79 Cal. 192 | Cal. | 1889
Plaintiff is a banking corporation. Defendant was sheriff of the county of Monterey. There was also another corporation in said county known as the Salinas Flouring Mill Company, having a mill and appurtenances, and being engaged in buying grain and manufacturing it into flour, bran, and other products.
It is clear, from the findings and evidence, that at the time of the attachment the property in controversy was in the actual possession of the mill company. Part of it was in the mill of that company in which it was carrying on its business, and the balance was in a warehouse owned and occupied by said company, and connected with the mill by a railroad about one hundred feet long. Plaintiff contends, however, that the property belonged to it, and was only temporarily in the possession of the mill company for a special purpose. But defendant contends that the only interest which plaintiff had in the property was that of a pledgee having a lien as security for the payment of money advanced for the mill company; and that as the pledged property was allowed to go into the possession of the pledgor, it was subject to attachment for the latter’s debts. If this last contention is true, then the judgment was correct, and the order denying the new trial should be affirmed.
The main facts found by the court upon sufficient evidence are as follows: On the 1st of June, 1883, the mill
“Resolved, That the president of this corporation be, and he is hereby, authorized and directed, on behalf of this corporation, to enter into an agreement with Mr. H. S. Ball, to engage the said H. S. Ball to purchase grain for this corporation; that such agreement be made on the best terms obtainable; provided, that the commission to be paid the said H. S. Ball does not exceed twenty-five cents per ton.
“Resolved, That the Salinas City Bank, at Salinas, California, be, and is hereby, requested to cash all drafts drawn upon this corporation by Mr. H. S. Ball, of Monterey County, for the price of grain purchased by him for the account of this corporation; and said H. S. Ball do transfer to said Salinas City Bank the grain so purchased upon his said drafts being cashed; and this corporation agrees to repay said Salinas City Bank the amount of said drafts, with interest, on demand; and that the grain so purchased shall be held by said Salinas City Bank as collateral security therefor; and said Salinas City Bank to keep said grain fully insured at the cost of this corporation.”
The plaintiff had a certified copy of these resolutions, which were Ball’s authority to draw on the bank. The court also found that “under these resolutions said Ball was employed by said mill company to purchase for it, from the farmers of Monterey County, wheat for the use of said mill company, and plaintiff agreed with the said company to advance the necessary funds to enable said company to make said purchases of wheat.” Ball proceeded to purchase grain from farmers for the mill company. Upon the delivery of wheat so purchased, at certain warehouses, Ball would give his check to the farmer on the bank (plaintiff) for the amount due, and would at the same- time take a warehouse receipt in the name of the plaintiff, which the farmer would take to the bank,
With this view, on March 22, 1884, the mill company made a lease of its warehouse to W. S. Johnson, as trustee of the bank, for the term of ninety days. Thereupon Baumberger gave the keys of the warehouse to Johnson, who a short time afterward put one Peterson in charge and gave him the keys. Until the latter part of June, 1884, Peterson opened the warehouse in the morning, and at night took an account of wheat that had been put in and taken out, and reported to Johnson. During the
From these facts, it is apparent that during the whole transaction the relation of the bank (plaintiff) to the grain and flour was merely that of one who has a lien on personal property as security for the payment of a debt, —the validity of the lien being dependent on the possession of the property. The bank was not engaged in the purchase of grain, and did not purchase the grain in controversy. It was purchased by Ball for the mill company. When delivered at the warehouse it was the property of the mill company. By the direction of Ball, acting for the mill company, the receipts were issued in the name of the bank, because, by a previous arrangement, security to the bank was to be effected in that way.
In the resolutions passed, and in the testimony of appellant’s witness, we find the words “security” and “collateral security” expressly used; so that there can be no doubt what the transaction was intended to be. While the grain remained in the original warehouses (of third parties) and the bank held the receipts, the latter, no doubt, had sufficient possession to keep its lien valid; but when the receipts were indorsed and delivered together with the grain to the mill company, the latter had both the title and the possession, and the lien of the bank as against creditors of the mill company was extinguished.
But assuming the finding to mean that it was done with the tacit consent of Lloyd, and assuming that such “tacit consent” would be sufficient to estop Lloyd, we do not see how it would have that effect upon Grant. Before the possession had gone from Petersen to Baumberger, Lloyd had sold and assigned his claim against the mill company to Grant, and had no further control of it, and the bank had been notified of such sale and assignment. After that the bank knew that Lloyd’s indebtedness had passed to a third party, whose rights oould not be compromised by anything that Lloyd might thereafter do. If, afterward, appellant allowed the pledged property to go into the possession of the pledgor, Grant could not be defeated as an attaching creditor by any tacit consent of Lloyd. The attachment was not levied until about three months afterward, and Lloyd had nothing to do with it, and had no knowledge of it, until after it was levied. And we do not see any materiality in the fact that the indebtedness was not a “ negotiable instrument.” That consideration could be of importance only as between the mill company and the attaching plaintiff.
We think there is no material conflict in the findings, and that they are supported by the evidence.
The order denying a new trial is affirmed.
Thornton, J., and Sharpstein, J., concurred.
Hearing in Bank denied.