Schultz v. Wells Butchers' Supply Co.

• Decision Date: 27 March 1929
• Docket Number: 21508.
• Citation: 275 P. 737,151 Wash. 382
• Court: Washington Supreme Court
• Parties: SCHULTZ v. WELLS BUTCHERS' SUPPLY CO.

275 P. 737

151 Wash. 382

SCHULTZ v. WELLS BUTCHERS' SUPPLY CO.

No. 21508.

Supreme Court of Washington

March 27, 1929

Department 1.

Appeal from Superior Court, King County; A. W. Hawkins, Judge.

Action by Frank E. Schultz against the Wells Butchers' Supply Company. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

Roberts Skeel & Holman, Tyre H. Hollander, and Elwood Hutcheson, all of Seattle, for appellant.

William A. Gilmore and Leo W. Stewart, both of Seattle, for respondent.

HOLCOMB J.

Respondent is a butcher of twenty years' experience. On January 25 1928, he was engaged in the operation of a retail meat market in connection with the Bee Hive Groceteria at 5315 Ballard avenue, Seattle; his business place being a space 12X40 feet in the groceteria. Appellant is engaged in the business of selling fixtures and butcher's supplies in Seattle.

During the fall of 1927 the butcher shop in question was operated by one Staley to whom appellant sold a quantity of fixtures, showcases, and supplies, on a conditional sale contract. Staley gave up the shop and fixtures, and it was thereafter operated for a short time by one Zeek, who failed and passed into bankruptcy, but not by reason of the operation of the butcher shop, according to uncontradicted evidence. The groceteria then took over the operation of the meat market and kept it going from September, 1927, to December 21, 1927, when it sold the meat market to respondent. During the time that the groceteria operated the market, it made a profit on the business; its net profit for the first month being $90. During the time respondent operated it, it made a net profit, according to his evidence, of from $450 to $500 per month.

When respondent purchased the meat market, he also purchased the fixtures and equipment from appellant upon a written conditional sale contract; the purchase price being $2,250 $1.07 was paid down by respondent on the contract, and the balance was payable in installments of $40 per month on the 1st day of each month. The installment due January 1, after the contract went into effect, was not paid at that time, but was paid by respondent to appellant on January 15, 1928, without any objection being made by appellant because of the lateness of the payment.

On January 6, 1928, this court decided in West American Finance Co. v. Finstad, 146 Wash. 315, 262 P. 636, that a conditional sale contract containing a provision entitling the vendor, in the event of default, to resell the property and hold the vendee for the deficiency, constituted a chattel mortgage, and was void as to third parties, unless executed as a chattel mortgage with acknowledgment and affidavit of good faith.

The conditional sale contract between these parties contains such a provision, and did not have an acknowledgment and affidavit of good faith. It did contain provisions for reselling the property and holding the vendee for the deficiency.

After being advised of this decision, one Levy, sales manager of appellant, went to see various purchasers of fixtures holding such defective contracts for the purpose of obtaining from them chattel mortgages duly executed in the manner and form required by law. On January 23, 1928, Levy visited respondent, taking with him a chattel mortgage in due form for him to sign. Respondent asked to be allowed to take the chattel mortgage to his attorney to secure advice, which permission was refused by the agent of appellant.

On January 25, 1928, while respondent was operating his meat market and had a large supply of meat on hand, appellant's agents went to his shop about noon and took away all the furnishings and equipment covered by the conditional sale contract, thereby leaving the meat shop in such condition that the business could not be operated. The fresh meat which was on hand was promptly and properly taken to another place operated by the groceteria and sold in due course of trade, from which was realized $190. Respondent gave different amounts as the value of the fresh meat so disposed of, at one time saying it was about $600 worth, but in his last and most definite answer in the record stated that the price he had paid for the same was $490. As the salvage price was $190, this left $300 for loss on the fresh meat.

Two days after the removal of the fixtures and equipment, respondent commenced his action to recover $500 for alleged damages to the meat and shop, $300 for damage to the ice machine, and $2,000 for alleged loss of respondent's business and good will. At the trial, the item of $300 for damage to the ice machine was expressly waived.

The case was tried to the court and a jury. At appropriate times appellant challenged the sufficiency of the evidence to justify any verdict for respondent and moved for dismissal.

The jury returned a verdict for respondent in the sum of $2,000. Thereupon appellant moved for judgment n. o. v. or for a new trial. These motions were denied; the trial court refused to reduce the amount of the recovery and entered judgment on the verdict.

Other material facts will be referred to in the discussion of the contentions of the parties.

Appellant first contends that there was a mutual agreement for the removal of the fixtures, and that respondent could not recover damages, and that therefore the court erred in not dismissing the action. There was a clear conflict in the evidence upon that matter which the court properly left for the decision of the jury.

The next claim is that the removal of the fixtures was legally justified under the terms of the contract, and for that reason respondent could not recover damages, and the action should have been dismissed.

Rem. Comp. Stat. §§ 1111 and 1112, relating to enforcement of chattel mortgages by immediate action when there is danger of insecurity, even though the debt be not due, are cited to sustain this claim. Those statutory provisions authorize an immediate action in the superior court of the county having jurisdiction in such cases, which was not the action taken by appellant in this case. That was the action which should have been taken if the contract between the parties was one which was valid as a chattel mortgage as between them, as it probably was. That position of appellant is therefore untenable.

It is also contended under this claim that, respondent having failed to pay the first installment on January 1, when it was due, appellant was entitled to retake the fixtures and equipment. Although the contract provides for payment promptly when due, later payment did not render the vendee in default when the vendor accepted the money without objection. The contract then remained in force until the 1st of the next month, when another payment became due. Before that payment became due appellant forcibly dispossessed respondent of the property.

It is further contended under this claim that there was a writ from the federal bankruptcy court in the bankruptcy of Zeek which had been issued and levied upon this property. That was no concern of respondent. He did not take title from Zeek. It was rather for the concern of appellant, who had contracted to convey the property to respondent free of any defect in title.

Certain instructions were given by the trial court and certain requested instructions refused upon which appellant bases error.

We have carefully reviewed the instructions given and those requested and refused, and consider the instructions given as properly applying to the issues in the case as to the right of respondent to the posession of the property at the time it was forcibly taken by appellant and the right of appellant under the law as stated in the Finstad Case, supra, and that an extended review thereof would unnecessarily and uselessly prolong the opinion.

Another claim of appellant is that respondent failed to mitigate damages. It is insisted that respondent failed to take prompt and proper care of the meat and failed to obtain...