First National Bank of Chicago v. W. J. Hartzell Co.

Opinion by Head, J., The Northern Produce Exchange of Chicago shipped a carload of eggs to Pittsburg. The bill of lading issued by the carrier showed that the consignor had billed the car to itself at Pittsburg. It contained the further direction that the W. J. Hartzell Company should be notified of the arrival of the car. At the same time the consignor drew a draft on the Hartzell Company for the price of the merchandise. This draft it sold for value to the First National Bank of Chicago and at the same time indorsed and turned over to the bank the bill of lading. The bank forwarded the draft with the bill of lading attached to its correspondent in Pittsburg. When presented in due course to the Hartzell Company, payment was refused, and that company, without payment of the draft, could not secure the bill of lading [64] and was therefore unable to obtain possession of the merchandise. On account of a claim arising out of some previous transaction, the Hartzell Company began an action in foreign attachment against the consignor and had the sheriff attach the contents of the car referred to. As the merchandise was perishable, an order was obtained from the court out of which the writ issued directing that the goods be sold, the proceeds of such sale to remain in the hands of the sheriff in lieu of the property. The Chicago bank, claiming that it was the owner, and therefore entitled to receive the proceeds resulting from the sale of the goods, asked and obtained leave to intervene and the trial proceeded. It having been made to appear from the evidence, which in this respect was undisputed, that the Chicago bank was the bona fide holder of the draft referred to and the bill of lading, the learned trial judge directed a verdict in its favor and afterwards entered judgment thereon. The Hartzell Company appealed. The assignments of error rest on the single legal proposition that there was no sufficient evidence to warrant the conclusion that the bank was the owner of the property attached, and therefore that the court should have directed a verdict for the appellant. If the transaction between the Produce Exchange, the consignor, and the bank in Chicago, is to be regarded as governed by the laws of Pennsylvania, the question must be disposed of in the light of our Act of September 24,1866, P. L. (1867), p. 1363, then in force. That act provides “That warehouse receipts, given for any goods, wares, merchandise, &c., deposited with any warehouseman, &c., or bills of lading, or receipts for the same, when in transit, by cars, &c., shall be negotiable, and may be transferred, by indorsement and delivery of said receipt, or bill of lading; and any person to whom the said receipt, or bill of lading, may be so transferred, shall be deemed and taken to be the owner of the goods [65] therein specified, so as to give security and validity to any lien created on the same, subject to the payment of freight and charges thereon, &e.” In the face of this statute it is of no moment to argue that the position, legally speaking, of the Chicago bank, after it had purchased the draft and become the indorsee of the bill of lading, was that of lien creditor rather than owner. Even if it be granted that the consignor had some interest, in the nature of an equity of redemption, in the property, in case it should sell for more than the amount of the draft, nevertheless the statute has declared that the interest of the bank was that of an owner. As a consequence, upon proof of the necessary statutory facts, the court below could not have done otherwise than declare that the bank was such owner for every purpose necessary to secure and enforce its claim. In Richardson & Co. v. Nathan, 167 Pa. 513, we have a case practically on all fours with the one at bar. There was, however, in that case one fact which apparently made a situation more favorable to the contention of the appellant here than the one presented by this record. That was the special form in which the bill of lading had been indorsed. It was there argued that the form of the indorsement was evidence that no intention existed to transfer the title to the property. After considering the nature and effect of the indorsement as made, Mr. Justice McCollum:, speaking for the court, goes on to say: “Thus considered, the effect of it was to invest the appellant with the rights of a purchaser of the property, so far as it might be necessary to exercise such rights for its protection: 2 Am. & Eng. Ency. pf Law, p. 243, and cases there cited. In other words, the appellant, after the delivery of the bills, must be deemed and taken to have been the owner of the property for the accomplishment of the purpose for which it was pledged: Act of September 24, 1866, R. L. (1867), 1363.” There is nothing in this decision conflicting with the [66] earlier case of Bissell v. Steel, 67 Pa. 443, on which the learned counsel for appellant largely relies. In that case there was no room for the operation of the statute we have quoted because the bills of lading had never passed by indorsement to the person claiming to be the holder of them., The statute therefore is not mentioned in the opinion of the court and the report of the case shows that it was cited only by counsel for defendant in error to sustain his proposition that unless a bill of lading is indorsed • it passes no property. Under such circumstances the case turned largely on the question of the pleadings and the court held that the principles declared in Meyers v. Prentzell, 33 Pa. 482, and Stewart v. Wilson, 42 Pa. 450, were controlling. An examination of those cases will show the soundness of the reasoning on which they proceeded and their inapplication to the case at bar, viewed in the light of the statute. If the transaction between the bank and the Produce Exchange be viewed in the light of the law of the state of Illinois, the appellant is in no better situation. Proof was duly made at the trial that the law of that state was to be found in the case of Walsh v. First National Bank of Hiawatha, 228 Ill. 446. The facts of that case and the legal principles controlling were cited at length in the opinion of the learned court below entering judgment on the verdict and in the brief of the learned counsel for the appellee presented to us. The correctness of these citations is not questioned. They impel us to the conclusion that the judgment entered by the learned court below is just as clearly supported by the law of the state of Illinois as it is by the law of our own state. The assignments of error are overruled. Judgment affirmed.