Wasatch Livestock Loan Co v. Lewis & Sharp

• Decision Date: 27 August 1934
• Docket Number: 5378
• Parties: WASATCH LIVESTOCK LOAN CO v. LEWIS & SHARP et al
• Court: Utah Supreme Court

35 P.2d 835

84 Utah 347

WASATCH LIVESTOCK LOAN CO v. LEWIS & SHARP et al

No. 5378

Supreme Court of Utah

August 27, 1934

Appeal from District Court, Third District, Salt Lake County; O. W McConkie, Judge.

Action by the Wasatch Livestock Loan Company against Siney Lewis and others, copartners, doing business as Lewis & Sharp, the First National Bank of Brigham City, Newell K. White, N. R Petersen, Eli Anderson, and the Tremonton Banking Company. From the judgment rendered, plaintiff appeals, and defendants White, Peterson, Anderson, and the Tremoton Banking Company cross-appeal.

IN PART AFFIRMED, and in part reversed and remanded, with directions.

Thomas & Thomas, of Salt Lake City, for appellant.

A. R Barnes, L. B. Wight, and P. C. Evans, all of Salt Lake City Wm. E. Davis, of Brigham, and Thatcher & Young, of Ogden, for respondents.

STRAUP, Chief Justice. ELIAS HANSEN, FOLLAND, EPHRAIM HANSON, and MOFFAT, JJ., concur.

OPINION

STRAUP, Chief Justice.

The Wasatch Livestock Loan Company brought this action against Siney Lewis, Clara A. Lewis, and J. Steward Sharp, Jr., copartners, Newell K. White, N. R. Petersen, Eli Anderson, the First National Bank of Brigham City, and Tremonton Banking Company, on foreclosure of a chattel mortgage in the sum of $ 45,000 on 9,777 ewe lambs on a ranch at or near Promontory Point in Box Elder county, Utah. The mortgage was executed by the partnership, Lewis & Sharp, to the plaintiff October 22, 1929. When the action was commenced, the partnership owned and possessed only about 4,000 or 5,862 head of lambs. Of these, White claimed he had a mortgage on 849 head, executed November 23, 1929, being a part of a sale of 1,849 lambs sold by him to Lewis & Sharp, September 25, 1929, for $ 15,738, of which $ 10,103 were paid in cash, and later the mortgage given for the remainder of the purchase price amounting to $ 5,635. Of the 4,000 or 5,862 head claimed to be owned by Lewis & Sharp and which the plaintiff claimed were included in its mortgage, Petersen claimed ownership of 607 head on which he, October 23, 1929, gave the Tremonton Bank a mortgage for $ 5,000 for money borrowed with which to purchase such lambs, which mortgage he and the Tremonton Bank asserted was superior and paramount to plaintiff's mortgage. Likewise, Anderson, of the 4,000 or 5,862 head, claimed ownership to 605 head on which he, October 5, 1929, gave the First National Bank of Brigham City a mortgage in the sum of $ 5,000 for money borrowed by him from the bank with which to purchase such lambs, which he and the bank asserted was superior and paramount to the mortgage of the plaintiff. Pending the proceedings, and with the consent of all parties concerned, the 4,000 or 5,862 head of lambs by order of court were sold for $ 32,000 and the proceeds thereof turned over to the plaintiff, but to be retained by it, until the determination of the respective rights of the parties in the action.

The case was tried to the court. It was found and adjudged that the plaintiff's mortgage was superior and paramount to all of the claims of the defendants, except that of the First National Bank of Brigham City; that, after giving credit for partial payments made on plaintiff's mortgage, there was due the plaintiff and unpaid the sum of $ 32,989, and, after applying thereon the proceeds of $ 32,000 derived from the sale of the sheep, there remained due and unpaid on plaintiff's mortgage the sum of $ 989, together with $ 914 advanced by plaintiff to Lewis & Sharp in accordance with the terms of the mortgage and secured thereby, or a total amount due and unpaid of $ 1,903, and an attorney's fee of $ 3,100.

As to the First National Bank of Brigham City, the court found that its mortgage lien was superior to that of plaintiff's; that the proceeds of the sale of sheep were to be prorated between the plaintiff and the bank, the bank given 605/5862 of $ 32,000, or $ 3,296; and, since the whole of the $ 32,000 was paid to the plaintiff, the court required it to pay the Brigham City Bank $ 3,296, its proportion of such proceeds, gave the bank judgment against the plaintiff for such sum, and further gave the bank judgment against Anderson for the difference between such amount and the amount due from Anderson on his mortgage, amounting to $ 2,346 and attorney's fee.

The Tremonton Bank was given judgment against Petersen for the amount due it on his mortgage, amounting to $ 6,008 and $ 600 attorney's fees. Judgment was given in favor of White and against Lewis & Sharp for $ 5,669, the amount due him on his mortgage from them to him, and $ 600 attorney's fees. No judgment was given against the plaintiff in favor of the Tremonton Bank, or of Anderson, Petersen, or White. In other words, as to all of the defendants the plaintiff on its foreclosure prevailed, except as against the First National Bank of Brigham City.

The plaintiff, as against the Brigham City Bank, appeals from that part of the judgment holding the bank's mortgage superior to that of the plaintiff, and requiring the plaintiff to prorate with the bank the proceeds of the sale of the sheep and rendering judgment for such amount against the plaintiff and in favor of the bank. The defendants White, Anderson, Petersen, and the Tremonton Bank each separately appeal from that part of the judgment holding plaintiff's mortgage superior to their respective claims and not awarding them anything out of the proceeds of the sale of the sheep.

The partnership, Lewis & Sharp, was engaged in buying, selling, and feeding sheep on a rather large ranch of about 45,000 acres near Promontory Point in Box Elder county. On or about September 20, 1929, about a month prior to the execution of the mortgage by them to the plaintiff, Lewis & Sharp, a copartnership, as party of the first part, and the defendants Anderson, Petersen and three others, Conrad, Holmes, and Warren, as parties of the second part, entered into a written agreement referred to in the record as Exhibit C, wherein it was recited that the first party had access to a range of lands near Promontory Point on which they desired to range ewe lambs until the next summer, and that the second parties desired to stock such range with lambs, and by the terms thereof it was provided that the parties signing as the second part were to have an interest in the "contract rights and the proceeds and profits thereof," in proportion to the amount of money contributed by each party of the second part; that the first party had the right to solicit other members as second parties who, upon signing the agreement, had the same rights as the second parties who already had signed the agreement; that "the title to such lambs should be taken in the name of the first party, Lewis & Sharp"; and that it had "the right to mortgage the same to the extent of $ 5 per head to supplement the amount raised by the second parties, the two sums to be used solely in the purchase and delivery of the lambs at Promontory Point, Utah"; that the first party at its own expense was to furnish range for the lambs and to have the sole care and management of them, "including the purchase and resale of them and their wool," and that the lambs were to be ranged by turning them loose on the range at Promontory Point; that the first party was to pay all taxes and costs of shearing and caring for and maintaining the lambs; that, on a resale of them, the first party was to apply the proceeds of sale, first, to the "payment of chattel mortgage on these lambs"; second, to retain 25 cents per head per month for ranging, etc.; thirdly, to costs of supplying feed (hay, corn, etc.) to the lambs in case such feeding became necessary; and that the balance was to be divided by the first party among the members of the second party in proportion to the amount contributed by each. In accordance with such agreement, Lewis & Sharp signed and subscribed $ 10,000, Frank Conrad $ 5,000, Eli C. Anderson $ 5,000, N. R. Petersen $ 5,000, Eugene Holmes $ 500, and Walter S. Warren $ 500.

White was not a party to the agreement. He, September 25, 1929, sold to Lewis & Sharp 1,849 lambs for $ 15,738, $ 10,103 of which was paid in cash, and the balance of $ 5,635 to be paid in a few days. The lambs were delivered by White to Lewis & Sharp at Promontory Point, and there on the ranch mingled with other lambs of the partnership and of the joint adventure. White claimed he had an oral agreement with Lewis, who conducted the purchase of the lambs on behalf of the partnership, that the title to the lambs should not pass until they were fully paid for. Lewis, by his testimony, denied there was any such agreement. The court, in accordance with his testimony, so found, and that title to the lambs on delivery passed from White to Lewis & Sharp. White at divers times demanded payment of Lewis & Sharp for the balance remaining due and unpaid. Lewis & Sharp each time promised to pay the same, but failed to do so. So, on November 23, 1929, Lewis & Sharp executed and delivered to White a promissory note for the amount remaining due, but dated it back to September 25 when the sheep were sold, and, to secure the payment of the note, Lewis & Sharp at the same time gave a chattel mortgage on 849 lambs of the general herd covered by and included in plaintiff's mortgage given October 22, 1929. It is not clear whether the lambs so mortgaged by Lewis & Sharp to White when the mortgage was given could be identified from the rest of the herd of lambs of Lewis & Sharp on the range. But it is quite clear that they could not be so identified at the commencement of the action.

The court found and held that White neither orally nor otherwise had retained title to the lambs sold by him to Lewis & Sharp and that title passed from him to...