Gibson v. Stevens

Where personal property is, from its character or situation at the time of the. sale, incapable of actual delivery, the delivery of the bill of sale, or other evidence of title, is sufficient to transfer the property and possession to the vendee. Where articles of commerce were purchased in the State of Indiana, and the vendors, in whose warehouses they were lying, gave a written memorandum of the salé, with a receipt for the money, and an engagement to deliver them on board of canal-boats soon after the opening of canal navigation, these documents transferred the property and the possession of the articles to the purchasers. These documents, being indorsed and delivered to a merchant in New York, in consideration of advances of money in the usual course of trade, transferred to him the legal title and constructive possession of the property. Therefore, an attachment subsequently issued, at the instance of a creditor of the original purchasers, which was levied upon the property in question, could not be maintained.. This court will judicially recognize this branch of trade. It has existed long enough to assume a regular form of dealing, and its ordinary course and usages are now publicly known and understood. The New York merchant stood in the position of an actual purchaser to the extent of his advances, and not in that of a factor who had made advances upon goods in his possession. A guarantee by the first sellers that the articles should pass inspection did not change the original sale into an executory contract. It was nothing more than the usual warranty of the soundness of the goods sold.

This case was 'brought up, by writ of error, from the Circuit Court of the United States for the- District of Indiana. It was an action of replevin brought by Gibson, a citizen of New York, against Stevens, the sheriff of Allen County, Indiana, who had in his custody sundry articles of property which he had taken by virtue of a writ of foreign attachment, issued under the State laws of Indiana. The facts in the case were agreed upon by the counsel in the Circuit Court as follows. Be it remembered, that at the May term of said court, A. D. 1844, the above cause was submitted to the decision of the court, without the intervention of a jury, upon the following agreed facts, to wit: — The parties mutually agree that the following are the facts in this case: — That McGLueen & McKay, citizens of the city of Detroit, Slate of Michigan, about the 20th of March, 1844, by false pretences, fraudulently procured the branch of the State Bank of Indiana, at Indianapolis, to loan to them the sum of about eleven thousand dollars. The money thus loaned consisted of notes of the Indianapolis branch of said State Bank of Indiana, payable to bearer, and transferable by delivery. With part of the money thus obtained, McQueen & McKay purchased of Hanna, Hamilton, & Co. three hundred and fifty barrels of mess pork, for the sum of $ 2,908.50, and at the same time paid to the said Hanna, Hamilton, J. A. F. Nichols the said purchase-money ; and thereupon said D. & J. A. F. Nichols executed and delivered to said McQueen & McKay a memorandum of said purchase, receipt, and guarantee, in the words and figures following, to wit: — “ Fort Wayne, April Ath, 1844. “ Messrs. McQueen & McKay, “ Bought of D. & J. A. F. Nichols. “ Two hundred barrels of superfine flour, at $ 3.56J, $ 712.50 “ Received, Fort Wayne, April 4th, 1844, payment in full.. “D. & J. A. F. Nichols. - “Received the above flour in store, at Fort Wayne, April 4th, 1844, which we agree to deliver on board of canal-boats here, soon after the opening of the navigation, subject to the order of McQueen & McKay. “ D. & J. A. F. Nichols. “ We guarantee the inspection of the above flour in' New York as superfine flour. D. & J. A. F. Nichols.” Which are herewith filed and marked B, and are part of this agreement. Said barrels of flour were, at the time of said sale, lying in the warehouse-of said D. & J. A. F. Nichols, in the town of Fort Wayne, Indiana, on-the bank of the Wabash and Erie Canal, and there remained until they were seized and taken under the attachment hereinafter mentioned. Said purchases were both made in the town of Fort Wayne, in the county of Allen, in the said State of Indiana, on the 4th day .of April,’ 1844. On the 17th day of April, 1844, said McQueen & McKay presented the said memorandums of purchase, receipts, and guarantees thereto appended, as above set forth, and marked A and B, to the said Gibson, in the city of New York, and re-quested of said Gibson an advancement upon the flour and pork therein, mentioned; whereupon the said Gibson did advance to the said McQueen & McKay, on the faith of said flour and pork, and the evidences of-title thereto, the sum of $2,7-87.50, and took from said McQueen & McKay an ai-Agnment of said memorandums of purchase, receipts, and guarantees, respectively, indorsed on the back of each in the words and. figures following, to wit: — “ Deliver the within two hundred barrels of flour to E.- T. H. Gibson, or order. “ McQueen & McKay.” “ New York, April 17, 1844. “ Deliver the within 350 barrels of pork to E. T. H. Gibson, or order. “ McQueen & McKay.” Which are also part of this agreement. Said McQueen & McKay, at the same time, delivered to the said Gibson the original memorandums of purchase, receipts, and guarantees above set forth, and marked A and B; in whose possession they now remain. At the same time McQueen & McKay wrote, signed, and delivered to said Gibson, the letter which is herewith filed, marked C, and made a part of this agreement; and is in the words and figures following, to wit: — “ New York, 17th April, 1844. “ Messrs. Ludlow & Babcock, Toledo: — “ Gentlemen, — We have this day received an advance from E. T. H. Gibson, Esq., on the following lots of pork, which you will have the goodness to deliver to his order, and to comply with his instructions relative to the shipment, to wit: — meSS ook 225 do. prime do. £ y from warehouse of Walker, Roger, & Go. & 5 11 do. mess do. from warehouse of Benbridge 200, and cases cited there. III. The flour in the custody of Hanna, Hamilton, & Co., and the pork in the hands of D. & J. A. F. Nichols, were the legal property of McQueen & McKay, at the time of the transfer thereof by them to Gibson, the plaintiff, and said McQueen & McKay'held, at the time of the attachment, the beneficial interest only in the residue of the proceeds of sale thereof, to be made by Gibson, when the property reached him, after satisfying his advance thereon, with commissions and all other charges. IV. McQueen & McKay acquired a vested legal title in said pork and flour, by their purchases. The bills of sale being their muniments of title, also a constructive possession thereof, the property remaining in the custody of the respective vendors, as their bailees. Because; — 1. The sale was a perfect vested sale, and not an executory agreement to sell at a future period. Martindale v. Smith, 1 Adolph. & Ell. (N. S.) 389 (41 Cond. Com. Law, 595). 2. The bills of sale purport to pass a present vested interest, and they were delivered to McQueen & McKay. The payment of the purchase-money bound the bargain, and passed at once the legal title to them. Barret v, Goddard, 3 Mason, 110. 3. Whenever there is a present vested sale, valid in law, and the property sold is left with the vendor, he holds it in custody as bailee for the purchaser. Elmore v. Stone, 1 Taunton, 157; Bailey v. Ogdens, 3 Johns. 416; Dixon v. Yates, 5 Barn. & Adolph. 314. 4. The pork and flour were sufficiently identified and distinguishable from all other property, there being no other pork in the warehouse, and the flour being marked. Barret v. Goddard, 3 Mason, 107; Pleasants v. Pendleton, 6 Rand. 473; Swan-wick v. Sothern, 9 Adolph. &, Ell. 895. 5. This construction is confirmed by the condition of the property at the time, and the general, well-established usage of trade in regard to it; which usage is to leave such produce in the warehouse till the opening of navigation, the warehouseman being in the mean time the bailee of the owner; and for the owner to get an advance thereon from the Eastern merchant, and to transfer the same to secure the advance: he to sell the same on commission. 6. The delivery on board of canal-boats provided for, was a delivery as bailee for the purpose of transmission. The guarantee of inspection at Toledo was a warranty of quality, to be tested after sale, and it was not preliminary to the sale. Y. McQueen & McKay passed the entire legal title in said produce to the plaintiff, together with the beneficial interest, to the extent of his advance thereon, and gave him the constructive possession. Because, —■ 1. The condition of said produce was such as not to admit of actual delivery at the time, and it was in accordance with the course of business and the usage of trade to leave it with the warehouseman in the W est. 2. The delivery order, according to the weight of authority, was sufficient of itself to pass the title to Gibson, on making the advance, before its presentment and acceptance. 3. But if not, the delivery to Gibson of the muniments of title, viz. the bills of sale, was sufficient for that purpose, especially when accompanied with a delivery order. Hollingsworth v. Napier, 3 Caines, 182; Wilkes v. Ferris, 5 Johns. 338 ; Bailey v. Johnson, 9 Cowen, 115; Lucas v. Dorrien, 7 Taunt. 279; Greaves v. Hepke, 2 Barn. 316 to 325; Black v.- Zacharie, 3 Howard, 512. VI. If Gibson be considered as not having the' entire legal title, but as a pledgee to the amount of his advances, he is pro tanto to be considered and protected as a purchaser. Story on Bailments, 111. VII. The legal title of the plaintiff in said produce is not superseded or divested by the levy of the attachment on the property. Because, — 1. The bank was not a bond fide purchaser. The attachment amounted only to an assignment in invitum by operation of law, and for the benefit of the creditors at large, as well as for the attaching creditor. ' Indiana Code, 1843, pp. 762 —775; Lempriere v. Pasley, 2 Term Rep. 485; 1 Atk. 160; Nathan v. Giles, 5 Taunton, 558; United States v. Vaughan, 3 Bin. 394; Ingraham v. Wheeler, 6 Conn. 277; Ricker v. Cross, 5 N. Hamp. 571; Portland Bank v. Stacey, 4 Mass. 663; Putnam v. Dutch, 8 Mass. 287; Badlam v. Tucker, 1 Pick. 389 ; Gardner v. Howland, 2 Pick. 604;. Arnold v. Brown, 24 Pick. 95; note to Lanfear v. Sumner, 17 Mass. 114. 2. If the bank had been a bond fide purchaser of said produce of Mcdueen & McKay, instead of being attaching creditors, such purchase would not divest the plaintiff of his title, which is a legal title, with a constructive possession, fairly acquired and unaccompanied with any laches in notifying the bailee thereof, or in reducing the same to actual possession, according to the course of trade; such a legal title, being prior in time, is prior in right. See cases cited under last proposition; also Caldwell v. Ball, 1 Term Rep. 205; Tuxworth v. Moore. 9 Pick. 348; Joy v. Sears, 9 Pick. 4; Turner v. Coolidge, 2 Mete. 351; 3 Mason, 114; Meeker v. Wilson, 1 Gall. 422; Phillemore v. Barry, 1 Camp; 563. The cases do not turn on the question of notice to an attaching creditor, but whether there has been such a delay in taking actual possession as to furnish evidence of' fraud. 3. If the attachment had the character of a purchase, it would not be bona fide and without notice, within the reason of the rule, because Mcdueen & McKay were out of possession, actual or constructive, which put the purchaser upon inquiry, and amounted to constructive notice of the prior legal transfer to the plaintiff. Lucas v. Dorrien, 7 Taunt. 278; 1 Gall. 422. 4. The bank, therefore, under the circumstances, took only the interest of McQueen & McKay then existing, and subject to all equitable, ás well as legal, interests then outstanding against it. ■ Till. The only interest of McQueen & McKay was the equitable beneficial interest in the residue of the proceeds of the produce when sold by the plaintiff on the consignment to him, after satisfying thereout his advances and charges on sales, which alone .was attachable, and which did not warrant the officer in taking the property. Story on Bailments, 353, and cases cited; .Badiana v. Tucker, 1 Pick. 399; Indiana Code, 383, p. 744, and 39, p. 770; Evans v. Darlington, 5 Blackf.'320. IX. The rights of the plaintiff are not weakened by his having purchased ihe property out of the State of Indiana, to be sent and' sold in New York, according to the course of trade. Blake v. Williams, 6 Pick. 307-314; Black v. Zacharie, 3 Howard, 514. X. If there had been any danger that the plaintiff would have absconded with the property, to the injury of the equitable lien of the bank and other creditors, acquired by the attachment, (which is not shown or pretended,) their remedy would then have been in equity only. IX. The warehouse receipt accompanying the transfer to Gibson was equivalent, under the usage of trade, to a bill of lading, and its transfer divested all outstanding title unknown to Gibson, whether legal or equitable. Because, — 1. Such instruments are assignable. Indiana Code, p. 576; Laws of New York of 1830, p. 203, § 5; 2 Rev.- Stat. p. 60. 2. The case states that it was usual and customary to make ádvanees on the assignment of proper evidences of title. Noble v. Kennoway, 1 Doug. 512; Zwinger v. Samuda, 7 Taunt. 265; Lucas v. Dorrien, Ibid. 288; Barton v. Baddington, 1 Car. 6 Payne, 207; Keyser v. Suse, Gow, 58. The argument filed on behalf of the defendant in error was an elaborate support of the following points: — 1. If Gibson’s claim be in the nature of a lien, he cannot recover, unless.he, or his agent for the purpose expressly authorized, had the actual possession of the pork and flour before the attachment was levied. Under the circumstances of this case, a constructive possession cannot be conferred, for the following reasons: — 1. Because the bills of parcels, &c., in this cause, do not amount to warehouse receipts; for instance, the memorandum of Hanna, Hamilton, & Co. is a mere receipted bill of parcels, and a guarantee of the inspection of the pork at Toledo; it does not even acknowledge the pork to be in storel Should the pork and flour not pass inspection, MeQueen & McKay Would not be bound to accept them. The bills of parcels, with, their indorsements, &c., amount to nothing more than mere orders to deliver the pork and flour to Gibson; and until the Nicholses, and Hanna, Hamilton, & Co., were presented with such orders, and they had accepted the same, and assented to hold the pork and flour for Gibson, as his agents, his lien could not attach; and the attachment having been sued out, and levied on the pork and flour in question before they received orders in favor of Gibson, the attaching lien of the State Bank must prevail. 2. Although the memoranda may be considered as warehouse receipts, y^et, there being no legislative enactment or usage in New York making the transfer and delivery thereof to confer a constructive possession of the pork and flour, their transfer and delivery to Gibson cannot have that effect. 3. Althoiigh, by the laws of New York, these memoranda might confer a constructive possession on Gibson, yet, as the pork and flour were, at the time of the delivery of those memoranda to Gibson, at Fort Wayne, in Indiana, the transaction must be governed try the laws of Indiana. In Indiana we have no law, or usage, giving such force to warehouse receipts. 2. Although Gibson should be regarded as an absolute purchaser, yet, as the attachment wras levied upon the pork and flour before he or.any agent of his had actual possession of them, Gibson cannot recover. A fortiori if Gibson’s claim be only a lien. 3. If the pork and flour be regarded as a security to Gibson, for the repayment of the advance, nevertheless, as neither Gibson nor any agent of his had the actual possession of the pork and flour before they were attached, nor had the instruments by which his lien on the pork and flour was created been recorded in Allen county, Indiana, (the place where the pork and flour were,) within ten days, according to the Rev. Stat. of Indiana, 1843, p. 590, sec. 10, such assignment to Gibson is void as to the State Bank. 4. Whether Gibson’s right be regarded as a lien on, or a purchase of, the pork and flour, still, as neither Gibson nor any agent of his, had the actual possession thereof, before the attachment was levied, Gibson cannot recover. 5. If Gibson be regarded a “ deemed pro tanto purchaser,” Mcdueen & McKay must be regarded as owners of the residue. This condition of things necessarily makes Gibson and McQueen & McKay tenants in common of the pork .and flour. 'If this be true, (which we regard as unquestionable, if Gibson be a “pro tanto purchaser,”) the interest of McQueen & McKay in the pork and flour is attachable, and the officer attaching can, by virtue of the attachment, take the whole of the pork and flour, even out of the actual possession of Gibson, and deliver it over to-the purchaser, and Gibson cannot replevy them from the officer or the purchaser under the attachment. 6. If Gibson’s right be only a lien, although such lien may have attached oh the pork and flour before the attachment of the State Bank was levied thereon, nevertheless the interest of McQueen & McKay therein is attachable.