truck Sales, Inc., arranged to sell the 1947 model truck and trailer to one Emerick of Aberdeen, Washington, for a net return of $7,077.54. This sale was completed on or about June 14, 1950, and the amount received by plaintiff out of the sale was paid to the bank to apply on the mortgage indebtedness, leaving then a balance due the bank of approximately $6,300. Defendants knew of the negotiations being carried on for this sale. The amount received by the bank upon this sale to Emerick more than paid the delinquent installments upon plaintiff's note.

As a witness for defendants, Walter A. Thomas admitted that neither the bank nor Oregon Truck Sales, Inc., had ever demanded that defendants pay the delinquent installments, nor did defendants pay the same, or any part thereof.

About June 1, 1950, plaintiff received an accidental injury and was taken to the hospital. He remained there for approximately eight days, but he was not able to return to work until about August 1, 1950. While he was in the hospital, the truck and trailer involved in this litigation was being operated for plaintiff by his employe, one Earl Oakley.

Relating to the circumstances surrounding the alleged wrongful taking of the truck and trailer by defendants, we quote from the direct testimony of defendant Walter A. Thomas as follows:

'Q. Just state to the jury the circumstances under which the truck was picked up. A. Well, I had Mr. Lee McClintock driving another truck for me, and I asked him if he seen Mr. Perry's driver, if he wouldn't drive the truck up and leave it parked in our camp, and Lee contacted Mr. Perry's driver and he left it in our camp.

'Q. How long did it stay there after it was brought up? A. It stayed there a number of weeks, and it was taken down to a garage to have it looked at to see if it was in running order.

'Q. When did you actually start foreclosure on it? A. I don't believe we started foreclosing on it--we didn't get the final papers on it until in November. It took a period of months to do it. We figured Mr. Perry would pick the truck up.'

Upon cross-examination, Thomas testified as follows to a conversation he had with Perry about the middle of May, 1950:

'Q. But it was May? A. I will say it was in May.

'Q. I want to know was it or wasn't it? A. Yes, I will say it was in May.

'Q. Early May or late May, or in the middle? A. Somewhere around the middle of May.

'Q. Was it some time after you told McClintock to bring the truck in? A. Before.

'Q. Then you told McClintock that in the middle of May? A. Yes.

'Q. And you told Perry to store it before that? A. Yes, a day or two before.

'Q. What did Perry say? A. Perry said we couldn't get blood out of a turnip.

'Q. Did he say he would park the truck, or not? A. He said it was up to the bank, and we had no right to ask him to do that.

'Q. What did you say? A. I was between two fires.

'Q. Please answer my...