Robson v. Swart

Swart, a warehouseman, received into his warehouse a quantity of wheat from F. tho owner thereof, upon an agreement “ to safely store and keep the said wheat in his said' warehouse, until a return thereof should be demanded by said F. or his assigns ” Upon receipt of each load of the wheat, S. issued to F. a memorandum in this form: “ No. 711. Account A. P. Foster, • 41.25 Bushels No. 2 Wheat. 20 Sacks. Dyer. J. G. SWART. Minneiska, September 29,1868.” The wheat was in fact of a quality inferior to No. 2. Swart kept it in the warehouse in a bin by itself. F. sold the wheat to parties who sold it to R. At each sale the “ Memoranda ” were transferred and delivered to the purchaser, with a written order from F. to S. directing S. to deliver the wheat to the bearer. At the time of his purchase, R. had no knowledge of the amount and quality of the wheat, except what appeared in the “Memoranda”. Upon tender of charges and demand of the wheat, S. tendered and offered to deliver to R. the identical wheat stored, but R.'refused to receive it. Udd, that S. was not estopped by the memoranda from showing that the wheat received was of a quality inferior to No. 2. Udd further, that his tender and offer to deliver to R. the identical wheat stored, was a sufficient offer to perform Ms contract.

This action was commenced -in the District Court for Winona County, and was tried before the court without a jury. The facts found, and the conclusions of law arrived at bv tbe court below, appear in tbe opinion of tbe Court. Judgment was entered for tbe defendant, and tbe plaintiff appeals to tliis Court. Swart is estopped from denying the truth of tbe admissions contained in bis receipts as against Robson, who is an innocent purchaser, especially as these admissions or statements relate to matters'which were or ought to have been within tbe knowledge of himself or agents. An estoppel in pais will-exist against a party when it appears : a. That be has made an admission inconsistent with tbe evidence offered. b. That the other party has acted on that admission. g. That the other party will be injured by allowing the truth of the admission to be disproved. Greenleaf on Ev., Yol. 1, Seo. 207; Phillips on Ev., Yol. 1, page 453 and Sec. 9; Griswold vs. Haven, 25th H. Y, 595; Liolcbarrow vs. Mason, lsi Smith?s Leading Gases; Plumb vs.'Gatt. Ins. Go., 18, H. Y., 392; Dezellvs. Odell, 3 Hill, 215; Welland Oanal Go. vs. Hathaway, 8 Wend, 483; Piolc-ard vs. Sears, 6 Ad. do Ell., 475 ; Dyer vs. Gady, 20 Conn., 563 ; Kinney vs. Farnsworth, 17 Conn., 360. The doctrine of “ caveat emptor ” has no sort of application to a case of this kind. Nor does the doctrine of estop-pel above referred to, in any way or manner depend upon the question of the negotiability of the instrument containing the admission. It is not claimed that either bills of lading or warehouse receipts are negotiable either at common law or by statute, in the proper sense of that term “ negotiable. ” At common law actual delivery of the property was necessary to consummate a sale. Tet wlien the article was bulky, or not present at the time and place of sale, or for any reason incapable of actual delivery, the law was satisfied Avith symbolical delivery. For example, the delivery of the key of a warehouse in which goods Avere stored, or a bill of lading of goods at sea; or if in possession of a Avarehouseman, a delivery of the receipt of the Avarehouseman Avas considered good delivery of the goods. And from the usages of commerce, the law has gvown and hardened into its present form. Neither a bailee’s receipt nor a bill of lading are negotiable but either are transferable. Ghitty on Contracts, 390; Chaqoman vs. Searles, 3 Pick. 38 ; Stanton vs. Eager, 16 Pick., 474. Hence those cases arising under bills of lading, as to the rights of endorsees, rest on precisely the same grounds as those cases under any bailee’s receipts. In neither case do they turn upon the negotiability of the instrument, but on the doctrine of estoppel, as above stated. This doctrine has been applied by the courts in a great variety of cases, where business men place their blank signatures in the hands of parties who abuse their confidence. Ban7c vs. ETeale, 22 Mow., 111. It was enforced against a corporation for the acts of its agent. Mew Haven R. R. Go. vs. Sehuyler, 34 M. Y, 30. Also, in the case of false representations as to the amount of goods stored in a Avarehouse, made to a party by Avhom advances were made. Griswold vs. Haven, 25th N. Y., 595. Also in the case of bills of lading which had come into the hands of third parties. Portland Bank vs. Stubbs, Qth Mass., 425 ; Howard vs. Tucker, lsi B. <& Ad., 712; Dickerson vs. Seelye, 12 Barb., 99 ; Ellis vs. Willard, SthSeld., 534; Byrne vs. Weeks,1th Bosworth,S12; Strong vs. Grand T. R. R. Go., 15th Miah., 215; Bradst/reet vs. Reran, 2 Blatehford, 118. The New England cases, bolding that receiptors for property attached on mesne process are estopped as against the sheriff or creditor from showing that no property was ever delivered, illustrate the same doctrine. Smith vs. Gad-worth, 21th Pick., 196; Dewey vs. Field, 1th Met., 381; Scott vs. Whitmore, 21th R. R., 309. The cases which hold that a receipt is not conclusive, and may be explained in all cases between the original parties, or at least where no third party has been misled. See eases passim. Nor is it material that the admission as to quality of grain was not made expressly in words to the appellant. It may be implied from the open and general conduct of the party. In the latter case the implied declaration may be considered as made to every one in particular who may have occasion to act upon it. As made in the receipts in question, it is considered as made to every one who acts upon it in the ordinary course of business. Greenlecbf on Ev., Yol. 1, See. 201; Noyes vs. Ward, 19 Gonn., 265. The fact that the receipt was possibly somewhat informal, can make no difference. No particular form is established by law. A “ warehouse receipt ” is one issued by a warehouseman. A “receipt” is a written acknowledgment of the taking or receiving any goods or money from another. Whitney vs. TiFbitts,11th Wis., 360. It may be contended that the appellant cannot maintain this form of action ; that he was bound to receive the “ rejected wheat” and then sue for damages for the misrepresentation contained in tbe receipt. But it cannot be that a party is bound to receive any different article from that which the bailee is bound by law to deliver. If required to accept “rejected ” wheat, he would on the same principle be required to accept oats or rye. The true principle is, that the warehouseman is estopped by his receipt to show as against a bona fide purchaser, that the property therein specified was not in fact delivered. The law conclusively presumes that it was delivered. Hence an action is well brought as for conversion of the property, by refusal or failure to deliver when demanded by the bona fide holder of the receipt. Griswold vs. Haven, 25 N. Y, 595. The true measure of damages is the market value of No. 2 wheat at the time of the demand, with interest from that date. This would be $2.50 per bushel, with interest from the 14th day of May, 1867, for which amount judgment should be ordered for appellant, without remanding it for a new trial. Griswold vs. Haven, 25 N. Y, 595. The counsel for respondent may cite as authority the case of O. J. Hale et al. vs. The Milwaukee Bock Oorrvpany, 22 Wis. But when carefully examined that case will be found to be strictly in accordance with our position. The quantity and quality of the grain stored by Poster, were not only matters within the knowledge of respondent, but were facts which were, by the usages of trade, to be ascertained and determined by him, and if he either made a mistake or purposely misstated them, and a third party misled, the fault is his own and he is estopped from now contradicting them as against an innocent party. O. J. Hale vs. Mil. Book Go., 22 Wis. But Lastly. We have thus far argued the case upon the doctrine of estoppel, which would of course only obtain when the property had passed into the hands of an innocent third party, thereby practically admitting that had the suit been between the original parties, the respondent might relieve himself by tendering back the identical property. But we submit that in a case of this kind the question of quality of the wheat was, even as between the original parties, a matter of written contract, which the respondent would not now be allowed to contradict, even as against Foster. Osgood vs. McConnell, 32 III., 14. I. — The deposit of grain with a warehouseman for safe keeping in store, until demanded by the depositor or his assigns, constitutes a simple bailment. Bouvier's Bern Dietionary, '•'•BailmentStory on Bailments, C. 1, See. 2 ; Story on Contracts, Sec. 682, defining “ bailment2d Kent Comm., 122. [560.] A receipt of wheat “ m store” imports a bailment. Goodyear vs. Ogden Pearl, 4 Hill, 104 ; So “ on freight.” Dawson vs. Kittle, id. 107 ; So “ in store on freight?'’ Ont-water vs. Kelson, 20 Barb. 29 Wadsworth vs. Olcott, 2 Seld., 64. II. — At common law no assignment of the contract of bailment, in any of its forms, was available, to enable the assignee to maintain an action in his own name for the breach of any of its provisions; aud the code has made no change in this respect so as in any manner to interfere with the right of defense as against the assignee. 1 Parsons on Contracts, 5th ed., 223, 227; Statutes of Minnesota, 453, Sec. 27. “ A bill of lading is sometimes termed .quasi negotiable. An endorsement and delivery of it vests the title to the ■ oods while in transitu, in the endorsee ; but the instrument is not negotiable and suit cannot be brought on it in the name of the endorsee.” Thompson vs. Downing, 11 Meerson (& Welsby, 403 ; 1 Am. Leading Gases, 327 ; 8 Gray, 281. III. — But the delivery of warehouse receipts or bills of lading in case of a sale or hypothecation of the property is deemed effectual at law as a delivery of the froperty itself, and so far forth, evidence of the change of title and possession as to enable the holder to maintain an action in his own name, because of his ownership of the property. Zxovnger vs Sam-ula, 7 Taimt., 265 ; Dice vs. Gutter, 17 Wis., 351; Lucios vs. Douein, 7 Taiont., 279. IY. — "Warehouse receipts, in the ordinary and regular form, and a fortiori, mere tickets or memoranda of the crude and inexplicit character of those employed in the present instance, possess no quality of negotiability that will shield the purchaser of the property covered by them from the application of the maxim caveat emptor, or protect him from any equities against them in favor of the person executing them. Assignees of warehouse receipts can take no greater right or interest than the assignor possessed, and are chargeable with the same notice and with all the equities that would apply to him. Commercial Banle of Rochester vs. Oolt, 15 Barb. S. G., 515. The purchaser of a chose in action takes the interest purchased subject to all the defenses, legal and equitable, of the debtor who issued the security. Bush vs. Lathrop, 22 N. Y., 538. Y. — But even though it were conceded as true that warehouse receipts possessed any such character of negotiability that the person issuing them is bound by their contents absolutely, and at all events in the hands of the assignee where he would not be to the original holder, still so long as the property bailed remains intact, no such form of action is allowable, as. was adopted in this case. In the supposed case the action should be a special one to recover damages for the fraud perpetrated by the warehouseman in falsely describing the property — the measure of damages in such case, of course, being the difference in value if as described and what it was in fact. O. J. Hale vs. Mil. Doeh Go., 22 Wis. In short the answer to the question, in whom is the title to this wheat now, is the key to the proper determination of all the questions in controversy in this ease. The plaintiff, in his complaint, says it is his. The judge finds such to be the fact. The defendant concedes it. But now the appellant appears to be insisting that the title has been changed to Swart. But what act.of his did it ? Certainly not the erroneous description, if any there were. That could never work any such result. Suppose the wheat had in fact been “ No. 1,” and was then described as “ No. 2,” can there be the slightest doubt that Bobson, if owner, could demand and obtain the identical wheat ? In that case would Hr. Bobson concede that the defendant would fulfil his duty by keeping the good wheat and turning outf the inferior quality, simply becauseNo. 2 wheat was specified on the receipt ? The question furnishes its own answer. The truth is, the question is simply one of identity of the property in dispute, and not of quality, and when the former is determined, the latter is of necessity. The doctrine of estoppel so prominently urged by the appellant, has, therefore, no application to the case. Besides, they are not favored in the law. VI. — Thus far this discussion has been on the supposition that the receipts in question were in the usual form of bills of lading or warehouse receipts, showing the property deposited “ on account of the depositor or his order,” or “ on account of bearer ” or “ on account of whom it might concern,” and also that the alleged custom of buying on the strength of them was established, neither-of which is true in fact in this case. a. The tickets on their face show the deposit was .simply on u account of Poster.” b. The judge has not found any custom existing as alleged ; and, looking into the evidence, it is found contradictory on that point. Some would buy on the strength of them, but most would not. It is enough to say, the practice was not general, much less universal, at Minneiska, and hence there was no custom on which any legal right could be predicated. Mr. Robson, therefore, must look to Poster or those from whom he purchased the wheat, for any damages he may have sustained by reason of their selling him an inferior quality of grain from what he bargained for; but he has no legal or equitable demand against the innocent warehouseman.