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McKenzie Flying Service Inc. v. York

November 24, 1972

MCKENZIE FLYING SERVICE, INC., RESPONDENT,
v.
YORK, APPELLANT



Appeal from Circuit Court, Lane County. F. Gordon Cottrell, Judge.

Harold D. Gillis, Eugene, argued the cause for appellant. On the briefs were Butler, Husk & Gleaves, Eugene.

Paul D. Clayton, Eugene, argued the cause for respondent. With him on the brief were Luvaas, Cobb, Richards & Fraser, Eugene.

In Banc. Holman, J.

Holman

Plaintiff brought an action for the reasonable value of labor and materials furnished in the repair of a Cessna aircraft owned by defendant. Defendant

counterclaimed for damages for conversion to the aircraft. At trial, after completion of all evidence, the court directed a verdict in favor of plaintiff both on its complaint and on defendant's counterclaim. Defendant appeals and asserts as error the directed verdicts.

In 1966 defendant purchased the aircraft in question from plaintiff on a conditional sales contract. Plaintiff assigned the contract to the manufacturer's financing subsidiary, Cessna Finance Corporation (Cessna). The aircraft, together with five others, was then leased by defendant to another corporation, Fly Mooney, of which defendant was the principal stockholder. The plane was used for rental and flying lessons and on May 31, 1968, was damaged in a landing by a student pilot. After examination by an adjuster of defendant's insurer, the defendant ordered the aircraft repaired by plaintiff. After repair, it was returned to defendant on July 25, 1968. The amount of plaintiff's repair bill was $1,325.00.

A check for $1,071 was issued by defendant's insurer, which check represented the amount of the loss less a deductible amount provided by the policy and a minor item for which the company had no coverage. The check was delivered to Cessna, the legal owner, by the insurer and was made out both to Cessna and to defendant. Cessna forwarded the check to defendant on October 10 for his signature and defendant endorsed it and returned it to Cessna. Defendant testified that he thought Cessna was going to send the check to plaintiff. However, there were three monthly payments due Cessna on the contract of purchase and Cessna applied part of the check on defendant's contract to bring it current and sent the balance of $452.68 to defendant, who received the money on November 8.

In the meantime, on August 20, plaintiff filed a nonpossessory lien upon the aircraft for the amount of its charge. In the latter part of October plaintiff made inquiry concerning the insurance proceeds and was erroneously informed by the insurance adjuster that defendant had received the full amount of the insurance. Shortly thereafter, on November 6, plaintiff, through its president, Mr. Ruberg, directed the sheriff to seize the aircraft and to foreclose the lien in conformance with the statute.*fn1 On that day the sheriff seized the aircraft and it was flown to plaintiff's airfield where it remained in the legal possession of one of plaintiff's employes, who was appointed as a keeper by the sheriff.

Defendant was served with notice of the proceedings, knew of the seizure of the aircraft, and subsequently informed plaintiff that he had no intention of paying the lien. Defendant did not contest the lien proceedings and made no effort to secure possession of the aircraft. Also, he made no more payments to Cessna. There is no contention that during the aircraft's possession by the keeper, plaintiff interfered with that possession or used the aircraft in any way.

After the 14-day waiting period within which defendant could have made an appearance, the sheriff contacted Mr. Ruberg to arrange for the sale of the aircraft at auction upon foreclosure. Mr. Ruberg asked the sheriff to hold up the sale as he was attempting to secure a purchaser for the aircraft who would pay a price which would cover both the balance owing to Cessna and ...


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