Friednash v. Lawrence Warehouse Co.

SCOTT (Robert H.), J.

pro tem.—Defendant appeals from an adverse judgment, following trial by court without a jury, in an action for conversion, in which an award to plaintiff was made in the sum of $26,754.89, which included $2,939.76 interest.

Plaintiff and one A. J. Perenchio entered into an agreement on November 20, 1950. Perenchio had 50,000 gallons of wine, stored at the Village Winery in Escalón, California. The purchase price had been 77% cents per gallon, and Perenchio had paid $6,750 on account thereof. Plaintiff agreed to invest $12,000 of his own money and to

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borrow $20,000 from a bank, which, added to Perenehio’s $6,750, made the total of $38,750 purchase price of the wine. Profit on the wine when it was sold was to be divided equally between plaintiff and Perenehio. The agreement further provided as follows:

“6. Second party (plaintiff) agrees to use his credit and to arrange for the loan of Twenty Thousand Dollars ($20,-000. 00) above mentioned, with the understanding that warehouse receipts for said wine shall be used as security for said loans.

“7. It is mutually agreed that warehouse receipts for said merchandise shall be issued and same used as security for the above loan and Second Party (plaintiff)

shall he designated on said warehouse receipts as the owner of said wine.”

(Emphasis added.)

The agreement also provided that said merchandise was to be sold at a time and price mutually agreeable to both parties.

The trial court found that plaintiff paid the $12,000 and procured a loan of $20,000 from Union Bank and Trust Company of Los Angeles to be applied on the purchase price of the wine; that the next day defendant signed and delivered to the bank its warehouse receipt for the wine, stating that it had received for the account of plaintiff for storage in Escalón, California, Warehouse 4261, 50,000 gallons of wine, and, “that said defendant was holding the same for the account of, and that same would be delivered upon the written order of, Union Bank & Trust Co. of Los Angeles, pledgee for Hyman Friednash.”

On January 19, 1951, plaintiff repaid the $20,000 to the bank out of his own funds and directed the bank to forward its papers concerning the wine to plaintiff. On January 29, 1951, the bank signed and delivered to defendant written instructions for release of the wine, authorizing defendant to deliver it to plaintiff.