Templeton Feed and Grain v. Ralston Purina Co.

• Decision Date: 25 October 1968
• Citation: 72 Cal.Rptr. 344,69 Cal.2d 461,446 P.2d 152
• Court: California Supreme Court
• Parties: , 446 P.2d 152 TEMPLETON FEED AND GRAIN, Plaintiff and Appellant, v. RALSTON PURINA COMPANY, Defendant and Appellant. L.A. 29520, 29521.

Page 344

72 Cal.Rptr. 344

69 Cal.2d 461, 446 P.2d 152

TEMPLETON FEED AND GRAIN, Plaintiff and Appellant, v. RALSTON PURINA COMPANY, Defendant and Appellant.

L.A. 29520, 29521.

Supreme Court of California,

In Bank.

Oct. 25, 1968.

Irmas & Rutter and William A. Rutter, Beverly Hills, for plaintiff and appellant.

Spray, Gould & Bowers, John J. Costanzo, Henry E. Kappler and Jean Wunderlich, Los Angeles, for defendant and appellant.

TOBRINER, Justice.

Plaintiff Templeton Feed and Grain (Templeton), a corporation, brought this action against defendant Ralston Purina Company (Ralston) seeking damages for abuse of process and pleading a common count for money had and received. The jury found in favor of Templeton in the amount of $110,738.56. The trial court granted Ralston's motion for a new trial ¹ unless Templeton consented to a reduction of the verdict to $67,000. Templeton consented to the remission; the trial court entered judgment accordingly. Ralston appeals from the judgment entered, and Templeton appeals insofar as the judgment entered reflects the trial court's failure to instruct the jury on exemplary damages.

On appeal Ralston contends that no substantial evidence supports the jury's verdict in favor of Templeton. It also urges error in the trial court's instructions to the jury on the issue of damages. Templeton, on its appeal, contends that the trial court erred in failing to instruct the jury that it could award exemplary damages. We conclude that substantial evidence supports the jury's finding for Templeton, but that the trial court erred in instructing the jury on compensatory damages. On Templeton's appeal we hold that Templeton's consent to the remittitur does not preclude it from raising on appeal the trial court's failure to instruct on exemplary damages, and we conclude that the trial court committed error in this regard. We reverse the judgment with directions for a new trial limited to the issue of compensatory and punitive damages.

In aid of its claim and delivery action against Harold and Maureen Livingston to recover possession of personal property, Ralston caused the seizure from the Livingstons' Arroyo Grande ranch of some 35,000 turkeys. (See Code Civ.Proc. §§ 509--511.) Ralston purported to justify the seizure on the ground that a chattel mortgage executed by the Livingstons entitled it to the possession of the turkeys. Templeton, whose ownership of the turkeys rested on an agreement with the Livingstons, paid Ralston the amount of the Livingstons' debt plus interest, thereby obtaining the release of the birds. It then brought the present action.

The evidence before the jury showed that commencing with the year 1958 the Livingstons had raised turkeys on their ranch in Santa Margarita under various financing arrangements with Ralston. ² In May 1962 the Livingstons executed a chattel mortgage, duly recorded, in favor of Ralston; the mortgage covered '17,000 Broad Breasted Bronze Turkeys and also all future replacements, increase, products, and proceeds thereof, indemnity therefor, things, confused therewith, and things of the same kind afterwards acquired.' The document stated that the mortgaged property was located on the 'premises of H. E. Livingston, State of California, County of San Luis Obispo, Town of Santa Margarita.'

The Livingstons' 1962 turkey-raising activities provided to be unsuccessful; at the end of the season they owed Ralston $45,492.60. To secure this obligation they gave Ralston a deed of trust on acreage in Ventura County and on 40 acres of the Santa Margarita ranch. Because of the Livingstons' uncertain financial condition Ralston refused to assist in financing a crop of turkeys for 1963. Nevertheless Ralston wanted the Lvingstons to continue their operations; the Livingstons were on the verge of filing in bankruptcy; in the event of bankruptcy Ralston could anticipate a loss. Accordingly, Ralston's district representative agreed with the Livingstons and Templeton that Templeton would finance the 1963 crop and Ralston would 'leave the birds alone.'

The Livingstons' 1963 crop, financed by Templeton, was unsuccessful; the Livingstons were unable to reduce their debt to Ralston. In early 1964 the Livingstons again sought financing from Ralston for the 1964 crop, but Ralston refused. Harold Livingston then told Ralston that he would seek financing from Templeton. He did in fact make such arrangements, and Templeton deliver 111,000 poults to the Livingstons' Arroyo Grande ranch in April 1964.

Beginning in May 1964 Ralston's credit office in St. Louis exhibited renewed interest in collecting the debt owed by the Livingstons. In correspondence and other communication with the Livingstons, their attorney, and their accountant, Ralston referred to the 1962 chattel mortgage but did not threaten any action on that basis. Although Ralston's district representative knew that Templeton was financing the growing operations, no one informed Templeton that Ralston asserted any interest in the 1964 crop.

On November 4, 1964, Ralston filed a 'Complaint for Possession of Property' against the Livingstons; it alleged that Ralston was entitled to possession of 17,000 turkeys and replacements and increase under the 1962 chattel mortgage. Ralston instructed the sheriff to seize all turkeys on the Livingstons' Arroyo Grande ranch. On November 9, 1964, in the middle of the Thanksgiving marketing season, the sheriff seized about 35,000 turkeys from the ranch. Anxious to market the turkeys, which were worth $152,000, Templeton, after the seizure, paid Ralston $53,098.55, the amount of the Livingstons' debt plus interest.

1. Substantial evidence supports the jury's verdict against Ralston for abuse of process.

Ralston contends that no substantial evidence supports the finding that it committed an abuse of process. In Spellens v. Spellens (1957) 49 Cal.2d 210, 232, 317 P.2d 613, 626, the court sets out the essential elements of this tort as stated in Prosser on Torts (2d ed.) at page 667: "first, an ulterior purpose, and second, a wilful act in the use of the process not proper in the regular conduct of the proceeding. Some definite act or threat not authorized by the process, or aimed at an objective not legitimate in the use of the process, is required; and there is no liability where the defendant has done nothing more than carry out the process to its authorized conclusion, even though with bad intentions. The improper purpose Usually takes the form of coercion to obtain a collateral advantage, not properly involved in the proceeding itself, such as the Surrender of property or the payment of money, by the use of the process as a threat or a club. There is, in other words, a form of extortion, and it is what is done in the course of negotiation, rather than the issuance or any formal use of the process itself, which constitutes the tort." (Italics in opinion.) (See Kyne v. Eustice (1963) 215 Cal.App.2d 627, 632, 30 Cal.Rptr. 391; Tellefsen v. Key System Transit Lines (1961) 198 Cal.App.2d 611, 614--615, 17 Cal.Rptr. 919.)

The trial court properly instructed the jury as to the elements of abuse of process, and, as we shall explain, substantial evidence supports the jury's finding that Ralston had committed the tort. The jury properly could have found that Ralston, in procuring the seizure, knew or should have known that it was not entitled to possession of the turkeys and that Ralston had seized the turkeys in order to force Templeton, the owner of the birds, to discharge Livingston's debt.

As to Ralston's claim of the right to possession of the turkeys under the terms of the 1962 chattel mortgage, the trial court correctly ruled that the after-acquired property clause in the mortgage did not give Ralston a security interest in the seized turkeys. Former Civil Code section 2977, ³ authorizing mortgages on livestock and other animate chattels, title to which is subsequently acquired by the debtor, provided that 'it shall be a sufficient description of such live stock, or other animate chattels, if * * * the place where the same will ordinarily be located while owned by the mortgagor * * * (is) stated in such mortgate. * * *' The chattel mortgage stated the location of the turkeys to be the Livingstons' Santa Margarita ranch, whereas the seizure of the turkeys in 1964 occurred at the Arroyo Grande ranch. Ralston knew at the time the Livingstons executed the chattel mortgage that they raised turkeys on both the Santa Margarita and Arroyo Grande ranches. The 1962 chattel mortgage, therefore, did not purport to cover turkeys raised by the debtor on premises other than those described in the mortgage (see Witt v. Milton (1957) 147 Cal.App.2d 554, 555--557, 305 P.2d 944), and the jury could properly have concluded that Ralston knew that the chattel mortgage did not give it a right to possession of the turkeys on the Arroyo Grande ranch. ⁴

Moreover, the jury could properly have found that Ralston knew that Templeton possessed an interest in the turkeys and knew or should have known that such interest emanated from the 'contract grower' (see fn. 2, supra) arrangement with the Livingstons. The jury could properly infer from this evidence that Ralston wilfully obtained the issuance of process, to which it knew it had no right, for the ulterior purpose of forcing Templeton to discharge the Livingstons' debt. Thus Ralston seized the turkeys at the height of the Thanksgiving marketing season and immediately entered into negotiations with Templeton as to the terms of their release. Substantial evidence supports a finding of abuse of process. (Spellens v. Spellens, supra, 49 Cal.2d 210, 230, 317 P.2d 613; Peterson v. Wilson (1948) 88 Cal.App.2d 617, 629, 199 P.2d 757, 6 A.L.R.2d 258 (disapproved on other grounds in Freedland v. Greco (1955) 45 Cal.2d 462, 466, 289 P.2d 463, and in Bargioni v. Hill (1961) 59 Cal.2d 121, 123, 28 Cal.Rptr. 321, 378 P.2d 593); cf. White Lighting...