Stein v. Rheinstrom

Collins, J. It seems to be conceded by the counsel for both parties that warehouse receipts of the character of those herein involved are negotiable instruments, and that such interest or title as the holder thereof may have in the merchandise therein mentioned will pass to a purchaser upon the indorsement and delivery of the receipts. But, for the purposes of this action, assuming this, we are at a loss to discover why we should construe the clause, common to •each receipt, whereby the warehousemen stipulated “to deliver the same upon payment of the whiskey, the U. S. government and state tax, interest, and charges,” or why we should enter into any discussion as to what was meant by the use of the words “upon payment •of the whiskey," and over which the present litigation seems to have arisen. Whether these words should be regarded as equivalent to the words “upon payment for the whiskey” or “upon payment of the purchase price of the whiskey,” or as equivalent to some other form •of expressing the fact that a payment of some part of the price had to be made, is wholly immaterial for the proper disposition of the -order appealed from, which must be affirmed. Strictly speaking, the receipts were not negotiable, for they carried upon their face a notice that the whiskey would only be surrendered upon the payment of certain charges, thereafter to be ascertained. If there was anything ■doubtful or ambiguous about the language used as to the nature, character, or extent of the claim or lien, a purchaser was put upon his guard, and cautioned to inquire. He was thereby notified of an infirmity which would affect him, and this notice was ample to prevent a purchase of the receipts by any person exercising ordinary business prudence and judgment without first investigating. Observing a clause in the receipts which was uncertain, he was bound to learn its meaning, or, failing so to do, to suffer the consequences. The words in question were indefinite, and of doubtful import, but palpably a prepayment of some character was required, in addition -.to United States government and state taxes, interest, and charges. [479] It devolved upon the plaintiff, when purchasing, to discover what was intended by their use. The purchaser of what purports to be or is said to be negotiable paper must exercise ordinary prudence in respect to knowledge derived from an inspection of the paper. Hall v. Hale, 8 Conn. 336; Ayer v. Hutchins, 4 Mass. 370. See, also, First Nat. Bank of St. Paul v. County of Scott, 14 Minn. 59, (77.) Upon the admission that, when tendering taxes, interest, and charges, the plaintiff wholly ignored the clause which he concedes was doubtful and ambiguous, giving no effect to it whatsoever, the demurrer to the answer was properly overruled. Order affirmed.