Hieskell v. Farmers' & Mechanics' National Bank

Mr. Justice Sterrett delivered the opinion of the court, May 5th 1879. The bills of lading, taken by J. M. Morey & Oo. for delivery to their order, were symbols of property in the cotton, and when properly endorsed and delivered by them to Ball, Hutchings & Co. operated, in law, as a delivery of the cotton itself; thus investing the endorsees with a constructive custody which served all the purposes of an actual possession, and so continued until there was a valid and complete delivery of the property, under and in pursuance of the bills of lading, to a person entitled to receive the same. The special property and possession thus acquired by Ball, Hutchings & Co. were transferred by them to the National- City Bank of New York for collection of the drafts to which the bills of lading were attached, and by it, in turn, to the Farmers’ and Mechanics’ National Bank, defendant in error. ■ There was no dispute as to the material facts of the ease. It was clearly shown, inter alia, that the cotton was purchased by J. M. Morey & Co., of Galveston, Texas, for account and by direction [160] of J. F. ITellen, of Philadelphia, and shipped via New York, from, the former to the latter port; that Morey & Co., not having been provided with funds, requested. Ball, Hutchings & Co. to advance money to buy the cotton, which they agreed to do, upon the express condition that they should be furnished with the insurance certificates and drafts drawn on Hellen for the price, together with the bills of lading, and that they should hold the latter, as well as the cotton, until the drafts were not only accepted, but paid ; that, with the funds thus advanced on the faith of this arrangement, Morey & Co. purchased and shipped the cotton in their own name, drew on Hellen at thirty days’ sight for the amount, and according to agreement, endorsed the drafts and bills of lading to Ball, Hutchings & Co., who transmitted them, duly endorsed, to the bank in New York, by which they were sent to the defendant in error; that both banks were instructed to retain the bills of lading until actual payment of the drafts, to each of which was attached a bill of lading with a slip of paper on which was written : “ Hold bill of lading until draft is paid;” that the drafts with the bills of lading thus attached were duly presented to and accepted by Hellen, who neither then nor afterwards demanded the bills of lading ; that in due time the cotton arrived at Philadelphia and was delivered by the Express Steamboat Co. to Hellen, without the knowledge of the bank or presentation of the bills of lading; that Hellen immediately stored the cotton with the plaintiff in error and received an advance thereon of $10,000; and as soon as the bank learned that the cotton had been delivered and stored the writ of replevin was issued. The court, after calling attention of the jury to the testimony as to the terms on which Morey & Co. procured the money with which the cotton was purchased, and what was done in pursuance of their agreement with Ball, Hutchings & Co., instructed them that if they believed this testimony and found the facts as indicated by it, their verdict should be in favor of the plaintiff below, and they so found. As already stated, the material facts referred to by the court were not controverted, and the jury, under the instructions of the court, could have found no difficulty in rendering the verdict they did. On the facts established by the verdict, the delivery to Hellen was unauthorized; and the possession, acquired by the misdelivery of the cotton, gave him no higher or better right than he had before, viz., the right to the bills of lading, and consequently to the cotton, upon payment of his acceptances, to which the bills were attached as already stated. Numerous authorities might be cited in support of these views, among which are the following: Dows et al. v. National Exchange Bank of Milwaukee, 1 Otto 618, in which a very able and exhaustive opinion was delivered by Mr. Justice Strong ; Stollenwerck v. Thatcher, 115 Mass. 224; Alderman v. Eastern Railroad Co., Id. 233; Meyerstein v. Barber, Law Rep. 2 C. P. 38; Turner v. The Trustees, &c., 6 Exch. [161] Rep. 543 ; Jenkyns v. Brown, 14 Q. B. 496; Henry v. The Warehouse Co., 31 P. F. Smith 76; Benj. on Sales 381, 382 and note. Meyerstein v. Barber, supra, was a case in which advances had been made on cotton shipped from Madras to London, and bills of lading delivered to secure the lender. It is there said by Chief Justice Erie, “ If it were established that a bill of lading — one of the most frequent securities for advances amongst mercantile men — becomes exhausted and ceases to be a security when the ship has reached her destination, and the goods which it represents have been landed and warehoused, what a wide door would be opened for fraud. It is scarcely possible to exaggerate the evil consequences which would be likely to flow from such a doctrine. There is no authority for it.” In a concurring opinion, it is said: “ There can be no complete delivery of the goods under a bill of lading until they come -into the hands of some person who has a right to the possession under it.” Dows v. National Exchange Bank, supra, is in point, and rules the main questions in this case. It follows from what has been said, supported by the authorities above cited, that Hellen had no interest or right of possession, which he could transfer to the plaintiff in error to the prejudice of' the bank, and therefore, the latter could maintain the replevin,' unless there was something in the case affecting the rights of the parties, which wTas improperly excluded from the consideration of the jury. It is complained that the court declined to answer the points presented by the defendant below. If, as we think was the fact, there was no suflicient evidence to justify the submission of some of them, and the others were irrelevant, the learned judge very properly declined to answer them: Urket v. Coryell, 5 W. & S. 60; Covert v. Irwin, 3 S. & R. 283; Kline v. Johnston, 12 Harris 72. It frequently happens in the trial of a cause, that facts are elicited which, in the end, have no legitimate bearing on the case. It is entirely proper for the court to exclude the irrelevant facts from the consideration of the jury; and, if there is no dispute as to the relevant and material testimony, to instruct them as to its legal effect: Graff v. The Pittsburgh & Steubenville Railroad Co., 7 Casey 489; Johnston v. Gray, 16 S. & R. 361; Dows v. The National Ex. Bank, supra. In the present case, there was really no material fact in dispute. The testimony as to the inception of the transaction and previous course of dealing; how the bills of lading came to be taken in the name of J. M. Morey & Co., and by them endorsed to Ball, Hutchings & Co., and what occurred subsequently, was undisputed and consistent, but still it was submitted to the jury, with proper instructions as to its legal effect, in case they believed it to be true. They were told that the question was not what Hellen desired Morey & Co. to do, but what they had done ; that inasmuch as Hellen claimed the transaction was a sale [162] of the cotton to him, and insisted upon his rights as a purchaser, he would have to take it subject to such terms as Morey & Co., who were acting for him, were able to make, in order to procure the money to pay for it. There was no error in this. Hellen had never advanced or paid a cent on the cotton, and if he claimed the benefit of the purchase, as made by him through his agents, he could not repudiate the arrangement made by them to secure and pay for the cotton. There was no evidence of any laches on the part of the bank, by which the plaintiff in error was induced to receive the cotton and make the advances thereon. The testimony was undisputed that the bank was instructed to hold the bills of lading until the acceptances were paid; that it knew nothing of Hellen’s having obtained possession of the cotton by the unauthorized act of the steamboat company, until after it was stored with the plaintiff in error and the money had been advanced. Nor was there anything in the circumstances under which previous deliveries had been made to Hellen by the carrier, that was calculated to affect the bank. It was in no way a party to these unauthorized transactions, and so far as appeared was ignorant of his having thus obtained wrongful possession of the cotton on former occasions. In every case the bank had been instructed to retain the bill of lading until the accompanying draft was paid, and this instruction was always literally carried out. The bills of lading provided for the storage of the cotton by the carrier, in case it was not called for, and the bank might reasonably suppose that this had been or would be done. We find nothing in any of the assignments of error that would justify a reversal of the judgment. It is unfortunate that the plaintiff in error should lose the amount he advanced in apparent good faith; but, similar results often happen when property is purchased from one who has no title or right to sell. The trouble in this ease was brought about by the unauthorized act of the carrier, in putting Hellen in possession of the cotton; but, for this, the defendant in error was in no way responsible. Judgment affirmed.