Peterson v. Conida Warehouses, Inc., 12128

• Decision Date: 23 February 1978
• Docket Number: No. 12128,12128
• Citation: 98 Idaho 883,575 P.2d 481
• Parties: Leslie W. PETERSON, Plaintiff-Respondent, v. CONIDA WAREHOUSES, INC., a Connecticut Corporation, Defendant-Appellant.
• Court: Idaho Supreme Court

Page 481

575 P.2d 481

98 Idaho 883

Leslie W. PETERSON, Plaintiff-Respondent, v. CONIDA WAREHOUSES, INC., a Connecticut Corporation, Defendant-Appellant.

No. 12128.

Supreme Court of Idaho.

Feb. 23, 1978.

Daniel A. Slavin, Stephan, Slavin & Eaton, Twin Falls, for defendant-appellant.

Bert Larson, Parry, Robertson, Daly & Larson, Twin Falls, for plaintiff-respondent.

SHEPARD, Chief Justice.

This is an appeal from a judgment following trial entered in favor of plaintiff-respondent Leslie W. Peterson and against Conida Warehouses, Inc., defendant-appellant, for the value of a portion of a bean crop grown on Peterson property. It was delivered to Conida under the provisions of an agreement between Conida and third-party defendants Grimms who were tenant farmers on the Peterson property. We affirm.

Essentially two questions are presented for decision. The first is whether an earnest money agreement for the purchase of the Peterson farm vested some type of title in the Grimms which validated the transfer of the otherwise landlord's share of the crop of beans to Conida. Also presented is the question of whether in the absence of any land title in the Grimms, they nevertheless were able to transfer title to Peterson's share of the bean crop.

On September 6, 1972, the Grimms and Peterson entered an earnest money agreement contemplating the purchase of the Peterson property. The Grimms made a $4,000 earnest money payment and the total purchase price was agreed as $280,000, but no terms of the payment thereof were set forth. That agreement also made no provision in regard to taxes, rents, insurance, interest, date of possession or broker's commission. Obtention of an FHA loan was clearly contemplated and was a condition of the agreement.

During October or November of 1972, Peterson and Jim Grimm discussed the financing of the agreement which was expected from Farmers Home Administration and since Grimm's lease on other property had expired, it was agreed that Grimm would then take possession of the Peterson property. Grimm did so take possession, did the fall work on the farm and expended certain monies in improvements. During 1973 the Grimms continued to occupy and operate the Peterson farm and some time during April, May or June the Grimms and Peterson, after they determined that the FHA money would not be forthcoming, terminated the earnest money agreement and the $4,000 paid thereon was returned to the Grimms. The Grimms and Peterson then entered into a rental agreement for the Peterson farm wherein the seed and other farm expenses were to be shared on a basis of 60 percent contributed by the Grimms and 40 percent by Peterson. In return therefor, the crops would be shared on the same 60 percent to the Grimms and 40 percent to Peterson.

In the meantime and without the knowledge of Peterson, the Grimms and Conida entered into an agreement whereunder Grimms would receive seed beans which they would plant and the bean crop therefrom would be delivered to Conida at the rate of $10 per hundredweight. At the time of that agreement, Jim Grimm told the Conida field man that he, Grimm, was buying the Peterson property. During that negotiation the Conida representative made no further inquiry regarding the terms of the property acquisition nor did he see the earnest money agreement. There is no indication that the Conida representative made any effort to contact Peterson, make any inquiry regarding the real property transaction or Grimm's authority to sell the crop.

During the middle of September the Grimms harvested and delivered the bean crop to Conida and advised Conida of the Peterson-Grimm 60-40 crop sharing agreement. Peterson did not become aware of the Grimm-Conida agreement until December 1973 when Peterson and the Grimms were settling their account. In January 1974, Conida sent Peterson two checks representing what Conida claimed to be the Peterson interest in the bean crop, i. e., 40 percent at $10 per hundredweight. One check was for "pink" beans and the second for "bonus" beans (small white beans). Peterson cashed the check for the bonus beans, but returned the check for the pink beans to Conida with a request that Conida issue a warehouse receipt for the pink beans. Conida did not issue the requested warehouse receipt and on May 9, 1974, Peterson again wrote Conida requesting that Condia sell the Peterson share of the pink beans at the then current market price and if the market price was less than $50 per hundredweight, Conida was to first consult with Peterson's attorney. Conida did not comply with Peterson's request and did not sell the pink beans. Peterson brought action to recover the value of his share of the bean crop. Conida answered and filed a third-party complaint against the Grimms for indemnification of whatever loss Conida might suffer in the Peterson action. Following trial, judgment was rendered in favor of Peterson and against Conida for the market value of Peterson's pink beans. The trial court held that Peterson's cashing of the bonus beans check constituted a sale and Peterson's recovery thereon was denied. No appeal was taken from that portion of the judgment and no issue exists on appeal. The trial court further denied Conida's claim against the third-party defendant Grimms for indemnification. Although appeal was taken from that portion of the judgment, it was settled and dismissed.

Appellant Conida first argues that by virtue of the execution of the earnest money agreement between Peterson and the Grimms, equitable title to the farm passed to the Grimms and they therefore had the capacity to enter into a binding contract for the disposition of the crops grown thereon. The trial court held to the contrary in its decision on the motion to amend the findings and conclusions. That holding of the trial court is clearly supported by the record. The earnest money agreement itself was so unsettled, ambiguous and devoid of necessary terms and conditions as to be unenforceable and it conferred no rights on the Grimms. See Matheson v. Harris, 96 Idaho 759, 536 P.2d 754 (1975); Luke v. Conrad, 96 Idaho 221, 526 P.2d 181 (1974); C. H. Leavell & Co. v. Grafe & Assocs., Inc., 90 Idaho 502, 414 P.2d 873 (1966). The trial court held that the Grimms and Peterson entered into the earnest money agreement on a contingency basis, i. e., that if the desired financing for the Grimms was unavailable, the Grimms would occupy the farm on a tenant basis with a share crop arrangement. Since financing did not become available, the Grimms occupied the farm as tenants on a share crop basis. That holding is sustained by the evidence and will not be disturbed.

Appellant Conida argues that notwithstanding the landlord-tenant relationship between Grimm and Peterson and the lack of any land title in Grimm, Grimm was nevertheless able to contract with Conida for the disposition of Peterson's share of the bean crop. As recognized by the trial court, such theory is directly contrary to the law of this state as expressed in Washburn-Wilson Seed Co. v. Alexie, 54 Idaho 727, 35 P.2d 990 (1934). There, as here, "Appellant relies upon D. M. Ferry and Co. v. Smith, 36 Idaho 67, 209 P. 1066, which on the face of it unquestionably and squarely supports its position. The action there being between a landlord basing his claim on a crop share lease, as respondent does here and the seed company" on a contract declared by the court to be one of the bailment with the lessee. 54 Idaho at 729, 35 P.2d at 990-91. The Court in Washburn-Wilson held that D. M. Ferry & Co., supra, had been overruled and that under a crop share lease the landlord and tenant are cotenants in the crop and " * * * one tenant in common may not in any way dispose of the share or interest of any other cotenant without such other cotenant's consent * * *." 54 Idaho at 730, 35 P.2d at 991.

In Washburn-Wilson a landlord-tenant relationship existed on a crop sharing basis. The tenant contracted with a seed company for the furnishing of seed, with the crop thereon to be delivered to the seed company. A dispute arose between the seed company and the landlord as to the ownership of the landlord's share of the crop as determined by the landlord-tenant agreement. The Court held "Respondent (landlord) herein being a co-owner of any crops to be grown upon his land, his cotenant, the lessee, could made no contract with appellant (seed company) affecting his title to such one-third interest * * *." Id.

Hence, we determine that Washburn-Wilson is on all fours with the case at bar and is controlling. We decline appellant's invitation to overrule Washburn-Wilson. Appellant argues that Washburn-Wilson has been overruled or at least modified by Kent v. Campbell, 80 Idaho 57, 324 P.2d 398 (1958). Insofar as indicated by the opinion in Kent, no landlord-tenant (cotenant) relationship existed and the dispute there existed between a seed company and growers who admittedly were in privity with the seed company through the execution of seed and crop...