Canadian Bank of Commerce v. McCrea

106 Ill. 281, 1882 Ill. LEXIS 361

• Court: Illinois Supreme Court
• Decided: November 20, 1882
• Status: Published

Opinion

Mr. Justice Scholfield

delivered the opinion of the Court:

The question is presented by the ruling of the circuit court in the giving and refusing of instructions, whether warehouse receipts are placed on the same • footing, as respects the title vested in the assignee in case of assignment, as bills of exchange and promissory notes; and this is the question most elaborated by counsel in argument, and the first in order for consideration.

The contention of counsel for appellant is, the language of our statute in relation to negotiable instruments, (Hurd’s Stat. 1881, chap. 114, sec. 142,) comprehends warehouse receipts. They admit that this court, in Burton v. Curyea, 40 Ill. 320, (which was decided in 1866,) laid down a contrary doctrine, and that our statute in relation to negotiable instruments has since, or for many years prior to, that decision received no material change,—that if it now includes warehouse receipts, it did then; but they contend that that decision was wrong, and should not be adhered to. We might content ourselves by saying stare decisis, for Burton v. Curyea was argued by able counsel, and, as the opinion shows, the case was carefully considered by the court. But in our opinion it is demonstrably certain that the language of our statute in relation to negotiable instruments does not comprehend warehouse receipts or bills of lading, and instruments of that class. Its precise- phraseology, as applicable to this question, is: “Promissory notes, bonds, due bills, and other instruments in writing, made or to be made by any person, body politic or corporate, whereby such person promises or agrees to pay any sum of money or articles of personal property, or any sum of money in personal property, or acknowledges any sum of money or article of personal property to be due to any other person. ”

It is a familiar rule of construction that a statute is not to be construed as changing the common law farther than its terms expressly declare. (Cadwallader v. Harris, 76 Ill. 372; Thompson v. Weller, 85 id. 197.) We are not, therefore, at liberty to declare that this statute embraces covenants or agreements for the performance of individual services in and about property,—mutual, dependent and conditional covenants and agreements, or covenants and agreements to pay money or deliver property upon uncertain contingencies or events,—but must hold that it applies only to absolute and unconditional promises to pay money or deliver property. Such was the character of each one of the cases cited by counsel for appellant. Without referring to and analyzing these cases separately and at length, we simply call attention to the fact that in every ease in which this court has held an instrument negotiable by virtue of our statute in relation to negotiable instruments, the instrument is payable at some time certain,—absolutely,—and embraces no covenant or agreement other than for the payment of money or the delivery of property. On the other hand, it has been repeatedly held, where instruments embraced covenants or agreements for personal services, and where instruments for the payment of money or delivery of property provided for such payment or delivery only upon some uncertain or contingent event, that they were not negotiable under the statuté. Thus, in Beezley v. Jones, 1 Scam. 34, Beezley covenanted, by deed with Jones, to lease him a house, carding machine and apparatus, for a specified time, and further agreed to be at the expense of repairing the machine in case of any failure. Jones, on his part, covenanted to pay $170 rent, by installments, and at the expiration of' the term to return the machine, etc., in the same order he received them, the common wear excepted. The deed was assigned by indorsement to the plaintiff, who sued for a breach of the covenant to pay rent. It was held the assignee could not maintain a suit in his own name, and the court, referring to the statute in relation to negotiable instruments, said: “Neither the language of the statute nor the policy that occasioned its enactment, embraces instruments in writing for the conveyance of land, or for the performance .of personal duties, and the legislature never intended to impart a negotiable quality to a written agreement for the performance of perhaps twenty stipulations of different characters, merely because it contained one for the payment of money, or the delivery of an article of personal property. ”

In Kelley v. Hemmingway, 13 Ill. 604, the instrument sued on was one wherein David Kelley acknowledged there to be due to Henry D. Kelley $53, “when he is twenty-one years old. ” It was held to be not a negotiable instrument under our statute, because the event upon which it was to become due might never occur.

Smalley v. Edey, 15 Ill. 324, was an action to recover upon an instrument in writing, whereby Smalley agreed to pay Edey $148.27, provided he did not settle said amount with Bichard Hoover, and Edey was compelled to pay the same to Hoover. It was held this was not a promissory note, because it was payable on a contingency that might never happen.

In Gillilan v. Myers, 31 Ill. 525, the instrument sued upon was this:

“Algonquin, June 8, 1857.

“Mb. Myebs : Sir—You will please take up my note, payable to Samuel Smith, for $202, with ten per cent interest from the first of April, and it will be right, as we talked.

John Gillilan. ”

It was held this was not a bill of exchange—that it was a mere letter of request, and payable on the contingency that Smith should present the note, which he might never do.

In Kingsbury v. Wall, 68 Ill. 311, we held an order drawn on another, and accepted by him, for the payment of a certain sum in goods, payable on condition the payee shall have in his hands, ready to be delivered to the drawer, a deed from the payee and wife for certain property described, and making the delivery of the goods and the deed simultaneous acts, is not assignable either at common law or under the statute, as the contingency upon which payment is to be made might never happen. And we held in Husband v. Epling, 81 Ill. 172, an undertaking to pay a specified sum when an estate named is settled up, is not negotiable under the statute, since the estate might never be settled up.

Other cases illustrating the principles involved might be referred to, but we deem these sufficient. They render it clear that the promise or undertaking must be restricted to the payment of money or delivery of property at a time that will certainly happen. It may be unknown, in advance, when it will be, but it must be absolutely certain that it will be some time; and although it may be within the power of the party to whom the promise is made to render it certain, by his subsequent act, that the time will happen, this will not be sufficient,—it can not depend upon his will or pleasure.

The warehouse receipt .is, strictly, but the written evidence of a contract between the depositor of grain and the warehouseman. It is an acknowledgment by the latter that he has received and holds in store for the former the amount and description of grain named in the receipt, and from this acknowledgment the law imposes certain duties upon the warehouseman, which become as much a part of the contract as if written at length in the receipt. At common law the duty of the warehouseman was, that he should take common and reasonable care of the commodity intrusted to his charge, but he was not obliged, at all events, to return the property, nor in the same condition and quality. If he took common and reasonable care of it, and still it was stolen, or destroyed by rats, or otherwise materially damaged, he was not responsible. (Story on Bailments, sec. 442.) And by our present statute, “no public warehouseman shall be held responsible for any loss or damage to property by fire while in his custody, provided reasonable care and vigilance be exercised to protect and preserve the same; nor shall he be held liable for damage to grain by heating, if it can be shown' that he has exercised proper care in handling, ” etc. (Bev. Stat. 1874, ch. 114, sec. 16.) Nor is the warehouseman required to deliver the property for which his receipt is given until the “return of such receipt, properly indorsed, and the tender of all proper charges upon the property represented by it.” (Id. sec. 11.) It is therefore impossible that it can, in advance, be known with absolute certainty that the warehouseman will ever be required to deliver the wheat. It is precisely as if the promise were to deliver it upon condition that none of these things allowed as excuses for non-delivery should intervene, as well as upon the further condition actually written in the receipt—the return of the receipt and the payment of all charges upon the property.

Waiving this point, however, counsel for appellant claim that the General Assembly, to meet the decision in Burton v. Curyea, and establish the law otherwise than as there declared, enacted, by section 12 of an act entitled “An act regulating warehousemen, and authorizing connections of railroads with warehouses, and for other purposes, ” approved February 16, 1867, that “all receipts for grain issued by any warehouse shall be negotiable, by indorsement in blank or by special indorsement, in the same manner and to the same extent as bills of exchange and promissory notes are. ” But this act is repealed by “An act to regulate public warehouses, and the warehousing and inspection of grain, and to give effect to article 13 of the constitution of this State, ” approved April 25, 1871, which act is incorporated in the revision of 1874, and is the law in force at the time of the transactions out of which the present suit grew. If, therefore, it be true, which we do not concede, that the legislature intended, by section 12 of the act of 1867, to enact a different rule with regard to the effect of the assignment of warehouse receipts, the same logic proves that by section 24 of the act of April 25, 1871, the General Assembly intended to restore the rule as announced in Burton v. Curyea, for in that section, instead of making warehouse receipts negotiable by indorsement, “in the same manner arid to the same extent as bills of exchange are, ” this language is substituted: “Warehouse receipts for property stored in any class of public warehouses, as herein described, shall be transferable by the indorsement of the party to whose order such receipt may be issued, and such indorsement shall be deemed a valid transfer of the property represented by such receipt, and may be made either in blank or to the order of another. ” Thus, the indorsement of the symbol is made evidence of a transfer of that which it represents—nothing more. If, instead of the warehouse receipt, the property is present, and, upon sale, is actually delivered to the purchaser, this is evidence of a valid transfer of the property. The receipt, in the absence of the property, enables the parties, through its indorsement, to effect the same thing they could effect if the property were present, by its actual delivery,—namely, a valid transfer. But this neither authorizes nor implies that a title which the seller does not possess, shall pass in the one case any more than in the other.

A very satisfactory case, to us, on this question, is Shaw v. Railroad Co. 101 U. S. (11 Otto,) 557. In that case the question was on a bill of lading issued in Missouri on property to be carried from St. Louis, in that State, to Philadelphia, in Pennsylvania. The court deems it unimportant whether the statute of Missouri or that of Pennsylvania shall be regarded as affecting the contract, since there is, in its opinion, no substantial difference between the statutes of the two States in that regard. The language of that of Pennsylvania is, they—i. e., bills of lading—“shall be negotiable, and may be transferred by indorsement and delivery, ” while that of Missouri is, “they shall be negotiable by written indorsement thereon and delivery, in the same manner as bills of exchange and promissory notes. ” The court holds that the words in these statutes relating to the negotiability of bills of lading apply only to the transfer of the instrument, and do not determine that the rights of assignees shall be the same as the rights of assignees of bills of exchange, etc., after transfer. It is said in the opinion: “A bill or note past due is negotiable if it be payable to order, or bearer, but its indorsement or delivery does not cut off the defences of the maker or acceptor against it, nor create such a contract as results from an indorsement before maturity, and it does not give to the purchaser of a lost or stolen bill the rights of the real owner. It does not necessarily follow, therefore, that because a statute has made bills of lading negotiable by indorsement and delivery, all these consequences of an indorsement and delivery of bills and notes before maturity ensue, or are intended to result from, such negotiation. ” The court then proceeds to show that bills of exchange and promissory notes are exceptional in their character, and the reason why the bona fide purchaser of a bill, etc., for value, is not bound to look beyond the instrument, and then adds: “The reason can have no application to the case of a lost or stolen bill of lading. The function of that instrument is entirely different from that of a bill or note. It is not a representative of money, used for the transmission of money, or for the payment of debts, or for purchases. It does not pass from hand to hand, as bank notes or coins. It is a contract for the performance of a certain duty. True, it is a symbol of the ownership of the goods covered by it,—a representative of those goods; but if the goods themselves be lost or stolen, no sale of them by the finder or thief, though to a bona fide purchaser for value, will divest the ownership of the person who lost them, or from whom they were stolen. Why, then, should the sale of the symbol or mere representative of the goods have such an effect?” Again, it is said in the opinion: “Bills of lading are regarded as so much cotton, grain, iron, or other article of merchandise. The merchandise is very often sold or pledged by the transfer of the bills which cover it. They are, in commerce, a very different thing from bills of exchange and promissory notes, answering a different purpose, and performing different functions. It can not be, therefore, that the statute which made them negotiable by indorsement and delivery, or negotiable in the same manner as bills of exchange and promissory notes are negotiable, intended to change totally their character,—put them, in all respects, on the footing of instruments which are the representatives of money, and charge the negotiation of them with all the consequences which usually attend or follow the negotiation of bills and notes. ”

But counsel for appellant make the point that if the sale made by appellees to Banney & Co. was made of non-effect by the failure to pay the check, and appellant had such notice as would charge it as the purchaser of chattel property, and the warehouse receipts gave appellant no better title than if it had taken the grain itself, then the title of the grain was in appellees, and they could not recover its value from appellant. The answer to this is, the receipts stand in the place of the grain. Their possession is regarded as the possession, in law, of the grain itself, and the warehouseman, as has been seen, is not required to surrender the grain until the delivery of the receipts and the payment of charges. The suit, therefore, is in effect for the grain the receipts represented, and in recovering for them, therefore, the recovery was properly for the value of the grain,—that for which they stand.

Another point insisted upon by counsel for appellant is, that to enable appellees to defeat the title of Banney & Co. to the receipts, it was necessary to show that the sale was for cash, and that a check was given therefor which was not paid,—that to defeat the title of appellant it was necessary for appellees to prove that appellant knew, or had some reason to believe, that the sale was for cash, and that a check was given therefor which had not been or would not be paid, and that there is no evidence whatever that appellant knew, or had reason to believe, that the sale was for cash. It is, in our opinion, sufficient to say these are purely questions of fact, upon which the finding of the Appellate Court is conclusive. Bridge Co. v. Comrs. of Highways, 101 Ill. 518; Fitch v. Johnson, 104 id. 111.

The objection that questions of law and fact are submitted to the jury by certain of appellees’ instructions, we do not deem well founded. The whole case proceeds upon the theory that appellees were owners of the warehouse receipts, and continued to be such until, and unless, their ownership was divested by the sale to Banney & Co. There is no controversy, either in the evidence or in the arguments of counsel, in this regard. In the first and second instructions, given at the instance of appellees, the jury were fully instructed as to the law, on appellees’ theory of the case, relating to the sale, the effect whereof being, that if the facts were as claimed by appellees, then Banney & Co. had no title, and, by necessary consequence, appellees still remained owners. These instructions precede those complained of by appellant’s counsel, so when, by those, the jury were instructed that if they found Banney & Co. had no title, etc., —and if they found appellees were owners, etc.,—they ought to have understood, and we think it should be presumed they did understand, it was meant, if, under the rule laid down in the preceding instructions, they found that Banney & Co. had no title, and if, under such rule, they found appellees were owners, etc. They had been placed under the duty of being governed by the rules laid down by these instructions in passing upon these facts, and there is nothing from which they could have assumed they were to be released therefrom in making the findings contemplated in the instructions objected to. We think, as here presented, the instructions should be considered as announcing a series of consecutive and dependent propositions in a single charge.

The objection to the modification of appellant’s second instruction is without merit. The law is, undoubtedly, correctly laid-down in the'instruction as modified, and, therefore, even if it be conceded the instruction would have been correct without that modification, the modification could do no harm.

It is not contested, in argument, that the law is, where personal property, other than commercial paper, is, by contract, sold for cash, to be paid on delivery, the delivery and payment are to be .concurrent acts, and, therefore, if the goods, are put into possession of the buyer in expectation that he will immediately pay the price, and he does not do it, the seller is at liberty to regard the delivery as conditional, and may at once reclaim the goods. (See Schouler on Personal Prop. 292-300; Paul v. Reed; 52 N. H. 136.) And an attempted payment by a draft or check which is dishonored is no payment. (Mathews v. Cowan, 59 Ill. 341.) And in such ease trover lies for the recovery of goods, possession of which is obtained by such attempted payment. (Id.)

We perceive no substantial reason for disturbing the judgment below. It is therefore affirmed.

Judgment affirmed.