Ontario Livestock Commission Co. v. Flynn

126 N.W.2d 362, 256 Iowa 116, 1964 Iowa Sup. LEXIS 749
CourtSupreme Court of Iowa
DecidedFebruary 11, 1964
Docket51245
StatusPublished
Cited by23 cases

This text of 126 N.W.2d 362 (Ontario Livestock Commission Co. v. Flynn) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ontario Livestock Commission Co. v. Flynn, 126 N.W.2d 362, 256 Iowa 116, 1964 Iowa Sup. LEXIS 749 (iowa 1964).

Opinion

Garfield, C. J.

— This is a law action in two counts by Ontario Livestock Commission Company of Ontario, Oregon, against defendants Kastner and Flynn, who live in or near Sioux City, Iowa, for alleged conversion of two shipments, each of 65 cattle, from plaintiff to Kastner. Plaintiff claims the cattle were obtained by fraud upon worthless drafts and delivered by Kastner to Flynn, a livestock commission merchant, who sold them and paid Kastner the proceeds of the sale, less commission. At the close of the evidence a verdict was directed against plaintiff who has appealed from the adverse judgment thereon.

Grounds of the motion to direct which were sustained are 1) that plaintiff knew of and consented to the sale, and 2) the cattle were commingled with others not obtained from plaintiff before delivery to Flynn.

I. Plaintiff is a partnership engaged in the livestock business. Defendant Flynn is an individual also so engaged. Bach is a registered market agency under the federal Packers and Stockyards Act. At all material times defendant Kastner was an order buyer and speculator in livestock. Jerry Baker, a prominent figure in the controversy, was a livestock dealer at Caldwell, Idaho.

Kastner learned of Baker in April 1961 and arranged with him by phone to purchase cattle for him and pay for them by drawing a draft on Kastner payable through a bank at Laurel, Nebraska. Kastner would receive and sell the cattle and “pick up” the draft at the bank. In mid-June (1961.) Baker told Kast- *119 ner about 65 heifers plaintiff was about to sell. Kastner testifies be sold them to a man at Fort Collins, Colorado, and authorized Baker to buy the heifers for him (Kastner) and ship them to Fort Collins. Apparently all dealings between Kastner and Baker were by phone.

Baker caused the 65 heifers to be purchased for Kastner at plaintiff’s auction sale at Ontario, Oregon, and gave plaintiff a draft on Kastner for $9720.87 for the purchase price. The heifers were shipped to Kastner, in care of a commission company, at Fort Collins on June 22. Kastner testifies he turned the cattle down because of excessive cost and shrinkage in weight and so advised Baker. Baker denies this and says the heifers complied with the instructions he received from Kastner.

Morgan Beck, a partner and business manager of plaintiff, testifies Baker told him Kastner turned the cattle down. “I instructed Baker to- have the cattle sold through the Fort Collins auction in our name and remit directly to [us].” It is admitted plaintiff never sent the draft for $9720.87 through for collection. It has never been paid. The managing officer of the bank at Laurel, Nebraska, testifies Kastner on June 22 or later never had sufficient funds in his account to pay the draft and the bank had no arrangement to honor drafts drawn on him. Kastner admits this. When such drafts were paid Kastner deposited the funds the day payment was made.

Baker’s testimony is that Kastner kept telling him he had sold the heifers and promising to send plaintiff the amount of the draft and that Baker so informed Morgan Beck. “That was all right with Mr. Beck.” Later, according to Baker, Kastner admitted he was lying when he said he had the heifers sold. They were not sold at Fort Collins but shipped by Kastner to Laurel, Nebraska, commingled with other livestock he had there-, and shipped to Flynn at Sioux City. Flynn in turn sold the cattle he received and paid Kastner the proceeds, less commission for selling.

Count I of plaintiff’s petition asks judgment for the $9720.87 from both Kastner and Flynn on the theory the heifers were wrongfully converted when Kastner obtained possession of them through his agent Baker, both defendants *120 contributed to the conversion and the draft represented the fair and reasonable market value of the animals.

Plaintiff's Count II claims it sold Baker for Kastner’s account 65 mixed steers and heifers for $5513.44, their fair market value, on July 21, 1961; Baker paid for them with a draft on Kastner payable at the Laurel bank; the draft was presented and returned unpaid for insufficient funds; Kastner delivered the cattle to Flynn who sold them on commission and paid Kastner the net proceeds; both defendants wrongfully converted the cattle and are liable to plaintiff for their, value.

The evidence is these July 21 cattle were shipped from Ontario to Laurel, Nebraska, there mixed with other cattle of Kastner and the commingled lot was delivered to Flynn. Between June 22 and July 21 plaintiff sold about 200- other cattle to Kastner and the drafts given in payment of them were paid by the Laurel bank. We understand Baker made all these purchases for Kastner and had general authority to buy cattle for him and draw drafts on Kastner in payment.

II. Plaintiff contends title to the cattle did not pass to Kastner by reason of nonpayment of the drafts given for their purchase, Kastner obtained possession by fraud which amounted to conversion, Flynn — as Kastner’s agent — aided and assisted his codefendant in the conversion and is equally liable with him.

Plaintiff relies upon Birmingham v. Rice Bros., 238 Iowa 410, 26 N.W.2d 39, 2 A. L. R.2d 1108, and like decisions in other jurisdictions. There an impostor fraudulently obtained cattle from plaintiff by issuing to him a worthless check in payment, the impostor delivered the cattle to defendant commission firm which sold them to a third party and paid the impostor the net proceeds of the sale. Both plaintiff and defendant acted in good faith without knowledge of the fraud. We held, by reason of the fraud practiced on plaintiff, title to the cattle did not pass to the impostor, and defendant commission firm was liable to plaintiff, the true owner, for the value of the cattle even though it acted in good faith and in ignorance of its fraudulent principal’s want of title.

Although there is authority contrary to the cited decision most decisions are in accord. See 35 C. J. S., Factors (1960), *121 section 57b, pages 578, 579; United States v. Union Livestock Sales Co., 4 Cir., W. Va., 298 F.2d 755, 760; Restatement Agency, Second, section 349 and appendix, pages 574 to 578. However, Birmingham v. Rice Bros. does not involve or consider either of the grounds on which this verdict was directed against plaintiff. ¥e now consider whether the ruling, as to Count I, should be upheld on the ground plaintiff consented to sale of the cattle by Kastner.

III. The C. J. S. citation, supra, states (page 579), “The factor is not liable for conversion where he has been misled through the act of the owner * * * or where he obtains possession, and sells the goods, with the consent of the owner.”

89 C. J. S., Trover and Conversion, section 5, says, “Non-consent to the possession and disposition of the property by the defendant is indispensable to a conversion.”

53 Am.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Larson v. Great West Casualty Co.
482 N.W.2d 170 (Court of Appeals of Iowa, 1992)
Napoleon Livestock Auction, Inc. v. Rohrich
406 N.W.2d 346 (North Dakota Supreme Court, 1987)
F.S. Credit Corp. v. Shear Elevator, Inc.
377 N.W.2d 227 (Supreme Court of Iowa, 1985)
Countryman v. Mt. Pleasant Bank & Trust Co.
357 N.W.2d 599 (Supreme Court of Iowa, 1984)
Murray v. Conrad
346 N.W.2d 814 (Supreme Court of Iowa, 1984)
Larsen v. Warrington
348 N.W.2d 637 (Court of Appeals of Iowa, 1984)
Welke v. City of Devenport
309 N.W.2d 450 (Supreme Court of Iowa, 1981)
Whirlpool Corp. v. Bank of Naperville
421 N.E.2d 1078 (Appellate Court of Illinois, 1981)
Sandhorst v. Mauk's Transfer, Inc.
252 N.W.2d 393 (Supreme Court of Iowa, 1977)
Richardson v. Dunlap Livestock Auction, Inc.
210 N.W.2d 834 (Supreme Court of Iowa, 1973)
Rick v. Boegel
205 N.W.2d 713 (Supreme Court of Iowa, 1973)
Prior v. Rathjen
199 N.W.2d 327 (Supreme Court of Iowa, 1972)
DeVore v. McClure Livestock Commission Co., Inc.
485 P.2d 1013 (Supreme Court of Kansas, 1971)
Appling Ex Rel. Preminger v. Stuck
164 N.W.2d 810 (Supreme Court of Iowa, 1969)
Adams v. RS Bacon Veneer Company
162 N.W.2d 470 (Supreme Court of Iowa, 1968)
Fischer v. Fischer
142 N.W.2d 857 (Wisconsin Supreme Court, 1966)
United States v. Merchants Mutual Bonding Co.
242 F. Supp. 465 (N.D. Iowa, 1965)
Strang v. Frink
135 N.W.2d 103 (Supreme Court of Iowa, 1965)

Cite This Page — Counsel Stack

Bluebook (online)
126 N.W.2d 362, 256 Iowa 116, 1964 Iowa Sup. LEXIS 749, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ontario-livestock-commission-co-v-flynn-iowa-1964.