The opinion of the court was delivered by: MARSH
This is an action brought by the plaintiff against the defendant-auctioneer on a theory of conversion to recover the value of three cows sold by the defendant.
After non-jury trial, the court makes the following:
1. Plaintiff is the United States of America suing on behalf of the Farmers Home Administration of the Department of Agriculture.
2. The defendant, Sandy Sommerville, is a licensed auctioneer of the Commonwealth of Pennsylvania and since 1946 has owned and operated the New Wilmington Livestock Auction in Mercer County, Pennsylvania.
3. On Monday of each week, commencing at 12:30 P.M., the defendant conducts an auction at which approximately 1300 head of livestock are sold. The livestock are brought to his auction from Mercer, Lawrence, Crawford, Venango, Butler and Jefferson Counties, Pennsylvania.
4. The livestock are brought to defendant's auction on the day of the sale, some as early at 7:30 A.M., and arrivals may continue throughout the day during the sale until 6:00 P.M. The livestock are marked and unloaded by defendant's employees. If there is sufficient time before the sale, the defendant's employees will rough grade the cows and place them in pens to await the sale. In other cases, the cattle may proceed directly from the unloading chutes to the sales ring. Just prior to entering the sales ring, all of the cows are weighed. As each cow is delivered into the ring, the auctioneer proceeds to auction it off to the highest bidder per hundred pound. After the auctioneer closes the bidding by striking his hammer, the seller still has the right to reject the bid if he does so before the next cow is brought into the ring. If the seller does not reject the highest bid, the weight slip, with the price bid per hundred pound, is delivered to the office where the sales price and the auctioneer's commission are tabulated. The buyer pays for the livestock he has purchased and takes possession, and the seller collects his purchase money, less the auctioneer's commission. (R. 27, 28, 29, 30.) It is possible for some livestock to be sold within two to three minutes after they are delivered to the auction (R. 28), and it is possible for the seller to collect his money within ten minutes after the cows are sold (R. 37).
5. The United States Department of Agriculture through the Mercer County office of the Farmers Home Administration made loans from time to time during the period from March, 1954 to March, 1958 to Myron D. Flickinger, who operated a farm at Jackson Center in Mercer County, Pennsylvania (Stipulation and R. 7). As security for the repayment of said loans, Flickinger executed Security Agreements covering all of his personal property, including his farm equipment, crops and all of his livestock.
6. In 1957, Flickinger was in default on his loans to the Farmers Home Administration and actually sold cattle which were subject to the Security Agreement held by the Government. Upon learning of this default, the Farmers Home Administration took no action, either civil or criminal, against the said Flickinger. (R. 8, 9.)
7. In 1958, the Farmers Home Administration made a further loan to Flickinger and took back another Security Agreement (Govt. Ex. 1) covering all of Flickinger's farm equipment, crops and livestock as security for loans totaling $ 4,161.14.
8. This Security Agreement prepared and executed by the Department of Agriculture specifically provides that it is 'intended by the parties to serve as both 'Financing Statement' and 'Security Agreement' under Pennsylvania law'.
9. This Security Agreement was duly recorded in the Recorder's Office of Mercer County, Pennsylvania, at 2:30 P.M. on July 10, 1958.
10. At his auction on March 30, 1959, defendant sold a Holstein cow for $ 177.49; on April 6, 1959, a Guernsey cow for $ 143.50, and at some undisclosed time, a Jersey cow for $ 56.50, all of which were covered by the Security Agreement. These three cows were delivered to defendant's auction by Flickinger, who represented that he was the owner of the cows, and that there were no liens or encumbrances against the cows. The purchase money, less the defendant's commission, was turned over to Flickinger after the sale (Stipulation P5 and Additional Stipulation, which was filed on August 14, 1962.)
11. The three cows were delivered to the auction and sold without the knowledge and without the express or implied consent of ...