Third National Bank v. Smith

81 S.W. 215, 107 Mo. App. 178, 1904 Mo. App. LEXIS 245

• Court: Missouri Court of Appeals
• Decided: May 10, 1904
• Status: Published

Opinion

GOODE, J.

(after stating the facts). — The facts of the case are related without any material discrepancy by the different witnesses, and the question is as to the ownership of the corn under the law when it was sold and the proceeds appropriated by the respondents. If the judgment in their favor was based on the belief that the appellant did not discount the draft of the Woodson-Young Grain Company and accept the assignment of the bill of lading in good faith and in the ordinary course of business, we find no evidence in the record to sustain such a conclusion. Nothing appears to impugn the bank’s motive in paying the draft on the faith of the bill of lading, and if the judgment is to stand some other basis for it must be found. In truth the contention that bad faith tainted the purchase of the draft was not preferred in this court. The defense relied on is that there had been no delivery of the corn to the grain company and, therefore, the title to it had not passed from the respondents and the action of Edward Young in diverting it to the Illinois Central Railway Company’s tracks and procuring a bill of lading from that company was unlawful if not larcenous. In other words, the car of corn still belonged to the respondents and the grain company could transfer no title to the bank either by an outright sale and delivery of the corn itself, or by the assignment of the bill of lading. No doubt one individual can not take possession of personal property belonging to another and pass the title as against the owner by a sale, even if the purchaser buys in good faith. This is always true unless the owner was guilty of laches or acts which made the fraudulent sale possible. In that contingency the law raises an estoppel against him to prevent his careless conduct from resulting in loss to an innocent purchaser. This ease should be considered then, first, with reference to the legal nature of the transaction between Young and Vincent regarding the com. Did that transaction amount to a sale by which the title to the corn passed to the grain company; or was it only an executory contract of sale contemplating a future delivery and transfer of title when the corn reached the Louisville & Nashville Railway Company? The latter is the position taken by the respondents. They contend it was a cash sale and that no title was intended to or did pass until payment was made; or, at least, until the corn was delivefed; and that it could be delivered nowhere else than at the designated place, namely; the Louisville & Nashville Railway Company’s tracks in East St. Louis. This argument presents the defense of respondents’ ownership of the corn when the bill of lading was negotiated by the grain company to the bank, as hinging on two circumstances; that the price was to be paid when the weight of the corn was ascertained and that it was to be delivered, as the respondents say, to the Louisville & Nashville Railroad Company. Unless one or both of those circumstances sufficed to retain the ownership in the respondents, it had passed to the grain company before the bill of lading was issued by the Illinois Central Railway Company, and passed to the bank when the bill was negotiated. The corn was to be paid for as soon as its quantity was ascertained at the elevator and made known to the respondents, but the sale was not conditioned on immediate payment, though in the parlance of trade it may have been called a “cash sale.” The contract of sale contemplated a delay of several days in payment; and, in fact, though the contract was made on August 23, the com was not weighed until the twenty-seventh, and the weights were not ascertained by the respondents until the twenty-ninth. Under such an arrangement the respondents could have retained the title to and the possession of the com very easily, not only as against the grain company, but as against an innocent purchaser of a bill of lading fraudulently procured by the grain company, by keeping it in their own or their agent’s charge. Instead of doing this they surrendered the bill of lading previously issued to them by the Chicago, Burlington & Quincy Railroad Company, which was their muniment of title, and gave an order to the agent of that company to send the corn to the Louisville & Nashville tracks in East St. Louis by the Wiggins Ferry via the Columbia elevator. The order directed, too, that it should be transferred “for the account of the Woodson-Young Grain Company.” Neither the “K” Line, the Wiggins Ferry Company, nor the Columbia Elevator Company was directed to act as agent for the respondents for the collection of. the price of the corn, nor was either to hold it until the price was paid. The order given by the respondents authorized the “K” Line to deliver the grain to intermediate parties, the Wiggins Ferry Company and the Columbia Elevator Company, as agents of the vendee, the Woodson-Young Grain Company, and not as respondents’ agents. The rule is universal, we believe, that the delivery of goods to a common carrier for transportation to the vendee in accordance with his instructions, is a delivery to the carrier as the vendee’s agent and equivalent to a delivery to the vendee himself. See Tiedeman, Sales, sec. 97; Benjamin, Sales, sec. 182 and numerous citations in the notes; Scharff v. Meyer, 133 Mo. l. c. 444; Gill & Fisher v. Com. Co., 84 Mo. App. 456. No fact from which an intention on the part of the respondents to reserve the title or custody of the corn until it was paid for by the grain company, or until it reached the Louisville & Nashville tracks, is in evidence. It was shipped in strict accordance with the directions of Young and the respondents parted not only with possession of the grain itself, but with their evidence of' title, the bill of lading they held.

It is insisted that a place of delivery was designated (the L. & N. tracks) and, therefore, no delivery to the-grain company occurred because the corn never reached those tracks. The evidence refutes this notion; for it discloses that though' the corn was to be sent to the Louisville & Nashville Railway in East St. Louis, as the-respondents’ order to the agent of the “K” Line said,, there is nothing to show it was to be delivered to the Woodson-Young Grain Company, or to the Louisville & Nashville Railway Company for the grain company at those tracks. It was to be sent there because the grain, company intended to ship it to Nashville over that line;, but neither those tracks nor any other spot was designated as the place of delivery. Vincent testified that the shipping direction or routing was given at Young’s request; not because the respondents stipulated for delivery at that place, or sought to protect themselves as to payment for the corn by having it delivered there, or reserved the title until it was delivered there. Respondents ’ defense rests mainly on the bare fact that though their order to Elting was to send the corn to the Louisville & Nashville tracks, it did not reach there, but was diverted by Young from the Columbia Elevator to the Illinois Central tracks. Therefore, they say it never was delivered and the title never passed. This is basing the defense on an immaterial incident. It may readily be granted'that if the contract between the respondents and Young had contained a stipulation as to title passing or delivery taking place at the Louisville & Nashville tracks, that stipulation would have been an essential element of the sale and would have protected the respondents by keeping the title in them until complied with; would have protected them unless they broke down the protection by acts sufficient to create an* estoppel. But there is an essential difference between stipulating for the delivery of a purchased article to the vendee at a certain point and observing a request to send it to that point by an intermediate common carrier. Looking squarely at the facts, no inference is possible except that there was an outright sale of this corn on the floor of the Merchant’s Exchange, which, if it did not become effective then and there, became effective when the corn was turned over to the first carrier, the Wiggins Ferry Company. The title then passed to the Woodson-Young Grain Company and they could transfer it to an innocent purchaser by delivering the corn itself or assigning a bill of lading issued for it by a common carrier. R. S. 1899, sec. 5054; The Brunswick Co. v. Martin Co., 20 Mo. App. 158; Hall & Robinson v. Railroad, 50 Mo. App. 179, 184; Johnson-Brinkman Co. v. Bank, 116 Mo. 558.

It is to be borne in mind that the respondents sold a separate and distinct article, already separated from other property of the respondents. It did not need to he selected and set apart. Hence, nothing remained to-be done to consummate a present sale; for the fact that the corn had to be weighed to find the total price did not postpone the transfer of the title or render the saleexecutory. Cunningham v. Ashbrook, 20 Mo. 553;. Southwestern Co. v. Stanard, 44 Mo. 71; Ober v. Carson’s Excr., 62 Mo. 209; Glass v. Blazer Bros., 91 Mo., App. 564. There being no facts in proof to show an intention to transfer the property in the corn later, the-transaction presents the elements of a present sale.. Lingham v. Eggelston, 27 Mich. 329.

It is not necessary for us to determine whether or not the title to the corn had so far passed from the respondents that they could not have reclaimed it as against the Woodson-Young Crain Company or attaching creditors. What we decide is that the title had vested in the latter company so as to enable it to transfer the property to an innocent purchaser, and that a transfer to such a purchaser took place when appellant discounted the draft on J. H. Wilkes and Company in reliance on the bill of lading.

The same result we have reached by attending to-the question of the ownership of the corn when the bill of lading was assigned, might likewise be reached on the ground that the respondents were estopped to claim-the corn against the appellant by having made it possible for the Woodson-Young Crain Company to deal with it as an apparent owner. Depew v. Robards, 17 Mo. 580; Johnson-Brinkman Co. v. Bank, supra; Young v. Bradley, 68 Ill. 553.

Certain decisions are cited by respondents’ counsel in support of their position. One of these is the Stanard case, which we hold is favorable to the claim of the-bank. In that case Stanard prevailed against the holder of a bill of lading which had been negotiated by a vendee to whom Stanard had sold the commodity on ■which it was issued, because Stanard never had parted with the possession of the commodity; but, on the contrary, had refused to surrender possession. The bill of lading was procured by the vendee without the commodity having passed out of Stanard’s custody. In Hall & Robinson v. Mo. Pac. Railroad, plaintiffs had sold corn for cash and received in payment a check which was dishonored. They were allowed to recover the com from the railroad company, which had issued bills of lading to them. These bills had been assigned by the plaintiffs to Theodore Nathan. The railway company contended that the corn had been attached by creditors of Nathan. In fact it had not been, but was still in Nathan’s hands by virtue of the bills of lading assigned to him by the plaintiffs. As he had failed to pay for the corn on delivery and the contract of sale provided he should, the plaintiffs obtained judgment for it; but the opinion carefully guards against the inference that the plaintiffs could have recovered if a cash payment had been waived, or the com had passed into the hands of an innocent purchaser, or the bills of lading had been negotiated by Nathan. The decision in Alabama Nat’l Bank v. Railroad, 42 Mo. App. 284, was that an actual sale and delivery of goods by their owner who held a bill of lading on them from the railway company, transferred the title as against á subsequent innocent indorsee of the bill. That was the case of two equally innocent buyers of property and the right of the one who bought first prevailed. In Brunswick Co. v. Martin Co., supra, the plaintiff, as vendor, succeeded in reclaiming property sold for cash, from the defendants who claimed as purchasers from the vendee, because the plaintiff had retained the property in itself, either by taking a bill of lading when the goods were shipped in its own name and then indorsing the bill to its agents at destination, or by consigning the goods directly to the agents. Whichever mode was adopted, it is clear the agents were to collect the purchase money before the title passed or delivery 'was made to the vendee. The latter took possession of the goods surreptitiously and mortgaged them to the defendants.

The point decided in many cases and the principles declared in all of them are consistent with appellant’s ownership of the corn as assignee of the hill of lading.

The judgment is reversed and the cause remanded.

Bland, P. J., and Beyburn, J.} concur.