Production Credit Ass'n of St. Cloud v. Fitzpatrick

• Decision Date: 22 April 1986
• Docket Number: No. C2-85-1606,C2-85-1606
• Citation: 385 N.W.2d 410
• Parties: PRODUCTION CREDIT ASSOCIATION OF ST. CLOUD, Appellant, v. Mike FITZPATRICK, Respondent. Farmers Co-op Creamery Co., Foreston, Minnesota, Defendant.
• Court: Minnesota Court of Appeals

Page 410

385 N.W.2d 410

PRODUCTION CREDIT ASSOCIATION OF ST. CLOUD, Appellant, v. Mike FITZPATRICK, Respondent Farmers Co-op Creamery Co., Foreston, Minnesota, Defendant.

No. C2-85-1606.

Court of Appeals of Minnesota.

April 22, 1986.

Syllabus by the Court

1. Bailment relationship existed where corn was stored in respondent's grain bin at $.02 per bushel, entitling respondent to a statutory lien for storage costs.

2. The trial court did not abuse its discretion in allowing respondent to amend his counterclaim after trial to include a request for money damages.

Thomas A. Janson, Schmitt, Johnson & Marso, St. Cloud, for appellant.

William A. Torell, Torell Law Office, Foley, for respondent.

Heard, considered and decided by NIERENGARTEN, P.J., and FORSBERG and LESLIE, JJ.

OPINION

LESLIE, Judge.

This appeal arises from a judgment determining that Mike Fitzpatrick held a possessory lien superior to that of Production Credit Association in the amount of $9,336.90, and from an amended judgment awarding Fitzpatrick $9,575.94 to reflect the costs of electricity plus interest. We affirm.

FACTS

In the fall of 1981, Allen Kampa, not a party to this lawsuit, entered into an oral agreement with respondent Mike Fitzpatrick to store part of Kampa's corn harvest in space provided in respondent's 12,000 bushel grain bin at a price of $.02 per bushel per month. Kampa's corn was put into the bin in late November or early December.

Kampa made several monthly payments but was unable to continue paying. The corn later became part of the Payment-in-Kind (PIK) program and was assigned by Kampa to appellant Production Credit Association and the Farmers Co-op Creamery Company. On November 1, 1983, the corn was released from the PIK program and appellant sought to take possession of it. Respondent refused to relinquish possession, claiming a lien on the corn for Kampa's unpaid storage costs. In December 1983, Kampa filed for relief under the Bankruptcy Act, and the corn became part of the bankruptcy estate. The trustee in bankruptcy released the corn to appellant and again respondent refused to permit appellant to take possession of the corn.

The corn remained in respondent's bin until August 1984, when appellant, by agreement of the parties, sold the corn and filed a $10,000 surety bond to protect respondent's claim.

Appellant brought suit against respondent and Farmers Co-op Creamery Company seeking, among other things, a determination that appellant was entitled to possession of the corn and that respondent had no lien. At trial, appellant argued that Kampa rented the storage bin from respondent, thereby creating a landlord-tenant relationship. Respondent argued that the agreement between he and Kampa was that of a bailment, entitling respondent to a lien under Minn.Stat. Sec. 514.18, subd. 1 and Sec. 514.19(2) (1984).

The trial court entered judgment finding that the agreement between Kampa and respondent constituted a bailment. The court permitted respondent to amend his counterclaim to recover damages against appellant for storage of the corn plus interest. The court also amended its findings to include reimbursement for electricity expended in running the aerator to ventilate the bin plus interest. The trial court ordered judgment entered against appellant in the amount of $9,575.94 plus costs and disbursements.

ISSUES

1. Did the trial court err in finding a bailor-bailee relationship entitling respondent to a possessory lien pursuant to Minn.Stat. Sec. 514.18 and Sec. 514.19?

2. Did the trial court abuse its discretion in permitting respondent to amend his counterclaim after trial to include a request for money damages?

ANALYSIS

1. When someone, other than a "warehouseman" under article 7 of the Uniform Commercial Code, keeps or stores property as a bailee at the request of the owner, that person is entitled to a lien on the property for the price or value of storage and care. Minn.Stat. Sec. 514.18, subd. 1 (1984); Minn.Stat. Sec. 514.19(2) (1984).

Appellant's position is that Minn.Stat. Sec. 514.19(2) does not apply to this situation because respondent and Kampa had a landlord-tenant relationship rather than a bailor-bailee relationship. Because the applicable statutes do not define bailment or bailee, it is necessary to resort to common law. The Minnesota Supreme Court has defined bailment as "the legal relation arising upon delivery of goods without transference The case of J.I. Case Co. v. Jansa, 190 Minn. 518, 252 N.W. 436 (1934), is instructive. In Jansa, the plaintiff corporation entered into conditional sales contracts with the defendant dealer whereby the plaintiff agreed to ship farm machinery and implements and the dealer agreed to resell them to its customers and then pay plaintiff. The plaintiff retained title to all goods and proceeds of goods until resold and paid for, and the defendant agreed, among other things, to store, protect, and care for the machinery. The dealer, defendant Jansa, not having storage room for plaintiff's goods, arranged for storage in the warehouse of defendant Coggins. Coggins later notified plaintiff that it owed storage costs and that he claimed a lien on the property.

of ownership under an express or implied agreement that the goods be returned." Wallinga v. Johnson, 269 Minn. 436, 438, 131 N.W.2d 216, 218 (1964) (bailment relationship created where hotel guest's rings were placed in safety deposit envelopment in hotel safe); see National Fire Insurance Co. v. Commodore Hotel, Inc., 259 Minn. 349, 107 N.W.2d 708 (1961) (no bailment relationship created where mink jacket was stolen from hotel's unattended cloakroom); Dennis v. Coleman's Parking & Greasing Stations, 211 Minn. 597, 2 N.W.2d 33 (1942) (bailment relationship existed between operator of public parking lot and customer leaving car with keys); Huntoon v. Brendemuehl, 124 Minn. 54, 144 N.W. 426 (1913) (bailment existed rather than rental of storage space where bushels of potatoes stored at warehouse at $.05 per bushel).

The supreme court, rejecting the argument that Jansa was a lessee of part of the building, relied on the following facts: (1) No lease or agreement was made as to any particular space or part of the warehouse; (2) No time was fixed and no sum agreed to for storage; (3) Others were also storing goods in the warehouse; (4) Substantially the same amount of goods was kept by Jansa in the warehouse at all times; (5) Coggins had control of the warehouse; (6) Coggins could have excluded Jansa and plaintiff from the warehouse and claimed a lien at any time after storage costs were owing. Id. at 521-22, 252 N.W. at 437. Thus, ...