The Farmers Grain and Supply Company v. The Atchison

• Decision Date: 09 January 1926
• Docket Number: 26,297
• Citation: 245 P. 734,120 Kan. 21
• Court: Kansas Supreme Court
• Parties: THE FARMERS GRAIN AND SUPPLY COMPANY, Appellee, v. THE ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY, THE RED STAR MILLING COMPANY, and EDWARD KELLY, an Individual Doing Business as the EDWARD KELLY GRAIN COMPANY, Appellants

245 P. 734

120 Kan. 21

THE FARMERS GRAIN AND SUPPLY COMPANY, Appellee, v. THE ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY, THE RED STAR MILLING COMPANY, and EDWARD KELLY, an Individual Doing Business as the EDWARD KELLY GRAIN COMPANY, Appellants

No. 26,297

Supreme Court of Kansas

January 9, 1926

Decided January, 1926.

Appeal from Reno district court; WILLIAM G. FAIRCHILD, judge.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

1. TROVER AND CONVERSION--Joint Liability--Wrongful Disposition of Grain. Where a car of grain transported by a railway company under a standard bill of lading is consigned to the shipper with directions to notify a certain dealer at the point of destination, and it is there delivered to grain dealers without the surrender of the bill of lading and the grain is sold and disposed of without the consent of the owner and without compensation to him, the railway company and the grain dealers who contributed to the wrongful disposition of the grain are jointly and severally liable for the conversion of the grain.

2. PROCESS--Residence of Parties--Joint Wrongdoers. All of the wrongdoers being jointly and severally liable, the bringing of an action against all in a certain county where one of them was served with process, entitled the plaintiff to procure the service of summons on the other defendants residing in another county, where the action was brought in good faith against all and the plaintiff was acting in the honest belief that he had a cause of action against all of the defendants, and the subsequent failure to recover against the resident defendant, does not defeat jurisdiction over nonresident defendants or a recovery against them.

3. CARRIERS--Limitation of Liability--Notice of Loss. A stipulation in a standard bill of lading under which a shipment was made to the effect that claims for loss or damage must be made in writing, to the carrier, within four months after delivery of the property, and that unless claims are so made the carrier shall not be liable, is not unreasonable or invalid, and the fact that the carrier participated in the wrongful conversion of the property or that some of its employees had knowledge of the wrong and injury, did not avoid the stipulation nor warrant a recovery against it, where the claim was not made in accordance with the contract.

William R. Smith, Owen J. Wood, Alfred A. Scott, Alfred G. Armstrong all of Topeka, J. S. Simmons, of Hutchinson, Charles H. Brooks, Willard Brooks, Howard T. Fleeson, Thomas C. Wilson and Henry Lampl, all of Wichita, for the appellants.

C. E. Branine, H. R. Branine and H. F. Brown, all of Hutchinson, for the appellee.

OPINION

JOHNSTON, C. J.:

The Farmers Grain and Supply Company brought this action against the Atchison, Topeka & Santa Fe Railway Company, the Red Star Milling Company, and The Edward Kelly Grain Company, alleging the conversion of a car of wheat by the defendants and asking a recovery of $ 1,990, the value of the wheat converted. Judgment for the amount claimed was awarded to plaintiff against all of the defendants, from which they appeal.

The plaintiff was engaged in the grain business in Galva, Kan., and on February 22, 1921, delivered the car of wheat involved to the railway company for shipment, consigned to the plaintiff's order at Wichita, with a notation to notify Hausam-Bateman Grain Company. A bill of lading was issued to plaintiff, to which it attached a sight draft on the Hausam-Bateman Grain Company, and it turned both over to the State Bank of Galva to be forwarded and delivered to the grain company. In some way unknown to the parties the bill of lading and draft were lost in transmission. In due time the car arrived at Wichita, when the railway company notified the Hausam-Bateman Grain Company, and that company requested the railway company to notify the Edward Kelly Grain Company, which notice was given. The latter company not being able to produce the bill of lading, the railway company demanded indemnity from it for any loss or damage which might result from a delivery of the wheat without the surrender of the bill of lading. The Edward Kelly Grain Company gave the railway company a certified check for $ 2,450 as security, and on March 5, 1921, the railroad company delivered the wheat to the Red Star Milling Company, on the order of the Edward Kelly Grain Company. Later the certified check of the Kelly Grain Company was returned to it, and in lieu of that check the Hausam-Bateman Grain Company gave its certified check for the same amount, and afterwards that company executed a bond indemnifying the railroad company against loss or damage by reason of the delivery of the wheat without the surrender of a bill of lading. This bond was accepted by the railway company, knowing of the loss of the bill of lading. It appears that the draft drawn was never paid and no payment for the wheat has ever been made either to the plaintiff or the State Bank of Galva. It appears that the Kelly Grain Company delivered the wheat to the Red Star Milling Company and received payment therefor, and the latter company appropriated the same to its own use, and this disposition of the wheat was made without the surrender of a bill of lading and without the consent or authority of the plaintiff. The plaintiff was the owner of the wheat and never parted with its ownership beyond the pledging of the same to the State Bank of Galva as security for the draft drawn, which the plaintiff was subsequently required to pay to that bank. All of the defendants were informed of the loss of the bill of lading, and the plaintiff also had early knowledge of the loss. On March 24, 1921, plaintiff addressed a letter to the Hausam-Bateman Grain Company relating to the shipment, the sending of the bill of lading and draft, and their probable loss. That company wrote the division freight agent of the railway company of the shipment, of the bill of lading and draft, of the delivery of the wheat without the surrender of a bill of lading after certified check had been given, and asking permission to give an indemnity bond to the railway company so that they might collect their money for the wheat. That officer wrote the general claim agent of the railway company and advised him of the delivery of the wheat on a certified check, and asked permission and approval of the taking of a bond in lieu of the certified check. This approval was given. While plaintiff knew of the loss of the bill of lading and draft as early as March 4, 1921, no claim was presented to the railway company for the wheat until February 13, 1922, nearly a year after the wrongful appropriation of the wheat.

The railway company contends that the plaintiff is not entitled to a recovery against it because of the failure of plaintiff to file a formal claim within four months after the wrongful delivery of the grain. Among other provisions of the bill of lading were the following:

"The surrender of the original order, bill of lading properly indorsed shall be required before the delivery of the property. Claims for loss, damage or delay must be made in writing to the carrier at the point of delivery or at the point of origin within four months after delivery of the property or in case of failure to make delivery, then within four months after reasonable time for the delivery has elapsed. Unless claims are so made the carrier shall not be liable."

The defendants, other than the railway company, located in Sedgwick county, contended that they were illegally summoned and sued in Reno county, where the action was brought. It is conceded that jurisdiction of the railway company was obtained in Reno county, and under the statute when an action is rightly brought in one county a summons may issue to another against nonresident defendants. (R. S. 60-2502.) It is contended by the nonresident defendants that the action was not rightly brought against the defendants, because of plaintiff's failure to file a claim within four months after the wrongful delivery of the grain, and they insist that this failure not only released the railway company but released them from any liability for the wrongful conversion of the wheat. It appears that all of the defendants participated in the wrongful appropriation of plaintiff's wheat. All knew that it had been delivered without the surrender of a bill of lading, and with this knowledge each contributed its part to the misappropriation and their joint work occasioned the loss. Each party who took possession of the wheat, whether by purchase or otherwise, from one who had no power from the owner to dispose of it, is guilty of a conversion, and all who assist in the wrongful appropriation and disposition or shared in the proceeds thereof with guilty knowledge are guilty of a conversion and all are jointly and severally liable even though all may not have been equally guilty. (Westbrook v. Mize, 35 Kan. 299, 10 P. 881; Barnhart v. Ford, 37 Kan. 520, 15 P. 542; Sharpe v. Williams, 41 Kan. 56, 20 P. 497; Brown v Campbell Co., 44 Kan. 237, 24 P. 492; Kansas City v. Slangstrom, 53 Kan. 431, 36 P. 706; Kansas City v. File, 60 Kan. 157, 55 P. 877; Luengene v. Power Co., 86 Kan. 866, 122 P. 1032; McDaniel v. City of Cherryvale, 91 Kan. 40, 136 P. 899; Gooch v. Gooch, 108 Kan. 416, 195 P. 874.) All the defendants being joint tort-feasors the plaintiff was at liberty to sue them jointly or severally at its option. It is argued, however, that the railway company is not liable to plaintiff because a claim for the loss was not made to the company within four...