Lehman, Durr & Co. v. Marshall

PECK, C. J. 1. The evidence offered by appellants (defendants in the court below) to prove the alleged custom in the city of Montgomery, was properly rejected. None but good customs have any validity. A custom that has a tendency to tempt parties to acts of wrong doing, bad faith, or dishonesty, can not be a good custom; A bad — 376 — custom ought to be abolished. Malus usus est abolendus, 1 Wend. Blackst. 76. It is certainly an act of bad faith apd dishonesty for a party intrusted with a warehouseman’s receipt for cotton, to be handed to the owner, to transfer it by delivery to a third person, without the owner’s knowledge oí consent. The offer to prove this custom was an admission that such instruments could not be transferred by delivery, either by the common-law, or the law-merchant; and that is undoubtedly the case. Furthermore, this alleged custom is inconsistent with the spirit, if not with the letter, of section 1838 of the Revised Code, which provides that “ all bonds, contracts and writings for the payment of money, or other thing, or the performance of any act or duty, are assignable by indorsement.” A warehouseman’s receipt is a contract1 for the performance of a duty, and, therefore, can only be assigned by indorsement. — Skinner v. Bedell’s Adm’r, 32 Ala. 44; Henley v. Bush, 33 Ala. 636. 2. A growing crop may be mortgaged, and when matured and gathered, if not before, the mortgagee is entitled to the possession, and may maintain an action to recover it, or its value. — Adams v. Turner & Horton, 5 Ala. 740. 3. The contract between the mortgagee and mortgagors in the fall of 1867, that if the mortgagors would deliver, in the name of the mortgagee, at a warehouse in the city of Montgomery, or Wetumpka, to be selected by the mortgagee, a sufficient quantity of ginned cotton, at eleven cents per pound, to pay the note secured by the mortgage, the mortgagee would accept the cotton in payment of the note, did not destroy the legal effect of the mortgage. Such was manifestly not the intention of the parties. At most, it only amounted to an agreement to receive cotton at eleven cents per pound, if delivered, in payment of the note, instead of money, extending the time of payment to the end of the fall, but the mortgage still remained a security for its payment. 4. As between the plaintiff and defendants, the receipts copied into the bill of exceptions were an admission, on the part of the defendants, that the cotton belonged to the — 377 — plaintiff, (Kennedy, &c., v. Strong, 14 I. R. 128,) and it was no defense that it had been shipped and sold by direction of parties who had obtained possession of the receipts from a person who had no legal right to indorse or dispose of them. [Note by Repórter.- — -After the delivery of the foregoing opinion, appellants’ attorneys applied for a rehearing, and made the following argument in support thereof :] 5. The defence of usury can only, be set up by a party to the usurious contract, or by some one having an interest in, or prejudiced by, the same. The defendants were not parties to the contract alleged to be usurious, had no interest in it, and had not in any wise been injured or prejudiced by it, and, therefore, could not make it a defense to this action. — Cooke & Kornegay v. Dyer, 3 Ala. 643. 6. It is the province of a jury to determine the credibility of evidence, and if conflicting, it is their duty to reconcile it, if it can reasonably be done. If a fact be misstated by a witness, his evidence as to other matters is not to be altogether rejected, unless the jury believe the misstatement was wilfully and deliberately made, knowing it to be untrue. — The Sanctissama Trinidad, 7 Wheat. 338-9. Taking these principles as the law of this case, we do not discover any available error in the charges given by the court, and excepted to on the part of the defendants. The judgment of the court below is affirmed, with five per cent, damages. The appellants will pay the cost. Petitioners respectfully urge, that by the rulings of the court below, they were plainly deprived of an important provision of a valid and lawful contract, without any fault, or bad faith, or breach of contract, or breach of duty on their part; and were held responsible for the misconduct of plaintiff’s own agent, of which they had no notice when they exercised their right secured -by contract to deliver the • cotton to the order of “ the bearer ” of the cotton receipts, (which are in law contracts.) — Bush v. Bradford, 15 Ala. 317. — 378 — Bad usage is not insisted on by petitioners. Let all mere usage be put aside. Petitioners, however, do insist that no court ought to deprive them of the benefit of any portion of a lawful contract. Petitioners insist that no court ought to treat the contract (evidenced by the cotton receipt,) precisely as if it did not contain the words, “ or to the bearer of this cotton receipt.” The law of the land does not deny effect to such plain words when found in a lawful contract. The supreme court, in the opinion delivered, entirely overlooked the plain and rational distinction between the case where there is “ an express agreement to return the property to the plaintiff,” and the case where, as here, the agreement is evidenced by a receipt, and is, that the bailees receive the thing bailed from the plaintiff expressly “subject to his order, or the bearer of this receipt.” In the ease where the express agreement of the bailee is to deliver to the plaintiff, and nothing is agreed or said as to delivery to the bearer of the agreement, or other person, the delivery by the bailee, through mistake or negligence, to another person, without the consent or authority of the plaintiff, is a conversion, and renders the bailee liable. That was precisely the case in Esmay v. Fanning, 9 Barb. 190. And that is the principle asserted in sections 414 and 450 of Story on Bailments, and in the cases cited in the notes to those sections. But when, as here, the agreement is different, a different principle or rule must govern the case. A bailee certainly has the legal right to agree with the bailor, that the bailee shall have the right to deliver the thing bailed either to the bailor or to “the bearer” of the written agreement or receipt. This -was the very agreement which the parties to this suit did make, and did reduce to writing. There was no fraud in this -written agreement. This written agreement is a lawful and binding contract, and is the sole expositor, the conclusive evidence, of the terms of their contract. — Cole v. Spann, 13 Ala. 537. Yet, the plaintiff is permitted to recover in the very teeth — 379 — of this lawful contract. Yes, he is permitted to recover, simply because the bailees did precisely what this lawful contract secured them the right to do, that is, delivered the thing bailed to “ the bearer ” of the written agreement or receipt. In the class of cases first above noticed, (and of which Esmay v. Fanning, 9 Barb. 190, is one,) the bailee was held liable for making a delivery not provided for in the contract; for delivery to some other person, when his express contract required a delivery to the bailor, and made no further provision as to delivery. His liability arose from his going beyond and outside of the contract. But in the present case the bailees have not gone beyond or outside of their written contract; they have made no delivery which was not clearly provided for and authorized by their written contract; and yet, for an act clearly within the limits of their contract, and clearly authorized by it, they are held liable for a large sum in favor of their bailor. Reason, justice, principle and authority all forbid such a thing. Though the written contract here is in the form of a receipt, it is not a mere receipt; it is a contract, a contract between competent parties, and lawful in every respect. Bush v. Bradford, 15 Ala. 317, and cases there cited. It is a contract which certainly secured to the bailees “the option” to deliver to “the bearer” of the contractor to his order ; and it is settled, that “a contract may be optional with one of the parties, in part or in whole, and obligatory on the other.” — Disborough v. Neilson et al., 3 Johns. Cases, 81; Doug. 23, 1 Term Rep. 132-33; Cowp. 218; Giles v. Bradley, 2 Johns. Cases, 252; see, also, eases cited in last sentence of opinion on page 63 of Murrel v. Whiting, 32 Ala. It is of the highest consequence to all the people, that courts of justice should hold all parties to contracts lawfully made by them, as they made them; that courts should not practically expunge any part or term of such contracts by refusing to allow any effect to it, or by any other way of treating the subject. — 380 — The contract here under consideration is one of a class vast in number, and involving vast amounts of money. It is written in plain and unambiguous language. The plaintiff himself here treats it as a valid contract. The defendants have never violated that contract as it was made, written, delivered and accepted. No violation of that con-, tract by defendants can be made out, without first practically expunging from it the words “ or the bearer of this receipt.” "With all deference it is urged, that courts of law have no authority or jurisdiction to thus practically expunge from such contract such plain, lawful, and important provisions. To do this, is really to make for these defendants a new contract, and one they never made and were never willing to make. The error in the opinion of the court is, in treating this contract precisely as if it did not contain the important words, “or the bearer of this receipt.” .If the contract did not contain these words, then the delivery to a third person would be a conversion. But as the contract does contain those words, the cotton was plainly just as “subject” to the order of “the bearer of this receipt,” as it was to the order of the plaintiff himself. To deny this, is nothing short of denying to these parties the right to insert in them own contract such lawful terms and stipulations as they choose. If the rulings of the court below are to be affirmed as good law, then logic demands that the affirmance should be accompanied by the following head note: “A warehouseman who, for cotton stored with him, signs and delivers therefor a contract in writing in the form of a receipt, wherein he states that he has received the cotton from its owner, (naming him,) ‘subject to his order, or the bearer of this receipt,’ becomes guilty of conversion, and liable in trover to the owner, by the bare exercise of his contract right to deliver the cotton to ‘ the bearer of this receipt,’ or to his order. The exercise of this contract right is, per se, a breach of the contract, and makes the warehouseman guilty of a conversion (a tort).” ■ — 381 — Any close examination of this contract, and of section 1838 of the Revised Code, must result in convincing every judge that there is nothing in that section which has, or can have, the slightest bearing upon, or application to, the present case. True, the contract here is one “for the performance of an act or duty;” true, this contract is “assignable by indorsement;” true, no other person than plaintiff can,, in his own name, maintain an action upon the contract itself, without assignment or indorsement of that contract by the plaintiff. But admitting all this, yet the plaintiff has never assigned this contract by indorsement, and no one but the plaintiff is here sueing; and the plaintiff himself is not sueing upon the contract itself, but is sueing for a supposed tari. He can not possibly recover without showing that the delivery to “the bearer” of the receipt was a breach of the contract. Even if the plaintiff had assigned or indorsed the contract to a specified third person, that act of plaintiff could not expunge from the contract the option thereby secured to defendants to deliver the cotton to “ the bearer ” of the receipt. This option of the defendants, thus secured by their written contract, is not affected by anything contained in section 1838 of the Revised Code, nor by any other section of that Code; nor can that option of defendants be destroyed or impaired by any act of the plaintiff proved or brought to view in this case. Now, no fair man ever disputed that the contract was an admission by defendants that the cotton did belong to the plaintiff at the time the contract was made. But surely, it ought not to be claimed that it was an admission also that it would continue to be the property of plaintiff forever. A like admission implied from a replevy bond, was held not to conclude the party as to the actual facts twenty-four days afterwards. — Wallis v. Long, 16 Ala. 738. Suppose a banker, on the 1st day of January, 1872, received the money of A, and on that day executed to him a certificate of deposit, stating that the money so deposited was “subject to the order of A, or the bearer of this certificate.” Suppose A loses the certificate, and it is found — 382 — by B, and that on the 24th of January, 1872, B presents the certificate to the banker, who, without notice from A forbidding payment to any person but himself, pays the money to B: can any lawyer contend, upon such facts, that the banker is thereby guilty of a conversion, or that he remains liable to A? Of course not. The banker has paid the money to “ the bearer of the certificate,” as authorized to do by its terms, and that payment was clearly good, because A, after losing the certificate, did not prohibit payment to any person but himself. The plaintiff in this case did not prohibit the defendants from delivering the cotton to “the bearer of the receipt;” he gave no notice to the defendants that there was any 'wrong in delivering to such “ bearer;” and in the absence of all such notice, the defendants delivered to the order of “ the bearer of the receipts.” The contract authorized this delivery, and therefore such delivery was neither a tart nor a. conversion. The assignability of the contract has nothing to do with this case. The contract itself, upon its face, secured to defendants the right to discharge it by a delivery to “ the bearer” of the contract. This right was exercised, without notice from plaintiff forbidding such exercise. There is no law of this land which makes the defendants tort-feasers for such exercise of their right secured by contract. It is a legal impossibility, that any party to a lawful contract can become a tort-feaser by simply exercising the very right secured to him by the contract. And this is true, whether the contract be assignable or not. No negligence is shown against the defendants. No breach of contract is shown. No bad faith is shown. In good faith, and without negligence, they delivered the cotton to “the bearer” of the receipts, in strict accordance with their contract. It is confidently believed that there is not a principle or an adjudged ease which declares ware-housemen liable on such facts. — Runyan v. Caldwell, 7 Humph. 134; Willard v. Bridges, 4 Barb. 361. The contract itself secured the right to defendants to make this delivery to “the bearer.” This right certainly — 383 — continued of full force until the plaintiff might give notice to defendants not to deliver to “the bearer.-” No such notice was given, nor anything of the hind. In the absence of such notice, the plaintiff must be the loser by any misconduct of his own agent. He can not hold the defendants responsible for the misconduct of his own agent, of which misconduct the defendants had no notice when they delivered the cotton to “the bearer” of the receipts. Nelson v. Iverson, 17 Ala. 216. The several rulings of the court below are in conflict with the sound principles and positions above stated. The charges given to the jury rendered it impossible for the defendants to have “ a trial by jury,” upon the very matters on which the law of the land made the liability of defendants to depend. The charges make them hable simply for delivering to “the bearer” of the receipts, without fault, bad faith, negligence, or notice from plaintiff' that he did not wish such delivery made. — Nelson v. Iverson, supra. The attempt to prove the custom in the court below was cumulative, and no waiver of the rights of appellants under the contract. In Ray v. Wragg et al., decided at this term, this court uses the following langiiage: “ In construing contracts, the intention of the parties will be carried into effect so far as the rules of language and the rules of law will permit. A court would not, by construction of a contract, defeat the express stipulations of the parties.” Yet, in the present case the court has, by construction of a contract, defeated one of the “express- stipulations of the parties.” The contract here expressly stipulates that the cotton shall be “subject” to the order of “the bearer of this receipt,” or to the order of the plaintiff. The court says, no, the cotton shall not be subject to the order of “the bearer of this receipt,” but shall be subject only to the order of the plaintiff. The court, in this case, disregard that sound and universal rule of “sound exposition” which imperiously demands that such construction shall be put upon a written con — 384 — tract, or any other written instrument, as. allows some meaning, operation and effect to every word and clause thereof, rather than a construction which silences or denies effect to any clause or word thereof. — Smith on Stat. 710; Spivey v. The State, 26 Ala. 101; Smith on Contr. 407-8, marg., where “the most important'-of all the rules of construction” is stated and elucidated.