Mershon v. Moors

Oole, O. <J. This is a contest between Moors & Go., of Boston, and the respondents, merchants of Chicago, for certain moneys garnished as the property of E. S. Wheeler & Co., of New ITaven, Conn. The moneys have been paid into court by the garnishees, and the question in the case is, Can Moors & Co. hold them, or are they liable to attachment and garnishee process by the creditors of Wheeler & Co. ? The facts upon which Moors & Co. claim the money are, in substance, these: In May, 1887, Moors & Co., bankers, issued a letter of credit to E. S. Wheeler & Co. of Liverpool, England, authorizing them to draw upon Morton, Rose & Co., of London, for £10,000, for account of E. S. Wheeler & Co. of New Haven, Conn. These drafts were to be for the invoice cost of merchandise to be shipped to Atlantic ports in the United States, and were to be accompanied by consular invoices and bills of lading to order, and indorsed to Moors & Co. The latter were to pay, or provide for the payment of, these drafts thus drawn. On the back of the letter of credit, E. S. Wheeler & Co. of New Haven executed an agreement by which they bound themselves to furnish Moors & Co. bankers’ bills on London of the same amount, to meet these drafts, before maturity of the same, or pay the equivalent thereof in cash at current rates of exchange, and also agreed to pay certain specified commissions for the acceptances of Moors & Co. They further pledged and gave Moors & Co. a specific claim and lien on all goods and merchándise, and the proceeds thereof, which — 511 — the iatter might pay for under tbe arrangement by reason of the letter of credit, and also all the bills of lading and policies of insurance to an amount sufficient to cover all advances or engagements under such credit, with full power for Moors & Co. to take possession and dispose of the same for their security or reimbursement. The securities which Moors & Co. might receive were to bo held by them as security for any other indebtedness or liability which might exist between the parties. E. S. Wheeler & Co. was the name under which E. S. Wheeler did business in this country. He was also a member of the Liverpool firm to whom the letter of credit ran. In Juty, 1887, E. S. Wheeler & Co. of Liverpool, at the request of E. S. Wheeler of New Haven, shipped, by the steamer Sarmalian, 715 boxes of tin plates and 214 boxes of tin plates, taking separate bills of lading therefor, executed in triplicate, by which the carrier undertook to transport the first lot from Liverpool to Chicago, and the other lot from Liverpool to Milwaukee. Drafts were drawn for the invoice price of the goods shipped, and the bills of lading were indorsed: “ Deliver to Moors & Co. or order.” In July, 1887, E. S. Wheeler & Co. of New Haven requested Moors & Co., by telegraph, to send the documents for the Sarmatian shipments to the custom-house agent of the Grand Trunk Railway at Montreal. The goods were to be delivered by the steamer at the port of Montreal to the Grand Trunk Railway, to be forwarded by such company to their destination. Moors & Co. thereupon forwarded to the said customs agent a consular invoice and bill of lading for the 715 boxes of tin plates, and a consular invoice and bill of lading for the 214 boxes of tin plates, with instructions to forward the freight to Chicago and Milwaukee, as called for by the bills of lading, and by letter so informed E. S. Wheeler & Co. of New Haven, sending them at the same time a consular invoice and bill of — 512 — lading for the 715 boxes, and also a consular invoice and bill of lading for the 214 boxes, indorsing the bills: “Deliver to E. S. Wheeler & Co. or order.” They at the same time sent b_y mail an instrument to E. S. Wheeler & Co. of New Haven relating to both lots of tin plates, which E. S. Wheeler & Co. signed at New Iiaven and returned to them. By the material part of this instrument, E. S. Wheeler & Co. acknowledged the receipt from Moors & Co. of the merchandise, per steamer Sarmatian, as specified in the bill of lading describing the property, in all 214 boxes of tin plates, and added: “Which we hereby agree to hold in trust as their property, with proper insurance, but .with liberty to sell and deliver said merchandise to purchasers for the sum of not less than $4,845, payable in cash on or before October 5, 1887; we further hereby agreeing to deliver to said Moors & Co. the proceeds of said merchandise until the acceptances given or to be given for the purchase money of said merchandise under credit issued for our account shall have been paid or satisfactorily provided for, with the understanding that the said J. B. Moors & Co. are not to be chargeable with any expenses incurred thereon,— the intention of this agreement being to protect and preserve unimpaired the lien of J. B. Moors & Co. on said merchandise.” The 214 boxes of tin plates arrived at' Milwaukee, August 13, 1887, and were entered at the custom-house, and afterwards were delivered to a custom-house broker to whom E. S. Wheeler & Co. had sent two bills of lading indorsed to them b}*- J. B. Moors & Co. for that purpose. The broker delivered said boxes to the garnishees, according to the instructions of E. S. Wheeler & Co., on August 16 and 17, 1887. The moneys in controversy are the proceeds of these tin plates; and, upon the facts stated, the question is, To whom does the fund belong,— to Moors & Co., or to the simple — 513 — creditors of E. S. "Wheeler & Co., who have garnished the same? Now, if the positive agreement of the parties can have effect, it is clear that Moors & Co. are entitled to the money. They furnished the funds to pay the purchase price of the property. The bills of lading were indorsed to them, as it was agreed they should be; and by the arrangement they were to have a specific claim and lien on the merchandise and the proceeds thereof, for which they had paid or come under engagements to pay by reason of the letter of credit. It is insisted by the appellants’ counsel that the effect of the writings, which should, of course, be construed together, was to make Moors & Co. the owners of the property at the time of its sale to the garnishees; and such, we think, was the case. It will' be noticed that E. S. Wheeler & Co. pledged the property to them, and gave them a specific lien upon it and the proceeds thereof, with full power and authority to take possession of and dispose of the same at their discretion, as a security for their advances. By the indorsement of the bills of lading to them, Moors & Go. became vested with the legal title to the merchandise, and had a right to claim the proceeds thereof when sold. The evidence shows, we think, that they parted with the bills of lading to enable the goods to be passed through the custom-house. But the express language of the agreement, and the obvious intent-'of the parties, is that Moors & Co. should become the owners of the property. Now, while the parties held this relation to each other, the 4‘ trust receipt ” was given. By that receipt it appears that Moors & Go. delivered the property to E. S. Wheeler & Co. with a restricted power of sale. How does this transaction affect the rights of the parties % Wheeler & Co. received the propertjr, which they agreed to hold in trust as the property of Moors & Co., with liberty to sell and deliver the same to purchasers on certain terms. This arrangement was placing the property in .the possession of Wheeler & — 514 — Co. to sell the same for Moors & Co., the owners, and account for the proceeds. It created an agency to dispose of the tin plates on certain terms to purchasers, but the receipt expressly declares that the intention of the agreement was to protect and preserve unimpaired the lien of Moors & Co. on the merchandise. But Wheeler & Co. could, undoubtedly, under the arrangement, confer a good title on a purchaser; but they were bound to hold and account for the money arising from the sale to their principal, Moors & Co. This results from the nature of the transaction and the relation of the parties to the property in question. Moors & Co. could be said to be the owners of the property for security, subject to the right of Wheeler & Co. to acquire title to the same by paying all advances made for it, together with commissions due. There are numerous decisions to the effect that, where a commercial correspondent advances money for the purchase of property, and takes possession either actually or symbolically, he becomes the owner thereof, even when the advance was made and the property was purchased at the request and for the ultimate use and profit of another, and there was an agreement to transfer the title to that other upon the performance of certain conditions, and ownership was taken solely for the protection of the party making the advance. Many of these decisions are cited in the briefs of counsel which firmly establish that rule of law. We shall not comment upon them, as we do not deem it necessary. The intent of the parties in this case is perfectly clear. Wheeler & Co. received the plates as the property of Moors & Co., with a restricted power of sale; and, as between them and the owner or principal, the proceeds belong to the latter. It is for their protection that the rule of law just referred to exists. Now, it will be borne in mind that the respondents stand in the place of Wheeler & Co. so far as the proceeds are concerned. As those proceeds arise — 515 — from the sale of Moors & Co.’s property by their agent, it seems very plain that they should go to the party to whom they belonged. They were in the hands of the garnishees when this action was commenced, and, therefore, could be identified as readily as the tin plates themselves could have been had they not been sold. Even if the proceeds had been collected from the garnishees by Wheeler & Co. before the assignment under the Connecticut insolvent law, still, by the decisions of this court in Francis v. Evans, 69 Wis. 115, and McLeod v. Evans, 66 Wis. 401, and Bowers v. Evans, 71 Wis. 135, Moors & Co. would have been entitled to a priority over other creditors in respect to that fund; but, since all the writings show that it was the intention of the parties that the merchandise purchased by Moors & Co. should be held as security for advances, and that it was only intrusted to Wheeler & Co. with power to sell as their property, it results necessarily, from the facts, that the proceeds could not be garnished by the creditors of Wheeler & Go. There would be no justice nor equity in taking the fund from the party whose means had purchased the property under the contract. It is said this contract, being in the nature of a conditional sale, -was not valid, because not filed in the proper office as required by sec. 2317, R. S. That section does invalidate a conditional sale of personal property, as to third parties, unless the contract is filed in the office of the clerk of the town, city, or village where the vendee resides, or, if a nonresident, then in the office of the clerk of the town, city, or village where the property may be at the time of making such contract. In this case, neither the vendor nor the vendee resided in this state, and the tin plates were in transit from Liverpool to Milwaukee when the contract was made. Resides, the contract must be regarded as either a Massachusetts or a Connecticut contract,— and it is immaterial which,— and is governed by — 516 — the laws of one or the other of those states, and not by the law of this state. The law in Massachusetts and Connecticut seems to establish the validity of a conditional sale, as the cases cited by counsel show. It seems unnecessary to observe that Rawson Mfg. Co. v. Richards, 69 Wis. 643, and Thomas v. Richards, 69 Wis. 671, were, beyond all question, Wisconsin contracts, and our statute applied to them. But the transactions here, so far as they affect Moors & Co. and E. S. Wheeler & Co. of New Haven, were had in Massachusetts and Connecticut; and by the law of either state the contract was valid. So, upon the facts, we are quite clear that Moors & Co. are entitled to the avails of the tin plates which were sold to the garnishees, because they must be deemed the owners of the property. This is the plain meaning of the contract, and there is no statutory provision in this state which is in the way of giving effect to the intention of the parties in that regard. The respondents, as we have said, are simple creditors of E. S. Wheeler & Go., and their rights to these moneys are no stronger than the debtors’ were. Nor did Moors & Co. waive any right to claim the fund by proving their claim against the debtors’ estate in insolvency. Francis v. Evans, 69 Wis. 115; McLeod v. Evans, 66 Wis. 401. It follows from these views that the judgment of the circuit court must be reversed, and the case remanded with directions to that court to order the fund to be paid to Moors & Co. By the Court.— It is so ordered.