135 Mo. App. 366 | Mo. Ct. App. | 1909
(after stating the facts).
As the validity .of a pledge depends on possession of the thing pledged, the vital inquiry in the case relates to Avhether possession of the pianos was delivered to the bank and retained by it in such manner as to create a pledge and continue it in force, especially as against Feld’s creditors, to the date when the Trust Company took the pianos under his assignment. We are not helped toward an answer to'this question by the receipt executed by Muerer, reciting that he held the instruments subject to Feld’s order, the indorsement of the receipt by Feld to plaintiff and Muerer’s acceptance of said indorsement. Plaintiff’s attorney does not insist the paper Avas a Avarehouse receipt, the transfer of which to his client would pass the title to the pianos and be a constructive delivery of them. Feld -was no Avarehouseman, but simply had a storage room where he put some of his musical instruments. Hence a good pledge could not be created by assigning the receipt to plaintiff without turning over the property. [Valley National Bank v. Frank, 12 Mo. App. 460; Conrad v. Fisher, 37 Mo. App. 352.] The good faith of the bank is not impugned, but only the adequacy of the delivery to and retention of possession by it, of the pianos; for
Another proposition to be noticed in connection with the decisions upon the statute regulating sales of personal property is, that it requires sales to be held void as against creditors of the seller when actual and continued change of possession does not appear. The sales are presumed to be void because the statute says, they shall be void. [Knoop v. Distilling Co., 26 Mo. App. 303, 314, 102 Mo. 156.] Formerly when the lam guage of the act was different, sales without change of
“Two leading conclusions may be drawn from the precedents which form the modern mosaic of pledge delivery. 1. That in the growing complexity of commercial and mercantile transactions, with so many new classes of incorporeal rights coming into the list of things personal, the disposition increases to apply to all chattel transfers the test of mutual intent on equitable considerations, so that the English and American courts, while abating little of the common-law theory that full change of possession must attend every pledge transaction, have come to swerve very far from it in practice. 2. That, with the present laxity of construction, pledge delivery seems to comport itself differently under these three leading aspects: (a) as between the pledge parties themselves, (b) as between the pledge parties and the pledgor’s general creditors, and ,(c) as between' pledge parties and those like a pledgor’s attaching creditors or purchasers, or new parties lending on security of the thing, who acquire intervening rights ■in rem without notice. As between the parties themselves, their executory contract so upholds the transaction, while manual delivery continues incomplete, that the pledge security holds by construction, though accompanied by no actual change of possession. As between the pledge parties and general creditors, such
Another author says:
“Possession of the property by the pledgor after it is pledged is not conclusive evidence of fraud, but is prima facie evidence of it. Such possession may be explained and proved to be a possession by the pledgor as agent or servant of the pledgee. If the circumstances make out a good reason for giving the custody and apparent control of the property to the pledgor, who undertook to act as the pledgee’s agent, there may not even be any evidence of fraud, and at most the pledgor’s possession will only be evidence, either that the pledge had been abandoned, or that the transaction was fraudulent.” [Jones, Coll. Secur., sec. 42.]
The courts uniformly profess to require actual and unequivocal delivery of property pledged, in order to prevent creditors and purchasers from believing it is in the hands of the owner and free from possessory liens. [Hale, Bailments and Carriers, secs. 31, 32; Schouler, Bailments and Carriers (3 Ed.), sec. 202; 22 Ency. Law (2 Ed.), 853; Dunn v. Train, 125 Fed. 221; Keiser v. Topping, 72 Ill. 226; City Fire Ins. Co. v. Olmsted, 33 Conn. 473.] We do not say the facts in hand would
“Here, once more, the element of seasonable notice confronts us. By vigilance and seasonable notice of his claim to third parties, before they acquire adverse claims upon the thing, the pledgee may preserve his rights unimpaired, even though not retaining strict personal possession thereof; for thus is the third party deprived of that bona fide character which gives him priority, as one misled to his detriment without fault and innocently.” [Schouler, Bailments and Carriers (3 Ed.), sec. 202, p. 207.]
Beyond doubt the pianos were actually delivered to Hichols, the bank’s cashier — were turned into his hands, and as long as he remained by them, the retention of custody was perfect. Was possession lost as against creditors by entrusting the pianos to Muerer? We have seen there is no statute binding a pledgee to preserve not only possession, but a plain appearance of it, on pain of haying his lien declared void as a matter of law if some creditor levies or purchaser buys. Neither does any statute authorize a creditor or buyer to act on appearances; nor any rule of the common law, at least so far as to excuse him from inquiring on such facts as we have here. The latter proposition follows from the doctrine that when once the subject-matter of the pledge has been delivered to the pledgee, he may retransfer it to the pledgor for a temporary and special purpose, or in a special capacity, without losing his lien as a matter of law. [Jones, Pledges and Coll., sec. 42 et seq.; Hale, Bailments, sec. 31, p. 122; Schouler, Bailments and Carriers, sec. 201; Story, Bailments (9 Ed.), sec. 299.]. Jones says:
“A delivery of goods to a Avorkman or clerk employed by the pledgor, and possession of such workman in behalf of the pledgee, are sufficient to create and continue the lien.” . . . “But if the clerk or other employee of the pledgor alloAvs the pledged goods to be
There was no blending of goods in this case:
Story says on the immediate point:
“As possession» is necessary to complete the title by pledge, so, by the common law, the positive loss or the delivery back, of the possession of the thing with the consent of the pledgee, terminates his title. However, if the thing is delivered back to the owner for a temporary purpose only, and it is agreed to be redelivered by him, the pledgee may recover it against the owner if he refuses to restore it after the purpose is fulfilled. So, if it is delivered back to the owner in a new character, as for example, as a special bailee, or agent. In such a case, the pledgee will still be entitled to the pledge, not only as against the owner, but' also as against third persons; for under such circumstances, the possession is perfectly consistent with the existence of the original right of the- pledgee. But if the pledgee voluntarily, by his own act, places the pledge beyond his power to restore it, as by agreeing that it may be attached at the suit of a third person, that will amount to a waiver of his pledge. And, in like manner, it may, under the- like circumstances, be recovered from a bona fide holder for value; for the possession of the pledgor will be deemed a continuance of the possession of the pledgee.”
In Hale on Bailments, it is said:
“Even a clerk of the pledgor may hold the property for the pledgee. In such case the clerk has a special possession, distinct from his duties as clerk; and to constitute such special possession, it is not necessary that the goods should be removed from the premises of the former owner. It is sufficient that they are so far in the custody of the special bailee that he can at all times have the legal control of them, and
The point is thus discussed by Schouler:
‘‘What complicates pledge delivery still further in this connection is the doctrine, now well incorporated in our jurisprudence, that the agent to take and keep legal possession for the pledgee may be no other than the pledgor himself. But, the law declares a pledgor’s possession on his pledgee’s behalf should not be a mere device for the purpose of defrauding his other creditors; nor, as we may conjecture, ought the transaction to indicate that one, a pledgee by right, has simply delayed or abandoned his opportunities of accomplishing a transfer to his own possession. And whether the pledgor’s agency for his pledgee can be set up in every instance to disconcert bona fide attaching creditors or purchasers with claims in rem, we may still question; for to permit this doctrine of a pledgor’s agency to operate, except as between the parties themselves, and perhaps the general public, is practically to dispense with delivery altogether, and nullify the fundamental rule of bailment.”
The true point for decision is whether, in the absence of a statute, the facts in proof permit of no conclusion except that the transfer to and retention of possession by the bank, were inadequate as against the trust company representing Feld’s creditors, and even if no actual fraud was intended or occurred. We answer the inquiry in the negative, and deem it novel enough in this jurisdiction, to justify a display of the authorities which have controlled our thought. The note to Lanauz v. Hymel (La.), 25 L. R. A. 577, declares the cases hold with practical uniformity, the selection of a custodian for the subject-matter of a pledge who is in the service of the pledgor, does not invalidate the delivery. Occasionally the pledge has been defeated, not because the article was left in the
“Was there such a delivery and retention of possession of the collateral securities as to constitute a valid pledge by .the law of Louisiana? Clearly, they were never out of the possession of the officers of the bank, and were never out of the bank for a single moment, but Avere always subject to its disposal in any manner whatever, whether by collection, renewal, substitution or exchange, and collections when made, were made for the benefit of the bank, and not that of the Creditor Mobilier.”
It wiil be seen the contract failed, not because it provided the collateral securities should be turned over to Oavaroc, who was the main official of the bank and acted for both parties to the transaction; but because, in point of fact, the securities were so handled as to be in the bank’s custody and at its disposal. The reasoning of the opinion supports the proposition that if Oavaroc senior had kept the securities in his own custody, or if they had been kept in the vaults of the bank in the envelope where they were, placed, and had not been used by the bank, the bailment would have been effective. Several. circumstances are worthy of remark, concerning this opinion by our highest court. The case was decided on a statute which says the privilege of pledge — meaning thereby the right of a person to hold the article against the rights of creditors and of purchasers from the pledgor — should not “subsist in
“The contract of pledge stipulated that the property pledged was placed in the possession of one Joaquin Polet, as the agent of the pledgee and he (Polet) intervened in the act for the purpose, as expressed, ‘of accepting the trust,’ and it is shown by the evidence that to him was delivered the key to’the building containing the machinery, etc., pledged. He (Polet) testified that he exercised control over the property for about ten months and took care of it and cleaned the machinery. He was paid for his services as keeper. It is shown that by permission of the keeper and consent of Curtis, Jacquet & Yallette used the machinery at times in their tobacco business, and that Polet was one of their employees. We do not think, however, that these facts derogated from the validity of the pledge. The qiossession of the property by the pledgee, as shown, was sufficient. [C. C. 3162; Weems v. Moss Company,
Another Louisiana case, in which the pledge failed, was In re Succession of Lanaux (46 La. Ann.), 25 L. R. A. 577; hut there it was reasonably clear the subject-matter never passed out of the possession of the pledgor, because, though the property (certain certificates of stock) was put in an envelope and marked with the names of the creditors intended to be secured, and these envelopes were inclosed in the debtor’s bank box on which his name was inscribed, and it was deposited in the bank by his instruction, before the securities were turned over to the creditors, he died. These cases illustrate what is sufficient change and continuity of possession under the civil law.
Not less impressive as authority than the opinion of the Supreme Court of the United States in Casey v. Cavaroc, is that of the Supreme Judicial Court of Massachusetts, pronounced by Chief Justice Shaw, in Sumner v. Hamlet, 12 Pick. 76. As deputy sheriff Sumner had attached machinery and stock contained in a factory as the property of Stanley & Co. The stock was raw material tp be manufactured into flannel and finished goods. Some forty-five pieces of goods were removed from the factory by Hamlet, or at his order, he claiming them under a pledge. Three months before the attachment was levied, Stanley & Co. had selected the forty-five pieces from their stock and placed them in the care of Guild, to keep for the defendant as security for a debt they owed him. It was arranged that if Guild would relinquish to the debtors the particular pieces first selected to be sent to market, he might choose others to the same amount and of like quality in lieu of them. Guild agreed to do this and gave a receipt for the flannels. Some of the pieces were released to the debtors and others substituted in their
“Boston, August 31, 1895.
“Messrs. Train, Smith & Company
“Gentlemen: In order to keep your general lien unimpaired and, at the same time, to save the freight on the goods, we agree to deliver each day to your agent
“Very truly yours,
“Bangor Pulp & Paper Co.
“Chas. W. Walcott, Asst. Treasurer.”
Under this arrangement all the finished product of the mill was turned over to Kline, the custodian selected, and deposited in a place inaccessible from other parts of the mill and kept detached from other paper of the company. Afterwards the pledged paper was transferred to a new storehouse and remained there in the care of Gedney, likewise an employee of the paper company, who had superseded Kline as agent for the pledgees. And so there were several successive custodians appointed, all employees of the paper company. Rolls of paper were taken out and others substituted from time to time as sales were made by the company. The contest was between an assignee of the insolvent paper company, representing its creditors at large, and the pledgees. The court assumed change of possession from the pledgor to the pledgee and preservation of possession by the latter, were essential to the validity of the lien, and said the question then was whether the facts authorized a finding that these essentials were observed; said, further, there was no rule of law which rendered the possession and dominion of the pledgee inoperative because the keeper selected to protect the property was in the pledgor’s employ, and neither was there a rule requiring removal of the property from the premises; but it was enough if it was actually set apart in the keeping of a special bailee, with authority to notify third persons it was held in pledge. The same doctrine was declared in Busch v. Export Storage Co.,
“St. Paul, Minn., December 16, 1875.
“Received of F. W. Tuchelt & Co., 42,000 cigars, valued at fl,654.90, to be held as collateral security for an account of Parker, Holmes & Co., Detroit, in payment of seven notes, $257.40 each, dated November 29, 1875, at St. Paul, Minn., payable at intervals of fifteen days each from above date, the last being payable 120 days from NoArember 29, ’75. After the note due January 1, ’76, is paid, I am at liberty to relinquish cigars to F. W. Tuchelt & Co. as fast as they pay me cash to apply on notes due Parker, Holmes & Co. The price to be paid is as per schedule prices attached to this receipt.
“(Signed) Charles D. Mann.”
At the foot of the schedule of the cigars Mann had Avritten: “The above cigars aye in my possession.” When the cigars were turned over to Mann he, at the request and by permission of the pledgor and pledgee, took possession and agreed -to hold them for the purpose and on the conditions named in the receipt. That case is much like the one at bar, and the court held the evidence conclusively showed the cigars in the schedule were delivered into the possession of Mann as agent for the pledgee; and, further, the evidence reasonably shoAved Mann’s custody was continuous. In McCready v. Haslock, 3 Tenn. Ch. 13, a document construed to be a contract for the pledge of a stock of goods, provided their custody should be entrusted to
“Then, as to keeping possession, it may be kept by an agent, and that agent may be the pledgor. If the circumstances make out a good reason for giving the custody and apparent control to the pledgor, there may not even be evidence of fraud; but, at most, his possession will only be evidence either that the pledge has been abandoned, or that the transaction is covinous. See Sumner v. Hamlet, 12 Pick. 76; Macomber v. Parker, 14 Pick. 497; Hays v. Riddle, 1 Sandf. 248; Way v. Davidson, 12 Gray 465; Cooper v. Ray, 47 Ill. 53; Martin v. Reid, 11 C. B. (N. S.) 730; Thayer v. Dwight,
That case would be more pertinent to the one in band, if the assignee in bankruptcy had stood in the relation of a purchaser for value and if the subject-matter of the bailment had been less ponderous. The cases of First National Bank v. Harkness, 42 W. Va. 156, and Am. Storage Iron Co. v. German, 126 Ala. 194, are equally strong in their reasoning,- but the articles bailed were so unwieldy as to be incapable of more than symbolical delivery. In both cases, however, they were put in charge of agents of the pledgor and the bailments were held valid in opinions, the reasoning of which supports the validity of the present bailment. And, indeed, -sixteen pianos cannot be moved without considerable labor and expense; a circumstance not to be ignored in inquiring if there was actual delivery. Decisions in this State touching the point of law involved are meager, but what there are agree in their general statements with the uniform current of authority, to-Avit; that such possession of the property pledged as it is susceptible of, must be delivered to the pledgee in order for the transaction to be valid. [Valley National Bank v. Frank, 12 Mo. App. 460.] In that case there was an attempt to pledge certain bales of hides which a firm of dealers in hides had in their place of business, for loans advanced by the bank. The arrangement was for the bank to select a man whom the firm would employ as a clerk in the store, and at the same time he would act as agent for the bank. This clerk would give receipts to the firm for such hides as they wished to pawn and the receipts would be turned over to the bank. The arrangement was condemned, not because it would have been an inadequate delivery of possession if carried out, but because it was not carried out; for there was no separation of the hides pawned from the others in stock, but all alike continued to be sold by the borrowing firm as though there had been no pledge
Certain cases have been cited by appellant against the validity of the pledge if the servant of the pledgor remains in possession. The main one is Dirigo Tool Co. v. Woodruff, 41 N. J. Eq. 336. In said case the party with whom the pledged property was left, was superintendent of the factory of the pledgor and its most conspicuous representative. Moreover, he made a positive representation to the creditor who accepted a mor-gage on the property that there was no prior lien on it. On these facts the pledgee was held bound by his representation, inasmuch as it accorded with the surroundings and he had been chosen by the pledgee and thus enabled to impose on the mortgagee. Lilienthal v. Ballou, 125 Cal. 183, appears to be in point in favor of
The judgment is affirmed.