Court Opinion

ID: 3837125
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:06:03.917029+00
Date Added: 2024-06-11T14:14:14.930878
License: Public Domain

Petition for rehearing denied September 29, 1936                        ON PETITION FOR REHEARING                              (60 P.2d 979)
Counsel for plaintiff has filed a petition for rehearing in this case and urges further consideration. As shown from the memorandum opinion, the *Page 471 
question involved is the solvency or insolvency of the Smith 
Valley Iron Works Company on the date of plaintiff's attachment, January 21, 1932.
Plaintiff for the first time has submitted figures of the assets and liabilities of the Smith  Valley Iron Works Company and struck a balance on the date mentioned. At page 18 of plaintiff's brief on petition for rehearing we find the following figures:
Assets:
    Accounts Receivable ________________________ $ 17,182.87 Inventories ________________________________   58,155.04 Real Estate ________________________________   48,332.50 Machinery and Tools ________________________   26,295.00 Office Fixtures ____________________________      750.00 Truck ______________________________________      200.00 ___________ Total __________________________________  150,915.41
Liabilities __________________________________  127,065.59
Conclusion:
    Value of assets over liabilities under defendants' own testimony ________________   23,849.82
Net amount of assets over liabilities ______   29,855.42
The figures we made of the assets and liabilities of the Smith Valley Iron Works Company on January 21, 1932, in our former memorandum, are as follows:
  Real estate _________________________________  $ 48,332.50 Accounts receivable _________________________    13,285.93 Machinery and tools _________________________    26,000.00 Merchandise on hand _________________________     8,000.00 Office fixtures _____________________________       270.00 Truck _______________________________________       200.00 ___________ $ 96,088.43
The first difference in figures, taking them in the order that plaintiff has them, is accounts receivable, which, on the face of the books, is $17,182.87. Part of this is an account against the Weyerhaeuser Company *Page 472 
amounting to $8,764.77, which was disputed. We figured the Weyerhaeuser account at the amount which it would liquidate at the bank. As found in the testimony of Mr. A.J. Ersted, plaintiff's witness, this account "the creditor considers to have only a nuisance value of $2,000". This account was assigned to the Hibernia Bank and was considered to fully offset an indebtedness of $5,500 to that bank, reducing the account $3,264.77, which we deducted. It is also shown beyond dispute that the Spaulding account of $632.17 is valueless, which we deducted, leaving as the amount of the accounts receivable $13,285.93. Counsel for plaintiff is pleased to state that he does not know how we get this figure.
The next item, as stated by plaintiff, is inventories, $58,155.04. This item involves the main contention in this case. On January 1, 1932, the Smith  Valley Iron Works Company, following its custom which had prevailed for years, made an inventory of the "book values" of the merchandise, and the trial court ruled out the testimony in regard to "book values". The inventory was adopted by the sheriff in making his return on the attachment. He made no new inventory and these values went into all of the inventories made later. After the same had been ruled against by the trial court the attention of the jury was called to the same by asking the witnesses if they knew that certain figures were contained in the instruments, which contained simply the "book value" of this property. Changing the form of the inventory and inserting the same values in the sheriff's return and other documents would not validate the testimony. They still would be "book values". The testimony of Mr. A.J. Ersted, taken by plaintiff by deposition in California, in regard to the merchandise inventory is as follows: *Page 473 
"Merchandise Inventory: The merchandise inventory as listed and priced on the books is valued at $51,000. It consists almost entirely of logging engine and logging block parts manufactured ten or more years ago, and owing to obsolescence would have little more than scrap value today, even if business conditions were normal. If sold in a lump in the present market it is doubtful if the complete inventory would net over $1,500."
While this is plaintiff's own testimony, in view of the fact that there was other testimony showing that the merchandise was of the value of $8,000 (see page 225 of the transcript of testimony), which is the highest figure that is mentioned in any competent evidence in the case, we took the latter figure. Counsel for plaintiff does not plainly contend that "book value" is competent evidence of the value of the merchandise on January 21, 1932, but as such values are contained in the inventories, to which we have referred, it is contended that the inventories should govern.
The testimony in the case does not show that the merchandise of the Smith  Valley Iron Works Company on January 21, 1932, was of the value of $58,155.04 placed thereon by plaintiff, or any more than $8,000, if it was of that value. Plaintiff would have little room to complain if we took the testimony of its own witness to the effect that the merchandise would not bring more than $1,500. It would be illegal, inequitable and unfair, and contrary to the trial court's ruling and the testimony in the case, to place the value of the merchandise at the figure contended for by plaintiff, and the contention must be denied. In the testimony of Joseph A. Hedeen, the bookkeeper, on page 72 of the transcript of testimony, it is shown how the inventory was prepared: *Page 474 
"Q. How did you prepare it? Tell the jury what you did in preparing this inventory.
A. It is a book statement of all the assets and liabilities, a book value, and from that I prepared this statement, showing the different items owing and also the book value of the merchandise that we had in the stock.
Q. Where did you get the book value of that merchandise?
A. That is — it was not perpetual, but it was an inventory that we kept right along, showing the costs to the company, of making these different articles that they —
Q. If I understand you, then, you took these items in this inventory from that inventory that you had already prepared?
A. Yes, at the first of the year.
Q. That was only a few days prior, then?
A. Yes."
There seems to be no controversy in regard to the next item, value of real estate, fixed at $48,332.50.
At page 38 of plaintiff's brief on petition for rehearing, plaintiff takes a portion of the following statement, which is found in our former opinion:
"As we understand, where the opinion of competent witnesses is stated as to the value of real estate or personal property and there are no facts and circumstances in the case other than the opinion evidence, then the only thing for the jury to do is to be governed by the opinion evidence."
Counsel quotes and criticizes the last part of the sentence beginning "the only thing for the jury", etc. The matter was fully explained in a prior statement in the original opinion as follows:
"It is argued by counsel for plaintiff that much of the testimony in regard to the value of the property was opinion evidence, and the jury was not compelled to believe it. Property such as the machinery in this plant, *Page 475 
and the merchandise which had all been used, had no regular established market value, and opinion evidence was the best evidence that could be obtained as to its value." Citing 11 R.C.L. 636, § 55.
In regard to the value of the machinery and tools which plaintiff places at $26,295 on pages 146 and 147 of the transcript of testimony, Mr. Kull, who estimated the value of the property, placed the figures at $26,000, while plaintiff contends that if it had been taken as itemized the appraisement would be $295 more. As is often done the round number was taken by us. However, adding the various items of appraisement, this difference in the figure would not be material or change the result.
The office fixtures of the concern were valued at $750. We do not think there is any controversy or dispute about this amount. In our summing up these figures we erroneously placed it at $270, which was a clerical error on the part of the writer, the amount being taken from the notes of the testimony. The truck valued at $200 is not disputed.
Making the corrections suggested by plaintiff, we add to our total assets of $96,088.43, $775, making $96,863.43, as the total amount of assets of the Smith  Valley Iron Works Company on January 21, 1932. The liabilities, as shown by the books and testimony, are $127,065.59, making an excess of liabilities over and above the fair value of the property in the sum of $30,202.16. There is practically no controversy about the liabilities of the concern.
The competent testimony in the case does not show that the assets are of any greater value than we have given. For about four years the concern had been losing *Page 476 
$35,000 annually, and the whole testimony strongly shows they were hopelessly insolvent on January 21, 1932. Any other finding would be a travesty upon justice, and the verdict of the jury should be set aside.
We adhere to our former opinion.
BELT, KELLY and BAILEY, JJ., concur. *Page 477