Tonkoff v. Barr, 15022.

• Decision Date: 28 May 1957
• Docket Number: No. 15022.,15022.
• Parties: J. P. TONKOFF, individually and as trustee, Appellant, v. Clay BARR and Betty Barr, husband and wife, Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

245 F.2d 742 (1957)

J. P. TONKOFF, individually and as trustee, Appellant, v. Clay BARR and Betty Barr, husband and wife, Appellees.

No. 15022.

United States Court of Appeals Ninth Circuit.

May 28, 1957.

Tonkhoff, Holst & Hopp, Yakima, Wash., Fertig & Colombo, Portland, Or., for appellant.

Maguire, Shields, Morrison & Bailey, Randall B. Kester, Koerner, Young, McColloch & Dezendorf, William E. Dougherty, Howard K. Beebe, Portland, Or., for appellees.

Before STEPHENS and BARNES, Circuit Judges, and LINDBERG, District Judge.

LINDBERG, District Judge.

This action was commenced in the United States District Court for the District of Oregon by reason of diversity of citizenship. Appellant J. P. Tonkoff, individually and as trustee for E. J. and Viola Welch, husband and wife, and John W. Cramer, beneficiaries under a trust agreement, sought damages from appellees, Clay Barr and Betty Barr, husband and wife, allegedly arising from the failure of appellees in the performance of a trust and assignment of crops agreement executed with respect to crops grown in 1953 on the property known as the Meiss Ranch in northern California.

The following we believe to be a fair summary of the facts and contentions of the parties as disclosed by the record.

The Meiss Ranch is located in Siskiyou County, California. It contains about 13,000 acres, some 3,000 to 4,000 being farm land and the remainder being in pasture and lake. J. C. Stevenson had previously owned and operated the ranch but had sold it to Frank Hofues and A. G. Kirschmer in 1952. Hofues and Kirschmer hired J. C. Stevenson, Jr. to manage the ranch when they took it over and entered into a written management agreement with him in March, 1953.

Early in May, 1953 Hofues and Kirschmer visited the ranch and found the operations unsatisfactory. They then contacted appellees and made a written lease with them to farm the ranch for the remainder of the 1953 season with certain rights for the future. Appellees were to bear all expenses from then on and upon sale of the produce were to receive one-half of the price. The lease was subject to three existing leases to other persons for smaller acreage and also to the rights of J. C. Stevenson for pasturage. The lease was also subject to whatever rights arose from the management contract of J. C. Stevenson, Jr. When the lease was made about 1,200 acres already had been planted to grain. Appellees then planted about 250 acres of rye, 132 acres of wheat and 1,035 acres of oats. Appellee Barr remained on the ranch from May 7th, 1953, when he took over under the lease, until June 5, 1953, when he went to Spokane, where he was defendant in a civil action in the Superior Court of the State of Washington for Spokane County. Appellant Tonkoff was attorney for E. J. Welch, plaintiff in said action and Horton Herman was attorney for defendants (appellees herein). During the course of the trial appellee Barr offered to settle the action by assigning appellees' right, title and interest in the crops then growing on the Meiss Ranch under certain conditions. Such offer was accepted and a declaration of trust was then executed by all parties to that suit.¹

Appellee Barr has been a farmer all his life, having farmed in the states of Washington, Montana and Oregon. He has farmed on stock farms, grain farms and had done "a little irrigation." At the time he took over the Meiss Ranch he was operating a 2,300 acre wheat ranch in northern Oregon. He continued to operate both the Oregon ranch and the Meiss Ranch. The Meiss Ranch operations proved not entirely successful. James C. Stevenson, Jr., acting as manager for Hofues and Kirschmer as owners, and Edward J. Welch, acting for the trust, sold the grain to Kerr Gifford Co., Inc.

Appellant brought this action against appellees and Kerr Gifford & Co., Inc., alleging as against appellees the declaration of trust, that appellees operated the Meiss Ranch in 1953 under lease and that they committed certain named wrongs (later referred to) against appellant. As against Kerr Gifford & Co., Inc., appellant alleged that Kerr Gifford & Co., Inc. bought the crops for approximately $70,000, paying one-half of said sum to the owners of the Meiss Ranch and refusing to pay any of such proceeds to appellant. Appellant prayed as against Kerr Gifford & Co., Inc., for one-half of the proceeds of such sales with interest, and as against appellees for $72,500 with interest, less such sum as may be paid by Kerr Gifford & Co., Inc. by virtue of the action.

Appellees answered, generally admitting the execution of the declaration of trust, that appellees operated the Meiss Ranch and that the grain was sold to Kerr Gifford & Co., Inc., and denying the other allegations, and affirmatively alleging that appellees had sold, assigned and transferred to A. G. Kirschmer the $15,000 which appellees were to receive as expenses under the declaration of trust.

Kerr Gifford & Co. answered, admitting certain allegations of the complaint and denying certain others on information and belief. They further prayed for interpleader and, so far as material herein, alleged that they had purchased the grain grown on the Meiss Ranch for the full price of $88,746.53, and held the sum of $44,373.28 for the persons entitled thereto and prayed that the court order appellant, appellees and A. G. Kirschmer to interplead their respective demands and determine which of said parties was entitled to said sum of $44,373.28, or a portion thereof; and that the court order Kerr Gifford & Co., Inc. discharged upon payment of said sum into the registry of the court, and for attorneys' fees and costs.

Appellant subsequently filed a reply to answer of appellees which, by reason of the course which the case subsequently took, we believe is immaterial.

We omit mention of various pleadings which we regard as being immaterial to this opinion.

An order of interpleader was entered September 15, 1955 and appears in the margin.²

Appellees filed their claim in interpleader on October 25, 1955 as appears in the margin.³ The record fails to disclose that appellant complied with the court's order of interpleader.

In the absence of a pretrial order we must assume that during the trial appellant relied on the pleadings contained in the transcript of record. While such pleadings contain much irrelevant matter it would seem that appellant relied on the following allegations:

That at the time of the execution of the declaration of trust the crops growing on the Meiss Ranch were in good condition; that appellees warranted that there were approximately 2,800 acres of crops growing when in fact such warranty was false and untrue and that only 2,668 acres of crops were growing; that appellees refused, failed and neglected to farm said property in a good and farmerlike fashion; that appellees failed, refused and neglected to properly operate said ranch and care for said growing crops; that appellees failed, refused and neglected to properly irrigate; that appellees plowed under 120 acres of oats without the consent of the trustees or beneficiaries; that appellees failed, refused and neglected to harvest the crops in a farmerlike fashion so that approximately 10% of the grain crops were either not harvested or wasted; that appellees lost approximately 5% of the crop on the road while transporting same to market; and that had appellees cultivated, farmed and harvested in a good and farmerlike fashion the crops produced would have brought on the market in excess of $250,000, $125,000 of which would have been available to pay appellant and his beneficiaries the sum of $72,500.

Following the trial the case was submitted and shortly thereafter the trial court rendered his memorandum decision against appellant.⁴

The court made and entered findings of fact and conclusions of law, the pertinent parts, so far as this appeal is concerned, appearing in the margin.⁵

A somewhat detailed summary of the facts and contentions of the parties have been set forth because as appellant frankly states in his brief, "The issues presented by the appeal are factual."

Appellant's specifications of error may be summarized as follows: The trial court erred (1) in finding that the management contract of J. C. Stevenson, Jr. remained in effect through the 1953 harvest season; (2) in finding that appellees did not make any false or untrue warranties with respect to the acreage of the growing crops on the Meiss Ranch; (3) in finding as a fact that appellees did not fail, refuse or neglect to farm the Meiss Ranch in a good and farmerlike fashion; (4) in finding as a fact that appellees did not breach or fail to perform any covenants, provisions or conditions of the assignment dated June 10, 1953⁶ or any promise or agreement subsequent thereto; (5) in failing to make findings of fact contrary to the findings of fact referred to in the preceding specifications 2, 3 and 4; (6) in concluding that appellant is not entitled to judgment against appellees for the amount prayed for in the complaint; and (7) in entering a judgment for appellees and against appellant.

The appellant does not argue that the findings if sustained do not adequately support the conclusion of law and judgment. Therefore, we may confine our consideration to the question of whether there is evidence which properly can support the findings as made.

As to the first specification of error which relates to the trial court's finding numbered II⁷ admittedly there was a written management contract entered into in March, 1953 between Stevenson, Jr. as manager and Kirschmer and Hofues as owners for the harvest year of 1953 and there was no evidence of its rescission. Stevenson, Jr. testified there was no change in the arrangement because of the Barr lease and that he still regarded himself as the manager under his agreement. Further, he continued to live and supervise the place throughout the season and signed on behalf of the owners...