State ex rel. Olson v. Royal Indemnity Co.
| Decision Date | 15 November 1919 |
| Citation | 175 N.W. 625,44 N.D. 550 |
| Court | North Dakota Supreme Court |
Appeal from the District Court of Ward County, Leighton, J.
Affirmed.
W. H Sibbald and John C. Lowe, for respondent.
W. H Stutsman, for appellant.
BRONSON, J., did not participate.
This is an appeal from an order denying the defendant's motion for judgment upon a special verdict and for a judgment notwithstanding a special verdict, and also from the judgment entered. The action is upon a warehouseman's bond, conditioned, among other things, for the payment by H. T. Hogy, the warehouseman and principal on the bond, for all grain purchased and all sums for which the principal shall become liable to holders of warehouse receipts. It appears that Hogy, prior to 1916, operated two elevators, one at Burlington and one at Des Lacs, North Dakota. The defendant indemnity company furnished the bond for $ 10,000 now in suit, in compliance with § 3111, Comp. Laws 1913. In the fall of 1916, Hogy became insolvent and had shipped out of the Burlington elevator some $ 20,000 worth of grain, the storage tickets for which he was unable to redeem. About the middle of October a representative of the defendant company went to Minot for the purpose of adjusting Hogy's affairs in so far as it was interested, but Hogy had previously called the holders of the storage tickets together for the purpose of making an arrangement whereby he would be permitted to continue in business. The holders of the tickets, with some exceptions, surrendered them, taking Hogy's notes for the then market price of the grain represented, due in one year, and the latter in turn surrendered the storage tickets to the defendant who continued upon the bond. It appears that two ticket holders declined to surrender their tickets and the defendant company subsequently settled with them by paying $ 1,834.87. The notes not having been paid at maturity, this action was brought upon the bond to recover the amounts represented by them.
The action is in the name of the State on the relation of Henry Olson who sues for himself and others beneficially interested. The complaint, aside from formal allegations, alleges the receipt and storage by Hogy of certain definite quantities of grain for and on behalf of ten individuals, also amounts unknown for seven others; that Hogy obtained possession of the storage receipts through fraudulent representations to the effect that it was necessary for him to have possession of the receipts to avoid criminal prosecution. That he had secured the consent of all the outstanding receipt holders to the surrender of the receipts in exchange for notes, and that certain of the receipt holders had previously agreed to surrender their receipts if all would do so. It is further alleged that the receipts were surrendered through a mistake of fact, and in reliance upon the fraudulent and false representations that all the receipt holders had consented. The seven parties, the amount of whose receipts are alleged to be unknown to the plaintiff, do not participate as plaintiffs and are made defendants. In the answer of the Indemnity Company it is denied that the storage tickets are outstanding and unpaid and it is alleged that Hogy, on or about the 15th day of October, 1916, purchased from the owners the grain represented by the receipts for full consideration agreed to be paid, and that he gave his promissory notes to the owners in payment. It is further alleged that this settlement was not fraudulent and has not been rescinded. The settlement by the defendant company with two other defendants, Byerly and Durbin, by purchasing their tickets for $ 1,834.87, is pleaded and the judgment allows the benefit to the defendant company.
When the action came on for trial the defendant moved that it be tried to the court on the ground that the issues were of an equitable nature. The court, however, denied the motion and the action proceeded to trial before a jury. At the conclusion of the testimony thirty-four interrogatories were submitted upon which the jury were required to return their special verdict.
The first assignment argued upon this appeal is that the court erred in denying the defendant's motion for judgment non obstante. The principal argument in support of it is founded upon the lack of testimony going to establish the allegations in the complaint of fraud and mistake which would vitiate the settlement. It is contended that in the absence of proof in support of these allegations and affirmative findings in the special verdict, there is a fatal omission of proof which presumably cannot be supplied and which would therefore require the entry of a judgment for the defendant. The fallacy of this argument lies in its failure to distinguish between essential and nonessential allegations in the complaint. From the entire statement of the cause of action, it is apparent that liability is predicated upon a breach or breaches of the indemnity bond, consisting in the failure to deliver or pay for grain stored or sold. There may be liability on the bond for a breach of either character. It may well be that an action for the nondelivery of the grain represented by the storage tickets could not be brought without a rescission of the settlement represented by the notes and the surrender of the tickets. But the breach of the bond that is principally relied upon in this case is not the failure to deliver the grain but the failure to pay for it at the price arrived at in the settlement. The terms of the bond are sufficiently broad to cover a breach of this character. It is therefore immaterial, so far as liability is concerned, whether or not the settlement is rescinded. The plaintiffs are attempting only to recover the price agreed upon. Therefore, the allegations with reference to mistake and fraudulent misrepresentations may be properly disregarded.
The next assignment concerns the denial of the defendant's motion for a judgment upon the verdict. This assignment, like that first considered, is based upon the existence of a supposed necessity for a special...
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