Court Opinion

ID: 9625124
Source: CourtListenerOpinion
Date Created: 2023-08-22 07:28:38.80486+00
Date Added: 2024-06-11T12:15:09.408945
License: Public Domain

On Petition eor Rehearing
*94BRAND, J.
The appellant has requested a rehearing before the full court. This is impossible. The case was heard by six of the seven justices of this court. Mr. Justice Warner considered himself disqualified by reason of his former partnership with Mr. Wilber Henderson during the time that the firm was representing the Lawrence Warehouse Company. He is still of the opinion that he should not sit in the case. The decision of the case was unanimous on the part of the judges participating therein and we now adhere to that decision. In denying the motion for a rehearing we deem it proper, however, to clarify one sentence of our former opinion. The defendant takes vehement exception to the following statement which we made concerning the relationship between the bank, the plaintiff and the defendant:
“* * * Under the statute, the bank was therefore the owner of the logs and the relationship of bailor and bailee did not exist between the plaintiff warehouseman and the defendants, as claimed in defendant’s brief. * * *”
The appellant also still insists upon the proposition that our decision has in some way violated the parol evidence rule.
We did not say that as between the bank and the Best Lumber Company the former should be deemed to be the owner. Of course, as defendant asserts, the dealings between the bank and the lumber company constituted a security transaction. In our opinion this fact was clearly recognized. Speaking of the warehousing arrangement, we said:
“* * * the plaintiff * * * on authorization of the defendant, would issue nonnegotiable ware*95house receipts in the name of the First National Bank of Portland, thus affording to the defendant convenient collateral security for loans from the hank. * * *”
As between the defendant and the bank, the logs were collateral security for loans, and the bank was not the owner. But as between the bank as holder of the warehouse receipts and the plaintiff warehouse company, the bank was in substantially the position of owner by virtue of the provisions of statute ORS 74.200 and ORS 74.420, cited in our opinion. The rights of the bank as holder of the nonnegotiable warehouse receipts were measured by the statutes. A nonnegotiable receipt is one in which it is stated that the goods received will be delivered to the depositor or to any other specified person. ORS 74.040. The bank was the “specified person.” The parol evidence rule has no application. The bank innocently lent money to the defendant upon the security of the warehouse receipts. It did not seek to vary the terms of the receipts. It insisted upon its rights under those terms. One of those rights was to enforce the liability of the warehouse company for damages caused by the nonexistence of part of the goods covered by the receipts. ORS 74.200. The plaintiff recognized its liability and paid the bank the value of the logs which it could not deliver but which it was bound to deliver under its receipts.
We thought we had made it clear that, having paid the bank, the plaintiff bases its claim against the defendant upon the written certificate given to the plaintiff by the defendant and on which plaintiff relied in issuing the warehouse receipts to the bank. Again we say, the parole evidence rule has no application. Plaintiff asserts that it issued the receipts to the bank and was bound by them. Having been compelled to pay, *96it seeks to recover from the defendant lumber company for loss suffered by reason of its, issuance of tbe warehouse receipts in reliance upon defendant’s certificate.
The legal theory now advanced by defendants seems to be that since the plaintiff warehouse company relied upon representations of defendant in its dealings with the bank, it is barred from asserting as against the defendant lumber company the fact that the reprer sentations of the defendant were, in a substantial particular, untrue, as found by the jury. There is no merit in such a theory. It was unnecessary for us to say that the bank was the “owner” of the logs and that statement may be disregarded. It had rights under the statutes cited which are incidents of ownership.
In our original opinion we expressed doubt as to whether the second defense as pleaded should have been stricken. That was the defense which alleged in affirmative form, first, that defendant delivered the full amount of logs to the warehouse as shown by its certificates, and second, that if there was any shortage it was due to the negigence of the plaintiff warehouse company. On further consideration both allegations appear to be speaking denials couched in affirmative form. The plaintiff had the burden of proving an initial shortage. In alleging that all logs were delivered as represented, the defendant merely denied the plaintiff’s allegation of shortage. As to the alternative claim that plaintiff had lost the logs through negligence, a similar situation exists. Since plaintiff had the burden of proving that there was an initial shortage in the amount of logs certified, the defendant was entitled under a general denial to offer any evidence which would rebut plaintiff’s claim. Any evidence, whether of negligent loss by plaintiff or even of larceny by any one or by accident or act of God, *97would tend to explain the discrepancy between the incoming scale and the outgoing scale of the logs and to rebut the plaintiff’s claim that the full quantity was never delivered.
The defendant’s answer was not one in the nature of a cross complaint for damages on account of logs lost by plaintiff. It was an attempt to plead facts which would rebut plaintiff’s claim. The court permitted inquiry into the care exercised by plaintiff concerning the logs and instructed the jury that if they found a shortage and that such shortage was not due to the failure of plaintiff to exercise reasonable care, etc., the verdict should be for plaintiff.
We have again read the testimony and again we find that there was substantial evidence to sustain the plaintiff’s claim that the logs were over scaled by the defendant and that the certificates given by the defendant to the plaintiff showed substantially more logs delivered to the warehouse than were ever actually delivered.
The first matter which the jury was entitled to consider was the fact that when the logs were checked out, there was less footage than the defendant had certified as having been checked in. The jury then had the duty to consider any evidence which would explain the discrepancy and lead to a conclusion that the logs were placed in the warehouse to the full extent shown by the original certificates but that something had happened to some of them afterwards. The jury were entitled to consider the discrepancy between the original certificates and the final checkout along with the other evidence in arriving at its verdict.
There was testimony that no logs were taken out of the warehouse except by trucks operating for defendant. There was testimony concerning a “check *98scale” made by three employees of the plaintiff which indicated that the logs had been overscaled by the defendant. These men inspected the scale marks previously put upon the logs and compared their own scale with that shown by the marking on the logs. Contrary to the defendant’s contention, we hold that the jury could find from the evidence that the marks on the logs were put on as a result of the original scale by the defendants. These circumstances coupled with what we consider to be the established discrepancy between the amount certified and the amount checked out, authorized the jury to find as it did. The only logical conclusion at which we can arrive from a reexamination of the evidence is that no more than 3,624,390 feet of logs were ever delivered to the warehouse by the defendant. We adhere to the opinion that the judgment was such as should have been rendered. To our mind the only possible explanation for the discrepancy, other than an original shortage in logs delivered, would be on the theory that the defendant itself removed more logs from the warehouse than the amount shown in the records of logs cheeked out. This is highly improbable and was not and could not well be claimed by the defendant to explain a known discrepancy.
The petition for rehearing is denied.