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position was to be made of it. But it is claimed that, inasmuch as written receipts, whether for money or other property, are always subject to explanation by parol, that the terms on which this wheat was delivered can be explained by the declarations of the parties at the time of the delivery of the first load of wheat, and also by the custom of trade which prevailed among warehousemen at Milan ; and that, by such explanation it is shown that the real transaction was that the wheat was received, and, with the consent of the depositor, put in mass with other wheat of the warehouseman, and that received of other persons, with the understanding that the wheat was to be at the disposal of the warehouseman, either to retain or ship it, and that when the receipts should be presented by the depositor the warehouseman should either pay the market price therefor or re-deliver the wheat, or deliver other wheat equal in amount and quality.
If these terms were incorporated into the contract, they could not have excused the liability of the warehouseman in this case. The distinction between an irregular deposit, or a mutuum, and a sale, is sometimes drawn with great nicety, but it is clearly marked, and has been settled by high authority. In case of a regular deposit, the bailee is bound to return the specific article deposited ; but where the depositary is to return another article of the same kind and value, or has an option to return the specific article, or another of the same kind and value, it is an irregular deposit or mutuum, and passes the property as fully as a case of ordinary sale or exchange. Sir William Jones says, “ It may be proper to mention the distinction between an obligation to restore the specific things, and a power or necessity of returning others of equal value. In the first case, it is a regular bailment; in the second it becomes a debt." In the latter case, he considers the whole property transferred.
Judge Story, in his commentaries on the law of bailment, says, " The distinction between the obligation to restore the specific things, and the obligation to restore other things of the like kind and equal in value, holds in cases of hiring, as well as in cases of deposits and gratuitous loans. In the former cases, it is a regular bailment; in the latter, it becomes a debt or innominate contract. Thus, according to the famous laws of Alfenus, in the Digest, “ if an ingot of silver is delivered to a silversmith to make an urn, the whole property is transferred, and the employee is only a creditor of metal equally valuable, which the workman engages to pay in a certain shape, unless it is agreed that the specific silver and none other shall be wrought up in the urn.” Story on Bailments, $ 439.
In all this class of cases, the risk of loss by unavoidable accident attaches to the person who takes the control or dominion over the property. When, therefore, Washburn's wheat was delivered to Chase & Co., and became subject to their disposal, either to retain or to ship it on their own account, the property, passed, and the risk of loss by accident followed the dominion over it.
The doctrine here adopted was at one time somewhat obscured by the opinion of Chief Justice Spencer, in the case of Seymours v. Brown, 19 John. Rep. 44, in which the court decided that where the plaintiff delivered wheat to the defendants, on an agreement that for every five bushels of wheat the plaintiff's should deliver at the defendants' mill, they, the defendants, would deliver in exchange one barrel of flour, was a bailment, locatio operis faciendi ; and the wheat baving been consumed by fire, through accident, the defendants were not liable on their agreement to deliver the flour. This decision, however, was disapproved of by Chancellor Kent, as not being conformable to the true and settled doctrine laid down by Sir William Jones, who has been styled the great oracle of the law of bailment. 2 Kent's Com. 464. And the decision has been distinctly overruled by repeated subsequent adjudications in the State of New York. Hurd v. West, 7 Cowen, 752 ; Smith v. Clark, 21 Wend. 83; Norton v. Woodruff, 2 Comstock, 153; Mallory v. Willis, 4 Comstock, 77; and Pierce v. Skenck, 3 Hill, 28.
The same doctrine has been affirmed in the case of Baker v. Roberts, 8 Greenleaf's R. 101, and also Eving v. French, 1 Blackford, 354. In the latter case, a quantity of wheat having been delivered by the plaintiff to the defendants, at their mill, to be exchanged for flour, and the defendants having put the wheat into their common stock of wheat, the mill, with the wheat, was afterwards casually destroyed by fire. The court held that the defendants were liable for a refusal to deliver the flour. If in that case the agreement of the parties had been that the flour to be furnished should be the flour wbich should be manufactured from the specific wheat delivered, instead of an exchange of wheat for four, it would have been a bailment, and the loss would have fallen upon the plaintiff.
In the case of Buffum v. Merry, 3 Mason, 478, where the plaintiff had delivered to the defendant cotton yarn on a contract to manufacture the same into cotton plaids, and the defendant was to find filling, and to weave so many yards of plaids, at eighteen cents per yard, as was equal to the value of the yarn at sixty-five cents per pound, it was held to be a sale of the yarn ; and that, by the delivery of it to the defendant, it became his property, and he was responsible for the delivery of the plaid, notwithstanding the loss of the yarn by an accidental fire. But had the plaintiff and the defendant agreed to have the particular yarn, with filling to be found by the defendant, made into plaids on joint account, and the plaids, when woven, were to be divided according to their respective interests in the value of the materials; but, before the division, the plaids had been destroyed by accident, the loss, in the opinion of Judge Story, would have been mutual, each losing the materials furnished by himself.
The case of Slaughter v. Green, 1 Randolph, 3, and also the case of Inglebright v. Hammond, 19 Ohio Rep. 337, are relied upon as sustaining the plaintiffs in error. These two cases, on examination, do not sustain the doctrine of the case of Seymours v. Brown, above referred to
in 19 Johns. Rep. On the contrary, instead of an exchange of wheat for flour, in each of the cases, by the express terms of the contract, the flour to be returned was to be manufactured out of the wheat furnished. In the former case, the written receipts given for the wheat expressly provided, " that it is received to be ground," which excludes the idea of passing the ownership to the miller. And in the latter case, also expressly provided by the agreement, that the flour in controversy was “to be made out of the wheat furnished by Hammond," and “the flour made therefrom was to be delivered at Steubenville for said Hammond's use." In both these cases, therefore, the limitation in the agreement of the parties imported a bailment, and not an exchange for flour. And this character of the transaction is not lost either because the custom of the country in reference to which the wheat was received, warranted the mixing of it with the wheat of others, received on like terms; or because, by the express consent of the parties, the wheat was mixed with other wheat in the mill, belonging to the miller himself. When the owners of wheat consent to have their wheat, when delivered at a mill or warehouse, mixed with a common mass, each becomes the owner in common with others, of his respective share in the common stock. And this would not give the bailee any control over the property which he would not have, if the wheat of each one was kept separate and apart. If the wheat, thus thrown into a common mass, be delivered for the purpose of being converted into flour, each owner will be entitled to the flour manufactured from his proper quantity or proportion in the common stock. If a part of the wheat held in common belong to the bailee himself, he could not abstract from the common stock any more than his own appropriate share without a violation of the terms of the bailment; and such a breach of his engagement could not be cured by his procuring other wheat, to be delivered to supply the place of that thus wrongfully taken. But if the wheat be thrown into the common heap, with the understanding or agreement, that the person receiving it, may take from it at pleasure and appropriate the same to the use of himself or others, on the condition of his procuring other wheat to supply its place, the dominion over the property passes to the depositary, and the transaction is a sale, and not a bailment.
It is claimed that the court of Common Pleas erred in refusing to charge the jury, as requested, that the custom among warehousemen at Milan, in the absence of an express contract, if known to Washburn, became a part of the contract.
A custom, it is true, is not admissible, either to contradict or alter the terms or legal import of a contract, or to change the title to property by varying a general rule of law. But a custom, when fully established, becomes the law of the trade in reference to which it exists; and the presumption is that the parties intended to conform to it, when they have been silent on the subject. Its office is to interpret the otherwise indeterminate intentions of the parties, and to ascertain the nature and extent of their contract, arising not from express stipulations, but from mere implications and presumptions, and of acts of doubtful and equivocal character. I am not prepared to say that the customs at Milan, if fully established, and known to both the parties to a contract, for the delivery of wheat to a warehouseman, may not be regarded as law, as well as the customs of London, or of Kent. But, unfortunately for the plaintiffs in error, the customs of Milan, as the evidence tended to prove, according to the bill of exceptions, very clearly showed the transaction between the parties in this case, to be a contract of sale, and not a bailment. Had the court, therefore, charged as requested upon this point, it could not have aided the defence set up against the action. So that if the court did err in this particular, no injury was therefore done to the plaintiffs in error.
NELSON v. BROWN, DOTY & CO.
[Reported 44 Iowa, 455.] The plaintiff claims as the assignee of seven contracts, executed by defendants, of one of which a copy is as follows:
“ Received of C. C. Cowell, for Thompson in store for account and risk of C. C. Cowell, one hundred and eighty-three bushels No. 3 wheat, loss by fire, heating and the elements at owner's risk. Wheat of equal test and value, but not the identical wheat, may be returned.” The other six contracts are the same, except as to amount of wheat delivered, and the parties named as delivering the same. The petition alleges that defendants have failed and refused to perform their contract.
The answer alleges, " That at the time of the execution of the contracts set forth in said petition, the defendants were engaged in the business of buying, selling, and storing for hire, grain at Dysart, Tama County, and in their said business owned and used an elevator building at the place aforesaid ; that in their said business it was impossible to store and keep in separate parcels the grain delivered to them by their various customers, but it was necessary to mix the grain of different parties by placing the same in common bins, and it was and is the custom of warehousemen at said place, receiving grain belonging to different parties, to so place the same in common bins, and that the customers of the defendants, including the plaintiff and all the parties to whom the said receipts were issued, had full knowledge of said facts and of said custom, and consented that their wheat should be so stored by the defendants; that, with a full knowledge of such facts and of said custom, the plaintiff and the other parties named in the receipts sued on herein stored and caused to be stored, in the aforesaid elevator of the defendants, the grain mentioned in said receipts therefor, copies of which are set forth in the petition.
“And the said grain was, in accordance with said custom, stored in common bins with the wheat of other parties of equal test or value, at the risk of the respective owners mentioned in said receipts, storing the same, as to loss by fire, heating, etc. And that thereafter, and while said wheat was so in store in said elevator and before any demand therefor, and while the same was being housed and cared for by the defendants with all reasonable diligence, and without any fault or negligence on their part, the said building with the wheat therein, including that sued for herein, was destroyed by fire.”
The plaintiff demurred to this answer. The demurrer was sustained. Defendants appeal.
Stivers and Leland, for appellant.
DAY, J. We have held that, where grain is deposited with a warehouseman with the understanding that he is to ship and sell it on his own account, and when the depositor desires to sell the warehouseman will pay the highest price or return a like quantity and quality, the transaction constitutes a sale, and the property passes to the warehouseman. Johnston v. Brouone, 37 Iowa, 200.
The contract in question provides that “wheat of equal test and value, but not the identical wheat, may be returned.” This clearly gives the warehouseman the right to dispose of the wheat deposited on his own account, and, if there were no other provisions in the contract limiting and qualifying this provision, it would bring the case fully within the principle of Johnston v. Browne, and the wheat, from the time of the deposit, would be at the risk of the warehouseman. But, in order to get the exact sense and true meaning of the contract, all of its provisions must be construed together. The contract further provides that the wheat is received in store 6 for account and risk of C. C. Cowell, . . . loss by fire, heating, and the elements at owner's risk.” As the wheat is at the risk of Cowell, it is evident that he is the party who is alluded to in the contract as owner. To hold that, because the warehouseman was not under obligation to return the identical wheat, the transaction in law became a sale, and hence Brown, Doty & Co. are the owners, at whose risk is loss by fire, heating, and the elements, would do violence to the evident intention of the parties.
The meaning of the whole contract taken together is clearly this: That so long as the wheat remains in the elevator, loss by fire, heating, and the elements, is at the risk of the depositor. In other words, so long as the wheat is kept in the elevator, though thrown in a common bin and mingled with other wheat of like quality, it is a mere bailment. R But the warehouseman is not under obligation to retain the wheat of the depositor in his warehouse. He may, without breach of contract, and without being guilty of a conversion, ship the wheat away on his own account. When he avails himself of this privilege the character of the transaction and the relation of the parties change. There is theri a completed sale, and the warehouseman assumes a liability which he can