Lake Shore & Michigan Southern Railway Co. v. National Live Stock Bank

Me. Presiding Justice Waterman delivered tjie opinion oe the Court. In November, 1888, and for a number of years prior thereto, Hugh Gillice was a cattle buyer at the stock yards in Chicago. Among those for whom he bought cattle was his brother, M. C. Gillice, of Albany, New York. On the 8th day of' November, 1888, Hugh Gillice bought 299 head of cattle for M. C. Gillice, or more correctly speaking, M. C. Gillice, through his brother, Hugh Gillice, bought 299 head of cattle. For most of the cattle so purchased, Hugh Gillice gave to the vendors, scale tickets. The scale tickets were substantially in the following form : “ National Live Stock Bank. Pay account M. C. Gillice for-cattle. Hugh Gillice.” On the back of the scale tickets was indorsed the weight of the cattle and the price per pound at which they had been sold. The custom of doing business in this regard was that sellers of the cattle deposited these scale tickets, so indorsed, Avith whatever bank the seller happened to be doing business, and the bank at the close of business on each day would collect all these scale tickets which had been paid or credited upon the pass-book of the customer by the bank during the day, attach the scale tickets to a draft drawn by the bank upon Michael C. Gillice, or whomever had purchased them, and forward the draft for collection from such person. Before paying any of the scale tickets presented to the bank of appellee on the 12th of November, -1888, for cattle purchased for Michael 0. Gillice, the bank heard that Michael Gillice was in financial trouble, and at the close of that day’s business the cashier of appellee found Mr. Hugh Gillice and went with him to the office of appellant at the Union Stock Yards for the purpose of getting a bill of lading. At the office of appellant, Mr. Herrick, the cashier of appellee, met Mr. Vaughn, appellant’s agent. Mr. Herrick said to Hugh Gillice, “ If Ave pay for the cattle that you purchased for M. 0. Gillice, we Avant either the guaranty of some bank East where he is doing business, or we must have a bill of lading. It is too late now, there is not time enough to get a guaranty, and I want a bill of lading for these cattle if you want them paid for.” Whereupon, íavo bills of lading, being together for 299 head of cattle, were made by appellant and delivered to appellee; these bills' of lading_ Avere in the .customary form, acknowledging the receipt in good order from E. Z. Herrick, cashier, of 299 cattle to be forwarded as consigned in the margin; in the margin was, “ Order E. Z. Herrick, cashier; notify M. 0. Gillice, ¡New York.” At the time these bills of lading were issued the cattle had been already loaded on the cars, and perhaps had then left the stock yards, consigned to M. C. Gillice. Mr. Vaughn, the agent of appellant, who issued the bills of lading, testified that he did not hear Mr. Herrick say anything about requiring a bill of lading or a guaranty if the bank paid for the cattle, or anything to that effect; but that Mr. Herrick came into appellant’s office and wanted him, Vaughn, to change consignment of cattle from M. G. Gilliee to read: “ To the order of E. Z. Herrick, cashier. Notify M. G. Gilliee, Mew Y ork.” Mr. V aughn goes on: “I told him that the cattle had gone, and refused to change consignment until I had seen Hugh Gilliee. Hugh Gilliee was not present at the time. He was sent out for, and in a few minutes he came back with Hugh Gilliee. Mr. Herrick wanted consignment changed and wanted a bill of lading, and Hugh Gilliee says, ‘ I do not care a damn what you do, but you will be sorry for it.’ That was the conversation that was had in my office.” Having obtained these bills of lading, appellant paid the scale tickets which had been presented to it, and also cashed a draft made by Hugh Gilliee upon his brother, Michael Gilliee, for certain cattle which Hugh Gilliee, in purchasing for his brother Michael, had, instead of giving scale tickets, given his, Hugh’s, personal check. Appellant, instead of delivering the cattle to the order of appellee’s cashier, in accordance with the terms of the bills of lading, delivered them to Michael 0. Gilliee, who turned out to be insolvent, and never paid the drafts made by appellee upon him; whereupon appellee brought suit and recovered in the court below $13,607.64, of which $10,443.79 was the principal sum paid by appellee for 230 cattle purchased and received by Michael C. Gilliee, included in the bill of sale, which, with interest thereon from December 1, 1888, makes up the $13,607.64. Of the principal stim. of $10,443.79, $1,075 was on account of money paid by appellee to Hugh Gilliee to reimburse him for that sum which he had expended in the purchase of sixty bulls for his brother Michael Gilliee, which sixty bulls were shipped at the same time as the other cattle and included in the bills of lading for 299 cattle. Appellant says that the controlling feature in this ease is, who was the owner of the cattle in question % As to this appellant urges that the cattle at the time these bills of lading were given to appellee were the property of Michael 0, Gillice, and therefore the statement in the bills of lading that appellant had received from appellee 299 head of cattle was untrue, and was known to appellee to be untrue at the time it received such bills of lading; that such being the case, appellant has a right to contradict said bills of lading, to show that the statement therein made is not true, and that it, therefore, delivered the cattle, as it properly might and ought, to the real owner thereof, Michael O. Gillice. At the time these bills of lading were issued, Michael 0. Gillice had not paid those from whom he purchased the cattle, otherwise than symbolically, if indeed the symbol was as to most of the cattle such that it can be considered in any sense a payment. While it is true that for many purposes it may be said that when these bills of lading were issued the title to the cattle was in Michael 0. Gillice, yet it was not in him so absolutely that he had as against all the world a right to retain these cattle without further action upon his part. The vendors had received neither money for them nor commercial paper; they had merely that for which they expected to receive money. True, upon the reception of these scale tickets they had delivered the cattle to the agent of Michael Gillice, and had suffered such agent to put them on the cars for transportation to the East. Michael Gillice being, however, at the time insolvent, it would seem that the vendors had a right of stoppage in trmisitu. The rule laid down in Benjamin on Sales, Sec. 835, is that the vendor’s right to stoppage in transitu, is not lost by his having received conditional payment by bills of exchange or other securities, even though he may have negotiated the bills so that they are outstanding in third hands unmatured. The vendors of these cattle not having received payment therefor were entitled to have stopped them in transit, unless the transitas of the cattle was at an end at the time these bills of lading were issued. As to this Benjamin on Sales, Sec. 846, says: “ The question, and the sole question for determining whether the transi,tus is ended, is in what capacity the goods are held by him who has the custody; is he the buyer’s agent to forward them to the destination intended at the time the goods were put in transit. ” It is clear from the testimony of both Michael Grillice and Hugh Grillice that the latter purchased these cattle for his brother for the express purpose of shipping them at once to him in Hew York, and not for the purpose of holding them for any time whatever, so that the entire travel of these cattle from the time they left the vendor’s hands until they reached Michael Grillice in Hew York was one transit to the place of destination for transportation to which they were purchased. That a transit is not ended merely because the goods come into the possession of an agent of the vendee, other than the transportation company is abundantly established by the cases of Stubbs v. Lund, 7 Mass. 453-456; Harris v. Pratt, 17 N. Y. 249-263; Harris v. Hart, 6 Duer, 606-619; Holbrook v. Vose, 6 Bosw. 76-103; Newhall v. Vargas, 13 Me. 93-109. Moreover, the sale of these cattle was, it is manifest, a sale for cash. The vendors having delivered the cattle and not having actually received payment therefor, were entitled to bring suit at once against Michael Grillice, the purchaser. Being, as he was, a resident of the State of Hew York, they could have maintained an action of attachment against him and seized these very cattle, if they had not left the State, and garnisheed the appellant, in whose custody they were. Whether the cattle at the time these bills of lading were issued were actually in the State of Hlinois, does not with certainty appear. The only showing in respect to the place where they then were, is that they had been loaded upon the cars, and that the train had pulled out twenty-five minutes before. So that at the time these bills of lading were issued it is clear that' Michael Grillice had not acquired such a possession of the cattle as that he could have held them against the action of the vendors, who had not been paid. Hnder these circumstances, his agent being applied to, at least does not refuse to consent to have the consignment of the cattle changed and bills of lading for them issued to appellee; and while the emergency which would have required action on their part never occurred, it is altogether unlikely that had appellee refused to pay for these cattle the vendors of them would have allowed them to reach the actual possession of Michael G-illice without his paying for them. It is to be presumed in this court that the finding of the trial court was upon all questions of fact, such that we would sustain its judgment, and consequently that appellant was informed before it issued these bills of lading, that unless appellee received them it would not pay for these cattle; yet we think if it was not distinctly so informed it would not be relieved from responsibility. Appellant is chargeable with the knowledge which all great transportation companies have that moneys are paid and advances made on bills of lading in thousands of instances each day; that appellee for some purpose desired to and had obtained these bills of lading. Appellant could not, therefore, treat them as of no consequence; it knew that the cattle had already been' placed upon the cars consigned to Michael Gillice, and that it had issued these bills of lading by which the cattle were to be delivered only upon the order of appellee. There is no pretense that when these bills of lading were issued the cattle had actually been delivered to Michael Gil-lice, or were beyond the control of appellant. Béing still in its custody, it could easily, by telegraph or mail, have informed its eastern agents of $ie bills of lading it had issued and the obligation it had entered into to deliver the cattle, only upon the order of appellee; not having done so, it has been justly held to respond to appellee for the loss sustained by its conduct in the premises. Transportation companies have in many instances been allowed to show that the statement of a reception of goods made in a bill of lading was not true. In most cases this has been allowed, either because the agent of the company giving the receipt had done so fraudulently or did so under a mistake of facts. In the present case Mr. Vaughn,, the agent of appellant company, neither misunderstood the circumstances under which he, on behalf of appellant, issued these bills of lading, nor was he guilty of any fraudulent conduct. The most that is claimed by appellant is that he mistook his duty. Appellant’s position in truth in this case is, that while Michael C. Gillice, not having paid for these cattle, had no right to hold them as against the claim of those from whom, without payment, he had obtained them, yet) appellant having received the cattle from his agent, was then bound to deliver them to him and thus aid and assist him to defraud his creditors out of what was their just due; and that, it having by way of so aiding issued bills of lading to appellee and thus induced appellee to pay for the cattle, but for which there is the highest probability that Michael C. Gillice would never have received these cattle, it is not now bound to reimburse appellee for the money it paid upon the faith of appellant’s bill of lading, and in reliance upon the contract of shipment entered into by appellant with appellee. We do not deem it necessary to consider the various propositions of law submitted to the trial court, as we are of the opinion that under the undisputed facts appellee is entitled to the judgment it obtained. The judgment of the Superior Court is affirmed.