Ellis v. Nelson

Grace, J. This is an appeal from the judgment of the district court of Barnes county in favor of the defendant and respondent and against the plaintiff. The complaint in the case is one in conversion. The plaintiff in the case is the owner of a large tract of land which he had leased for a term of years to one Henry Swartz as tenant, who during the year 1914 raised upon such land a large quantity of wheat, which was delivered and hauled by said Swartz to E. B. Nelson, doing business at Oriska, North Dakota, as Nelson’s Independent Elevator. The amount — 304 — of wheat so delivered to such elevator was 3,315 bushels, according to the complaint of the plaintiff, title to which is claimed by the plaintiff. The complaint sets forth a demand of the plaintiff of the defendant for the value of such grain, which is alleged to be $4,640.50. The answer of the defendant, after denying certain paragraphs of the complaint, alleges the facts to be that for a period of five years prior to the 13th day of November, 1915, commencing on the 13th day of November, 1910, and continually during said period of five years, the said plaintiff herein, together with one Henry Swartz, were associated together in the operation, conduct, and farming of a certain farm situated in Weimer township, Barnes county, North Dakota; said Henry Swartz had the sole and exclusive charge and conduct of the farming operations conducted upon said farm by the said plaintiff and the said Henry Swartz, and did have sole and exclusive charge of the hauling and selling of all grains and produce sown; grown, harvested, raised, and produced upon said farm during the said period; that during each of the several farming years included in the said period, to wit, farming-years 1911, 1912, 1913, 1914, and 1915, the said plaintiff herein did instruct the public warehousemen doing business in the village of Oriska, county of Barnes, and state of. North Dakota, that the said Henry Swartz had sole and exclusive charge of the marketing and selling of all grains raised and produced on said farm during said several years, and that during said several years and each of them, and with •the full knowledge and consent and concurrence of the plaintiff herein, the said Henry Swartz did market the grains sown, grown, and pro-, duced upon said farm, other than such as was necessary to be retained for seed, - and did sell the same to the various warehousemen doing business at Oriska, Barnes county, North Dakota; and during the year 1914 the said Henry Swartz did market the grains produced upon said premises in the year 1914, and did haul and sell the same to the above-named defendant in part, and the remainder of that part marketed was hauled and sold to the Acme Elevator Company, at Oriska, Barnes county, North Dakota; and further alleging that there were unsold and retained upon the farm about 1,200 bushels of wheat. That that part of the grain so delivered to the defendant was sold by Swartz with the knowledge and consent of the plaintiff, and that the remainder of said grain so hauled was sold by the plaintiff. Defendant further — 305 — alleges that lie bad no knowledge of tbe proportionate parts of said grains belonging to either tbe plaintiff or Swartz, and alleges tbat be bad received notice from tbe plaintiff tbat tbe matter of marketing and selling of said grain was one in which be, tbe plaintiff, would not interfere, but was in tbe sole and exclusive charge of said Henry Swartz. Tbe complaint then sets forth tbe number of gross and net bushels delivered to tbe defendant elevator, and tbe defendant further alleges tbat it was tbe custom and practice adopted by tbe said plaintiff and tbe said Henry Swartz in tbe matter of tbe conduct of tbe farming-operations upon said farm during tbe farming years mentioned tbat said Henry Swartz was, upon tbe hauling of the grain, to sell a portion of said grain, and alleged tbat it was agreed between Swartz and tbe plaintiff tbat upon tbe sale of such grain tbe said Swartz was to account to tbe plaintiff for tbe proceeds. Tbe defendant further alleges tbat be at no time received tbe said grain and converted tbe same to bis own use, but on tbe contrary disposed of tbe same in tbe manner by custom established and both acts and words of tbe plaintiff herein consented to, and not otherwise. Defendant further alleges tbat prior to tbe time of tbe selling of said grain and tbe hauling thereof, a division of tbe grain bad been bad between Swartz and tbe plaintiff, each receiving bis portion, and Swartz did not sell or receive payment for more than bis share of said grain. Tbe defendant, further answering, alleges tbat tbe plaintiff herein bad constituted tbe said Henry Swartz bis agent during tbe period of five years immediately preceding this action; to wit, “Commencing on tbe 13th of November, 1910, for tbe purpose of marketing and selling said grain and receiving tbe purchase price therefor; and that in pursuance of said agency, and not otherwise, tbe said Henry Swartz marketed and sold tbe grain, or a large portion thereof, and did receive payment therefor, under full authority conferred upon him by tbe plaintiff herein, for tbe purpose of accounting to tbe plaintiff for such proceeds; and tbat during all tbe time said Henry Swartz marketed tbe said grain, sold tbe same, and received payment therefor, the said plaintiff herein was fully aware of bis action and acts, and had full and complete knowledge thereof, and did consent thereto, and concur therein, and did permit the said Henry Swartz to make division of — 306 — said grain and sell the same and receive payment therefor; and that during the year 1914 the said plaintiff at various times was present in the village of Oriska, county of Barnes, and state of North Dakota,, at the time when the said grain was hauled and delivered to the defendant herein, and at the time the same was sold by said Swartz.” The defendant further alleges that the grain was hauled to his elevator in the due course of business, was purchased by him without notice of any claim on the part of the plaintiff, other than that the said plaintiff had an interest therein, but that the said Henry Swartz had full power and authority to deliver the same to this defendant, to sell the same, and to receive payment therefor; that if the said plaintiff had rescinded the authority of the said Swartz to sell said grain, he-never at any time notified the defendant thereof, although he at all times had knowledge of the fact that the said Swartz was hauling the said grain to the defendant herein, and was selling the same to the defendant, and that the defendant was purchasing the same from the-said Henry Swartz; that at the time the plaintiff last sold grain to the defendant, on the 2d day of February, 1915, the plaintiff well knew that all the grain that had been hauled into the said elevator from the-said farm had been sold, and that he, the said plaintiff, had received payment for a portion thereof, and that the said plaintiff did not then,. nor had he at any time prior thereto notified the defendant that the said Henry Swartz had no authority to sell grain, or that the authority which had been prior thereto conferred upon the said. Henry Swartz, had been rescinded, or that the defendant had improperly purchased any of the said grain from the said Henry Swartz, and that the said defendant had no knowledge that the transaction was not regular and in conformity to the practice, custom, and agreement established and' entered into prior thereto, and had no knowledge that the said plaintiff contended the situation to be otherwise or that the plaintiff claimed to be the sole owner of the said grain until on the 3d day of April,. 1915. The facts in the case appear to be as follows: The pla.i-nt.i-ff and appellant is the owner of a large farm consisting of eight quarter sections of land in sections 21 and 22, Township 141, Bange 56, Barnes-county, North Dakota, which land lies about 6 miles north of Oriska, Barnes county, North Dakota. The land in question was leased by the — 307 — plaintiff to one Henry Swartz for five years, commencing in the latter part of November, 1910, under a written lease, being “exhibit A” of this case, by the terms of which, said Swartz was to farm said lands upon shares; that is, for one half of all crops raised on said premises; the plaintiff to furnish the seed and pay half the thresh bill. The contract contained the provision retaining .the title of all said grain raised upon said lands during each year of the life of the contract in the plaintiff until all the indebtedness due from said Swartz to said plaintiff, including advances and other debts, was fully paid, and until an actual division of the grain was made. That in the year 1914, under the terms of said written lease, Swartz operated such farm and raised thereon, among other grains, 3,315 bushels of wheat of the value of $1.40 per bushel, or $4,640.50. The defendant, under the name of Nelson’s Independent Elevator, operated a public elevator at Oriska, North Dakota, between the time of the threshing of said grain in the fall of 1913 to the 3d day of April, 1915, to which said Swartz hauled and delivered said wheat to said defendant, who received it in his elevator at Oriska, and paid said Swartz in full for the same. Whether the marketing of the grain in the year 1914 was with the consent, permission, and authority of plaintiff depends upon the disputed question of fact whether or not Swartz was the agent of Ellis. On the 3d day of April, 1915, plaintiff demanded from the said defendant, at his place of business in Oriska, the grain, in question or its equivalent in money, but the defendant refused to turn over the grain or any part thereof, or the value thereof. Disposing of the clause in the contract where the title and possession to all grains raised upon said land are by the terms of said lease reserved to the landlord Ellis until a division thereof, and all advances of the landlord to the tenant paid, it is held that such a clause in the lease means that the landlord has a lien on the tenant’s share of said grain in the nature of a chattel mortgage lien until such advances are paid, unless Ellis, by his conduct, has waived such provision; that is, unless by his acts, language, and conduct prior to the time of the marketing of the wheat in question he has constituted Swartz his agent for the purpose of marketing the grains which were raised upon such farm during the lease, then Ellis would have a special ownership iu Swartz’s half of said grain also. Eollowing the decision in the Min — 308 — neapolis Iron Store Company v. William Branum, this entire case turns upon the question of agency, and whether there was sufficient evidence of agency to submit to the jury. If there was such evidence concerning agency given at the trial of this case so that the minds of reasonable men considering such evidence might and could draw different conclusions therefrom, then there was sufficient evidence of agency to constitute a question of fact which should be submitted to the jury. It will be necessary to an intelligent comprehension of this question to set forth some of the evidence concerning the question of agency. Mr. Ellis, having been sworn as a witness in his own behalf, testified as follows concerning the 1914 crop in question: Q. Had you at that time — did you at that time, at any time heretofore, authorize Mr. Swartz to haul that grain out as your agent, or upon your behalf, or to sell any of it ? A. No, sir. Q. Who hauled the wheat raised on these premises in 1911 ? A. Mr. Swartz and his hired man, I guess. ■Q. So the grain was hauled that year by Mr. Swartz ? A. Tes, sir. Q. By whom was it sold? A. A part of it was sold by him and part of it was sold by me. Q. Who hauled the grain raised on these premises in 1912 ? A. Mr. Swartz. Q. By whom was it sold ? A. Well, some of it was sold by Mr. Swartz. Q. Some by you? A. Most of it was sold by myself. Q. Is it not a fact, in the year 1912, you told the elevator man at Oriska, the matter of hauling and marketing that grain was a matter you left entirely to Mr. Swartz ? A. I think Mr. Nelson asked where we were going to haul our wheat when we sold out at the farm. I told him I did not know, we were talking of shipping it. Did not malee any difference to me which elevator I sold it to. Q. Did you say at that time that was a matter of decision of Mr. Swartz ? — 309 — A. I don’t know, bnt I told him it did not make any difference to me which elevator Mr. Swartz hauled my grain to me. Q. Did you have any talk with Mr. Nelson regarding the hauling and marketing of any grain during the fall of 1913 ? A. I remember I had some talk. Mr. Nelson asked me, as I said before, he asked me where I was going to haul my grain. I told him Mr. Swartz was hauling that grain and I left it to him as to where he hauled the grain to. Had nothing to say in 1913 or 1912, did not say either way I had conversation about it. Q. Who sold the grain hauled to Mr. Nelson’s elevator in the fall of the year 1913, that is the grain hauled to the elevator from these premises ? A. I made the settlement. I was told Swartz sold some of the wheat. I went down there and Nelson paid me for what was in the elevator. Q. Gave you a statement ? A. Gave me a statement just as he did this other time. Gave me a statement of what was in the elevator. Q. Swartz sold some prior to that time ? A. Yes, sir. Q. When did you and Mr. Nelson first talk with regard to the crop grown on the premises in 1914 ? A. About December 10th, 1914. Q. Is it not a fact, Mr. Ellis, it was agreed that he was to deliver this wheat and sell it and pay the thresh bill ? A. No, sir. Q. The matter of handling of that grain was done this year just the same as it had been done in previous years, was it not ? A. Yes, sir, just about. Hired men every year to haul my grain. Q. And how about his grain ? A. I did not hire men to haul his. Q. Was there anything said in 1914 to that effect? A. No, sir, this was understood every year. I was to sell this grain, his share to pay my indebtedness, always had done so before. Q. As a matter of fact, the difference between you and Mr. Swartz; had always been the matter of his half of the grain had been hauled andl sold ? A. Yes, sir, after the grain was hauled we made settlement. Q. And sold it ? — 310 — A. Yes, sir, sold it,- and he was given credit. Had a book account and would go up and sell it and make settlement. Q. You selling the grain each fall ? A. Not all of it, I did not. Q. He would sell part of it ? A. He would sell some, yes. Q. That was agreeable to you both, was it ? A. I do not know as it was agreeable. Q. You did not instruct him not to? A. I did not want to go to law about it. He paid me what he owed me; gave him no right to sell it. Q. You did not object to him selling it? A. Oh, probably not, if he did not sell too much. Nelson, being called as a witness in his own behalf, testified as follows: Q. Did you have occasion to solicit the purchase, or buy any grain from that farm during the several years of Mr. Swartz’s occupation ? A. Yes, sir. Q. From whom did you solicit that ? A. From Mr. Ellis. Q. The plaintiff in this action ? A. Yes, sir. Q. You may state to the court and jury what Mr. Ellis informed you at the time of that solicitation. Where and when was this solicitation had? A. I do not recall the dates I have solicited from Mr. Ellis. He told me he left that entirely with Mr. Swartz. 'Wherever he wanted to haul the grain he could do so. Q. You solicited the hauling or the buying? A. The buying. Q. He said he left that entirely with Mr. Swartz ? A. Yes, sir. • Q. Did you during the year of. 1911, the first year of this farm contract, purchase the crops raised, buy the crops raised, on these premises from either Mr. Swartz or Mr. Ellis ? A. Yes, sir. — 311 — Q. Of whom did you buy it? A. Mr. Swartz. Q. From whom did you buy tbe grain, if any ? A. From Mr. Swartz. Q. Did you pay Mr. Ellis for any of the grain ? A. No, sir. Q. Did you bave any conversation tbe next year with these parties -or with Mr. Ellis in regard to tbe purchase of tbe grain there tbe year 1912? A. I don’t remember. I bave solicited several times. You mean — I don’t remember that year. Q. You solicited grain several times? A. Yes, sir. Every time I solicited tbe same answer would come forth. He left that entirely with Mr. Swartz. Q. So, you then solicited from Mr. Swartz ? A. Yes, sir. , Tbe witness Joseph Josski testified that be bad a conversation with Mr. Ellis at Valley City, in Ellis’s office about tbe 4th day of March, 1915. Tbe witness Josski was asked tbe following questions, and gave -the following answers: Q. Was anything said about who would bave tbe right to haul and sell tbe wheat grown there that year ? Well, did Mr. Ellis tell you at tbe time you talked to him in bis office at Valley City, March 4th, 1915 ? A. Yes. Q. As to whether or not be said anything to Swartz as to whether be should sell tbe grain on tbe farm that year ? A. Was here, Mr. Ellis told me like that. Let him do what be wants, like that. Sold tbe wheat and took tbe money. Let him, and be do dirty “work like that. Tbe testimony of this witness is denied by Mr. Ellis on rebuttal. This is about all of tbe testimony that goes to tbe question of agency. From tbe testimony of Nelson it appears that be bought all of the 1911 •crop and paid Swartz for it, and that be bought some of both the 1912 .and 1913 crops and paid Swartz for it. Ellis also testifies in answer to tbe following questions i Q. You did not object to him selling it ? A. Oh, probably not, if be did not sell too much. — 312 — He testifies also that he, Ellis, did not sell all the grain, and that Swartz would sell some. It seems from the testimony that Ellis never made any dissent from what Swartz had done in regard to selling some of the grain during 1911,1912, and 1913. He had made no demand for any of the grain sold during these years by Swartz, and had brought no action to recover it, had served no notice upon any of the elevators to which it was sold for them not to pay Swartz, and in fact had taken no steps to show that the action of Swartz was not perfectly agreeable to him. He did not tell Nelson or any other elevator man not to-buy such grain. On November 25th it appears from the testimony of Nelson that Ellis was down to Nelson’s elevator, and that at that time he asked Nelson if Swartz was hauling grain to the elevator, and Nelson told him that he was; and that at such time Ellis did not say anything concerning whether Nelson should pay for it. That nothing was said at such time about Swartz selling the grain, although Ellis had asked at such time if Swartz was hauling the grain. It appears that another conversation was had along the same line on the 29th of September; and, according to the testimony of Nelson, Ellis was at the elevator on the 4th and 5th of November, when talks were had about the hauling of the grain. Anri also that Ellis came down on the 20th of December and sold some of the grain, and Nelson testifies that Ellis had never before that sold any of the grain himself. Q. Had he ever sold any of the grain to you before that, himself ? A. Not during the term of this lease. Q. That is during 1912,1911,1913, and 1914 ? A. No, sir. Q. This was the first grain Mr. Ellis has sold to you ? A. Yes, sir. It would appear that during all of these different years Ellis had knowledge that Swartz was selling the grain upon which he had a lien under the clause of his contract. One of the rules laid down in Meehem on Agency, vól. 1, § 457, is as follows: “The rule as to what amounts to-ratification of an unauthorized act is elementary and may be sufficiently stated thus: Where a person assumes in good faith to act as agent for another in any given transaction, but acts without authority, whether the relation of principal and agent does or does not exist between them, thet — 313 — person in whose behalf the act was done upon being fully informed thereof must within a reasonable time disaffirm such act, at least in cases where his silence might operate to the prejudice of innocent parties, or he will be held to have ratified such unauthorized act.” Mobile & M. R. Co. v. Jay, 65 Ala. 113. Again, it was said: “We suppose acquiescence or tacit assent to mean the neglect to promptly and actively condemn the unauthorized act and to seek judicial redress after the knowledge of the committal of it, whereby innocent third parties may have been led .to put themselves in a position from which they cannot be taken without loss. It is the doctrine of equitable estoppel.” Kent v. Quicksilver Min. Co. 78 N. Y. 187, 4 Mor. Min. Rep. 47. It would seem in this case that the plaintiff has tacitly acquiesced in the acts and conduct of his tenant Swartz; that he has kept silent when he should have spoken; that by his silence he tacitly approved the conduct of Swartz when he should have openly disaffirmed it; that his conduct has been inconsistent with disapproval. We realize that there are two sides to this question, and if we were to consider that at the time the act was done the third party knew he was dealing with a special agent and took no steps to ascertain whether or not the proposed act was within the authority of the special agent, does the principal owe such third party who parted with the value a greater protection than the third party owes to himself ? He states that at the time the act was done the third party knew that it was at least doubtful whether the act was within the authority. Does that fact impose any duty upon him to ascertain the extent of the authority ? Can he assume that in all probability the principal would ratify the act ? But in the case under consideration all the evidence of agency was submitted to the jury, and there was some evidence tending to establish the agency. The testimony is conflicting, and is such that men of reasonable minds could draw different conclusions therefrom, and hence would seem to be a proper question for the jury. The jury having passed upon all these questions of fact concerning agency, and all questions of fact in this case, their conclusion is binding and conclusive upon this court. The assignments of error Nos. 1, 2, 3, 4, 5, and 6 relate to the admission or exclusion of evidence concerning agency, and there was no error in the court’s ruling therein. — 314 — Errors Nos. 7, 8, and 9 relate to the court’s instructions, and we find no error therein. As to assignment of error No. 10, the evidence is sufficient to sustain 'the verdict. As to error No. 11, the verdict is not against the law in the case. It is further held that if defendant herein had authority to buy any wheat from Swartz, he was authorized under the circumstances to buy .all that he did buy. If Ellis, by his silence, tacitly ratified the acts of Swartz in selling such grain, such ratification extended to all the grain which Swartz sold the defendant, which would include the 300 bushels of wheat which the plaintiff claims Swartz sold over and above his half •of the grain. If, as the jury have found, Swartz was the agent of Ellis for the purpose of selling this grain, then the selling of such grain by 'Swartz, the agent, would operate as a waiver of any lien which Ellis had upon Swartz’s share of such grain, Ellis having knowledge of the sale of such grain during each of the years of such lease, and having remained silent as to the sale of such grain by Swartz, and having made no demand except the one made prior to the bringing of this action, nor taken any judicial proceedings, nor made any disaffirmance of Swartz’s .authority, nor manifestations of dissent therefrom. There too was evidence from which the jury might find an ostensible agency. Swartz had sold the grain from the farm in the past and with the consent and acquiescence of the owner of the land, — at least there was ■evidence to this effect. The practice had gone on from year to year. No notice of any change in the relationship of the parties or in the authority of Swartz was given to the elevator company. • The elevator •company had the right to infer that the same authority existed in Swartz as had existed in the past. This, of course, was a matter for the jury to pass upon, but there was evidence from which they could make these findings. The judgment appealed from is in all things affirmed with costs.