E. L. Welch Co. v. Lahart Elevator Co., Nos. 15,950—(4)

Nos. 15,950—(4) | Minn. | Dec 10, 1909

LEWIS, J.

This action was brought to recover the value of 5,334 bushels of wheat, which appellant claimed was converted by respondent. On February 6, 1907, appellant and one W. B. Mohler, both members of the board of trade of the chamber of commerce of Minneapolis, entered into a transaction on the floor of the board of trade by which appellant, through its secretary, Mr. -MeClatchie, agreed to sell to Mohler five thousand bushels No. 1 Northern wheat at 83% cents per bushel, to arrive at Minneapolis at any time before June 1. The transaction occurred in the ordinary course of business, and at the close of the day appellant sent Mohler the following letter:

“Minneapolis, Minn., Feb. 6, 1907.

“Mr. W. B. Mohler, City — Dear Sir: We confirm sale to you today of 5,000 bushels 1 Northern wheat, 83%, to arrive any time to June 1st, 2 Northern to apply. Please check, and if not correct notify at once.

“Yours truly,

“E. L. Welch Company.”

On April 17 two cars of wheat were shipped to appellant at Minneapolis by the Mapes Farmers’ Elevator Company, and a bill of lading was issued by the Great Northern Bailway Company on that day to appellant as consignee. A similar shipment was made on April 19. The first two cars were inspected by the state grain inspector on April 22 and the next two on April 23, and certificates of inspection accordingly issued. Samples of the wheat and notations of inspection were placed for exhibition on the floor of the board, and Mohler signified his acceptance of the wheat, and thereupon, April 22, appellant sent Mr. Mohler the following notice:

“We apply on sale to you to-day of:

Car Initial Grade Article Price Remarks

23,724 G. N. 1° 1 Wht. 83 3-4 L. Sale 2/65 M

29,738 “ “ Io 2 “ 83 3-4 L. Do.

“Please check, and if not correct notify at once..

“Yours .truly,

“E. L. Welch Company, Per (N).”

The capital letter “L” indicated that the wheat was to go to respondent’s elevator. On April 23 a similar notice was sent with respect to two cars, Nos. 14,072 and 29,592, which arrived in Minneapolis on April 22 and 23, respectively, the bills of lading for which were held by appellant, and the freight paid by it.

On April 13, 1907, Mohler sold to respondent, on the floor of the board of trade, ten thousand bushels of cash wheat, to arrive, and confirmed the sale as follows:

“Minneapolis, Minn. Apr. 22, 1907.

“Lahart Ele. Oo. — Dear' Sir: Confirm delivery to you to-day of:

Car Initial Grade Article Price Remarks

23,724 G.N. Io 1 Wh. OS4/13-84J L via St. L

29,738 - 1° 2 - - -

“Please check this. If not correct, notify us at once.

“Tours truly,

“W. B. Mohler, per M.”

On the twelfth of May one of the four cars, No. 14072, arrived at respondent’s elevator and the grain was unloaded, and on the same day weighed by the deputy state weighmaster on scales in the elevator, and report made that night to the state weighmaster in Minneapolis. The following morning, May 13, appellant obtained the quantity of grain from the state weighmaster’s office, and at once made ■demand on Mphler for the amount, who notified appellant that he was in trouble and could not pay for it. Thereupon appellant sent written notice to respondent not to unload the other three cars, and was informed that they were already unloaded. The deputy state weighmaster testified that the:three cars were weighed May 13, and that the last car was not completely unloaded until after eleven o’clock that morning. The weights were not made public until May 14. There was a.dispute as to the time the notice not to unload was received, respondent claiming that it was three o’clock p.-m. May 33 while appellant claims that, it was sent about eleven o’clock a. m.

At the close of the trial the court instructed the jury to' return a verdict for respondent.

It appears from the evidence that the transaction involved in this case, with reference to sale and delivery, was in accordance with the custom generally followed by purchasers and sellers of grain on the floor of the Minneapolis board of trade. Appellant’s right to recover depends upon whether title to the grain passed from it to Mohler on the twenty-second and twenty-third of April, when the written notices of the application of the cars of grain to the February sale were sent by appellant and received by Mohler. If it was intended by the parties that the sale should become complete at that time, then title passed, and the failure of Mohler to make payment was a risk which appellant assumed.

A cash transaction contemplates no credit; whereas a bargain which contemplates credit until payment is made is termed a conditional sale. In this case the difficulty is to discover when the parties intended the sale to become complete. The February contract, made on the floor of the board of trade, was executory. It was immediately binding upon the parties, but was to be executed in the future. Title to the wheat did not pass at the date of the contract, because it was a present agreement for future delivery of grain upon payment of cash. The parties did not intend the grain should be paid for at the time notices were issued, nor at the time cars were switched out of the Great Northern yards to the Milwaukee tracks, because the amount of the bill could not be estimated until the wheat was unloaded in some elevator and weighed. If the contract was completed upon service of the application notices, or at the time the cars were switched onto the Milwaukee tracks, then the subsequent weighing of the grain may be considered a mere incident to delivery, for the purpose of ascertaining the exact amount of the contents of each car, and the seller took the chance of recovering payment from the purchaser after parting with control of the grain. The fact that nothing further remained to be done by the seller to complete delivery after giving the switching order was evidence tending to show that it was the intention to part with possession and title at that time. There are other facts, however, giving rise to other inferences. The switching order was not delivered by the seller and executed by the railroad company until some time after the notices of application were sent by appellant to Mohler. The seller still held the bills of lading, and until unloaded.the cars were still under his control. This is important, as bearing on the question of. delivery. It is consistent with appellant’s claim that delivery was not complete until the grain was weighed.

The question at issue may be illustrated by inquiring what the relation of the parties would be, had the deal taken place outside of the board of trade. Let it be assumed that Mohler purchased the grain for his own use as a mill man, and had directed it to be delivered to himself at elevator “L.” Under such'circumstances payment and delivery at. the elevator would be concurrent and mutually dependent acts, and title would not be presumed to pass on delivery, unless accompanied by payment. Such is the reasoning in Fishback v. G. W. Van Dusen & Co., 33 Minn. 111" court="Minn." date_filed="1885-01-21" href="https://app.midpage.ai/document/fishback-v-g-w-van-dusen--co-7964650?utm_source=webapp" opinion_id="7964650">33 Minn. 111, 22 N. W. 244. See also Globe Milling Co. v. Minneapolis Ele. Co., 44 Minn. 153" court="Minn." date_filed="1890-07-21" href="https://app.midpage.ai/document/globe-milling-co-v-minneapolis-elevator-co-7966616?utm_source=webapp" opinion_id="7966616">44 Minn. 153, 46 N.W. 306" court="Minn." date_filed="1890-07-21" href="https://app.midpage.ai/document/klimple-v-boelter-7966621?utm_source=webapp" opinion_id="7966621">46 N. W. 306, and Carter, Rice & Co. v. Cream of Wheat Co., 73 Minn. 315" court="Minn." date_filed="1898-07-14" href="https://app.midpage.ai/document/carter-rice--co-v-cream-of-wheat-co-7970546?utm_source=webapp" opinion_id="7970546">73 Minn. 315, 76 N. WT. 55. The main point of distinction between the present transaction and one of that character is the fact that the sale here was made on the floor of the board of trade, according to the usual course of business pursued there.

The learned trial court held that the parties intended to pass title upon the giving of the application notices, although the grain had not passed absolutely out of the seller’s control. . There is strong reason for this conclusion from the fact that, immediately upon being notified of the application of the wheat, the buyer was at liberty to sell the same grain, and that thus the same shipment or application of actual grain might become the basis of many transactions between board members. But the presumption that the seller does not part with the title until payment, when payment and delivery are concurrent acts, rests upon a very just basis. A cash sale is an exchange of property for money, and if delivery is made by the seller, relying upon performance by the other party, such delivery does not complete the sale, and the seller may take possession of his property if payment be not made in the ordinary course of business, or, if the purchaser has in the meantime placed it beyond recovery, its value must be accounted for. Unloading and weighing at the elevator and payment were substantially concurrent acts, and, unless the general rule was changed by the method of transacting business on the board of trade, title did not pass until the grain was paid for. The wheat having been unloaded, it was' impossible to' secure possession, and the rights of the parties became fixed upon refusal to make payment. If it conclusively appears, from the method of dealing on the board of trade, giving notices, switching orders, weighing, and payment, that it was the intention of members, in dealing with- each other in actual grain, that the seller should assume the risk of parting with his title and possession at the time of giving notices, and rely only on the responsibility of the buyer, then the order appealed from must be sustained. In our judgment the evidence does not require such conclusion. As between the seller and buyer, there is nothing in the course of dealing inconsistent with the general rule that in a cash transaction the title is not presumed to pass until payment is made. As to subsequent purchasers on the board, who buy grain for future delivery, such transactions may be consistent with the general rule that title does not pass until payment is made. If the custom was established that title passed upon the giving of the application notices, the record fails to show it, and the parties to this transaction did not proceed in accordance with such understanding.

We are of opinion that the question of title was a disputed one, and that it does not conclusively appear from the evidence when title passed and when the delivery was completed. It was a question of fact to be determined by the jury. Consequently the trial court erred in directing a verdict for respondent.

Reversed. New trial granted.

JAGGABD, j.

I dissent.