Miller v. Hirschberg

*535 Opinion by Mr. Chief Justice Bean.

In July, eighteen hundred and ninety-four, judgment was rendered in this court affirming the judgment of the court below: 37 Pac. 85 . A rehearing was subsequently granted, and in the light of an able reargument we have again carefully considered the question by which the judgment was controlled, but still feel compelled to adhere to our former conclusion. We have, however, taken occasion to make some changes in the language of the opinion, with the view of more fully and clearly stating the reasons by which we are governed, and the present opinion will, therefore, be substituted for that formerly filed. We begin by saying that the findings of fact, which stand as the verdict of a jury, and, for the purposes of this appeal, must be regarded as true, show that the defendant received from Bentley and appropriated to his own use ten thousand two hundred and eleven bushels of wheat, of the value of seven thousand eight hundred and eighty-one dollars, which he knew at the time he did not own, and for which he refuses to account. Upon the merits, then, the judgment is right, and the principal question on this appeal is whether the findings of fact are sufficient, under the pleadings, to support the judgment.

1. The contention for the defendant is that, as the court found the allegation of fraud in the complaint to be untrue, the remaining facts as found by it only show a breach of an implied contract of sale, and, therefore, under the well settled rule that a recovery cannot be had on a complaint which in terms alleges a cause of action sounding in tort by proof of the breach of a contract express or implied, the judgment must be reversed. If the premises upon which this argument is based are conceded, the conclusion inevitably follows, for the rule re *536 ferred to is too well settled to be questioned. After a careful consideration of the able reargument of this case, and a reSxamination of the record, we concur with counsel that the complaint sounds in tort, and will not support an action on a contract, and the holding to the contrary in the former opinion is erroneous. The plaintiff must recover in tort, or not at all. He has so laid his cause of action, and must abide the result.

2. But we are also, satisfied that there was an error in assuming, as the former opinion did, that the findings of fact show an implied contract of sale, and that the allegations of fraud in the complaint were essential to an action in trover. Without these allegations the complaint still contains facts sufficient to constitute a cause of action for an unlawful conversion. Omitting the allegations of fraud and deceit, the complaint avers: “That plaintiff during the years eighteen hundred and eighty-seven, eighteen hundred and eighty-eight, eighteen hundred and eighty-nine, and eighteen hundred and ninety, was engaged in the warehouse and storage business in the town of Independence, county of Polk, and State of Oregon; that during said years plaintiff, as such warehouseman, received for storage from the owners thereof large amounts of wheat, for which plaintiff charged and received from each of said persons so storing wheat with him four cents per bushel for the first year, and one and one tenth cents per bushel for each year thereafter; that such wheat was so kept in storage by plaintiff for the owners thereof; that plaintiff issued to all persons so storing wheat with him receipts for the full amount of such wheat so stored by' each person; that such wheat was to be delivered by plaintiff upon order of the owner or owners of such wheat on board of boats or cars, the purchasers thereof to pay for sacks containing said wheat, and that plaintiff thereby became and was the *537 lawful bailee of said wheat; that during said years said defendant was engaged in business, and purchased of and from the persons having wheat in storage with this plaintiff as aforesaid; that at divers times during said years said defendant, * * * representing to this plaintiff that he was the owner of and had purchased large quantities of wheat in storage with plaintiff, as aforesaid, * * * ordered and directed this plaintiff, as such warehouseman, at divers times, to ship for and deliver to him large amounts of said wheat, aggregating eighty-four thousand and seven bushels; that, fully relying upon said * * * statements and representations of said defendant, * * * this plaintiff, as such warehouseman, did at such times ship for and deliver to said defendant quantities of such wheat aggregating the full amount of eighty-four thousand and seven bushels, as will more fully appear by the itemized statement of wheat delivered and shipped upon the order of defendant by plaintiff, hereunto attached, marked ‘Exhibit A’; that in truth and in fact, said defendant, during said years, was the owner of wheat so in storage in the plaintiff’s warehouse in the aggregate of no more than seventy-three thousand seven hundred and ninety-five bushels, as will more fully appear by itemized statement of wheat owned and purchased by said defendant in the warehouse of plaintiff during the time aforesaid, hereto attached, marked ‘Exhibit B ’; that plaintiff, so being in the lawful possession of said wheat, as such warehouseman and bailee as aforesaid, * * * shipped for and delivered to defendant ten thousand two hundred and eleven bushels of wheat in excess of the amount owned by said defendant, or of which he, defendant, was entitled to the possession; that said defendant has, prior to the commencement of this action, wrongfully and unlawfully converted said wheat to his own use; that, although de *538 mand therefor has been duly made upon said defendant for the return of said ten thousand two hundred and eleven bushels of wheat, said defendant has wholly neglected and refused to account for or deliver said wheat to plaintiff, or any part thereof; that plaintiff was at all times since the storage of said ten thousand two hundred and eleven bushels of wheat with him, and -is now lawfully entitled to the possession of the same and every part thereof, and the value thereof is nine thousand one hundred and eighty-seven dollars; that by reason of said wrongful and unlawful conversion of said wheat, and said wrongful acts as aforesaid of said defendant, plaintiff is damaged in the full sum of nine thousand one hundred and eighty-seven dollars, the value of said wheat so converted by said defendant. ”

It thus appears that the complaint is manifestly sufficient, at least after verdict, to sustain an action for trover, after eliminating therefrom all the allegations of fraud. The action of trover is founded upon the right of property, general or special, and right to the possession in plaintiff, and possession and an unlawful conversion by defendant. The material averments in an action of this character are ownership and right to the possession in plaintiff, and that the defendant wrongfully took and converted the property in question to his own use, or that, being lawfully in possession thereof, he so converted it: 26 American and English Encyclopaedia, 801. Now, the complaint in this case contains these essential averments. It alleges that Bentley was the bailee, and as such entitled to the possession, of the wheat in question, and that it was delivered to the defendant at 'his request and upon his direction, and by him subsequently converted to his own use. The gist of the action is the unlawful conversion, not deceit, and the means used by the defendant to obtain possession are wholly immate *539 rial. The title or right to the possession did not pass by the delivery, because, as defendant knew, Bentley had no title which he could dispose of, and he did not intend to surrender his right to the possession of any wheat except such as belonged to the defendant. The complaint shows that Bentley was not the owner, that he did not pretend to be, and that he did not purport to pass title to the defendant. On the contrary, he delivered the wheat because he thought the defendant owned it, and, when he discovered his mistake, demanded its return. There is no material difference between the findings of the court and the averments of the complaint, except the complaint alleges that Bentley was induced to part with the possession of wheat by false and fraudulent representations of the defendant, which the court finds is not true. But, as we have said, disregarding the allegations of fraud, the complaint contains enough to show that defendant obtained from Bentley possession of a certain quantity of wheat which belonged to his (Bentley’s) bailors, and to the possession of which he was entitled, and which the said defendent subsequently converted to his own use.

3. Whether the findings would support an action ex eontraetu is not material, because the question of election was with Bentley, and not the defendant. Under some circumstances a plaintiff may waive a tort, and sue in contract, but he is not compelled to do so. The defendant having received and wrongfully converted to his own use property in which Bentley had both a right of property and right of possession, cannot insist that Bentley shall waive the tort and sue in assumpsit for its value. He was entitled to adopt the form of action which he preferred.

4. Having elected to proceed in tort, plaintiff is entitled, after judgment, to have the findings of the court construed to support the judgment, if it can be done *540 without violating well settled rules of law. Unless, therefore, the findings show an express contract of sale, or facts from which the law will necessarily imply a sale or attempted sale, the judgment will be sustained. Every inference and intendment is in favor of the judgment of the court below.

5. Now, it is not pretended that there was any express sale, nor do we think the findings necessarily show an implied sale or purchase. To constitute a sale, either express or implied, there must be an intention by the vendor to sell and by the vendee to purchase, which does not appear in this case. Bentley did not own the property, had no power or authority to sell it, and certainly the law will not imply a sale where an express one could not have been legally made. And, besides, there is nothing to indicate that he intended to sell, nor that defendant intended to purchase. It is but a fair inference from the record that Bentley supposed he was delivering to the defendant that which belonged to him, and the defendant, although he knew he was receiving wheat to which he had no title, did not intend to purchase. As appears from the complaint and the findings of the court, this is a case where one bailor has, by mistake of a common bailee, obtained possession from him and wrongfully converted to his own use property belonging to another bailor, and which the bailee is seeking to recover in an action of trover. Bentley was simply a bailee for the defendant and the other owners of wheat on storage with him, and accountable to each for the quantity belonging to him; and when, by mistake, he surrendered possession to the defendant of a greater quantity than he was entitled to, he was not bound to treat the transaction as a sale, nor did he estop himself from recovering possession of the excess, or its value in case of conversion, although no fraud or misrepresentation was used to *541 induce the delivery. It is immaterial in this case what means were used by the defendant to gain possession, so long as there was no intention to pass the title. His possession, if not unlawful from the beginning, became so as soon as demand was made for the return of the wheat to which he was not entitled; and when he failed to return it after such demand, he became a wrongdoer, and liable to the plaintiff in an action of trover. Although Bentley may have delivered the wheat voluntarily, it is but a fair inference that he was acting in good faith, on the supposition that it belonged to the defendant, and with no intention to deliver any wheat to him of which he was not the owner. When he discovered his mistake he demanded its return in order that he might carry out his contract of bailment with the true owners; and defendant, having refused to comply with this demand, is, in our opinion, liable in this form of action for the value of the wheat, and the findings are amply sufficient to support the judgment.

6. It is next contended that the delivery of the wheat to defendant being made in violation of sections 4201-4207 of Hill’s Code, which makes it a crime for any person operating a warehouse to sell, encumber, ship, transfer, or in any manner remove, or permit to be shipped, transferred, or removed, beyond his custody or control, any grain for which a receipt has been given, without the written consent of the owner, the plaintiff cannot recover for its wrongful conversion. It may well be doubted whether the defendant could avail himself of the defense of illegality in this action; but, however that may be, no such defense is set up in the answer, and therefore he is not entitled to the benefit of it as a matter of right: Ah Doon v. Smith, 25 Or. 89 ( 34 Pac. 1093 ); Cardoze v. Swift, 113 Mass. 250 . To entitle a defendant to the defense of illegality he must plead it, although a failure to do so *542 will not compel the court to entertain the action when such illegality appears, but it may dismiss it sua sponte.

7. The question then remains whether the court ought, upon grounds of public policy and good morals, to reverse this judgment and dismiss the action, because there may have been a technical violation by Bentley of the statute in delivering possession of the wheat to defendant. We certainly think not. The rule seem to be quite well settled that courts will refuse, on grounds of public policy and good morals, to enforce an illegal or immoral contract, or to sustain an action when its object is to enforce the provisions of an engagement prohibited by law, but this case is not strictly of that character. It is rather in disaffirmance of the illegal act of delivering the wheat to the defendant, and does not grow out of any contract or agreement in violation of the statute, but arises from the fact that defendant has received, through mistake, and converted to his own use, property which belonged to Bentley as bailee. It is true the violation of the statute made it possible for the defendant to convert the wheat, but there was no actual criminal or fraudulent intent on the part of Bentley, and therefore plaintiff ought not to be summarily turned out of court, and the defendant thereby escape liability, because Bentley may have been technically guilty of a crime in putting it within his power to appropriate the wheat. Having received it from Bentley without any lawful right thereto, and converted it to his own use, it seems to us the court ought not, of its own motion, to interpose in his behalf on the ground of a violation of the statute, and thus allow him to reap the benefit of his own wrongful act. If he intended to rely upon such a defense he should have set it up in his answer, and, not having done so, the court will not make it for him.

8. It is further contended that the settlement pleaded *543 in the answer is a bar to this action, because the reply does not contain appropriate allegations upon which evidence to surcharge or falsify it could be admitted. No objection was made to the sufficiency of the reply by demurrer or otherwise, and we think it comes too late when made for the first time by motion for judgment notwithstanding the findings of the referee. It avers that the settlements alleged in the answer did not include the claim upon which this action is founded, or any part thereof, or have any reference thereto; and, while it may have been defective in not setting forth fully the fraud, error, or mistake relied upon to surcharge or falsify the settlement, we are not trying the question on demurrer, but considering the sufficiency of the pleading after verdict. In such case it is entitled to the benefit of every reasonable inference and intendment in support of the judgment, and will not be held insufficient for a mere defective statement: Gschwander v. Cort, 19 Or. 513 ( 26 Pac. 621 ); Andros v. Childers, 14 Or. 447 ( 13 Pac. 65 ); Aiken v. Coolidge, 12 Or. 244 ( 6 Pac. 712 ). From the pleadings and findings of the referee and court it appears that the claim upon which this action is based was not included in any settlement had between the parties, and this is sufficient after verdict, although the reply may have been vulnerable to a demurrer. It follows from these views that the judgment of affirmance is right and will be adhered to.

Affirmed.

Mr. Justice Wolverton having been of counsel and argued the case on the first appeal, did not participate in this decision.