88 So. 68 | La. | 1920
Lead Opinion
Plaintiff sued E. Martin & <3o., a firm of cotton brokers, and the individual members thereof, on an alleged indebtedness of .$20,395.32, and coupled with its demand a writ of sequestration under which certain cotton was seized in the hands of other parties. S. Gumbel & Co., Limited, of New Orleans, La., was made a party defendant, and enjoined from disposing of bills of lading for some ISO* bales of the cotton; and plaintiff prayed for judgment ordering the delivery of said bills to it, or in default thereof that it have judgment against the said Gumbel & Co., Limited, for the sum of $9,751.39, with interest, as the value of the cotton. The Hibernia Bank & Trust .Company was likewise made defendant, and the same relief asked for as to 83 bales of said cotton, or a personal judgment in the sum of $8,000.
This suit was filed on March 14, 1912, and on March 20th E. Martin & Co. were adjudged bankrupt. On March 25th, counsel for Gumbel '& Co. filed an exception, suggesting the bankruptcy proceedings, and pleading that the lower court had been divested of jurisdiction thereby as to Martin & Co.' Similar exceptions were filed on behalf of the receivers for the bankrupt, and the Hibernia Bank & Trust Company, all of which were, on May 23d, overruled.
Thereafter Gumbel & Co. and ■ Hibernia Bank & Trust Co. pleaded a misjoinder of causes of action and parties defendant. These exceptions were tried and taken under advisement, and on'January 17, 1913, counsel' for plaintiff took a nonsuit as to its demands against the sáid bank, whereupon said' exceptions were overruled. Again, on January 22, 1913, Gumbel & Co.,' filed an additional exception of misjoinder of persons and ac-' tions, in that, notwithstanding the dismissal of the demands against the bank,' plaintiff was' still attempting- to litigate its' claims against Martin & Co. in this case, and in which exceptor had no interest or concern;' and' on March 7,' 1918, plaintiff mbved the
Reserving its exceptions, Gumbel & Co., Limited, on March 10, 1913, answered that it was the holder of the cotton in good faith under negotiable documents of title, i. e., warehouse receipts and bills of lading, upon the faith of which it had advanced sums in excess of the value of said cotton, and averred that its rights were superior to and could not be affected by any undisclosed claims thereon of the plaintiff. It further pleaded that the plaintiff, having clothed the said Martin & Co. with negotiable muniments of title or indicia of ownership of said cotton, and being charged with the knowledge that said firm would negotiate the same, and plaintiff having itself indorsed the said bills of lading, was estopped to recover of defendant or any one else acting on the faith thereof.
The judgment below was in favor of defendant, and plaintiff brings this appeal.
The case was tried upon an agreed statement of the facts, which we summarize as follows:
The indebtedness of Martin & Go. to plaintiff as alleged was admitted.
Fifty bales of the cotton in dispute, 25 of ■ which were marked “LERO” and 25 “LEER,” were sold to Martin & Co. by plaintiff on March 6, 1912, for $2,645.93. On March 8th Sloan & Co., consignee of said 50 bales, gave plaintiff an order on the Illinois Central Railroad Company therefor, which order was appended to a similar one from ' plaintiff, and both of which were, on the same day, delivered to Martin & Go. Martin & Co. received the cotton from the railroad, company on March .9th, and re-marked 38 bales “R<§>I,” and 12 bales “K<g>'.S,” after which all of it was stored in a public warehouse, and negotiable receipts therefor obtained by Martin & Co. These receipts were indorsed over to S. Gumbel & Co., Limited, who took the same in good faith, for a valuable consideration, and in the regular course of business. On March 11th, plaintiff invoiced the said cotton to Martin & Co., and on the same day, received a check from the latter for the’price drawn upon the Hibernia Bank & Trust Company, and receipted the bill. The next day, the bank dishonored the check, and plaintiff sequestered the cotton on March 14th.
In addition to the 50 bales above mentioned, the plaintiff on March 12, 1912, and before it had been informed of the dishonor of Martin & Co.’s check, delivered to the latter four bills of lading for cotton, under contracts previously made, as follows:
The price agreed to be paid' for these four lots was $9,751.39.
All four of these bills of lading covered cotton shipped from points in the state oí Mississippi, and it was admitted that at the
It was further admitted that all of the transactions had with, reference to the cotton involved herein (except the 50 bales first mentioned and covered by warehouse receipts) were conducted under the rules of the New Orleans Cotton Exchange, with reference to f. o. b. cotton, as distinguished from “spot cotton.”
It was also admitted that—
Plaintiff “was in the habit of delivering negotiable bills of lading indorsed by it in blank to E. Martin & Co., when plaintiff made Martin & Co. sales other than sales of spot cotton. Plaintiff knew that E. Martin <te Co. were in the habit of negotiating bills of lading negotiated to them, and knew when it delivered to Martin & Co. the particular bills of lading herein involved that E. Martin & Co. probably would negotiate them, and delivered them to Martin & Co. for the purpose of carrying out the sales and of enabling Martin & Co. to negotiate the documents and raise funds thereon, if Martin & Co. had not sufficient funds to make payment without outside assistance.”
It was further shown that on other occasions the checks of Martin & Co., given in payment for) cotton to plaintiff, had been held up by the banks, but the amounts thereof were later made good. Plaintiff also knew that the senior member of the firm of Martin & Co. was a man “sometimes careless of his credit.”
Opinion.
Plaintiff relies for recovery upon the provisions of article 3227 of the Revised Civil Code and Act No. 63 of 1890. The article of the Code was made to apply to the city of New Orleans alone, while the Act 63 of 1890 applies to sales made in any of the chartered cities and towns in this state. We find it appropriate therefore to quote only the pertinent provisions of the latter as follows:
“Section 1. Be' it enacted by the General Assembly of the state of Louisiana, that any person who may sell the agricultural products of the United States in any chartered city or town of this state shall be entitled to a special lien and privilege thereon, to secure the payment of the purchase money for and during the space of five days only after the day of delivery; within which time the vendor shall be entitled to seize the same in whatsoever hands or place it may be found, and his claim for the purchase money shall have preference over all others, and especially over any warehouse privilege or claim for warehouse charges, or any privilege or claim by the holder of any warehouse receipt. If the vendor gives a written order for the delivery of any such produce and shall say therein that it is to be delivered without vendor’s privilege, then no lien shall attach thereto.!’
The remaining and concluding section repeals all laws in conflict therewith, and especially Act No. 156 of 1888.
As to the Fifty Bales Held by Gumbel & Go., Limited, under Warehouse Receipts.
There would seem to be little doubt, if this statute stood alone as the law of the case, of the correctness of plaintiff’s contention, in so far as the 50 hales covered by warehouse receipts are concerned. The language of that -law is plain, and it is made expressly to prevail in favor of the vendor against the • holder.of a warehouse receipt; and we do not think that the particular manner in which the cotton, in this instance was turned over to Martin & Co. could have availed the
However, the statute quoted must be com strued in conjunction with the Uniform Warehouse Receipts Act, No. 221 of 1908, and if there be a conflict, the latter, being a later statute dealing with the force and effect of warehouse receipts,, must prevail. The title of the Warehouse Receipts Act is as follows:
“An act to make uniform with other states, the laws of the state of Louisiana governing warehouse receipts, by defining warehousemen and fixing their qualifications, defining their duties, providing the manner, method and character of receipts to be issued, declaring the extent and method of their negotiation and transfer and fixing the rights and liabilities thereunder, and fixing penalties for violation of this act.”
The act in its first section merely provides that any warehouseman may issue such receipts, and the second section proceeds to 'define a négotiable warehouse receipt; section three prescribes the terms which may be inserted, section 4 defines nonnegotiable receipts, and section 5 reads:
“Section 5. Definition of Negotiable Receipt. —A receipt in which it is stated that the goods received will be delivered to the.bearer, or to the order of any person named in such receipt, is a negotiable receipt.
“No provision shall be inserted in a negotiable receipt that' it is nonnegotiable. Such provision, if inserted, shall be void.”
Sections 7 and 8 deal with duplicate receipts and the penalties for' failure to mark certain receipts “nonnegotiable.”
“Part II” of the act, consisting of sections 8 to 36, inclusive, deals with the “Obligations and Rights of Warehousemen upon their Receipts,” matters not pertinent to this case; but “part III,” covering “Negotiations and Transfer of Receipts,” embracing sections 37 to 49, inclusive, contains certain provisions which seem applicable to the issues here, and which we quote, to wit:
‘.‘Section 49. Who may Negotiate Receipt.— A negotiable receipt may be negotiated—
“(a) By the owner thereof; or
“(b) By any person to whom the possession or custody of the receipt has been intrusted by the owner, if, by the terms of the receipt, the warehouseman undertakes to deliver the goods to the order of the persor) to whom the possession or custody of the receipt-has been intrusted, or if at any time of such, intrusting the receipt is in such form that it may be. negotiated by delivery.
“See. 41. Rights of Person to Whom a Receipt has been Negotiated. — A person to whom a negotiable receipt, has been negotiated acquires thereby—
“(a) Such title to the goods as the person negotiating the receipt to him had or had ability to convey to a purchaser in good faith for ■value, and also such title to .the goods as the depositor or person to whose order the goods were to be delivered by the terms of the receipt had or had ability to convey to a purchaser in good faith for value; and
“(b) The direct obligation of the warehouseman to hold possession of the goods for him according to the terms of the receipt as fully as if the warehouseman had contracted directly with him.”
Section 42 deals with transfers in which a' receipt is “not negotiated” in the strict legal sense, and with rights under nonnegotiable-receipts; section 43, with the transfer without- indorsement; 44, with the warranties of the person who negotiates a receipt; 45, with the effect of an indorsement and 46, with the effect of accepting payment of the’ debt for
“Sec. 47. When Negotiation not Impaired by Fraud, Mistake or Duress. — The validity of the negotiation of a receipt is not impaired hy the fact that such negotiation was a breach of "duty on the part of the person making the negotiation, or by the fact that the owner of the receipt was induced by fraud, mistake or duress to intrust the possession or custody of the receipt to such person, if the person to whom the receipt was negotiated, or a person to whom the receipt was subsequently negotiated, paid value therefor, without notice of the breach of duty, or fraud, mistake, or duress.”
We also quote section 48 as showing the far-reaching purpose of the law to cut off undisclosed claims or equities in third persons. It reads:
“Section 48. Subsequent Negotiation.— Where a person, having sold, mortgaged, or pledged goods which are in a warehouse and for which a negotiable receipt has been issued, or having sold, mortgaged, or pledged the negotiable receipt representing such- goods, continues in possession of the negotiable receipt, the subsequent negotiation thereof by that person under any sale or other disposition thereof to any person receiving the same in good faith, for value and without notice of the previous sale mortgage, or pledge, shall have the same effect as if the first purchaser of the goods or receipt had expressly authorized the subsequent negotiation.”
If the law stopped here, it might be argued with some plausibility that the two statutes could stand together — that is, that Act No. 63 of 1890, dealing exclusively with the lien and privilege of vendors upon agricultural products, existing for the limited period of five days, and subsisting for that time in “whatever hands” they might be found, would remain in force as to that character of goods unless the receipt bore the inscription “without vendor’s lien,” and that Act No. 221 of 1908 would apply to warehouse receipts for all other commodities and to agricultural products after the expiration of five days. But even under those eircumstances such an intention on the part of the .Legislature hardly seems probable, in view of the declared purpose to enact a uniform warehouse receipts law, as indicated by the title and sweeping provisions of the latter act. However, all doubt as to the intention of the lawmaker seems to have, been removed by the next section, No. 49, which we quote, viz.:
“Sec. 49. Negotiation Defeats Vendor’s Lien. . — When a negotiable receipt has been issued for goods no seller’s lien or right of stoppage in transitu shall defeat the rights of any purchaser for value in good faith to whom such receipt has been negotiated whether such negotiation be prior or subsequent to the notification to the warehouseman who issued such receipt of the seller’s claim to a lien or * * * stoppage in transitu. Nor shall the warehouseman be obliged to deliver or justified in delivering the goods to an unpaid seller unless the receipt is first surrendered for cancellation.”
It is not disputed that plaintiff had sold this 50 bales of cotton to Martin & Co., in fact, its sole hope of recovery rests upon the vendor’s lien, as specially protected by the Act 63 of 1890; and section 60 of the Warehouse Receipts Act repeals all laws or parts of laws in conflict therewith. It reads:
“Section 60. Inconsistent Legislation Repealed. — All acts or parts of acts inconsistent with this act are hereby repealed.”
As to the Remainder of the Cotton Covered by Bills of Lading.
As to the remainder of the cotton, the Uniform Warehouse Receipts Act has no application; but defendant Gumbel & Co., Limited, relies upon other considerations for escape from the application of the lien accorded under Act No. 63 of 1890, which are stated in the brief as follows:
“(a) The cotton upon which defendant would assert a lien, was situated, when sold, outside the state of Louisiana, and title to it passed outside the state, so that the laws of Louisiana relating to vendor’s lien, and particularly the statute referred to, have no application.
“(b) The statute referred to was intended by the Legislature to apply only to the sales of ‘spot’ cotton situated in a chartered city or town of this state, i. e., cotton actually on hand for delivery at the time of sale, and was not intended to apply to cotton not on hand, but situated at the time in another state, being what is known in the trade as f. o. b. cotton, or cotton to arrive, dealings with regard to which have developed entirely since the passage of the Act of 1890, and which were not within the contemplation of the Legislature.
“(e) That even if Act 63 of 1S90 could apply to sales of cotton outside the state, the plaintiff would be estopped from asserting any lien because it itself clothed Martin & Co. with the indicia of title represented by a negotiable bill of lading which plaintiff itself indorsed and which it placed in Martin’s hands well knowing that he would negotiate the same, and, indeed, for the express purpose of permitting him to negotiate it.”
Plea of Estoppel.
Bills of lading of the character of these involved in this case constitute both contracts of carriage between the shipper and the carrier and obligations to deliver the cotton to whomever shall present them, properly indorsed, at destination, and in the latter sense, they partake of the nature of warehouse receipts. In fact, the general law governing this feature of such contracts is the same as that applicable to warehouse-men, and, in the absence of Act No. 221 of 1908, there can be little doubt that the vendor’s lien would prevail over the claim of a holder of a negotiable warehouse receipt, whatever 'may have been the circumstances of its negotiation. Does,the inclusion of the agreement to carry with the obligation to deliver as a warehouseman give any higher quality to a bill of lading than that possessed by warehouse receipts before the passage of Act No. 221 of 1908? and, if so, why? The Legislature found it necessary to pass an express law giving warehouse receipts preference over vendor’s liens upon movables, including, in our opinion, agricultural products, but in so doing prescribed the particular form and conditions necessary to accomplish that purpose, and which are not possessed by the bills of lading in this case.
The Act of 1890 provides that the vendor of agricultural products of the United States, sold in the chartered towns and cities of this state, shall have a privilege for the payment of the purchase price for five days after delivery “within which time the vendor shall be entitled to seize the same in whatever hands or place it [thejr] may be found, and his claim for the purchase money shall have preference over all others, and especially over any warehouse privilege or claim for warehouse charges, or any privilege or claim -by the holder of any warehouse receipt.” Thus the statute, after using the all-embracing language giving the vendor a “preference over all others,” mentions especially warehouse receipts, for the reason, no doubt, that it was generally understood that these represented the highest character of negotiable title which could be given to personal property. To hold that the issuance and negotiation of a bill of lading of the character here would have the effect of defeating the vendor’s lien would have, under the law as it stood prior to 1908, produced the following results: If A. had shipped to his own order a lot of cotton and indorsed and mailed the bill of lading to B., B. could have negotiated the same to C. for value and without notice, so as to defeat the vendor’s lien; but if B., instead of negotiating the bill of lading, surrendered it, obtained the cotton, stored it in a public warehouse, and obtained a negotiable warehouse receipt therefor, he could not have conveyed thereby a title which would have' deprived A. of his lien. Let the bill of lading would form the first
Then, again, the indorsement in blank of a bill of lading is equivalent to an order for the delivery of the goods (cotton), and, in order to have the effect of destroying the lien, it is made necessary by the Act of 1890 that the vendor shall direct that “it is to be delivered without vendor’s privilege.” No such waiver was executed in the present case.
In either case, a bill of lading or a warehouse receipt is but the evidence of the title or right to possession of the property. Can it bo said that such evidence of title is stronger than the actual possession of the property itself, where admittedly the property had been sold, but not paid for? No more complete conveyance of title could be conceived than the sale and delivery of the actual cotton, yet we are asked to give a greater force to the evidence of title carrying with it the right to possession, in other words, to the representative of the thing than to the thing itself, merely because of the negotiable character of that evidence. We apprehend that it will not be contended that the vendor’s lien would be destroyed by the sale to third persons of a purchaser who had not paid the price of the actual cotton, unaccompanied by a bill of lading, even though the original owner had sold it with the expressed intention-that it should be resold.
The statute (Act No. 63 of 1890), in our opinion, provides the only way in which the vendor’s lien on agricultural products may be waived or lost; i. e., by written waiver over the vendor’s signature. Harris, Parker & Co. v. Nicolopulo, Citizens’ Bank, Intervener, 38 La. Ann. 12.
Whatever inconvenience or handicap this state of the law may have been to commerce, the LegisI ature of 1912 seems to have met by the passage of Act No. 94 of that year, dealing with bills of lading the provisions of which are very similar to those of Act No. 221, of 1908 covering warehouse receipts; section 42 of the former being identical with section 49 of the latter, save that “bill of lading” is used in place of “warehouse receipt.”
Without going into a discussion of the several cases cited by counsel for Gumbel & Go., we think it sufficient to point out that the present one is differentiated from all of them by the fact that plaintiff’s lien was by' statute preserved for'five days “in whatever hands or place” the cotton might have gone, and dealers in this particular kind of property must be held to have taken with notice, of the law. No such statute existed or was urged in the cases cited.
For the reasons assigned, the judgment appealed from is therefore annulled and reversed, and it. is now ordered, adjudged, and decreed that there be judgment in favor of plaintiff, John M. - Parker Company, and against S. Gumbel & Co., Limited, recognizing and sustaining its vendor’s lien and privilege upon the 125 bales referred to as covered by bills of lading to the extent of $9,751.39, and that it be paid by preference and priority over the claims of S. Gumbel & Co., Limited, from the proceeds thereof. Appellee to pay all costs.
Rehearing
On Application for Rehearing.
The application of the defendant S. Gumbel & Co,, Limited, for a re
In so far as plaintiff’s application for rehearing pertains to the 50 bales of cotton for which S. Gumbel & Co., Limited, held warehouse receipts, a rehearing is denied. In all other respects, the rehearing applied for by plaintiff is granted.
Rehearing
On Rehearing.
The questions before us on this rehearing are: First, as to whether plaintiff is entitled to have its vendor’s privilege under Act 63 of 1890 sustained as to 65 bales of cotton which were never seized under the writ of sequestration; second, should it have a personal judgment against S. Gumbel & Co.; and, third, is it entitled to interest on its claim?
It must be borne in mind that plaintiff was not the owner, and was not claiming as such any of the cotton in this case, but merely seeking to be paid by preference the price thereof out of the cotton itself, to satisfy the lien which the law gave under the particular circumstance. It is true that in addition to praying for. the sequestration of the cotton it also asked that Gumbel & Co. be enjoined from disposing of the bills of lading, and that it be ordered to turn the same over to the sheriff, or in lieu thereof, the price which Martin & Co. had agreed to pay at 6 per cent, interest from March 12, 1912. However, plaintiff’s rights- are not to- be measured by the prayer of the petition, but by the law applicable to the case. But for Act 63 of 1890, giving special protection to the vendors of agricultural products, plaintiff would have had no recourse either against Gumbel & Co. or the cotton, under the admitted facts of this case, the latter being a third purchaser in good faith, and for value. Therefore we must look to that statute and our law of procedure to determine the measure of plaintiff’s rights.
The seller shall have a lien “ * * * to secure the payment of the purchase money for and during the space of five days only after the day of delivery; within which time the vendors shall be entitled to seize the same in whatever hands or place it may be found,” etc.
The Code of Practice plainly points out that the mode of enforcing a lien or privilege upon specific property is by sequestration. C. P. art. 275, par. 7; Ansley v. Stuart, 119 La. 1, 43 South. 892; Lehman, Stern & Co. v. E. Martin & Co., 132 La. 231, 61 South. 212. In a few cases we have held that where one fraudulently appropriated property upon which another had a lien, to the knowledge of the one so appropriating it, the latter might be made to respond in an action for damages. But that is not the case here, and we know of no law which authorizes the substitution of- the writ of injunction for the writ of sequestration.
Not having seized the 65 bales of cotton covered by bills of lading other than the 125 bales marked “JAKE,” plaintiff acquired no rights against the same, and its lien expired five days after the sale and delivery to Martin & Co.
We think therefore that Gumbel & Co. are not liable for interest on the price which they received for the cotton, but that they should pay the market value of cotton of that grade at the date they are called upon to produce it after final judgment herein.
Inasmuch as the entire lot of cotton covered by bills of lading seems to have been sold in one transaction and for a lump price to Martin & Co., it was all liable for the entire purchase price; in other words, if half of it would suffice at the time of definitive judgment to pay plaintiff with legal interest, it could claim no more, but if it required all of that upon the lien was recognized, the entirety would have to be applied. The transaction was indivisible.
For the reasons assigned our former decree is amended so as to allow plaintiff interest at the legal rate from March 1, 1912, as against Martin & Co., with privilege and preference as therein decreed upon the 125 bales of cotton marked “JAKE,” and as thus amended our said decree is reinstated and made the final judgment of this court.
