Page images
PDF
EPUB

discharge only by payment in wheat of like quality and value, or in money. The wheat does not pass to the warehouseman, and become at his risk, simply because that of a number of depositors, of like grade, is with their consent mingled in a common mass. Upon this subject see Young v. Miles, 20 Wis. 615; Sterns v. Raymond, 26 Wis. 74; and Gardner v. Dutch, 9 Mass. 407.

The answer alleges that the wheat deposited by the respective owners named in the contracts sued on was in the elevator, and with it, without fault or negligence of defendants, was destroyed by fire. These facts constituted a defense, under the contract of the parties. The demurrer was improperly sustained.

Reversed.

SEXTON & ABBOTT v. GRAHAM.

SUPREME COURT OF Iowa. 1880.

[Reported 53 Iowa, 181.]

ACTION in equity to determine the respective rights of plaintiffs and others as warehouse receipt holders in a common mass of grain. The defendant James R. Graham was for many years a dealer in grain at Davenport, Iowa. He received grain belonging to other parties on storage, and bought and sold on his own account, and in the course of his business he issued from time to time a large number of warehouse receipts. He transacted his business at a building called Bazar Block, in which there was an elevator which was used for the purpose of receiving grain, and distributing it in the various apartments of the building. On the 20th day of October, 1875, the said Graham, being largely in debt, absconded, leaving his warehouse or grain elevator in charge of his son, who had been for some time before that his clerk and book-keeper. There were then in the warehouse, nearly 7,000 bushels of oats and about 8,900 bushels of wheat. There were outstanding warehouse receipts for more than 60,000 bushels of wheat, and for 38,000 bushels of oats, which receipts had been issued to the several parties hereto. The plaintiffs, Sexton & Abbott, held a wheat receipt for 13,000 bushels which was in these words:

No. 33.

ELEVATOR, DAVENPORT, April 1, 1875.

Received in store from Sexton & Abbott thirteen thousand bushels of wheat, subject only to the order hereon of Sexton & Abbott, and the surrender of this receipt and the payment of charges.

It is hereby agreed by the holders of this receipt that the grain herein mentioned may be stored with other grain received about the date hereof, of the same quality by inspection. Loss by fire or heating at owner's risk. 13,000 bush. JAMES R. GRAHAM,

In Bazar Block, Room No. 3.

per F. GRAHAM.

Said Sexton & Abbott also held a receipt for oats of which the following is a copy:

No. 16.

ELEVATOR, DAVENPORT, Oct. 16, 1875. Received in store from Sexton & Abbott ten thousand bushels of oats, subject only to the order hereon of Sexton & Abbott, and the surrender of this receipt and the payment of charges.

It is hereby agreed by the holders of this receipt that the grain herein mentioned may be stored with other grain received about the date hereof, of the same quality by inspection. Loss by fire or heating at owner's risk. 10,000 bush. JAMES R. GRAHAM,

per F. GRAHAM.

There was also a receipt to the defendant Geo. W. Baker for 5,000 bushels of wheat, dated May 31, 1875, assigned by Baker to the Davenport National Bank, as collateral security for a loan to him. Also, another receipt to Baker, dated June 4, 1875, for 5,000 bushels of wheat, assigned by Baker to the First National Bank of Davenport, as collateral security for a loan to him of $3,800. Also, another receipt to said Baker for 1,200 bushels of wheat, dated July 13, 1875, and held by Baker. There were, also, two receipts to the defendants D. B. Sears & Sons, each for 2,000 bushels of wheat, one dated on the 27th day of August, 1875, the other on the 2d day of October, 1875. The defendants Chandler, Brown & Co. also had a receipt for 10,000 bushels of wheat, dated September 23, 1875. The defendant the Davenport National Bank also held wheat receipts amounting in the aggregate to 28,000 bushels, which had been issued by Graham to the bank as collateral security for loans of money made by the bank to him at various times. The said bank also held receipts for 17,300 bushels of oats. These were also collaterals for loans of money.

At the time of Graham's failure he was indebted to said bank in the sum of about $20,000, evidenced by his promissory notes, and the bank had no other security aside from said warehouse receipts. Chandler, Brown & Co. were commission merchants in the city of Milwaukee, with whom Graham transacted a large amount of business. He issued the receipt to them as collateral security for an indebtedness of $20,000, which arose by reason of overdrafts made by Graham upon them.

The receipts of Sexton & Abbott, those held by the Davenport National Bank and the First National Bank as assignee of Baker, and that held by Baker in his own right, and the receipts of D. B. Sears & Sons, are all claimed to have been issued by Graham to the respective parties holders thereof upon actual purchase of grain made by them, and upon full payment therefor, or upon actual storage of grain by the parties with Graham. The receipts issued to the several parties were mostly in the same form as those issued to Sexton & Abbott, of which copies are above given, except that most of those issued to the Davenport National Bank contain the clause, "storage and insurance

paid," and some of them omit the clause about loss by fire and heating. Those issued to Baker and to Chandler, Brown & Co. also omit the provision to store with other grain of same quality.

On the next morning after Graham absconded, B. B. Woodward, president of the Davenport National Bank, went to the warehouse or elevator of Graham, where the grain was stored, and demanded of Graham's son the delivery of the grain called for in the receipts held by the bank. Fremont Graham, the son of Jas. R. Graham, thereupon delivered to said Woodward the keys of the building, and Woodward took possession of the warehouse and put one Brown, a former employee of Graham, in charge of it, with instructions to permit no one to have any of the grain in the warehouse except on the order of the bank. On the next day the said Geo. W. Baker, D. B. Sears & Sons, and Sexton & Abbott, commenced actions of replevin against Graham and the Davenport National Bank, and seized the grain upon writs issued in said actions.

Sexton & Abbott and the Davenport National Bank were the only parties who held receipts for oats, and the oats found in the warehouse were in one pile or mass.

On the 27th day of October, 1875, this action in equity was commenced by Sexton & Abbott, claiming that they were entitled to a balance of 5,000 bushels of wheat on their receipts for 13,000 bushels, and 10,000 bushels of oats on their receipt for oats, and that the other receipt-holders made claim to grain to fill their receipts, and that the amount of grain left by Graham was insufficient to fill all the outstanding receipts. They asked the appointment of a receiver to take possession of the wheat and oats and sell the same, and that the suits of replevin be enjoined, and that upon a final hearing the rights of the parties in the grain, or the proceeds thereof, might be adjusted and determined.

All of the other receipt-holders answered. Some of them filed crosspetitions claiming the grain, and to these there were answers and replies until, as one of the counsel expresses it, there was a "wilderness of pleadings."

D. B. Sears & Sons claimed a balance of 3,200 bushels of wheat as due them when Graham left. They obtained, by their writ of replevin, 640 bushels, which was in a separate pile in the warehouse. Their right to this was not disputed by any of the parties. Pending the suit, by an agreement consented to by all the parties, a further amount of 1,481 bushels, which was also in a separate pile, was divided between Sears and Sexton & Abbott. Sears & Sons had also removed some wheat from the main body or mass, and when the cause was submitted to the court below, they claimed 1,076 bushels. There was, therefore, left for such of the parties as were entitled thereto, a quantity of wheat, all stored in said warehouse in one undivided mass, containing 6,791 bushels, and also 6,796 bushels of oats, all stored in one mass in said warehouse.

The Davenport National Bank claimed the entire quantity of wheat and oats. Sexton & Abbott claimed all the oats. All of the other parties, including Sexton & Abbott, claimed an interest in the wheat, and denied the right of the Davenport National Bank to any part thereof. A receiver was appointed, who sold the grain in controversy, and the decree distributed the proceeds among the several parties, as follows: All the proceeds of the oats were awarded to Sexton & Abbott. It was found that D. B. Sears & Sons were entitled to the entire proceeds of the sale of 1,076 bushels of wheat, and that Sexton & Abbott, the two banks as assignees of the Baker receipts, and Baker for the receipt held in his own name, were entitled to participate in the balance of the proceeds of the wheat in proportion to the amount due upon the respective receipts held by them. No relief was given to Chandler, Brown & Co., nor to the Davenport National Bank upon the receipts held by it as collateral security for loans of money to Graham. Isaac M. Hill and W. H. Hubbard, who had filed a petition of intervention, claiming a right in the fund in the hands of the receiver by virtue of a judgment against Graham, and a garnishment process served upon the receiver, were, by the decree, denied any right to participate in said fund. The Davenport National Bank appeals.

Davison & Lane, for appellant.

Putnam & Rogers and George E. Hubbell, for Sexton & Abbott. Green & Peters, Bills & Block, Martin, Murphy & Lynch, Chas. Whittaker, Cook & Richman, and Stewart & White, for the other appellees.

ADAMS, CH. J. The defendants Chandler, Brown & Co., Isaac M. Hill and W. H. 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 minor differences among themselves and made common cause against their common

enemy.

We will proceed, in the first place, to determine the rights 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 the issuance of the receipts, or, if not, that their title to the grain became extinguished by reason of what afterward transpired.

The first question to be determined is as to whether the transaction, in pursuance of which the receipts were issued to plaintiffs by Graham, was a sale by them to him. Of course, if the grain had been specially deposited, that is, with the agreement or understanding that it should be kept separate from all other grain, no question could have arisen. It would be conceded by the appellant that the transaction would have been a bailment and not a sale. But the receipt expressly provided that the grain might be stored with other grain of the same kind and grade, the conceded meaning of which is that the grain might be mixed with other grain of the same kind and grade in a common mass. Now, while the appellant contends that this is a most important fact, it does not contend that this fact alone would necessarily make the transaction a sale. Where a warehouseman merely receives grain from sereral depositors, with the understanding that it may be mixed in a common mass, and it is so mixed, the transaction is a bailment, and the depositors are tenants in common. Cushing v. Breed, 14 Allen, 380. But it is said that where the warehouseman is himself a depositor, and it is understood by the other depositors that their grain is to be mixed with his, with the right, on his part, to draw from the mass to the amount of his deposit, then the depositors do not become tenants in common, but the title to all the grain passes at once, upon deposit, to the warehouseman. In support of this view, the appellant cites South Australian Insurance Co. v. Randall, Law Rep. 3 Privy Council Appeals, 101; Chase v. Washburne, 1 Ohio St. 244; Norton v. Woodruff, 2 Coms. 155; Carlisle v. Wallace, 12 Ind. 252; Smith v. Clarke, 21 Wend. 84; Hurd v. West, 7 Cow. 752; Lornegan v. Stewart, 55 Ill. 45; Wilson v. Cooper, 10 Iowa, 565; Johnston v. Browne, 37 Iowa, 200. It is claimed by appellant, and we think the evidence so shows, that at the time of the transaction in question Graham was depositing, upon his own account, grain in his warehouse or elevator in common mass, and shipping therefrom, and that the plaintiffs knew it. We have then the question whether, such being the fact, the title to plaintiffs' grain under their receipts passed to Graham.

Upon this point one other fact ought to be mentioned. The evidence shows that the grain described in the plaintiff's 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

« PreviousContinue »