Union State Bank of Wapato v. Warner

• Decision Date: 18 August 1926
• Docket Number: 19878.
• Citation: 140 Wash. 220,248 P. 394
• Court: Washington Supreme Court
• Parties: UNION STATE BANK OF WAPATO v. WARNER et al.

248 P. 394

140 Wash. 220

UNION STATE BANK OF WAPATO v. WARNER et al.

No. 19878.

Supreme Court of Washington

August 18, 1926

Department 2.

Appeal from Superior Court, Yakima County; Hawkins, Judge.

Action by the Union State Bank of Wapato against Wayne W. Warner and another. Judgment for defendants, and plaintiff appeals. Reversed and remanded.

Shumate & Cheney, of Yakima, for appellant.

C. A Norton, of Wapato, and Reynolds, Ballinger & Hutson, of Seattle, for respondents.

PARKER J.

The plaintiff bank seeks recovery of damages which it claims to have suffered from the conversion by the defendants Warner and Murphy, acting jointly, of certain hay upon which it held a chattel mortgage lien. The case proceeded to trial in the superior court for Yakima county. Judgment of dismissal without prejudice was rendered by the court at the conclusion of the introduction of evidence on behalf of the bank, in response to appropriate motions then made by counsel for Warner and Murphy. These motions were made and the judgment of dismissal rendered upon the ground of failure of proof of joint liability of the defendants. From this disposition of the case in the superior court the bank has appealed to this court.

The controlling facts are not in dispute, and may be summarized as follows: In March, 1924, one Wilbur executed and delivered to appellant bank a chattel mortgage upon certain farm stock and implements owned by him, and also upon crops to be grown by him during the year 1924 upon certain described lands being farmed by him in Yakima county, to secure indebtedness then owing by him to the bank and certain additional advances to be, and which were, made to him by the bank thereafter during that year. This mortgage was duly acknowledged, had the usual affidavit of good faith in due form indorsed thereon, and was timely placed of record in the auditor's office of Yakima county. In January, 1925, at the time of the alleged conversion in question, there was owing by Wilbur to the bank upon the indebtedness secured by the mortgage approximately $2,000. On about January 24, 1925, respondent Warner purchased from Wilbur 443 bales of hay covered by the chattel mortgage, and immediately sold the same to one Rice who was doing business in Seattle in King county, who in turn immediately sold the hay to respondent Murphy. Both of these sales were made f. o. b., at Wapato, in Yakima county, that being the shipping station at which the hay was received from Wilbur. In pursuance of orders from Rice, Warner caused the hay to be shipped to Murphy at Auburn, in King county, who received it in due course. Soon thereafter Murphy disposed of the hay to others, and thereby its identity became lost resulting in the bank's mortgage lien becoming impossible of enforcement as against the hay. Thereafter the bank commenced a foreclosure action in the superior court for Yakima county against Wilbur seeking a decree directing sale of the remaining mortgaged property shich could be found in Yakima county. Such decree was accordingly rendered on July 28, 1925, directing sale of the portion of the mortgaged property to be found in Yakima county, and that the proceeds be applied towards the payment of the secured indebtedness, then amounting to approximately $2,000. The sheriff of Yakima county soon thereafter, in pursuance of the decree, sold all of the mortgaged property which he was able to find in Yakima county, receiving therefor $250, and no more. This is all that the bank has received on the portion of the indebtedness remaining unpaid at the time of the rendering of the decree of foreclosure, and the bank has thus been damaged by the conversion of the hay and the consequent loss of its mortgage lien thereon to the extent of the value of the hay, which is conceded to have been, at the time of the conversion, $407.28. Soon thereafter this action was commenced by the bank against Warner and Murphy, it alleging conversion by them as follows:

'That between the 20th and 24th day of January, 1925, both dates inclusive, defendants herein conveyed, converted, eloigned, and transported away 443 bales of alfalfa hay, weighing 58,185 pounds, which was grown by the said Wilbur upon the land above described which was mortgaged to the plaintiff to secure the indebtedness above set forth.'

Manifestly, the conversion was so alleged to be in effect jointly by Warner and Murphy to make sure that the complaint would not be subject to attack because of misjoinder of parties defendant; counsel for the bank manifestly having in mind the general rule that, in order to sue Warner and Murphy jointly, they must be charged as joint tort-feasors.

We have seen that the judgment of dismissal was asked for, and awarded, upon the ground of failure of proof of joint conversion by Warner and Murphy; the theory of the trial court and counsel for Warner and Murphy being that the evidence showed them to be separately, and not jointly, liable, if at all, as for separate conversions, that is, as for separate torts, and that hence there was an entire failure of proof to support the cause of action set up in the complaint. We shall assume, as counsel for Warner and Murphy insist, that, under the general rule, for the bank to successfully maintain this action against Warner and Murphy jointly, the bank must prove a joint conversion by them, so, if our inquiry calls for the conclusion that they are so jointly liable, it seems plain that we need go no farther in our present inquiry, and that the judgment of dismissal must be reversed.

We think it must be held that it now prima facie appears from this record that Warner and Murphy did, in a legal sense, act jointly in the conversion of the hay. They both took the hay with constructive notice, which in law is as effective as actual notice, of the bank's mortgage rights; the...