Yoder Feed Service v. Allied Pullets, Inc.

• Decision Date: 26 January 1977
• Docket Number: No. 3--374A38,3--374A38
• Citation: 359 N.E.2d 602,171 Ind.App. 692
• Parties: YODER FEED SERVICE and Clarence Yoder d/b/a Yoder Feed Service, Defendants-Appellants, v. ALLIED PULLETS, INC., Plaintiff-Appellee.
• Court: Indiana Appellate Court

Page 602

359 N.E.2d 602

171 Ind.App. 692

YODER FEED SERVICE and Clarence Yoder d/b/a Yoder Feed Service, Defendants-Appellants, v. ALLIED PULLETS, INC., Plaintiff-Appellee.

No. 3--374A38.

Court of Appeals of Indiana, Third District.

Jan. 26, 1977.

Gregory A. Hartzler, Yoder, Ainlay, Ulmer & Buckingham, Goshen, for defendants-appellants.

Thomas E. Warrick, Church, Meteiver, Warrick & Weaver, Elkhart, for plaintiff-appellee.

HOFFMAN, Judge.

Plaintiff-appellee Allied Pullets, Inc. brought an action for the conversion of 16,000 pullets against the defendant-appellant Clarence Yoder d/b/a Yoder Feed Service. Yoder counterclaimed for damages arising from an alleged breach of the contract between the parties. A trial to the court resulted in judgment for Allied with a partial judgment for Yoder on his counterclaim. Upon the overruling of his motion to correct errors, Yoder perfected this appeal asserting that the trial court erred in its finding of tortious conversion and in its refusal to entertain evidence in mitigation of the damages assessed thereon. Allied asserts an assignment of cross-errors in which it has prayed for additional damages.

The facts most favorable to appellee include the following: Allied is a firm in Upper Sandusky, Ohio, which contracts with growers to raise its female chickens during their first twenty weeks or pullet stage. After the pullets are sufficiently matured Allied sells them to poultry farmers to be placed in laying houses. On December 19, 1970, Allied entered into two written contracts with Yoder Feed Service of Goshen, Indiana. The first contract involved the raising of 6,275 pullets, hatched on January 14, 1971. This flock was kept by Yoder in the Lowell Weaver chicken house. The second contract called for 16,000 pullets to be raised from the time of hatching on January 19, 1971. This flock was kept by Yoder in the Glen Yoder chicken house. Accoridng to the terms of the agreements Yoder was to furnish the appropriate environment for raising the chickens in return for which he was to receive 'payment according to the rate of 29 cents for each good pullet removed during the 16th week of age plus 1 1/2 cents per week per pullet thereafter.' These payments were to be made 'not later than 21 days after (the) pullets are removed.'

Originally the contracts had specified that Allied would supply the necessary feed. However, owing to the distance between the parties an oral agreement was made requiring Yoder to supply his own feed to the pullets in exchange for monthly payments by Allied.

On February 20, 1971, and March 24, 1971, Allied signed an agreement with Don Lewis of Galion, Ohio, and Donald E. Rager of Kenton, Ohio, for the sale of 10,880 and 6,144 pullets, respectively, to be delivered on June 7, 1971, at the price of $1.75 each. Allied anticipated using the pullets grown by Yoder at his Glen Yoder house under the second contract to fill the bulk of these two orders. Accordingly on May 12, 1971, Paul Geiser, president and principal shareholder of Allied, made an inspection of the pullets at the Glen Yoder house. He found them to be late in maturity, and registered appropriate complaints. Geiser made other inspections on May 24, 1971, and on June 4, 1971, and was still dissatisfied. Finally, he decided to have the pullets retrieved and taken to the Ohio contractors on June 25, 1971. However, the evidence also discloses that Clarence Yoder telephoned Geiser on June 2, 1971 and arranged to have the Glen Yoder flock removed by Allied and replaced with chickens from another hatcher during the week of June 7, 1971. Presumably since Allied failed to meet Yoder's expectations on June 7, 1971, he would not allow Geiser to remove any of the pullets on June 25, 1971, until he received payment of $12,680. Geiser offered to pay $4,700 for the feed Allied had purchased but refused more.

After negotiations failed between the parties, Allied filled the two Ohio contracts for layers with pullets from other portions of its own stock. Yoder retained the pullets from the Glen Yoder flock and began them as layers in different facilities.

The first question raised on appeal is whether Allied's complaint was based on an appropriate factual circumstance to support an action for conversion. Yoder asserts that Allied failed to make a demand sufficient to place Yoder in a position of wrongful possession. Yoder also maintains he was entitled not to release the pullets until grower payments and feed costs were remitted by Allied. In answer we note that conversion is a descendant of the commonlaw action of trover. It is a tort consisting of an appropriation of the personal property of another to a party's own use and benefit in exclusion and defiance of the owner's rights and under an inconsistent claim of title. Seip v. Gray (1949), 227 Ind. 52, 83 N.E.2d 790; Prudential Ins. Co. v. Thatcher (1936), 104 Ind.App. 14, 4 N.E.2d 574 (transfer denied). The essential elements which need to be proved by the moving party in order to maintain the action are an immediate, unqualified right to possession resting on a superior claim of title. Foley v. Colby (1971), 148 Ind.App. 391, 266 N.E.2d 619; Heeter v. Fleming (1946), 116 Ind.App. 644, 67 N.E.2d 317.

In the case at bar, it is clear from the contract that the grower was responsible with the contractor for the development of the chickens. Under such circumstances when the possession originated through a proper exercise of right, it only becomes an unlawful conversion in derogation of the plaintiff's rights after he makes an unqualified request for their return. Beaver Products Co. v. Voorhees (1924), 81 Ind.App. 181, 142 N.E. 717. Thus, although Allied was the sole owner of the pullets, Yoder was in legal possession of them until Allied made a sufficient demand. Deeter v. Sellers et al. (1885), 102 Ind. 458, 1 N.E. 854.

The evidence most favorable to the appellee discloses that Earl Ruth, a vice president of Allied, called Yoder Feed by telephone on June 23, 1971. He advised the office manager that Allied would remove two truck loads of pullets from the Glen Yoder chicken house on June 25, 1971. However on the day when the trucks were scheduled to arrive, Clarence Yoder called Geiser at Upper Sandusky, and told him that none of the pullets could be removed until he received a certified check for $12,680. Geiser checked his records, called back, and offered $4,700. Yoder rejected the offer insisting upon a check for $12,680. Geiser thereupon contacted Ruth and another driver and stopped them before they drove to Goshen to pick up the pullets.

Under the circumstances of this case, when an owner has arranged for truckers to drive 200 miles to retrieve his property and must call one of them to return after making half the trip, it would be unrealistic to hold the formalities of the demand insufficient. Clarence Yoder's telephone call refusing the drivers was an affirmative tortious act sufficient to sustain a complaint of conversion. Dodds v. Vannoy, Administrator (1877), 61 Ind. 89; Hanna and Another v. Phelps (1855), 7 Ind. 21; First Nat. Bank v. Ransford (1914), 55 Ind.App. 663, 104 N.E. 604.

However as a defense Yoder asserts that tender of the debt for feed and grower payments was necessary in order for Allied to maintain the action. The rationale is that if the property is subject to a lien in favor of Yoder and is withheld therefor, it would have been necessary for Allied to tender the amount due Yoder as lienholder, otherwise Allied would not at the time of the alleged conversion be entitled to the immediate possession of the pullets. Yeager and Sullivan, Inc. v. Farmers Bank (1974), Ind.App., 317 N.E.2d 792.

Yoder claims this lien as a defense to the conversion based upon IC 1971, 32--8--29--1 (Burns Code Ed.), which states:

'Feeding stock--Liens of liverymen and others.--The keepers of livery stables and all others engaged in feeding horses, cattle, hogs and other livestock, shall have a lien upon such property for the feed and care bestowed by them upon the same, and shall have the same rights and remedies as are provided for those persons heretofore having, by law, such lien in the act (32--8--30--1--32--8--30--8) to which this is supplemental.'

This argument must fail when considered in light of evidence adduced at trial. The unpaid May feed bills were approximately $2,940.67. The total feed cost as ultimately found owing by the court with respect to the Glen Yoder and Lowell Weaver flocks as of June 25, 1971, was $4,956.22. Given that Yoder had a lien on the pullets for feed supplied, which Allied would have been required to satisfy prior to release of the pullets, the amount of that lien could be for no more than $4,956.22.

Although Allied's offer to pay the feed debt was $256.22 short of the amount due, the effect of this error is negated by Yoder's continued demand for $12,680 before the pullets would be released. Clearly, Yoder insisted on being paid for more than the feed and his insistence constituted coversion.

The refusal to accept Allied's tender of $4,700 on June 25, 1971, was unreasonable. In Mockford v. Iles (1940), 217 Ind. 137, 26 N.E.2d 42, where a mover had separate contracts for the transportation and the storage of certain household items, the court, at 144 of 217 Ind., at 46 of 26 N.E.2d, stated:

'When a warehouseman refuses a proper demand for the delivery of goods upon the payment or the tender of the amount due him, and insists on the payment of excessive or improper charges before delivery, he thereby loses his lien upon the goods he has in storage and acts illegally and unlawfully in so refusing delivery.'

Considering the case at bar in this context, it is important to note that the growers' fees were separate from the feed costs. An oral variation in the agreement was made to accommodate the distance between the parties so that Allied would pay for Yoder's feed in monthly installments. However the...