Vollmer Clearwater Co., Ltd. v. Union Warehouse & Supply Co., Ltd.

• Decision Date: 03 August 1926
• Citation: 43 Idaho 37,248 P. 865
• Court: Idaho Supreme Court
• Parties: VOLLMER CLEARWATER COMPANY, LTD., Appellant, v. UNION WAREHOUSE & SUPPLY COMPANY, LTD., Respondent

248 P. 865

43 Idaho 37

VOLLMER CLEARWATER COMPANY, LTD., Appellant, v. UNION WAREHOUSE & SUPPLY COMPANY, LTD., Respondent

Supreme Court of Idaho

August 3, 1926

PLEADING-CHATTEL MORTGAGES-WAREHOUSEMAN'S LIEN FOR STORAGE-PRIORITY OF LIEN-CONVERSION-DAMAGES-INCHOATE LABORERS' LIENS.

1. Permitting filing of amended answer, on morning before trial plaintiff not appearing to have been deprived of substantial right, and declining offered postponement, was proper exercise of court's discretion.

2. In determining damages of second mortgagee of grain for conversion thereof, his interest is grain's value less amount required to discharge first mortgage.

3. As respects priority of lien of mortgage or warehouseman's lien, by stipulation in second mortgage of grain that it is subject to prior mortgage, second mortgagee consents to delivery of grain to warehouse to be stored, as provided in prior mortgage.

4. Warehouseman's lien for storage, while not made by C. S sec. 6145, superior to mortgage on stored chattel, takes precedence over mortgage lien where mortgagee consents to storage.

5. In determining mortgagee's damages for conversion by warehouseman of mortgaged chattel stored with mortgagee's consent, storage charges are deductible from value of article.

6. Relative to damages to mortgagee of grain from defendant's conversion thereof, defendant is not entitled to deduct what it paid from proceeds to farm-hand of mortgagor who raised the grain, only part of his services being lienable, and that part not established by evidence.

7. From mortgagee's damages from defendant's conversion of mortgaged grain, defendant could not deduct the sums it paid laborers for harvesting the crop, they not having filed their claims for liens, though time therefor, under C. S., sec 7373, had not expired.

APPEAL from the district court of the Tenth Judicial District, for Idaho County. Hon W. F. McNaughton Judge.

Action for conversion of grain. Judgment for plaintiff for portion of damages claimed, from which it appeals. Reversed and remanded with directions.

Reversed and remanded with instructions. Costs to appellant.

A. S. Hardy, for Appellant.

Conversion of mortgaged property entitles mortgagee to recover value of same, with interest. (Averill Mach. Co. v. Vollmer Clearwater Co., 30 Idaho 587, 166 P. 253; Adams v. Caldwell etc. Co., 33 Idaho 677, 197 P. 723; Meyer v. Munro, 9 Idaho 46, 71 P. 969.)

Amended answer was improperly allowed. (Snowy Peak Min. Co. v. Tamarack & Chesapeake Min. Co., 17 Idaho 630, 107 P. 60; 1 Ency. Pl. & Pr. 637, footnote; Hayden v. Hayden, 46 Cal. 332; Ray v. Northrup, 55 Wis. 396, 13 N.W. 239; Johnson v. Swayze, 35 Neb. 117, 52 N.W. 835.)

Warehouse charges on grain were not a lien to be deducted in determining damages. (C. S., sec. 7372; Storms v. Smith, 137 Mass. 201; Arnold v. Peasley, 128 Wash. 176, 222 P. 472; Adler v. Godfrey, 153 Wis. 186, 140 N.W. 1115; Ludwig Baumann & Co., v. Roth, 67 Misc. 458, 123 N.Y.S. 191.)

Lien allowed by statute is the reasonable value only of labor respecting grain, as contributory to its production. (C. S., sec. 7372; Blake v. Crystalline Lime Co., 37 Idaho 637, 221 P. 1100; Holt Mfg. Co. v. Collins, 154 Cal. 265, 97 P. 516; Little Bros. Mill. Co. v. Baker, 57 Wash. 311, 135 Am. St. 980, 106 P. 910; Wallace v. Palmer, 36 Minn. 126, 30 N.W. 445; Anderson v. Bingham, 1 Colo. App. 222, 28 P. 145.)

Indefiniteness in proof of lien claim precludes establishment of lien. (McClain v. Hutton, 131 Cal. 132, 61 P. 273, 63 P. 182, 622; Hudson v. Wright, 1 Ala. App. 433, 56 So. 258; Dextor Horton Co. v. Sparkman, 2 Wash. 165, 25 P. 1070.)

No pleading of any liens and no proof should have been received, and no labor liens should have been found or deducted. (Arkansas R. Land etc. Co. v. Flinn, 3 Colo. App. 381, 33 P. 1006; Pilz v. Killingsworth, 20 Ore. 432, 26 P. 305; McGlauflin v. Wormser, 28 Mont. 177, 72 P. 428; McPherson v. Hattich, 10 Ariz. 104, 85 P. 731; Ahlers v. Smiley, 11 Cal.App. 343, 104 P. 997.)

The Campbell & Son mortgage was waived and released and not deductible as a lien. (Knollin & Co. v. Jones, 7 Idaho 466, 63 P. 638; Bellevue State Bank v. Hailey Nat. Bank, 37 Idaho 121, 215 P. 126; Seat v. Quarles, 31 Idaho 212, 169 P. 1167; Bank of Roberts v. Olaveson, 38 Idaho 223, 221 P. 560; Carr v. Brawley, 43 L. R. A., N. S., 302; Adams v. Caldwell Milling & Elev. Co., 33 Idaho 677, 197 P. 723; Everett v. Buchanan, 2 Dak. 249, 6 N.W. 439.)

M. Reese Hattabaugh and F. E. Fogg, for Respondent.

Order of court allowing amendment to answer was granted in open court upon due hearing, upon reasonable terms; no abuse of discretion was shown and it should not be disturbed. (C. S., sec. 6726; Pennsylvania Coeur d'Alene Min. Co. v. Gallagher, 19 Idaho 101, 112 P. 1044; Cady v. Keller, 28 Idaho 368, 154 P. 629; Trousdale v. Winona Wagon Co., 25 Idaho 130, 137 P. 372; Idaho Placer Mining Co. v. Green, 14 Idaho 294, 94 P. 161; Small v. Harrington, 10 Idaho 499.)

Appellant's second mortgage amounted to no more than a right to redeem upon payment of first mortgage and was subject to all conditions of the first mortgage. (Andrews v. Sarantakis, 185 Ill.App. 382.)

Storage charges, with consent of mortgagee, are a prior lien. (Schmidt v. Bekins Van Storage Co., 27 Cal.App. 667, 155 P. 647.)

All claims for wages of farm laborers deducted by court in determining plaintiff's damages were paramount existing liens at time of alleged conversion. (C. S., sec. 7372.) Liens vest from time of commencement of work. (Anderson v. Great Northern Ry. Co., 25 Idaho 433, Ann. Cas. 1916C, 191, 138 P. 127; Mine etc. Co. v. Idaho etc. Mines Co., 20 Idaho 300, 118 P. 301; Grosbeck v. Barger, 1 Kan. App. 61, 41 P. 204; Central Trust Co. v. Richmond, 68 F. 90, 15 C. C. A. 273, 41 L. R. A. 458.)

All labor allowed by court was lienable. (Beckstead v. Griffith, 11 Idaho 738, 83 P. 764.)

Filing notice is merely procedure for enforcement of vested liens and not necessary to warrant deduction in computing appellant's damages. (Dunlop v. Kennedy, 4 Cal. Unrep. 196, 34 P. 92; Fosset v. Rockland Lbr. Co., 76 Kan. 428, 92 P. 833, 41 L. R. A., N. S., 918.)

Appellant acquired from the mortgagor, under its second mortgage, only a lien upon mortgagor's equity of redemption, subject to the performance by mortgagor of all its terms and the payment of all paramount liens, and its recovery must be limited to the value of its equity at the time of the alleged conversion. (Andrews v. Sarantakis, 185 Ill.App. 382; Cassidy v. Harrelson, 1 Colo. App. 458, 29 P. 525; Keelin v. Postlewait, 174 Ill.App. 71.)

Second mortgagee's damages were limited to value of his equity and unless market value of grain exceeded valid prior liens, appellant suffered no damages. (Thompson v. Anderson, 86 Iowa 703, 53 N.W. 418; Dempster Mill Mfg. Co. v. Wright, 1 Neb. (Unof.) 666, 95 N.W. 806; Citizens Nat. Bank of Jamestown v. Osborn-MacMillan Elevator Co., 21 N.D. 335, 131 N.W. 266; Lovejoy v. Merchants' State Bank, 5 N.D. 623, 67 N.W. 956.)

WM. E. LEE, J. William A. Lee, C. J., and Budge, Givens and Taylor, JJ., concur.

OPINION

WM. E. LEE, J.

--Witherow, a farmer, mortgaged his portion of a crop to be grown on certain leased premises, during the season of 1921, to Campbell and later mortgaged the same crop to appellant subject to the Campbell mortgage. Certain persons had performed labor on the farm and in raising and harvesting the crop for which they had not been paid. At the direction of Campbell, Witherow sold the grain to respondent, a warehouse corporation, in whose warehouse it had been stored. Respondent deducted its warehouse storage charges and paid the balance to Witherow, who paid the labor claims and the Campbell mortgage. From a judgment in its favor for a portion of the amount claimed, appellant prosecutes this appeal and assigns a number of alleged errors, on account of which we are asked to direct the district court to enter judgment for the amount claimed. Only those assignments material to a determination of the appeal will be passed on.

On the morning of the day the cause was set for trial, the court, over the objection of appellant, permitted an amended answer to be filed. The amended answer set up a defense and included denials not contained in the original answer. In allowing the amended answer to be filed, the court offered to postpone the trial until later in the term or to adjourn the term for two weeks and return and try the cause. Without suggesting any reason why either proposition made by the court was not agreeable or satisfactory, appellant proceeded to trial. It does not appear that the filing of the amended answer deprived appellant of any substantial right. Permitting the amended answer to be filed was a proper exercise of the court's discretion. (Cady v. Keller, 28 Idaho 368, 154 P. 629; Trousdale v. Winona Wagon Co., 25 Idaho 130, 137 P. 372; Idaho Placer Min. Co., Ltd., v. Green, 14 Idaho 294, 94 P. 161.)

A jury having been waived, the trial court found that respondents converted the chattels, adjudged it liable in damages to appellant in a sum equal to the value of the grain, and no objection is made to the findings and judgment in this respect. The court found that appellant was damaged, by reason of the conversion of the grain, in an amount equal to the value of the grain less the amount of the prior mortgage on the grain, less certain warehouse charges of respondent, less the sums paid to divers persons for labor in harvesting, hauling and housing the grain, and general labor on the farm on which the grain was grown.

With respect to the assignment that the court permitted a reduction of appellant's damages in the amount of the prior mortgage, appellant's mortgage was not only...