95 Wis. 651 | Wis. | 1897
The following opinion was filed February 23, 1897:
The so-called storage warrants were not warehouse receipts, either under the laws of Pennsylvania ■or of Visconsin. In order to be such, they must be issued by a warehouseman or one openly engaged in the business of storing property for others for a compensation. 1 Brightly’s
Thus, at the outset of the case, it appears that the plaintiff had no interest in or lien upon the iron in question, as indorsee of a warehouse receipt nor as a chattel mortgagee.. Nor can it be claimed that the plaintiff actually bought or obtained legal title to the iron. These possible claims-being thus eliminated, we know of no other claim which the plaintiff can make, unless it be a claim as pledgee of the iron-as collateral to the debts of the Buffalo Mining Company-
In considering the question of whether it had such a lien which was valid as against the creditors of the furnace company, a brief recapitulation of the essential facts will be useful. Ferdinand Schlesinger owned two corporations,— one, a mining corporation, engaged in mining ore in Michigan; the other, a furnace company, engaged in smelting ore in Pennsylvania. These corporations were nominally furnished with full complements of officers, but in fact the business of each was directed and controlled by Schlesinger as though it were , his own. The furnace company had a large stock of pig iron constantly on hand in its yards in Pennsylvania, and was largely indebted to Corrigan, Ives & Co., of whom it purchased its iron. It refused to give Corrigan, Ives & Co. security on the iron, on the ground that such a course would injure its credit. In order to raise money for the furnace company, Schlesinger caused the fur
The court found that the bank took the certificates innocently, without knowledge of any defect.- We cannot probably disturb this finding, because it is based on the affirmative evidence of the cashier who made the loans; but, in view of the facts proven on cross-examination of the cashier himself, this finding seems to be a considerable tax on the credulity. The facts are, in brief, that the cashier was well acquainted with Mr. Schlesinger, so much so that in 1892 Schlesinger put in his hands one share of stock in
It is very apparent that, had the certificates remained in the hands of the mining company, they would have constituted no obstacle' to creditors of the furnace company in the collection of their debts. They were subject to nearly, if not quite, all the objections which render transfers void as to creditors. They were absolutely false in fact. There was no change of possession of the iron; no payment nor agreement to pay for it; no intention to pass title. They were the merest shams. There was in effect an agreement that the furnace company should remain the apparent owner,
It is seriously and ably argued that the scheme has been successful; that the original transaction has been purged of' all objections by the intervention of the innocent thjrd person, in the shape of the plaintiff bank; and thus that the shifting and self-adjusting, but void, title of the mining company has been turned into an equally shifting and delusive, but good, lien for the benefit of the bank,— a lien which is secret and invisible to creditors, but entirely visible and very real to the plaintiff. As before said in this opinion, the only interest which the plaintiff claims or can claim in the iron in question is that of a lien thereon as pledgee; and, in order to-make a valid pledge, there must have been either actual or constructive delivery of the property pledged. Bona fides--does not avail the pledgee in the absence of delivery and possession, either actual or constructive. There was confessedly no actual delivery here, and the only thing that can be claimed to be a symbolical or constructive delivery is the indorsement and delivery of the false receipts. Hence the
In the present case there is no such element. The pledgee never saw or attempted to see the iron described in the certificates, and made no inquiries concerning it. It never notified the furnace company that it held any certificates in pledge, or claimed any interest in any iron in its possession. It tacitly allowed the furnace company to go on in its business for months, selling out the very iron nominally covered by the certificates, and replacing it with other iron, and collecting and using the proceeds of its sales. There can be no constructive or symbolical delivery and continuance of possession logically claimed where such a state of facts appears. Conceding that the title to the iron was in the mining company, the furnace company was the custodian, and the custodian received no notice of pledge, made no agreement to hold for the benefit of the pledgee, but went on in business, selling the property, and substituting other property in its place, with no one to hinder or make it afraid. Apparently the owner of more than 20,000 tons of iron, it was (if plaintiff’s theory is correct) really not the owner of it in case a creditor appeared with an execution. It was held in Casey
The trial court found that the judgment note was obtained by threats and fraud, for the purpose of at once levying on the property of the furnace company. We have found no evidence in the case which establishes fraud or duress. There was some excited language, but nothing amounting to duress or fraud. Corrigan, Ives & Co. had a right to obtain a judgment note for the very purpose of entering judgment at once, and levying upon the furnace company’s property. Such is frequently the purpose for which judgment notes are taken, and such purpose does not, of itself alone, constitute fraud or vitiate the note.
We do not find any evidence that justifies the finding that the defendants fraudulently employed Hirschfeld, so as to prevent him from marking off particular lots of iron to the holders of storage warrants. There is nothing to show that Hirschfeld intended to do’ so, or that the plaintiff or any one else expected or wished him to do so. Whether he would have done so or not had he not been employed by the defendants is purely a subject of speculation.
These views necessitate reversal of the judgment.
By the Gourt.— Judgment reversed, and action remanded with directions to dismiss the plaintiff’s complaint.
A motion for rehearing was denied, April 30, 1897.