Court Opinion

ID: 9533874
Source: CourtListenerOpinion
Date Created: 2023-08-07 04:35:11.529352+00
Date Added: 2024-06-11T13:29:12.029188
License: Public Domain

McFADDEN, Justice
(dissenting).
It is my conclusion that the judgment of the trial court should be affirmed, and.I dissent from that portion of the majority opinion which after determining that Chandler was obligated to pay for the plywood it received, then proceeds to grant an offset to Chandler for an alleged debt owed to it by North America Millwork.
*745The basic reason for this dissent is that the majority opinion in effect grants to Chandler an offset for a trade debt allegedly due Chandler from North America, who is neither a party to this action, nor in privity with Continental. Stringent requirements are established for a court to recognize an offset. See, Brown v. Porter, 42 Idaho 295, 245 P. 398 (1926), which considered the provisions governing the right to a setoff, C.S. §§ 6694-6697 (I.C. §§ 5-612 to 5-615). See I.R.C.P. 13(a) and 13(b). In Petersen v. Lyders, 139 Cal.App. 303, 33 P.2d 1030, 1031 (1934), cert. den. 294 U.S. 716, 55 S.Ct. 514, 79 L. Ed. 1249, reh. den. 294 U.S. 734, 55 S.Ct. 635, 79 L.Ed. 1262, the Supreme Court of California considered statutes governing the right to setoff which were identical to Idaho’s:
“It is elementary that a set-off may not be invoked unless the parties and the debts are mutual and that the doctrine of mutuality requires that the debts be due to and from the same persons in the same capacity.”
Later in Advance Ind. Fin. Co. v. Western Equities, Inc, 173 Cal.App.2d 420, 343 P.2d 408 (1959), the California Supreme Court again emphasized the necessity of mutuality in setoff cases in the following language:
“A counterclaim or a setoff is defined as a cause of action in favor of the defendant on which he might have sued the plaintiff in a separate action and, in the case of a counterclaim, might have obtained affirmative relief * * *. A claim based on an equitable right may be set up as a counterclaim against a claim based on a legal right. While the doctrine of setoff, as distinguished from statutory counterclaim, is eminently an equitable one, the equitable right is founded on the idea that mutual existing indebtedness, arising out of contracts between parties to the record, creates payment of both demands so far as they equal each other. The two demands must be mutual.” (Citations omitted.) 343 P.2d at 412.
See also, Cruzan v. Franklin Stores Corp, 72 N.M. 42, 380 P.2d 190 (N.M. 1963); Sarkeys v. Marlow, 205 Okl. 15, 235 P.2d 676 (1951); A. S. & R. Co. v. Swisshelm Gold Silver Co, 63 Ariz. 204, 160 P.2d 757 (Ariz. 1945).
In this case there is no record of mutuality. The alleged debt is owing from North America to Chandler, Continental has not been shown to have been connected with North America by agency, contract, or assignment, and the trial court did not find any such relationship between Continental and North America.
The majority opinion reaches its final conclusion on the basis that Chandler was going to be unjustly enriched if it was allowed to retain the plywood shipped by Continental without paying somebody. By some process the opinion places fault on the part of Continental, and then states “Under these circumstances we feel that it would not be unjust to require Chandler to pay only that amount which he would have had to pay to North America had the transaction gone the way Chandler had intended and attempted to have it go.” This conclusion is then followed by a refusal of the majority opinion to consider what in my opinion is one of the crucial points of the case, i. e, whether Continental ever received the copies of the acknowledgment of orders on which Earl Chandler had written “Purchased from North America Millwork. Earl Chandler 7-7-69.”
The majority opinion in faulting Continental for its activities in effect holds the trial court erred when it specifically found “the return acknowledgment with the notation by Mr. Earl Chandler was not received by Continental Forest Products.” At trial both parties contested this issue and appellant assigned the issue as an error on appeal. In such cases, when there is testimony by the addressee denying receipt of the mailed instrument, an issue of fact .is presented for resolution by the trier *746of facts. American Surety Co. v. Blake, 54 Idaho 1, 27 P.2d 972 (1933); IX Wigmore (3d ed.) § 2519; Bell, Handbook of Evidence (1972), p. 239. The trial court sat as a trier of the facts and its function was to weigh the evidence and judge the credibility of the witnesses. A conflict in the evidence as to the receipt of the acknowledgments was presented, and in light of competent, substantial, although conflicting evidence, the trial court’s findings in this regard should have been considered and upheld. Ivie v. Peck, 94 Idaho 625, 495 P.2d 1110 (1972).
There are numerous other points wherein I disagree with the majority opinion, particularly in regard to what it claims the trial court found. Extended discussion of these would be futile in a dissent and would unduly lengthen it.