Mechanics & Traders' Bank v. Farmers & Mechanics' National Bank

15 N.Y. 40
CourtNew York Court of Appeals
DecidedFebruary 9, 1875
StatusPublished
Cited by13 cases

This text of 15 N.Y. 40 (Mechanics & Traders' Bank v. Farmers & Mechanics' National Bank) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mechanics & Traders' Bank v. Farmers & Mechanics' National Bank, 15 N.Y. 40 (N.Y. 1875).

Opinion

Miller, J.

Upon the trial of this case at the Circuit, the defendants’ cou'nsel excepted to that part of the charge of the judge to the jury, to the effect that the plaintiff was entitled to recover if the jury believed that the arrangement for the delivery of the wheat to the railway company was as it is stated to. have been by Worthington. Assuming that the exception covered a portion of the charge as made, the principal question in the case arises, I think, upon this exception. A proper consideration of this question involves the inquiry as to the effect of the order made by Worthington by which it is claimed he parted with the plaintiff’s claim to the grain.

The evidence showed that the wheat in question was purchased at Milwaukie for Worthington, and paid for by a draft on Worthington, payable to the order of D. Ferguson, cashier. This draft together with the bill of lading, in which [47]*47it was stated that it was on account of D. Ferguson, cashier, and to the care of Worthington, and a policy of insurance upon the same, was sent to the plaintiff for the purpose of having the draft collected. To meet this draft Worthingtou made his note, payable to the order of the plaintiffs president, at the bank, in thirty days, which was discounted at the bank, which at the same time received from Worthington an indorsement of the bill of lading and the insurance policy as security for the loan. The delivery of the bill of lading to the plaintiff was a good symbolical delivery of the grain, and the plaintiff thereby acquired a lien upon it or title to it, and was fully authorized to hold it until the loan was paid. (Bank of Rochester v. Jones, 4 Comst., 497, 507; City Bank v. Rome, Watertown and Ogdensburgh R. R. Co., 44 N. Y., 136.) The judge ruled at the trial that the plaintiff was a mortgagee of the grain; but whether the plaintiff held it as mortgagee, pledgee, or by any other title, is not material so long as the title or the right to the possession was vested in the plaintiff. To all intents and purposes the plaintiff’s property in the wheat was clearly established and beyond any question.

The plaintiff being thus entitled to the wheat, it remains to be considered whether it did any act by its officers or by means of its authorized agent, which has deprived it of the title which it had acquired. The bank itself did no act, and if any was committed which impaired the plaintiff’s ownership of the wheat, it was done by means of Worthington, who, by an arrangement or understanding when the note was dis counted, was to take charge of the cargo upon its arrival and place it in store subject to the order of the plaintiff, as seen rity for the draft which had been discounted. Worthington did place it in store accordingly, and took a receipt -for it subject to his own order ; which was contrary to the arrangement with, and without the knowledge*»!, the plaintiff. He had an undoubted right to exercise a control over the disposition of the wheat, for the benefit of the plaintiff; and had he sold it absolutely to any party, without notice of the [48]*48rights of the bank, the plaintiff would have no ground to complain, as he would be acting entirely within the scope of his authority, as the plaintiff’s agent, in so doing. I think he did not make any such disposition of the grain as depri ved the plaintiff of its title thereto. The oral agreement which he had made with Nims was without any direct authority from the plaintiff; but assuming that such authority existed in Worthington as plaintiff’s agent, the contract with Nims not being in writing, nor any money paid or property delivered, it was void within the statute of frauds. It vested no title whatever in Nims, individually or otherwise. Neither party was lawfully bound by it, and each of them would be justified in refusing to perform it. Nor, in my opinion, did Nims acquire any right to the grain by the mere delivery of the order by Worthington to him. The order, upon its face, conferred no right upon Nims to receive the grain, and no such construction can legitimately be placed upon it. The true meaning and effect of the order was," that the wheat should be delivered to the Erie ¡Railway Company, for Worthington himself. This did not authorize Nims or any one else to receive a bill of lading from'the company, or the company to transport the same, without further directions. The fact that Nims had possession of the order, of itself, conferred no right to take out a bill of lading in his own name. If it had been delivered to a clerk or an entire stranger and handed to the company, neither of them would be justified in giving him a bill of lading and transporting the wheat for his benefit. Or if, after the receipt had been delivered, Nims had refused to pay before he had received a bill of lading, he would not be liable, because he delivered the order without some extrinsic evidence to establish a sale.

There was a conflict in the evidence as to whether the blank between the words “ to ” and “ order ” had been filled up with a black line from a pen; but assuming, as is claimed, that the words “ subject to-order ” were erased, it made no-difference, and the legal effect was the same. In this form [49]*49it was a notice to the railway company, to whose freight agent it was delivered, to hold the wheat until Worthington, who had signed the order, gave directions in regard to it. Certainly, it would not bear the interpretation that it was subject to Nims’ order, for his name was not mentioned. It did not direct that the grain should be shipped in Kims’ name or in any other name, except Worthington’s, or in any way convey the idea that Nims was the owner of the grain, or that any other person but Worthington, who had signed the order, had a right to control it.

We have been referred to a class of cases which, it is claimed, hold that the order in question was sufficient to authorize a delivery of the wheat. I think they are not analogous, and in no way decisive upon the question of delivery. In Rawls v. Deshler (3 Keyes, 512), the order was to deliver to the purchaser of the grain or order, and it was delivered on the production of the order, and shipped by him in his name. The words “subject to order until paid for” may well be held to be evidence of an agreement between Deshler, who made the draft, and Griffin, who purchased the grain, that Griffin should hold it subject to Deshler’s order until payment should be made. The order simply transferred the grain, subject to the lien of Deshler, and the principle decided has no application.

In Dows v. Greene (24 N. Y., 638), the seller of the grain made and delivered to Bloss, the agent of the buyer, Mack, a bill of lading for “ account J. F. Mack, care of Dows & Gary.” The consignees, Dows & Cary, advanced money, in good faith, on the bill, and it was held that they had a lien under the factors’ act, as well as upon equitable grounds. This is not applicable to the case at bar, and no case is cited which holds the doctrine that the'delivery of an order of this kind confers authority upon a person not named in it to receive a bill of lading in his own name, to the detriment of the real owner.

The defendants’ counsel claims that the railway company had the wheat for Kims, as his bailee, as soon as it was placed [50]*50in the cars, and not for Worthington, between whom and the Erie Bail way Company there was no privity of contract. In this, I think, he is mistaken, as the order itself, on its face, showed that Worthington was in possession and had the control of the wheat.

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Cite This Page — Counsel Stack

Bluebook (online)
15 N.Y. 40, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mechanics-traders-bank-v-farmers-mechanics-national-bank-ny-1875.