Tuesday, August 14, 2007

Inflated Steer Causes Consternation at Warren County Fair

The Register reports that an episode of cheating was uncovered at the Warren County Fair when it was determined that a reserve grand champion steer being shown by Lexie Smith of Martensdale had been injected with air to make it look a little more buffed.

Some folks are of the opinion that 4H animal competitions are a venue for suburban kids whose parents want to give them an experience they might otherwise not have in West Des Moines. I've heard it said by a gentleman in the country of unimpeachable reputation that designer show cattle for suburban kids with parents eager to buy their kids every experience has changed the landscape of what the competition was supposed to be about.

Cheating, it seems, is going to be part of life in the 21st century, even in what ought to be a transparent childhood pursuit.

At the risk of sounding like Cassandra, it bespeaks a certain slack and fluid moral standard that ultimately will have its payback somewhere down the road in mesne adverse ways.

Kids do what their parents tell them and teach them to do, in the main. One wonders what else Lexie Smith's parents taught Lexie to try and slip past her teachers or get over with when nobody was looking. The ethos of winning at any cost and cheating to win is a bad one that defeats the notion of sportsmanship and being rewarded for merit and hard work. It cuts at the very heart of what makes civilization tick.

Ultimately, all a person carries into life is their reputation for telling the truth and not dealing from the bottom of the deck. It's a terrible thing that Lexie's parents are responsible for.

Wednesday, August 08, 2007

Attempt to Sidestep Judgment Lien Fails

Debruce Grain, Inc. v. Mitchell, no. 05-1934 (Iowa Ct. App. July 25, 2007)

This case is a cautionary tale for family farmers who owe money and are thinking about some fancy footwork in an attempt to dodge judgments.

Maurice and Marvin Mitchell are father and son, farmers who reside in West Des Moines, Iowa.

I briefly became acquainted with Marvin Mitchell when he had the short lived and dubious distinction of owning the largest overweight truck ticket in the state of Iowa. The disposition of that ticket, when there was ample evidence, is a story for another time and place.

Marvin Mitchell and his wife declared bankruptcy in 2002, but prior to and after the bankruptcy they had done business under the name Mitchell Farms. In 2003, Maurice Mitchell opened a bank acount in the name of "Mitchell Farms Clearing Account".

DeBruce operates a grain elevator in Creston, Iowa and was contacted by Marvin Mitchell in 2004 requesting an offer to purchase 36,000 bushels of soybeans for October delivery. DeBruce accepted the offer and set up an account with Mitchell using the Mitchell Farms Clearing Account name and address, but with Marvin's personal identification including name, phone number and social security identification. DeBruce had never heard of Maurice.

DeBruce issued a confirmation order and mailed it to the address listed with Marvin's name and customer identification number on it. When the confirmation was received, Maurice crossed out Marvin's name and wrote in his name as seller and signed it. It was returned to DeBruce and entered into the computer system. DeBruce later discovered a Cargill judgment lien against Marvin Mitchell and evidence of the bankruptcy.

When the beans were delivered there was a small overrun and DeBruce prepared a clearing contract in the name of Mitchell Farms Clearing Account in care of Marvin Mitchell. On learning that DeBruce was going to pay Marvin and his creditors, Maurice demanded payment in full to him and DeBruce declined, arguing that their contract was with Marvin. A complaint for nonpayment was lodged with the Iowa Department of Agriculture by Maurice and DeBruce filed an interpleader action and deposited the proceeds of the sale with the Clerk of Court of Union County.

The district court, based on affidavits from both Mitchells and the bankruptcy trustee entered an order to pay Maurice based on his claim that it was his contract and his beans. This order was set aside. Ultimately, the only remaining parties were Cargill and Maurice.

If the contract was between DeBruce and Marvin, the proceeds would go to satisfy Cargill's judgment lien, and if the contract was between DeBruce and Maurice, then the proceeds would go directly to him. The district court ruled that the contract was between Marvin and DeBruce, and and this appeal followed.

The court of appeals found that Marvin never stated to DeBruce he was acting as Maurice's agent, and entered personal information identifying him into its system. The court also found that Maurice did not meet his burden of establishing that Marvin was his agent. because his answers to interrogatories contradicted his conclusory testimony at trial

Maurice also argued that the contract was with him because he owned the bank account entitled Mitchell Farms Clearing Account. The court found that a bank account is not an entity capable of contracting.

Further, the court found that Maurice's act of scratching out "Marvin" and writing in "Maurice" on the purchase confirmation did not in itself affect the contract, because a confirmation is not a contract itself, but merely a method of bypassing application of the Statute of Frauds. In addition, even if it was significant, Maurice didn't own the contract and therefore could not change or modify its terms.

Because the contract was as between DeBruce and Marvin Mitchell, Maurice took nothing and Cargill, as judgment creditor, took the proceeds of the sale.