Moulton v. Williams Fruit Corp.

PRESTON, J.

This appeal arises from a judgment entered November 23, 1931, for $5,000 in favor of plaintiff and against defendants, based upon á written stipulation of facts, having certain exemplars thereto attached.

Plaintiff is the Director of Agriculture of the State of California and acts in the premises in behalf of five certain grape growers of the state who claim to be creditors of defendant fruit corporation. This corporation defaulted and defendant surety corporation alone questions the judgment.

The facts are that defendant fruit corporation, during the grape season of 1928, entered into separate written contracts with each of said growers to handle on consignment all their grape crops for said season. The contracts were of the same general form, an illustration of a portion of one of them being as follows: “Contract. Parties: Williams Fruit Corporation, Shipper, Vida M. Martin, Grower. It is mutually agreed: The Grower hereby places on consignment with shipper the entire crop of muscats (season of 1928) consisting of 16 acres, more or less, grown ... at or near Selma . . . delivery point, shippers’ packing house . . . Selma . . . $15.00 per ton guarantee. ...”

The fruit corporation in due course received the grape crops and marketed them admittedly to the best advantage but it failed to realize a net return sufficient to cover the guaranty specified and, in so doing, it is admitted that the fruit corporation was guilty of no negligence, deceit or bad faith in the matter but on the contrary secured the best price the market afforded and did not even deduct its commissions but returned the full avails to the growers.

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The growers, however, standing on their above-mentioned guaranty, claimed to be creditors in an amount aggregating more than $5,000; they complained to the Director of Agriculture, who made unsuccessful demands upon defendants and this suit followed.

The action arises under the Statutes of 1927, chapter 860 (p. 1812 et seq.), in effect July 21, 1927. Under this act defendant fruit corporation applied for and obtained a license as a “produce dealer” and gave its bond in the sum of $5,000 as required by the act. Appellant became the surety thereon. The obligation of the bond followed the language of the act and so far as here material reads: “Now, Therefore, If said principal shall well and truly comply with the provisions of the act and shall faithfully and honestly handle farm products as such licensed produce dealer, until January 1, 1929, in accordance with the terms of said act and any and all amendments thereto, then this obligation is to be void; otherwise to remain in full force and effect. ...”