53 Iowa 181 | Iowa | 1880
Lead Opinion
The defendants Chandler, Brown & Co., Isaac M. Hill and "W. IT. Hubbard, who were, by the court below, denied any participation in the proceeds of the grain, do not complain of the decree. They are, 'therefore, practically out of the case, and their rights need not be considered.
The plaintiffs, Sexton & Abbott, and the defendants Baker and Sears & Sons have, as their counsel expresses it, waived
We will proceed, in tlie first place, to determine the right? of Sexton & Abbott as against the. appellant, and in so doing we shall dispose, for the most part, of the questions which arise between the-appellant and the other appellees.
Sexton & Abbott claim that - the appellant acquired no right in the grain, either by the issue to it of the receipts by Graham, or afterward by the delivery to it of the grain.
The appellant claims that, while Sexton & Abbott may at one time have owned the grain described in their receipts,.. they sold the same to Graham at .the time of tlie issuance of the receipts, or, if not, that their title to the grain became extinguished by reason of what afterward transpired.
Upon this point one other fact ought to be mentioned. The evidence shows that the grain described in the plaintiffs’ receipt was already in the elevator, having been originally deposited by Graham as the owner. The receipts were issued in pursuance merely of what the parties claimed to be a sale from Graham to plaintiffs. How the same transaction could be a sale from plaintiffs to Graham is, to say the least, a little difficult to understand.
But suppose that the plaintiffs had bought the grain of a third person and brought it to the elevator and deposited it, would the title have passed to Graham? It is a common thing, we believe, for proprietors of elevators to employ them for the deposit of their own grain, if they have any, in common mass with others’ grain. Depositors, we think, generally know this, and consent that their grain may be mixed not only with grain belonging to third persons, but with grain belonging to the proprietor, if he should have any. This mode of doing business seems to be demanded by considera
Again, upon looking into the plaintiffs’ receipts, we find that they are something more than mere receipts. They contain what appears to us to be an express contract of bailment. If so, it is not competent to show that there existed a differ
The transaction, then, being ji bailment in the outset, we come to inquire whether the relation of the parties became changed by reason of what afterwards transpired. The appellant contends that it did. It is insisted that the evidence shows that the grain in controversy is entirely different grain from that in store when the plaintiff’s receipts were issued.
The business which Graham was doing was an ordinary grain warehouse or elevator business. Grain received from different depositors was put in at the top of the elevator and delivered to them at the bottom. Grain of like kind and grade was mixed in a common mass. Delivery was made to each depositor without the slightest reference to identity of grain deposited. It was not only useless but impracticable to respect the identity of the deposit. The plaintiff’s wheat receipt was held about six months. There were in store at the time of its issuance about 55,000 bushels. Afterwards there passed through the elevator about 150,000 bushels. This fact alone, it is said, is sufficient to render it improbable that any considerable part of the wheat in controversy is identical with that originally covered by the plaintiff’s receipt; besides, it is said that the evidence shows that the elevator was cleaned out two or three times. It appears that a mode of receiving and delivering grain was employed two or three times which resulted in substantially effecting a change in the mass; it was done to prevent heating; it was accomplished by preventing grain received after a certain date from mingling with that received before. This was'easily practicable by reason of the different floors and compartments of the elevator. The amount of grain in store, however, at any given time was neither greater nor less by reason of the cleaning out process. The different floors or compartments were emptied successively and successively refilled, but the change of mass was effected as substantially as if all had been emptied at once. The appellant insists that the change of
In the ordinary conduct of the business of an elevator a partial change of mass is effected by every receipt and shipment. Such partial change, however, does not impair the value of the outstanding receipts. As each receipt-holder withdraws his grain, the remaining receipt-holders become each the owner of a larger fraction in a smaller mass. Upon each new deposit being made, the receipt-holders become each the owner of a smaller fraction in a larger mass. So far, we presume that there is no controversy. The process may be continued from day to day, and so long as the change of mass is a partial one, though approximating day by day to completeness, the value of the outstanding receipts remains unchanged. Possibly it would be admitted by appellant that the value of a receipt would remain unchanged when next to the last kernel originally covered by it was withdrawn. Possibly somewhat more than that amount might be deemed necessary to uphold the receipt. But according to the appellant’s theory, as we understand it, whatever the amount may be, whether one kernel or one bushel, its withdrawal, although in the ordinary and necessary conduct of business, renders the receipt worthless as evidence of a claim to grain, and what a moment before was a valid title in the receipt-holder to all the grain called for by his receipt becomes transferred from the receipt-holder to the warehouseman, and that, too, in the absence of any agreement or understanding of that kind between the parties. It will be seen at once that the rule contended for would result in the most painful uncertainty and interminable confusion. No receipt-holder who had held his receipt even for a short time during a period of active business would know, or could i possibly ascertain, what his rights are. This result, so undesirable in every respect, is reached by appellant upon the purely technical view that unless a portion of the original grain, at least a kernel or two,
At this point a qixestion arises 'as to what is to be deemed a common mass. The elevator, as we have seen, was constructed with different" floors and compartments. Grain was pxxt in at the top of the elevator and delivered at the bottom. If a receipt holder called for his grain immediately it seems probable that he would not only receive no part of the grain deposited, but would receive grain from' some floor or compartment which would contain no part of the grain deposited. He would, therefore, receive grain with which the grain deposited by him had not been actually mixed. But the delivery to him would not for that reason, we think, be wrongfml. When grain is deposited in an elevator with the xxnderstanding that it may be mixed with all grain of that kind and grade in the elevator, and the grain of that kind and grade is distributed upon different floors or in different compartments merely becaxxse the weight of the grain, or prevention from heating, or convenience in handling, or some other reason of that kind requires it, and not at all for the presei’vation of identity, all the grain of that kind and grade is to be deemed a common mass within the view of the law as applicable to such a case. This must be so, because the grain is practically treated as a common mass. When grain passes into the elevator with the understanding that it may be mixed with other grain of the same kind and grade it passes beyond the control of the depositor, so far as identity is concerned. What the parties have agx'eed to treat as a common mass is such for the purpose of determining the rights of the parties. We think, then, that a depositor becomes a tenant in common of all the grain in the elevator with which his grain may properly be mixed, and he may demand the satisfaction of his receipt oxit of any or all such grain. Of course • if grain is
Whether, if Graham’s deposits had all been made subsequent to his wrongful taking, he could in a controversy between the receipt-holders and himself, in respect to the grain left on hand, be heard to say that they had no interest in it, because he had before the deposit of this grain wrongfully taken all their grain, is a question perhaps not fjilly settled by adjudication. As tending to support the rule that he would be estopped in such case, see Gardiner v. Suydam, 3 Selden, 363. But we need not go into this question. There is nothing to show that Graham’s wrongful shipments were all made prior to his deposits. To the extent of his deposits. at the time of liis shipments they were not wrongful. And his shipments altogether never equalled the amount of his deposits, and the amount called for by the outstanding receipts. They lacked precisely the amount left on hand. That, we think, must be deemed to belong to the receipt-holders.
But it is said that subsequent to the issuance to the plaintiffs of their wheat receipts they gave their consent to Graham that he might sell their wheat upon his account. If they did give such consent, and the deficiency resulted from the sales of their wheat in pursuance of such consent, perhaps as '
There is some evidence showing a consent by plaintiffs to certain sales. One of the plaintiffs testified that Graham sometimes asked for permission to sell wheat, and that he gave permission on condition of his replacing it, which he generally did in a few days. Now while it is certain that lie sold a largo amount which he did not replace, it is not shown that that grain was sold by plaintiffs’ permission.
The appellant further insists that the evidence shows that Graham not only sold a portion of plaintiffs’ grain by their permission, but purchased of them all the balance. In the evidence upon this point there is a very decided conflict. Graham testifies that he not only purchased the plaintiffs’ grain but jiaid them for it. But Graham’s relation to the case is not such as to commend his testimony to us as entitled to the fullest credit. Besides there is an undisputed fact that prevents us from believing that Graham made such purchase and payment. The plaintiffs’ receipt was held by the Citizens’ National Bank of Davenport as collateral to a loan of $10,000, which wasl7well known to Graham. It was not within Sexton & Abbott’s power to give Graham a good title while the bank held the receipt. Possibly title was of no consequence to Graham. He may have contemplated selling and shipping the grain without title, as he in fact did do to a considerable extent. But that is no reason why he should buy the grain of the plaintiffs, who he knew could not sell it, and pay them for it!
But it is said that Graham’s testimony is corroborated, hour witnesses do indeed testify to hearing one of the plaintiffs say that they had sold their grain to Graham. It seems improbable that these witnesses were all mistaken. There were negotiations for a sale, as aj>pears from the evidence; and we are inclined to think that plaintiffs, for reasons known to themselves, spoke of the sale to others as having been consummated. But this is not, in our opinion, sufficient to overcome
The appellant further insists that the evidence shows that the plaintiffs were partners with Graham, and that Graham had a right as partner to sell the grain. Graham testifies that such was the fact. But the,right on the part of Graham to sell the grain as partner would not include the right to sell it upon his own account, and there is no pretense that he sold it upon any other. That circumstance alone would discredit him. But further than that the undisputed fact is that the title to the grain was not only solely in the plaintiffs, but they had transferred their receipt to the Citizens’ National Bank as security, which bank still held it. If anything more were necessary to show that Graham did not consider the shipment and disposal of the grain by him as a partnership transaction, it may be found in the fact that no specific shipment and disposal of the grain appears to have been made. The shipment and disposal appear to have been an undistinguishable part of a criminal raid.
Both plaintiffs and appellant are receipt-holders. • In our opinion, however, they do not stand in the same relation to the grain. The appellant’s receipts were not issued to it upon deposits made by it, nor because it had acquired the title to any grain in the ■ elevator. The understanding between Graham, the maker of the receipts, and the appellant was, that the receipts were issued upon grain owned by him, and to which he still retained the title. They were issued merely as security. The appellant, insists that as such they are valid,
Section 2172 of the Code provides that “no warehouseman * * * shall issue any receipt * * * for any personal property to any person unless such property ¡is in store,” and section 2171 provides that “ all warehouse receipts, or other evidences of the deposit of property * * * shall be, in the hands of the holder thereof, presumptive evidence of title to said property.”
It is evident that the property contemplated by the statute, for which a warehouse receipt may be issued, must be the property of the receipt holder. This is so because the statute provides that the receipt shall be presumptive evidence of title in the holder. If it is issued in a case where the holder has no title, and where the receipt was not designed by either party to be evidence of title, it appears to us that it is issued in contravention of the statute and cannot be sustained.
Under the rule contended for by the appellant we should have two distinct kinds of receipts, although of the same import upon their face; the one kind issued as evidence of title, and .the other merely as a mode of effecting a lien. The allowance of two distinct kinds of receipts of the same import upon their face would have a tendency to introduce uncertainty and confusion, for which no advantage, so far as we can discover, would be a sufficient compensation. We should hesitate, therefore, about sanctioning the rule ’ contended for even if the provisions of the statute were less explicit than they are. The appellant, however, cites and relies upon Cochran v. Rippey, 13 Bush. (Ky.), 495. In that case a warehouse receipt issued by a person upon his own property, and designed as security to the holder, was held valid. The appellant claims that the statute under which the decision was made is in its essential provisions similar to our own.' But it appears to be contemplated by the fifth section of the statute that such receipts may be issued.
The understanding of the appellant is shown by what was done by its president at the time it took possession of the grain. The president testifies that he said to Graham’s son who was in charge that he wished to get possession of the grain for the bank, and at the same time presented the receipts held by the bank, and possession was delivered to him. The possession, then, was gained solely under an antecedent claim. The transfer thus made is not of itself evidence of a new and
The views which we have expressed thus far have had reference more especially to the plaintiffs’ wheat receipt. The claims in respect to the oats are less complicated. No question is raised in respect to them not already disposed of.
Upon the receipts issued to Baker, an independent question is raised. It is claimed that Baker sold 10,000 bushels of his wheat through Graham, in Milwaukee. Baker, it appears, owned 11,200 bushels. A receipt for 5,000 bushels had been deposited by Baker in the appellant’s bank as collateral security, and another receipt for the same amount had been deposited in another bank for the same purpose. A receipt for 1,200 was still retained by him. While the three receipts were so held, it appears that Baker directed Graham to make a sale of 10,000 bushels. Graham claims that in accordance with such directions he did make such sale in Milwaukee in August, 1875. But his testimony shows that what he calls a sale of 10,000 bushels of Baker’s wheat was a mere contract to deliver that amount in September, and that he did not contemplate shipping from Baker’s wheat unless, to use his own words, “ wheat went against them.” The evidence tends to show that no shipment was made from Baker’s wheat in pursuance of any such contract, and that it was understood between Graham and Baker that none should be made, but that the contract was otherwise disjiosed of, and such, we ■ think, was the fact.
The amount found due Sears & Son as a basis of division of the common mass was 1,076 bushels. The appellant insists that there was not that amount due them, if anything.
The evidence shows that a part of the grain covered by the receipts held by Sears & Son had been drawn out by them. In the decree in their favor some deduction was made on this account. The appellant insists that the deduction was not large enough. ¥e have examined the evidence carefully upon this point, and are unable to determine with entire certainty
The appellant objects to the amount allowed the receiver for services, and also to the amount allowed for other expenses, all of which were made a charge upon the fund in the receiver’s hands. Of this the appellees, who are entitled to the principal part of the fund, do not complain. The appellant is interested only to the small extent to which it is allowed to share in the fund through one of the Baker receipts. In view of these facts, and the meager condition of the evidence upon this point, we do not think it would be proper for us to interfere.
"We think that the judgment of the Circuit Court must be
Affirmed.
Dissenting Opinion
dissenting. It is conceded by counsel in-all the parties that when personal property, such as grain, of the same grade and quality is mixed in a common mass by the consent of the owners, so that no one can identify his own, they become tenants in common in the whole mass. This seems to be now regarded as the settled rule, and is well supported by authority. Young v. Mills, 20 Wis., 615; Dale v. Olmstead, 36 Ill., 150; Kimberly v. Patchin, 19 N. Y., 330; Warren v. Milliken, 51 Maine, 97; Cushing v. Breed, 14 Allen, 376.
In the last named case the plaintiffs were the owners of a ship’s cargo of oats, containing 6,095 bushels, which» was stored in an elevator in Boston. They sold to the defendants 500 bushels, and delivered to them an order, and the proprietors of the elevator accepted the order and delivered 105 bushels. All of the remainder of the cargo was sold except 1,274 bushels, and the grain thus left was injured by fire. It
The court said: “ The use of elevators for the storage of grain has introduced new methods of dealing, and when sev • eral parties have stored grain in an elevator in one mass or bin they are tenants in common, and each entitled to such a proportion as the quantity placed there by him bears to the whole mass.”
It was held that the plaintiffs were entitled to recover for the whole 500 bushels. But it seems that no case can be found which adopts the rule that where there has been an entire change of the mass, even by the wrongful act of the bailee, and other grain has been substituted, that the title to the substituted grain vests in the owners of. the original mass. In some of the cases, as in Young v. Mills, supra, it is held that any invasion of the rights of the owner by the bailee appropriating the same is a wrongful conversion, and that the owner- may 'follow the grain and recover it wherever it can be identified; and other cases hold that where the quantity has been dimished from any cause each owner is entitled to his proportion of the remainder. Dale v. Olmstead, supra. But I repeat, no case has been cited by counsel, or has come under our observation, which has gone so fajas to hold that, where there- has been a complete change by substitution, the tenancy in common eontijiues in the substituted grain.
The majoi-ity opinion not only holds that where there has been an entire substitution of the mass deposited in one bin or pile the tenancy in commoji continues, but it goes further, as it‘must to reach the conclusion arrived at by the majority, and holds that the parties are tenants in common in all the grain of the same grade and quality contained in the elevator, whether mingled in ojie pile or bin, or in separate compartments in the building. It is necessary to so hold to be consistent with the facts in the case, for it clearly appears
The law applicable to bailments is well understood and need not be repeated. If the right qf property to the substituted grain, which was deposited after all of that on hand at the time the receipts were given was removed, and an entire change had taken place, remained in the original depositor, upon the same principle if the bailee of a horse should sell him, the bailor could claim title to another horse owned by the bailee. There is no controlling reason why this character of chattels should be held by a tenure which may not be applicable to all other property.
In my opinion none of the parties had title to the wheat found in the elevator on the 20th of October, 1875, and they had no other relation to Graham, by virtue of their warehouse receipts, than that of mere creditors, with the right to subject his property to the payment of their demands by the ordinary processes of the law, and that the possession taken of the grain by the appellant, under the facts, as I understand them, authorized it to hold the same as a pledge for the payment of the claims due to it from Graham. It serves. no useful purpose to elaborate a dissenting opinion. All that