Sloan v. Johnson

Opinion by William W. Porter, J., This action is brought for the value of fifty barrels of whiskey. The plaintiff’s claim is founded upon ten warehouse receipts issued by the defendant, who is a distiller and warehouseman. The receipts were issued in blank in respect to the person on whose account the whiskey was held, and no indorsement appears on the receipts. The plaintiff sues as transferee of the goods by purchase of the receipts. He has obtained a verdict and judgment. Appeals have been taken by both defendant and plaintiff. First, as to that of the former. [648] APPEAL OE DANIEL J. JOHNSON. The warehouse receipts were sent, in the form above described, by Johnson to one, Preyer, a whiskey broker in New York city, pursuant to a communication received from Preyer that he had a cash purchaser. After they were forwarded, Preyer wrote Johnson that he had found another and more desirable purchaser in J. B. Hart & Company (as to whose business and financial standing he made certain statements), and sent the note of J. B. Hart & Company for the purchase price to Johnson, who returned it, requiring cash to be paid. Shortly thereafter, three smaller notes of J. B. Hart & Company, aggregating the purchase price, were forwarded to Johnson. These were made at four months. Johnson retained them until maturity, and, finding them unpaid, made some personal investigations in New York city, which led him to think that the former representations made by Preyer of Hart & Company were untrue. Because of this; because the broker, Preyer, had exceeded his authority in not selling for cash; and because the receipts were not indorsed, Johnson denies liability on the receipts, which, as appears by the testimony, had been delivered by J. B. Hart & Company to the plaintiff, Sloan, for a valuable consideration. These reasons for repudiation will be disposed of in their reverse order. First, it may be said that if Hart & Company were in fact owners of the whiskey represented by the receipts, the delivery of the receipts to Sloan, being intended by the parties to transfer all of Hart & Company's title, was sufficient to accomplish that result without indorsement. By the provision of the act of September 24,1866, bills of lading and warehouse receipts are made negotiable and transferable by indorsement and delivery. The two documents are affected by the same provisions. The defendant contends that the act provides the only method of transferring title to the goods, namely, by indorsement and delivery of the document representing the goods, and that the absence of indorsement upon the receipts in this case, prevented the passage of title to Sloan. This position cannot be sustained. As to bills of lading, it has been held that where the intention of the parties is clear, delivery of a bill of lading without formal indorsement transfers the title to the goods : Richardson v. Nathan, 167 Pa. 513; Harrison v. Mora, 150 Pa. 481; Holmes v. German Security Bank, 87 Pa. 525. No reason is apparent [649] why the same rule should not apply to warehouse receipts. In the case before us, the plantiff is uncontradicted in his proof that he paid value and received the receipts with intent by both parties that title should pass. The defendant, second, alleges that the receipts were sent to the broker in New York city with authority to sell only for cash, and that the delivery of the receipts to Hart & Company on the basis of credit, was beyond the agent’s authority. It is true that Johnson repudiated the sale made to Hart & Company when first reported. Subsequently, however, he received the three notes of Hart & Company. These he retained until after maturity. Under the circumstances, even if the limitation of the authority of the agent in the first instance should be conceded, the defendant is estopped from repudiating the act of the agent which he has adopted. No one will doubt that if the notes had been paid upon maturity, the defendant would have been silent as to any lack of authority in his agent. The defendant says, third, that the receipts were procured from him by fraud, and that all holders took them subject to the defense of fraud. There is discussion in the paper-books, of the law in respect to the negotiability of bills of lading and warehouse receipts. This can only have application in this case if the fact of fraud has been proven. The defendant attempted to prove fraud by his own testimony. His allegations are that Preyer, the broker, made false representations which induced the defendant to part with the warehouse receipts. The first misrepresentation alleged is that Preyer originally procured the receipts to be sent to him by stating that he had a cash customer for them in the Teeter Land and Improvement Company. Nowhere is this statement proved to have been false. The second alleged false statement bjr Preyer is that J. B. Hart & Company were one of the largest retail liquor dealers in New York city, and highly rated. Before Johnson accepted the notes of J. B. Hart & Company, he made some inquiry and could not find that they had any commercial rating at all. The misrepresentation, therefore, did not deceive him. With knowledge, he retained the notes and did not repudiate the sale.. Johnson alleges, third, that when these notes were received by him, Preyer wrote that J. B. Hart & Company had purchased property to the extent of $32,000, for which cash was required, but that [650] they would be able to discount their paper in the course of ten days. The latter is but a statement of expectation. Failure to discount as anticipated would not amount to fraud, even if the statement in respect to discounting had been made by the proven authority of Hart & Company. The statement in regard to the purchase of the property is nowhere proven to have been false. There is no evidence (save that referred to above as to rating) which definitely tends to prove that any of the alleged statements were false when made by Preyer. ' Some ten days after the failure to pay the notes, Johnson made some investigations, with his counsel, in New York city. They visited both Preyer and Hart & Company. Both were uncommunicative as to the failure of the latter to pay the notes, and as to the disposition which had been made of the warehouse receipts. The place of business of Hart & Company, as described by the defendant, was far from iznpressive, when he saw it some four or five months after the notes were given. Hart’s property was then, as Johnson says, in the hands of the sheriff. There appeared to Johnson ground to suspect that he had been unfairly treated. But circumstances warranting suspicion will not support an allegation of positive fraud. Nowhere does Johnson connect Hart & Company -with the statements made by Preyer when the notes were forwarded. No attempt is made to connect Sloan, the present plaintiff, who paid money for the receipts when delivered to him by Hart & Coznpany with the representations made by Preyer. In view of this conditiou of the defendant’s evidezice, the court below should have excluded from the jury the whole question of fraud. The submission of it, even if with erroneous instructions as to the law, worked no injury to the defendant. This leads up to a consideration of the plaintiff’s complaint of the action of the court below set out in THE APPEAL OP GEORGE B. SLOAN. The evidence submitted in the effort to substantiate the allegations of fraud and the notice taken of it, in argument and in the charge, is alleged by the plaintiff to have resulted in injury to him in the rendition of a comproznise verdict less than the amount to which he is entitled. If this result were clear, a retrial of this case should be ordered. The result is not a [651] compromise verdict. The plaintiff has not been injured by the amount of the verdict. In his case in chief he attempted to prove the market value of the particular whiskey called for by the warehouse receipts, which was described as the John T. Moss whiskey, made in 1895. Two witnesses were called by the plaintiff in his case in chief. The first, when asked the worth of this whiskey, said in reply, that he did not know anything about it. The second witness called had never seen any John T. Moss whiskey, and when pressed to give a valuation said, that he could not say what the value of the John T. Moss whiskey of 1895 would be. Both witnesses showed some knowledge of the value of the standard brands and the effect of age upon value, but from the testimony of neither could the jury have reasonably found the value of the Moss whiskey represented by the warehouse receipts in evidence. In rebuttal the plaintiff says, that when he took the receipts from Hart & Company, the latter claimed that the whiskey was worth fifty cents a gallon (although just bought from Johnson at forty). The plaintiff further says, that the lawyer he consulted expressed the opinion that the receipts were worth $1,000. The only definite testimony as to value was obtained from the defendant, Johnson, who said that the whiskey was worth about forty cents per gallon, if sold on the market. He knew the whiskey and for his valuation he gives reasons. The jury adopted his appraisement. The number of gallons was approximately 2,387.66, and at forty cents per gallon, this amounted to $955.06. The storage charges were $185. Deducting these from the value of the whiskey, leaves $770.06, the amount of the verdict. It is manifest from this result that the testimony and discussion in respect to the alleged fraud (which should have been excluded from the jury) did not affect the appraisement by the jury of the value of the whiskey represented by the certificates, and the plaintiff, therefore, suffered no injury. In fact, he demonstrates in his own paper-book, as appellee in the defendant's appeal, that the amount of the verdict was not the result of chance or compromise, but calculation based on Johnson’s valuation. There are errors in this record, but we are unable to see that a retrial of this case, although desired by both parties to the litigation, is necessary to an adjustment of their rights. The errors have not resulted in injury. The judgment entered in the court below is, therefore, as to both of the appeals, affirmed.