134 Minn. 1 | Minn. | 1916
The trial court directed a verdict for plaintiff. Defendant made a motion for a new trial and appealed from the order denying it.
Steve Williams, a stock buyer at Hansboro, North Dakota, bought from farmers in that vicinity enough stock to make a carload, and paid for part of it but lacked money to pay for the remainder. He was already indebted to the Hansboro State Bank for money previously borrowed. He went to plaintiff, cashier of that bank, and made an agreement with him that the bank should furnish the money to pay for the remainder of the stock, and that the stock should be shipped and sold by plaintiff as consignor. Plaintiff claims and testified that it was agreed that the money then to be advanced by the bank should first be repaid out of the proceeds of the stock, and that the remainder of such proceeds should be applied upon the prior indebtedness of Williams to the bank. Pursuant to the agreement, the balance due for the stock was paid by the bank upon checks issued by Williams, and the stock was shipped by plaintiff as consignor to defendant, a corporation doing business as a commission merchant or factor at South St. Paul, Minnesota, as consignee. Plaintiff sent the bill of lading attached to a draft upon defendant to a bank at South St. Paul. Defendant received the stock, sold
It is a well-settled rule in the law of bailments that the bailee must return the property or its proceeds to the possession of the bailor before he can assert a claim thereto adverse to the bailor. In 3 R. C. L., p. 87, the rule is -stated thus: “A bailee, when he receives the property by virtue of the bailment, legally admits the right of the bailor to make the contract of bailment. After this subservient relation of the bailee to the bailor in respect to the property is established, the law forbids him to dispute the title of the bailor. So far does this principle of estoppel obtain, that although the title to the goods may be in the bailee, and even though he may have received them in ignorance of his own right, having accepted the possession of them in the capacity of bailee he is estopped from claiming them by title until he has fulfilled the obligations of the trust by returning
To the rule that a factor is estopped from denying his bailor’s title there are various exceptions, as where he has yielded to a paramount title asserted by a third party without his connivance, or where the actual shipper fraudulently consigns the property in the name of another for the purpose of defrauding the factor out of his advances (see Holden v. Maxfield, 94 Minn. 27, 101 N. W. 955; also Thomas v. Northern Pacific Exp. Co. 73 Minn. 185, 75 N. W. 1120); but the present case is not within any of the exceptions. It follows that defendant is estopped from denying plaintiff’s title to the proceeds of the stock and that the ruling of the trial eourt was correct.
Order affirmed.