1. An invoice is neither a bill of sale nor evidence of a sale,
and, standing alone, furnishes no proof of title.
2. A party discounting a draft, and receiving therewith,
deliverable to his order, a bill of lading of the goods against
which the draft was drawn, acquires a special property in them and
has a complete right to hold them as security for the acceptance
and payment of the draft.
3. Where such party forwarded the draft, with the bill of lading
thereto attached, to an agent with instructions by special
endorsement on the bill and by letter to hold the wheat in the bill
mentioned, against which the draft had been drawn, until payment of
the draft should be made, the agent had no power, prior to such
payment, to make a delivery which would divest the ownership of his
principal.
4. Where the agent directed the carrying vessels, on which the
wheat was shipped, to deliver it to the Corn Exchange Elevator, the
proprietor whereof accepted the wheat in bailment under express
instructions that it was to "be held subject to and delivered only
on the payment of the draft,"
held that such proprietor,
although the drawee of the draft, acknowledged, by the act of
receiving the wheat, that it was not placed in his hands as the
owner thereof, and that the title of the bailors was not
transferred.
5. The drawee having, under such circumstances, possession of
the wheat as a mere warehouseman, and not as a vendee, his
subsequent sale and delivery thereof conferred no title thereto on
the purchaser.
6. Where neither the evidence received nor offered tended to
rebut the intent exhibited in the bills of lading, and confirmed
throughout by the endorsement thereon and the written instructions,
to retain the ownership of the wheat until the payment of the
draft,
held that there was no necessity of submitting to
the jury the question whether there had been a change of
ownership.
7. The court below properly charged the jury that on the refusal
of the party in possession of the wheat to deliver it to the owner
when thereunto requested, the latter was entitled to recover the
value thereof, with interest from the date of such refusal.
This is an action of trover, instituted by the National Exchange
Bank of Milwaukee to recover damages for the alleged conversion, by
the plaintiffs in error, of 22,341 bushels of wheat, which the
National Exchange Bank of Milwaukee claimed as its property.
The wheat was purchased in Milwaukee, Wis., by McLaren &
Co., in the month of September, 1869, upon orders received
Page 91 U. S. 619
from Smith & Co. of Oswego, N.Y., who were in need of it for
immediate use and requested that the drafts on account thereof be
drawn on them through the Merchants' Bank of Watertown, N.Y.
McLaren & Co. paid for the wheat so purchased, and, to
reimburse themselves, shipped it on three vessels, named
respectively
Kate Kelly, Grenada, and
Corsican,
and received from the captains of said vessels triplicate bills of
lading which describe McLaren & Co. as the shippers and by
their terms make the wheat deliverable to the account of W. G.
Fitch, cashier, care Merchants' Bank, Watertown, N.Y. McLaren &
Co. presented drafts drawn on Smith & Co., with the original
bills of lading attached thereto, to the National Exchange Bank of
Milwaukee. The bank discounted them, placed the proceeds to the
credit of McLaren & Co., and retained the original bills of
lading. Its cashier, after discounting the drafts, wrote a special
endorsement on the back of each bill of lading. The endorsement on
that of the
Grenada reads as follows:
"On payment of two drafts drawn by McLaren & Co. on Smith
& Co., Oswego, N.Y., to my order, dated Sept. 13, 1869 -- one
draft at thirty days' date for $8,000, and the other at forty-five
days' date for $8,000, both drafts being payable at the Merchants'
Bank, Watertown, N.Y. -- you will surrender the within-mentioned
wheat to Smith & Co. or order. Should drafts above mentioned
not be promptly paid, hold the wheat for my account, without
recourse."
"W. G. FITCH,
Cashier"
"MILWAUKEE, 13th September, 1869"
"To Merchants' Bank, Watertown, N.Y."
A similar endorsement, except as to the amounts and dates of the
drafts, was made on the bills of lading of the
Kate Kelly
and the
Corsican. McLaren & Co. insured the cargoes
for their account from Milwaukee to Oswego, and transferred the
insurance certificates to the bank. After making the endorsements
on the bills of lading, the cashier enclosed the drafts, bills of
lading, and certificates of insurance, to the Merchants' Bank,
Watertown, N.Y. The letter enclosing those relating to the
Kate
Kelly is as follows:
Page 91 U. S. 620
"SEPT. 2"
"To Cashier Merchants' Bank, Watertown, N.Y.:"
"I hand you for collection and remittance to Mercantile National
Bank, New York, for my credit:"
McLaren & Co., on Smith & Co., Oswego . . . $4,080.81
exg.
" ' Oct. 5 . . . . . . . . . . . 7,500.00 "
" ' Oct. 20. . . . . . . . . . . 7,500.00 "
B. L. schr.
Kate Kelly, 8,727 bushels Amber Mil.
wheat.
B. L. schr.
Kate Kelly, 5,527 2/6 0/0 bushels No. 1,
Amber Mil.
wheat, consigned to your bank for my account, and to be held
by
you subject to the payment of the above drafts.
Insured North-western Nat. Ins. Co. . . . . $5,000
Nat. Ins. Co., Boston . . . . . . . . . 5,000
AEtna Ins. Co., Hartford. . . . . . . . 5,000
Republic Ins. Co. . . . . . . . . . . . 5,000
Security Ins. Co. . . . . . . . . . . . 4,000
"I consign this wheat to you, to be held as per endorsed bill of
lading, and surrender only on payment of the drafts drawn against
it, holding you responsible for the same in case of nonpayment of
the drafts. Will you receive consignments in this way, charging
reasonably for the same?"
"Yours truly,"
"W. G. FITCH,
Cashier"
On the 6th of September, 1869, J. F. Moffatt, cashier of the
Merchants' Bank, acknowledged the receipt of the letter and its
enclosures.
On the 8th of that month Fitch addressed another letter, as
follows:
"To Merchants' Bank of Watertown, N.Y.:"
"In my letter of the 2d, I requested you to state in your letter
whether you would hold all wheat I consign to you strictly for my
account, holding your bank responsible for the safekeeping of the
property for this bank and holding such property subject to my
orders in all cases where the drafts made against it are not paid.
Your reply of the 6th instant does not answer my inquiry. Will you
please write me by return mail defining your position? We have
adopted the invariable rule to in no instance consign property only
on condition that the consignee acknowledges himself responsible
for it until instructed to hand over to a third party."
"Very respectfully,"
"W. G. FITCH,
Cashier"
Page 91 U. S. 621
In Moffatt's answer of the 11th, he says,
"In reply to yours of the 2d instant, I would say that we will
receive, until further notice, such consignments as you choose to
send us, holding us responsible for the grain in case of
nonpayments of drafts, and shall charge 3/8 percent commissions for
so doing."
On the 13th he acknowledged the receipt of Fitch's letter of the
8th and said, "I believe your inquiry was answered in mine of the
11th instant."
Letters, in substantially the same language as that of Sept. 2,
were written to the cashier of the Merchants' Bank, enclosing the
drafts, bills of lading, and certificates of insurance, of the
cargoes of the
Grenada and
Corsican.
The cashier of the Merchants' Bank, upon receipt of the drafts
and bill of lading of the
Kate Kelly, wrote three letters
-- one to Smith & Co., dated Watertown, N.Y., Sept. 6, 1869, as
follows:
"Please find enclosed for acceptance, and return the following,
to-wit:"
McLaren & Co., on your st. . . . . . $4,080.81 and exg.
" ' Oct. 5. . . . . . . . 7,500.00 "
" ' Oct. 20 . . . . . . . 7,500.00 "
"Also inspection certificate."
Another, bearing the same date, as follows:
"Proprietors of Corn Exchange Elevator, Oswego, N.Y.:"
"Please find enclosed an order for cargo schooner
Kate
Kelly for 8,727 bushels Amber Milwaukee wheat, and 5,527 20/60
bushels No. 1 Amber Milwaukee wheat, to be delivered to you; and
you will please hold the same subject to, and deliver the grain
only on payment of, the following drafts; to-wit:"
McLaren & Co., on Smith & Co., st. . . . $4,080.81 and
exg.
" ' Oct. 5 . . . . . . . . . . 7,500.00 "
" ' Oct. 20. . . . . . . . . . 7,500.00 "
And the third, of the same date, as follows:
"MERCHANTS' BANK, WATERTOWN, N.Y., Sept. 6, 1869"
"Robert Hayes, Esq., Master schr.
Kate Kelly, Oswego,
N.Y.:"
"Please deliver to the Corn Exchange Elevator, Oswego, N.Y.,
your cargo, 8,727 bushels of Amber Milwaukee wheat, and 5,527 20/60
bushels of No. 1 Amber Milwaukee wheat, consigned to us by W. G.
Fitch, Esq., cashier. "
Page 91 U. S. 622
Letters of the same purport were written in relation to the
cargoes of the
Grenada and
Corsican, except that,
in the case of the
Corsican, the letter enclosing the
order to the master of that vessel to deliver her cargo was
addressed to "Smith & Co., Proprietors Corn Exchange Elevator."
Smith & Co., on the receipt of the letters, paid each of the
sight drafts, and returned the time drafts, accepted, to the
Merchants' Bank, without objection and without expressing any
dissent to the terms and conditions upon which the wheat was to be
delivered, on its arrival, to the Corn Exchange Elevator. The sight
drafts were paid and the time drafts accepted several days before
the arrival of the cargoes at Oswego.
McLaren & Co. forwarded to Smith & Co. invoices of the
purchases, with statement of account for disbursements and
commissions. The invoice of the
Kate Kelly is headed,
"Account purchase of 14,250 20/60 bushels wheat, bought for
account, and by order of Smith & Co., Oswego, N.Y., through
McLaren & Co." Those of the
Grenada and of the
Corsican respectively differ from it only in the number of
bushels. No bill of lading for either cargo was sent to Smith &
Co.
The
Kate Kelly arrived in Oswego Sept. 16, 1869. Her
cargo was discharged into the Corn Exchange Elevator. Seven
thousand three hundred bushels were "spouted" direct from the
vessel through the elevator into the canal boat
Frank
Alvord, and other quantities into the south, middle, and north
team bins; the balance of the cargo went into numbered bins; and
3,047 10/60 bushels was, on the 18th September, shipped into the
canal boat
Four Sisters, and a bill of lading, dated Sept.
18, 1869, signed by G. A. Bennett, was delivered to Smith & Co.
The canal boat arrived in New York Oct. 9, 1869. Smith & Co.
paid the time draft of $7,500, drawn at thirty days. The time draft
of $7,500, drawn at forty-five days, was unpaid at the date of this
shipment.
The
Grenada arrived with her cargo on the twenty-fourth
day of September, 1860. Two thousand bushels were "spouted" into
the boat
Caribbean, and on the 27th September, 1869, 7,100
bushels were shipped into the canal boat
B. Hagaman by
Smith & Co., and a bill of lading of that date, signed by G. A.
Bennett, was delivered to them. This
Page 91 U. S. 623
canal boat arrived in New York Oct. 27, 1869. The two time
drafts drawn on the cargo of the
Grenada were unpaid at
the date of this shipment.
The
Corsican arrived with her cargo on the 8th October,
1869, and on the same day Smith & Co. shipped 4,358 bushels of
it into the canal boat
Anna Rebecca, and 7,836 bushels of
it into the canal boat
George Ames, and received bills of
lading therefor. These canal boats arrived in New York on the 4th
November, 1869. The time drafts drawn on the cargo of the
Corsican were not paid at the time of these shipments. The
drawees of the drafts were the proprietors of the Corn Exchange
Elevator.
The captains of the
Kate Kelly, Grenada, and
Corsican, on their arrival at Oswego, called at the office
of the Corn Exchange Elevator, and there found and received from
Smith & Co., before delivering their cargoes, the orders which
had been sent for them, in the letters written by the cashier of
the Merchants' Bank to the "Proprietors Corn Exchange Elevator,"
and to "Smith & Co., Proprietors Corn Exchange Elevator." The
latter paid the freight on the cargoes, and receipted therefor on
the back of the bills of lading retained by the captains.
The shipments by Smith & Co. were made without the knowledge
or consent of the officers of the Merchants' Bank.
There was no mixture in the elevator of the cargoes of the
Kate Kelly, Grenada, or
Corsican.
Smith & Co., on receiving the canal boat bills of lading,
sent the same, with drafts attached, through banks in New York
City, to Dows & Co., the plaintiffs in error. They paid the
drafts, and received the bills of lading.
All of the time drafts drawn by McLaren & Co. on Smith &
Co. (except the thirty-day draft on the cargo of the
Kate
Kelly), being unpaid, were, with the original bills of lading
and certificates of insurance, returned by the Merchants' Bank to
the Milwaukee bank. The latter having been advised in October that
the wheat had been shipped by Smith & Co., William P. McLaren,
a member of the firm of McLaren & Co., went to Oswego to look
after it. He was there from about the 20th to the 25th of that
month, and on examination found no wheat in the elevator. Having
ascertained
Page 91 U. S. 624
on the 22d that portions of the cargoes had been shipped to Dows
& Co., a telegram was sent to and received by them on that day,
notifying them that the wheat shipped on the canal boats
Four
Sisters, B. Hagaman, George Ames, and
Anna Rebecca,
was the property of the National Exchange Bank of Milwaukee. The
following day, parties interested in the wheat called on Dows &
Co., who agreed, that, if no attempt was made to stop the wheat on
the canal, it should, on its arrival in New York, be kept separate;
that the Milwaukee bank should be notified of its arrival, and that
they (Dows & Co.) would identify it as the wheat coming out of
the said canal boats, and would only require proof of the identity
of the wheat in the canal boats at Oswego.
On the arrival of the wheat, a formal demand in writing therefor
was made on Dows & Co. by the Milwaukee bank. They refused to
deliver it unless they were reimbursed the amount of their advances
to Smith & Co., and freight and charges, and unless the
Milwaukee bank would take care of an order given by Smith & Co.
to Norris Winslow on them for any margins in their hands due Smith
& Co.
The jury found a verdict in favor of the plaintiff for
$31,111.51.
Judgment was rendered therefor: whereupon the defendants sued
out this writ of error.
Page 91 U. S. 629
MR. JUSTICE STRONG delivered the opinion of the Court.
The verdict of the jury having established that the wheat came
to the possession of the defendants below (now plaintiffs in
error), and that there was a conversion, there is really no
controversy respecting any other fact in this case than whether the
ownership of the plaintiffs had been divested before the
conversion. The evidence bearing upon the transmission of the title
was contained mainly in written instruments, the legal effect of
which was for the court, and so far as there was evidence outside
of these instruments, it was either uncontradicted or it had no
bearing upon the construction to be given to them. We have
therefore only to inquire to whom the wheat belonged when it came
to the hands of the defendants, and when they refused to surrender
it at the demand of the plaintiff.
It is not open to question that McLaren & Co., having
purchased it at Milwaukee and paid for it with their own money,
became its owners. Though they had received orders from Smith &
Co. to buy wheat for them, and to ship it, they had not been
supplied with funds for the purpose, nor had they assumed to
contract with those from whom they purchased on behalf of their
correspondents. They were under no obligation to give up their
title or the possession on any terms other than such as they might
dictate. If, after their purchase, they had
Page 91 U. S. 630
sold the wheat to any person living in Milwaukee or elsewhere,
other than Smith & Co., no doubt their vendee would have
succeeded to the ownership. Nothing in any agency for Smith &
Co. would have prevented it. This we do not understand to be
controverted. Having, then, acquired the absolute ownership,
McLaren & Co. had the complete power of disposition, and there
is no pretense that they directly transmitted their ownership to
Smith & Co. They doubtless expected that firm to become
purchasers from them. They bought from their vendors with that
expectation. Accordingly, they drew drafts for the price, but they
never agreed to deliver the wheat to the drawees unless upon the
condition that the drafts should be accepted and paid. They shipped
it, but they did not consign it to Smith & Co., and they sent
to that firm no bills of lading; on the contrary, they consigned
the wheat to the cashier of the Milwaukee bank, and handed over to
that bank the bills of lading as a security for the drafts drawn
against it -- drafts which the bank purchased. It is true, they
sent invoices. That, however, is of no significance by itself. The
position taken on behalf of the defendants, that the transmission
of the invoices passed the property in the wheat without the
acceptance and payment of the drafts drawn against it, is utterly
untenable. An invoice is not a bill of sale, nor is it evidence of
a sale. It is a mere detailed statement of the nature, quantity,
and cost or price of the things invoiced, and it is as appropriate
to a bailment as it is to a sale. It does not of itself necessarily
indicate to whom the things are sent, or even that they have been
sent at all. Hence, standing alone, it is never regarded as
evidence of title. It seems unnecessary to refer to authorities to
sustain this position. Reference may, however, be made to
Shepherd v. Harrison, Law Rep. 4, App.Cas. 116, and
Newcomb v. Boston & Lowell R. Co., 115 Mass. 230. In
these and in many other cases it has been regarded as of no
importance that an invoice was sent by the shipper to the drawee of
the drafts drawn against the shipment, even when the goods were
described as bought and shipped on account of and at the risk of
the drawee.
It follows that McLaren & Co. remained the owners of the
wheat notwithstanding their transmission of the invoices to
Page 91 U. S. 631
Smith & Co. As owners, then, they had a right to transfer it
to the plaintiff as a security for the acceptance and payment of
their drafts drawn against it. This they did by taking bills of
lading deliverable to the cashier of the plaintiff and handing them
over with the drafts when the latter were discounted. These bills
of lading unexplained are almost conclusive proof of an intention
to reserve to the shipper the
jus disponendi, and prevent
the property in the wheat from passing to the drawees of the
drafts. Such is the rule of interpretation as stated in Benjamin on
Sales 306, and in support of it he cites numerous authorities, to
only one of which we make special reference --
Jenkyns v.
Brown, 14 Q.B. 496. There it appeared that the plaintiff was a
commission merchant, living in London and employing Klingender
& Co. as his agents at New Orleans. The agents purchased for
the plaintiff a cargo of corn, paying for it with their own money.
They then drew upon him at thirty days' sight, stating in the body
of the drafts that they were to be placed to the account of the
corn. These drafts they sold, handing over to the purchaser with
them the bills of lading, which were made deliverable to the order
of Klingender & Co., the agents, and they sent invoices and a
letter of advice to the plaintiff informing him that the cargo was
bought and shipped on his account. On this state of facts, the
court ruled that the property did not pass to the plaintiff; that
the taking of a bill of lading by Klingender & Co., deliverable
to their own order, was nearly conclusive evidence that they did
not intend to pass the property in the corn; and that, by endorsing
the bills of lading to the buyer of the bills of exchange, they had
conveyed to him a special property in the cargo, so that the
plaintiff's right to the corn could not arise until the bills of
exchange were paid by him. That such is the legal effect of a bill
of lading taken deliverable to the shipper's own order that it is
inconsistent with an intention to pass the ownership of the cargo
to the person on whose account it may have been purchased,
even
when the shipment has been made in the vessel of the drawee of the
drafts against the cargo, has been repeatedly decided.
Turner v. Trustees of the Liverpool Docks, 6 Exch. 543;
Schorman v. Railway Co., Law Rep., 2 Ch.App. 336;
Ellerslaw v. Magniac, 6 Exch. 570.
Page 91 U. S. 632
In the present case, the wheat was not shipped on the vessels of
Smith & Co., and the bills of lading stipulated for deliveries
to the cashier of the Milwaukee bank. When, therefore, the drafts
against the wheat were discounted by that bank and the bills of
lading were handed over with the drafts as security, the bank
became the owner of the wheat and had a complete right to maintain
it until payment. The ownership of McLaren & Co. was
transmitted to it, and it succeeded to their power of disposition.
That the bank never consented to part with its ownership thus
acquired, so long as the drafts it had discounted remained unpaid,
is rendered certain by the uncontradicted written evidence. It sent
the drafts, with the bills of lading attached, to the Merchants'
Bank, Watertown, accompanied with the most positive instructions,
by letter and by endorsement on the bills, to hold the wheat until
the drafts were paid; and when subsequently the Merchants' Bank
sent orders to the masters of the carrying vessels to deliver it to
the "Corn Exchange Elevator, Oswego, N.Y.," they accompanied the
orders with letters to Smith & Co., the proprietors of the
elevator, containing clear instructions to hold the grain, and
"deliver" it only on payment of the drafts. To these instructions
Smith & Co. made no objection. Now as it is certain that
whether the property in the wheat passed to Smith & Co. or not
depends upon the answer which must be given to the question whether
it was intended by McLaren & Co., or by the Milwaukee bank,
their successors in ownership, that it should pass before payment
of the drafts, where can there be any room for doubt? What is there
upon which to base an inference that it was intended Smith &
Co. should become immediate owners of the wheat, and be clothed
with a right to dispose of it at once? Such an inference is
forbidden, as we have already said, by the bills of lading made
deliverable to W. G. Fitch, cashier of the Milwaukee bank, and it
is inadmissible, in view of the express orders given by that bank
to their special agents, the Merchants' Bank at Watertown,
directing them to hold the wheat subject to the payment of the
drafts drawn against it. No intent to vest immediate ownership in
the drawees of the drafts can be implied in the face of these
express arrangements and positive orders to the contrary. It is
true that Smith &
Page 91 U. S. 633
Co. were the proprietors of the Corn Exchange Elevator, and that
the wheat was handed over to the "custody of the elevator" at the
direction of the Merchants' Bank; but it cannot be claimed that
that was a delivery to the drawees under and in pursuance of their
contract to purchase. The Merchants' Bank, having been only special
agents of the owners, had no power to make such a delivery as would
divest the ownership of their principals.
Stollenwerck v.
Thatcher, 115 Mass. 124. And they made no attempt to divest
that ownership. They guardedly retained the
jus
disponendi. Concurrently with their directions that the wheat
should be delivered to the elevator, in the very orders for the
delivery, they stated that the cargoes were for the account of W.
G. Fitch, cashier, and were to be held subject to their order. By
accompanying letters to the proprietors of the elevator, they
stated that the cargoes were delivered to them "to be held subject
to and delivered only on payment of the drafts drawn by McLaren
& Co." All this contemplated a subsequent delivery -- a
delivery after the receipt of the grain in the elevator, and when
the drafts should be paid. It negatives directly the possibility
that the delivery into the elevator was intended as a consummation
of the purchase, or as giving title to the purchasers. It was a
clear case of bailment, utterly inconsistent with the idea of
ownership in the bailees. A man cannot hold as bailee for himself.
By the Act of accepting goods in bailment, he acknowledges a right
or title in the bailor. When, therefore, as was said in the court
below,
"the proprietors of the Corn Exchange Elevator, or Smith &
Co., received the wheat under the instructions of the Merchants'
Bank, they received it with the knowledge that the delivery to them
was not absolute, that it was not placed in their hands as owners,
and that they were not thereby to acquire title."
They were informed that the holders of the drafts, and bills of
lading, had no intention to let go their ownership so long as the
drafts remained unpaid. The possession they had, therefore, was not
their possession. It belonged to their bailors, and they were mere
warehousemen, and not vendees.
We agree that where a bill of lading has been taken containing a
stipulation that the goods shipped shall be delivered to the order
of the shipper, or to some person designated by him
Page 91 U. S. 634
other than the one on whose account they have been shipped, the
inference that it was not intended the property in the goods should
pass, except by subsequent order of the person holding the bill,
may be rebutted, though it is held to be almost conclusive, and we
agree that where there are circumstances pointing both ways, some
indicating an intent to pass the ownership immediately,
notwithstanding the bill of lading, in other words, where there is
anything to rebut the effect of the bill, it becomes a question for
the jury whether the property has passed. Such was the case of
Ogg v. Shuter, 10 Law Rep. C.P. 159. There, the ordinary
effect of a bill of lading deliverable to the shipper's order was
held to be rebutted by the court sitting with power to draw
inferences of fact. The delivery to the carrier was "free on
board," and the bill of lading was sent to the consignor's agent.
The goods were also delivered into the purchaser's bags, and there
was a part payment. But in this case there are no circumstances to
rebut the intent to retain ownership exhibited in the bills of
lading, and confirmed throughout by the endorsements on the bills,
and by the written instructions to hold the wheat till payment of
the drafts. Nothing in the evidence received or offered tended to
show any other intent. Hence there was no necessity of submitting
to the jury the question whether there was a change of ownership.
That would have been an invitation to find a fact of which there
was no evidence. The circumstances as relied upon by the plaintiffs
in error as tending to show that the property vested in Smith &
Co. cannot have the significance attributed to them.
It is certainly immaterial that the wheat was consigned to W. G.
Fitch, cashier, care of the Merchants' Bank, Watertown, and that it
was thus consigned at the request of Smith & Co., made to
McLaren & Co. Had it been consigned directly to that bank, and
had there been no reservation of the
jus disponendi
accompanying the consignment, the case might have been different.
Then an intent to deliver to the purchasers might possibly have
been presumed; but as the case was, no room was left for such a
presumption. The express direction to hold the wheat for the
payment of the drafts and to deliver it only on payment removes the
possibility of any presumed intent to
Page 91 U. S. 635
deliver it while the drafts remained unpaid. A shipment on the
purchaser's own vessel is ordinarily held to pass the property to
the purchaser, but not so if the bill of lading exhibits a contrary
intent -- if thereby the shipper reserves to himself or to his
assigns the dominion over the goods shipped.
Turner v. Trustees
of the Liverpool Docks, supra. There are many such decisions.
A strong case may be found in the Court of Queen's Bench, decided
in 1840. It is
Mitchell v. Ede, 11 Ad. & E. N.S. 888.
A Jamaica planter, being the owner of sugars and indebted to the
defendant, residing in London, for more than their value, shipped
them at Jamaica, on the 4th of April, on a ship belonging to the
defendant which was in the habit of carrying supplies to Jamaica to
the owner of the sugars and others and taking back consignments
from him and others. On the same day he took a bill of lading by
which the goods were stipulated to be delivered to the defendant at
London, he paying freight. Two days afterwards (April 6), the
shipper made an endorsement on the bill that the sugars were to be
delivered to the defendant only on condition of his giving security
for certain payments, but otherwise to the plaintiff's agent. He
also drew drafts on the defendant. At the same time he endorsed the
bill of lading, and delivered it to the plaintiff, to whom he was
indebted. The bill was never in the defendant's hands. The sugars
arrived in London, and the defendant paid the drafts drawn by the
shipper, but did not comply with the conditions of the endorsement
of April 6. On this state of facts it was held by the court that
the plaintiff was entitled to the sugars; that the shipper had not
parted with the property by delivering it on board the defendant's
ship, employed as it was, nor by accepting the bill of lading as
drawn on the 4th of April, and that he was entitled to change the
destination of the sugars till he had delivered them or the bill.
In the case now in hand, there never was an instant, after the
purchase of the wheat by McLaren & Co., when there was not an
express reservation of the right to withhold the delivery from
Smith & Co., and also an avowed purpose to withhold it until
the drafts should be paid. Consent to consign the wheat to W. G.
Fitch, cashier, care of Merchants' Bank, amounts, therefore, to no
evidence of consent that it should pass into the control and
ownership of the purchasers.
Page 91 U. S. 636
It has been argued on behalf of the plaintiffs in error that the
correspondence between Smith & Co. and McLaren & Co. shows
that the wheat was wanted by the former to supply their immediate
need, and that therefore it was a legitimate inference that both
parties to the correspondence intended an immediate delivery. If
this were so, it was still in the power of the vendors to change
the destination of the property until delivery was actually or at
least symbolically made, and that the intention, if any ever
existed, was never carried out, the bills of lading prove. It may
be that Smith & Co. expected to secure early possession of the
wheat by obtaining discounts from the Watertown bank, and then by
taking up the drafts. If so, it would account for their request
that the drafts and bills of lading might be sent through that
bank; but that has no tendency to show an assent by either McLaren
& Co. or the Milwaukee bank to an unconditional delivery of the
property before payment of the drafts.
Nor does the fact that any engagement to hold themselves
responsible for the safekeeping of the wheat for the plaintiff, and
subject to its orders until the drafts drawn against it should be
paid, was exacted from the Watertown bank, have any tendency to
prove such an assent. This was an additional protection to the
continued ownership of the plaintiff, and the words of the
engagement plainly negative any consent to a divestiture of that
ownership.
Without reference, therefore, to the testimony of McLaren --
which was in substance that before the shipments, the agent of
Smith & Co. was informed that while the shipping firm would
agree to send their time drafts through any bank he might designate
and consign the property to any responsible bank Smith & Co.
might designate, they would adhere to their positive business rule
in such cases, and on no account consent that any property so
shipped should pass out of the control of the banks in whose care
it had been placed until all drafts made against it had been paid
-- without reference to this, we think it clear that the ownership
of the wheat for the conversion of which the defendants were sued,
never vested in Smith & Co., never passed out of the
plaintiff.
This is a conclusion necessarily drawn from the written and
Page 91 U. S. 637
uncontradicted evidence, and there is nothing in any evidence
received or offered by the defendants and overruled by the court
which has any tendency to resist the conclusion. It is unnecessary,
therefore, to examine in detail the numerous assignments of error
in the admission and rejection of evidence. None of the rulings
have injured the defendants.
If, then, the Exchange Bank of Milwaukee was the owner of the
wheat when Smith & Co. undertook to ship it to the defendants
and when the defendants received it and converted it to their use,
the right of the bank to recover in this action is
incontrovertible. Smith & Co. were incapable of divesting that
ownership. The defendants could acquire no title, or even lien,
from a tortious possessor. However innocent they may have been (and
they were undoubtedly innocent of any attempt to do wrong), they
could not obtain ownership of the wheat from any other than the
owner. The owner of personal property cannot be divested of his
ownership without his consent except by process of law. It is not
claimed and it could not be that the defendants were deceived or
misled by any act of the plaintiff. They are the victims of a gross
fraud perpetrated by Smith & Co., and however unfortunate their
case may be, they cannot be relieved by casting the loss upon the
plaintiff, who is at least equally innocent with themselves and who
has used the extremest precaution to protect its title.
It is sufficient to add that in our opinion there is no just
reason for complaint against the instruction given by the circuit
judge to the jury, and his rulings upon the subject of damages and
interest.
Judgment affirmed.
In the case of
Dows v. Wisconsin Marine and Fire Insurance
Company, error to the Circuit Court of the United States for
the Southern District of New York, MR. JUSTICE STRONG, in behalf of
the Court, remarked,
"This case differs in no essential particulars from that of
Dows v. National Exchange Bank, supra. It presents the
same questions, and is controlled by the same rules of law. The
judgment must therefore be affirmed."
