Huether v. McCaull-dinsmore Co.

204 N.W. 614, 52 N.D. 721, 1925 N.D. LEXIS 137
CourtNorth Dakota Supreme Court
DecidedMay 29, 1925
StatusPublished
Cited by12 cases

This text of 204 N.W. 614 (Huether v. McCaull-dinsmore Co.) is published on Counsel Stack Legal Research, covering North Dakota Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Huether v. McCaull-dinsmore Co., 204 N.W. 614, 52 N.D. 721, 1925 N.D. LEXIS 137 (N.D. 1925).

Opinion

*726 Nuessle, J.

This action was brought to recover damages on account of the conversion of certain grain.

Plaintiff is a farmer residing near Havelock, North Dakota. The defendant McCaull-Dinsmore Company is a corporation engaged -in the grain commission business at Minneapolis, and a member of the Chamber of Commerce of that city. The defendant Havelock Equity Exchange was a corporation, nearly all of whose stockholders were fanner’s in the vicinity of Havelock. The Exchange was incorporated in 1910. It owned and operated a grain elevator at Havelock and was engaged in buying grain and reselling the same at terminal markets. In July, 1920, the Exchange entered into a contract in writing with tire defendant company, whereby in consideration of tire company making certain advances in money from time to time, the Exchange was to ship at least eighty per cent of the grain received by it to the Company, which agreed to sell the same, and ’after deducting its commissions and other charges for freight, handling, etc. to credit the proceeds upon the account, if any, owing to it by the Exchange for advances thus made. During the fall of 1920 .and thereafter the Exchange shipped all of its grain to the company and the company handled and sold the same under the terms of the sales contract. The method followed was that if the Exchange needed money it drew *727 sight drafts upon the company tlie amounts of which when paid were charged to the account of the Exchange. The grain was shipped in car lots to the company at Minneapolis, and the bills of lading were sent forward to it. Upon receipt of the bills of lading the company sold the grain thus consigned and endorsed the bills of lading to the buyer. After deducting the freight and handling charges and its commissions, it credited the proceeds on the account of the Exchange. At the time that this contract was entered into in July 1920, the Exchange was owing several thousand dollars to the company on account of its previous business transactions. During the succeeding months further advances were made by the company so that when on October 11th, the first shipment of grain was made to and received by the company, the Exchange owed, nearly $16,000 on account.

In the fall of 1920 the plaintiff deposited in the elevator of the Exchange for storage 1134 bushels 20 pounds of wheat. The usual storage receipts or 'tickets for this wheat were issued to him. In. the spring of 1920 the plaintiff had furnished one Stemvick, 160 bushels of seed wheat at the 'agreed price of $3.16 per bushel. He filed a lien for this seed. Stemvick raised a crop from it and sold it to the Exchange. Erom August to December 1920, one Bean was the manager of the Exchange. Bean was discharged in December 1920. After Bean was discharged, Rafferty, president of the Exchange, 'acted as manager from that time and until it ceased to do business. During the fall of 1920 the Exchange received either by purchase or for storage about 40,000 bushels of wheat. A large amount of this was received for storage, and the usual storage tickets were issued. Some of these were later redeemed. During the latter part of 1920 the Exchange met with financial difficulties and was unable to meet the demands of the holders of the storage tickets. Checks that it issued were dishonored. After Rafferty became manager and during the winter and spring of 1921, the Exchange made an effort to reduce its storage liability by giving its promissory notes to ticket holders. By this means the liability was reduced several thousand bushels. The holders of these notes, however, received them conditionally, and the condition was never performed. This was denied by Rafferty and others in authority,, but the jury found to the contrary. In 'May 192.1, a mooting of the stockholders ’and some of the ticket holders was held *728 for the purpose of considering tbe condition of the Exchange and devising some means to re-establish it financially. At this mooting it was proposed that the Exchange should give its notes to such 'ticket holders as would accept them for their storage tickets, and such of the mm-stockholders as would take notes for their storage tickets should each be given a share o£ the capital stock of the Exchange as an inducement to enter into this arrangement. Some of those present at the meeting signed an agreement in accordance with this proposal. Committees were appointed to solicit holders of storage tickets to take notes therefor, and through and by means of these committee's the storage liability was reduced to about 3,200 bushels. However, this arrangement was tentative only and was entered into only on condition that it should not he final and binding unless all the ticket holders agreed thereto. All the ticket holders, however, did not enter into the arrangement and the condition thus was never performed and the arrangement never became effective. Among those solicited by the committees to take notes for their storage tickets was the plaintiff. He was given a note for $2,007.25, the value of the grain stored by him at the price then prevailing. The elevator was not opened in the fall of 2921 and did no business. In January 1922, the Exchange was adjudged a bankrupt. The note given to the plaintiff for his tickets was kept by. him until after the adjudication in bankruptcy, when it was mailed to the Exchange. It was listed by the Exchange in the bankruptcy proceedings as one of its liabilities.

The meeting of the ticket holders and stockholders in May 1921, was so held after conference by Rafferty with the defendant company. In June Rafferty wrote the company that the Exchange had purchased tickets representing 11,000 bushels of grain, leaving tickets for a little over 3,000 bushels outstanding, and that these were held by banks and business men who had promised not to force collection. At this time there were 4,000 bushels of wheat and certain other grain in the elevator. In July 1921, Rafferty made a statement to the company showing that at that time there was only 3,210 bushels of grain unsettled for. After that the Exchange shipped some of the wheat to the company, which sold the same and credited the proceeds thereof on the Exchange’s account. In June and July, 1922, the plaintiff served on the defendant company a demand for the grain *729 olaimed by. him, botli on account of bis storage tickets and under bis seed lien claim. When the Exchange was adjudicated a bankrupt there was 1,700 bushels of wheat in the elevator which was appropriated by the trustee. At that time there were outstanding unredeemed wheat storage tickets aggregating 15,058 bushels and rye tickets for 11S bushels. The Exchange was .bonded 'as a warehouseman in the sum of $.1,000 pursuant to the statute. The plaintiff and other ticket-holders brought suit to realize on the bond. The bonding company defended as against this suit, but subsequently admitted its liability on the bond, and the amount thereof was paid into court pursuant to an order of the court, and is there for such distribution among the ticket holders as may be proper.

The plaintiff in this action sought to recover on account of the conversion by the defendant of the grain to which the plaintiff was entitled under the storage tickets issued to him, and of the grain on which he claimed the seed lien to the amount of such lien claim. The cause came to trial in February 1923. The jury returned a special verdict, consisting of sixty-three findings.

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Cite This Page — Counsel Stack

Bluebook (online)
204 N.W. 614, 52 N.D. 721, 1925 N.D. LEXIS 137, Counsel Stack Legal Research, https://law.counselstack.com/opinion/huether-v-mccaull-dinsmore-co-nd-1925.