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defend against the note in a suit brought by B., yet if B. sells the note to a third party who does not know of the facts, A. then must pay the note. Just so in the case of a warehouse receipt. If A. issues such a paper to B., for articles which he has never received, a third party treating with B. on the faith of the statement and promise contained in the receipt will hold A. for the goods or their value. It is of no consequence what the transaction may be between the original parties; whether the receipt, as is claimed here, was intended as a security for a loan, or was entirely false.
The defendant here offers to prove that he never received the property mentioned in the receipt which he has given, but that the paper was issued as a security for a loan, or as an advance on wheat to be delivered. But he has stated in this receipt that he has the wheat in his warehouse, and also promised therein to deliver the wheat to the order of Upham & Co. These plaintiffs, believing this statement to be true, and relying on this promise, bought of Upham & Co. the receipt and property mentioned therein. They were justified in doing this, and the defendants must respond to their promise. The evidence is not admissible.
HARRIS v. BRADLEY.
(Circuit Court for Nebraska: 2 Dillon, 284-289; 16 Int. Rev. Rec., 165. 1872.) STATEMENT OF FACTS.— Action for a lot of corn for which defendants had given what it is insisted was a warehouse receipt, to Bailey & Weightman, who assigned it to the plaintiffs as security for a pre-existing debt and for further advances. It appeared that defendants were commission merchants and grain dealers in Nebraska City, and after giving the receipt in question shipped the corn for the account of Bailey & Weightman to Chicago. The receipt in question was in the following words:
“NEBRASKA City, May 26, 1870. “Received in store for the account of Bailey & Weightman three thousand sacks of corn. (Signed)
“BRADLEY & ROBERTSON." There was a general and special verdict in favor of plaintiffs, who moved for judgment upon them.
§ 28. “ Received in store for account of B. & W. three thousand sacks of corn” is a warehouse receipt, and its indorsement passes the title to the indorsee, who can hold the warehouseman responsible upon it.
Opinion by Dillon, J.
1. The title to the corn mentioned in the receipt of May 26, 1870, was in Bailey & Weightman, and the defendants, Bradley & Robertson, were their bailees. The receipt was the evidence of the title of Bailey & Weightman, and the indorsement and delivery thereof in St. Louis to the plaintiffs, the property being then in Nebraska City, was equivalent to the delivery to the plaintiffs of the property itself. The indorsement and delivery of the receipt of the warehouseman in the course of trade passes the title and right of possession of the property to the party to whom it is so indorsed and delivered. Such is the law, and such is the understanding of the business community. The legal title to the property passed to the plaintiffs by the
. indorsement and delivery to them of the evidence of the title. To the extent of their advances, certainly they are purchasers for value, if not, indeed, as respects their pre-existing debt, and they hold the title to the corn to
protect their interests. When the transfer was made to them the defendants became their bailees, and ceased to be the bailees of Bailey & Weight
All tbe foregoing principles are established by the judyment of the supreme court of the United States in the case of Gibson v. Stevens, 8 How., 884.
2. The defendants insist that the instrument in suit is not a warehouse receipt, either within the contemplation of the local statute of the state on that subject (R. S. of Neb., p. 632), or of the law relating to this peculiar class of instruinents. See McNeil v. Hill, Woolw. C. C. R., 96 (SS 26, 27, supra), where the subject is discussed by Mr. Justice Miller.
The fourth special finding of the jury shows that the defendants were engaged in buying, storing and shipping grain generally, and particularly for Bailey & Weightman (to whom the receipt was issued), on a contingent commission. The defendants advertised themselves to the world as merchants and grain dealers. Clearly they were warehousemen, and it is to be presumed that they were known as such to the bus ness community.
$ 29. In the absence of law or usaye it is not necessary that a warehouse receipt should be in any particular form.
It is urged that the instrument in suit was not intended to be a warehouse receipt, or to be used or negotiated as such, but was intended simply as a memorandum or personal voucher to Bailey & Weightman to show that the defendants had that amount of corn in store for them; and this view, it is argued, is supported by the nature or tenor of the paper itself, since it contains no words indicating that the defendants are to account to any persons other than Bailey & Weightman.
In other words, it is claimed by the defendants, as a matter of lair, that in order to give to such an instrument, even when issued by a merchant or warehouseman, a negotiable or assignable quality, so as to estop the makers from showing against a subsequent holder that the property mentioned has not been in fact received, or bad, before notice of the assignment, been deliv. ered to the persons to whom the instrument was originally made, the instrument should contain language showing that it was to be or might be thus used. If the receipt in question had contained, after the name of Bailey & Weightman, the words or order," or after the word corn the words “deliv
" ered in virtue of this receipt,” or similar language, it is conceded that it would have the qualities of a warehouse receipt, and that a delivery to any person without the production of the receipt would be at the peril of the warehouseman or party making it. No authorities have been produced to sustain this view; nor is it shown that there is any such custom or usage among warehousemen or known to the business community.
There is nothing in the statute of the state requiring or implying that such. instruments should be of any particular form, and the instrument on which the plaintiffs rely for title would seem to be more formal than some of those in the case of Gibson v. Stevens before cited.
Under these circumstances, it is my opinion that the defendants were not justified, with this receipt outstanding, in shipping the corn mentioned in it, as the jury find they did, to Chicago for the benefit of Bailey & Weightman.
Judyment for plaintitt.
§ 30. Warehouse receipts stating the kind and grade of the grain stored and the terms of storage are such instruments as under the act of the legislature of Minnesota of March 3, 1876 (Gen. Laws of Minn., 8th Session, 96), constitute prima facie evidence of title to the
aniount and grade of grain mentioned therein as deposited in a warehouse or elevator. Grrenleaf v. Dows,* 3 McC., 27; 8 Fed. R., 550; 12 Rep., 545.
$ 31. Surrender certificates issued by a warehouseman, setting forth that the parties named therein bave" surrendered elevator tickets" for a certain quantity of wheat free on the track," are not evidence of title to grain deposited with warehousemen which is recognized by the above statute. Ibid.
$ 32. Where a warehouseman absconds leaving an insufficient number of bushels of grain in his warehouse to satisfy the holders of warehouse receipts for grain stored, and the holders of surrender certificates setting forth that the parties therein named "have surrendered elevator tickets" for a certain quantity of grain “ free on the track,” the claims of the latter inust be postponed to those of the former, the actual depositors, who present the evidence of title recognized by the statute. Ibid.
$ 33. The assignee of a bankrupt is estopped, in the absence of fraud, from denying the validity of warehouse receipts issued by the latter. Sharp v. The Philadelphia Warehouse Co.,* 19 N. B. R., 378; 9 Rep., 572.
$ 34. The surrender of possession by a warehouseman, after he has become insolvent, of property to parties holding warehouse receipts therefor is not in violation of the bankrupt law, as the title was in the transferee and not in the bankrupt. lbid.
$ 35. A transfer by a warehouseman, made after his insolvency, of substituted property to a party holding a warehouse receipt, to meet a deinand which arose out of a previous abstractio: by the former of the latter's property, is, though honestly intended, a violation of the bankrupt laws. Ibid.
$36. Warehousemen who issue receipts for property in store become responsible only as custodians of the property, not as guarantors of its title to the assignees of the receipts. The duty of the warehouseman is performed when he gets the property into his own possesbion before he issues the receipt, and transfers that possession wheu demanded to the lawful holder of the receipt. Insurance Co. v. Kiger, 13 Otto, 3.12.
$ 37. A receipt by a warehouseman for property to be forwarded to order, and of paymedi, when assigned to a connu.ssion merchant, who makes an advance, does not create a lien on the property paramouut to that of an attachment laid before notice of the assignment. The money advanced not being equal to the value of the property leaves an attachable interest beyond the lien, if it exist, of the commission merchant. Gibson v. Stevens, 5 McL., 531.
$ 38. When a warehouseman, having in store a quantity of wheat deposited by several persous, for which, under the statute, he issues receipts to each depositor, fraudulently disposes of part of the wheat, the receipt holders must share in what remains according to the equitable interest of each, to be ascertained by an accounting. No one of such receipt holders can recover the whole at law, nor could any nuinber of such holders less than the whole number recover possession as against the remainder. Dows v. Ekstrune, * 1 McC., 431; 3 Fed. R., 19; 10 Rep., 419.
$ 59. The indorsement and delivery of a warehouse receipt transfers to the indorsee the legal title and constructive possession of the property, and the warebouseman from the time of the transfer becomes his bailee; the delivery of the evidence of title and the orders indursed upon them is equivalent to the delivery of the property itself. First Nat. Bank v. Bates, * 1 Fed. R., 702.
$ 40. If warehouse receipts are assigned as collateral security for a general indebtedness, and the warehouseoan afterwards deliver the property over to the assignor, the assignee may maintain trover and may recover against the warehouseman the value of the property not exceeding the amount of indebtedness the receipt was given to secure. Ibid.
§ 41. The jury were instructed that if they found from the evidence that all of the warehouse receipts in question were not pledged as general collaterals for general indebtedness of the assignor to the plaintiff, the assignee, but were pledged as special collaterals to secure specific loans, and the loans for which they were pledged had all been paid, then their verdict must be in favor of the defendant; or if a portion of them were so specifically pledged, the plaintiff would not be entitled to a recovery for those so pledged. Ibid.
$ 42. Where a fictitious certificate of deposit issued by a warehouseman is the basis of an action against his assignee, evidence is admissible to show that the receiver of the certificate never deposited any wheat in the warehouse. Jackson v. Hale, * 14 How., 525.
$ 43. Where a warehouseman gives a receipt for wheat which he has never received, and afterwards the quantity which he has received is divided amongst the respective depositors, an action of replevip brought by the assignee of the fictitious receipt cannot be maintained against a third person for wheat held by him in that warehouse, to which the plaintiff possesses no evidence of title other than the fictitious receipt. lbid. § 44. Assignees of a warehouseman are not responsible to a party to whom the latter has
issued warehouse receipts unless it can be shown that grain was deposited which has come into their possession. Ibid.
$ 45. To secure moneys advanced by plaintiff to defendants the latter delivered warehouse receipts to the former, and gave power of sale to be executed in case the advances were not repaid within a certain time after request made or notice given. Whenever defendants de sired to sell any of the wheat represented by the receipts in the hands of plaintiff they obtained an order from the plaintiff to the warehouseman for the removal of the same, and as soon as it was delivered to the buyer they delivered the money or bills of lading received therefor to the plaintiff and received from it the warehouse receipts, which they surrendered to the warehouseman who issued them. All these receipts contained a clause that in case of flood the property was at the risk of the owner. Held, that the delivery of the receipts to the plaintiff was in the nature of a pledge; that the issue and delivery of the receipt was only a mode of furnishing the plaintiff with the evidence of the deposit of the pledge at the place agreed upon, and the right of possession of the same, and to dispose of it according to the terms of the bailment, and that the pledge was so qualified by the contract and conduct of the parties that the custody of the property, iustead of being actually or absolutely in the plaintiff, remained in the warehouseman, subject to its control, for the purposes of the con. tract, and while there at the risk of the owners, the defendants, in case of flood. Bank of British Columbia v. Marshall,* 11 Fed. R., 19.
$ 46. An agent who is broker and bas an interest may maintain an action in his own name for goods sold, and the suit cannot be resisted on the ground that there is a warehouse receipt for the goods in the hands of a third party. McCullough v. Roots, 19 How., 349.
$ 47. A fabricated warehouse receipt, representing that a large amount of pork had been received by defendant, subject to the orders of the plaintiff, irrevocably, which receipt, accompanied by a draft of $12,000, being forwarded, was accepted and paid by the plaintiff, affords ground for an action against the warehouseman to the extent of the injury received. Suydam v. Watts, 4 McL., 162.
$ 48. Interstate commerce.- Where warehouses are situated and their business carried on exclusively within a state, though incidentally, but not necessarily, their business may be connected with interstate commerce, the state may, until congress acts in reference to their interstate relations, exercise all the powers of government over them, though in doing so it may operate upon interstate commerce. Munn v. Illinois, 4 Otto, 113.
$ 49. The business of warehousemen is a private business which has no special privileges granted to it by the government, and the state has no right to interfere with the profits of the same or regulate the compensation for the use of warehouses or elevators. (Per FIELD and STRONG, JJ., dissenting.) Ibid.
$ 50. The Illinois statute of April 25, 1871, to regulate public warehouses and elevators, is not repugnant to section 9, article 1, of the constitution of the United States, because it gives preference to the ports of one state over those of another, as this section operates only as a limitation of the powers of congress, and in no respect affects the states in the regulation of their domestic affairs. Ibid.
$51. Grain mixed. Where wheat stored by various parties with a warehouseman has been mixed, and a portion of it disposed of by the latter, the holders of the warehouse receipts are entitled to their pro rata proportion of the property, on the principle that property intrusted to a bailee is still taken to belong to the bailor, notwithstanding any change it may have undergone, so long as such property can be identified and distinguished from all other property. Rahilly v. Wilson, 17 Int. Rev. Rec., 46. See SS 19–22.
$ 52. Lien.— A warehouseman who receives goods from a steamboat in the carrying trade, and pays to such boat the freight charges, does not by reason of such payment obtain a lien upon the goods. His lien for warehouse charges depends upon principles of law that cannot be applied in the case of payment of freight charges. Bass v. Upton,* 1 Minn., 408.
S 53. Foreign goods deposited in a private bonded warehouse, under the laws of the United States and regulations of the treasury department, are subject to the charge of half storage. Clark v. Peaslee, * 16 Law Rep. (N. S.), 609.
$ 54. A pledge by a factor of property belonging to his consignor, in which he has no interest, as security for a debt of his own, conveys no title to the pledgee adverse to the consignor, although the pledge be accompanied by a warehouse receipt. Such a pledge under the laws of Louisiana is in valid. If, in such case, upon judicial process sued out by the consignor, he surrender the property pursuant thereto and give notice to the pledgee, the duty of the warehouseman under those laws is performed. Insurance Co. v. Kiger, 13 Otto, 352.
$ 55. Jurisdiction.—A federal court has in general no jurisdiction of suits against warehousemen by citizens of the same state. The Mary Washington, 1 Abb., 1; Chase's Dec., 125.
$ 56. Liability as carrier.– A carrier who transports goods to the port of delivery and stores them in his warehouse without giving the consignee notice of their arrival remains
liable as carrier, not as warehouseman, until the latter shall receive information from some quarter of their arrival and have an opportunity to remove them. Ibid.
$ 57. Delivery of wheat to vessel. — The duty of the warehouseman in delivering a cargo of wheat to a vessel ends the moment the wheat is placed in the outside pipe leading to the vessel. The pipe is attached to the warehouse, and is used jointly by the warehouse and the vessel, but the vessel controls the discharge of the wheat from the warehouse through the pipe. The R. G. Winslow, 4 Biss., 13.
WATER AND WATER-COURSES.
(See CONSTITUTION AND LAWS; MARITIME LAW. Rivers as Boundaries, see LAND. Use of Water by Miners,
see MINES AND MINING.)
I. RIPARIAN AND LITTORAL PROPRIETORS,
IV. POWER OF CONGRESS OVER NAVIGABLE
WATERS, SS 347-368.
I. RIPARIAN AND LITTORAL PROPRIETORS.
SUMMARY — Injury by public improvements, SS 1, 2.- Power of state to improve navigable
stream, § 2. — Public rights on navigable waters, $ 3.— Title to land under navigable waters, $ 4.- Property in use of water, $ 5.- Wharves on lakes, $ 6.— Bridge piers and landing-places, $ 7.— Street extending to harbor; rights of wharf owners, $ 8.- Boundaries of public lands, SS 9, 11, 12. — Mouth of river, S 9. Accretions, SS 10, 15-19.— Right to construct buildings and wharves, $ 13.- Public use of land between high and low water; dedication, $ 14.-- Mill owners on opposite sides of a stream, $ 20.- Title to use of water, $ 21. — Reasonable use of water, $ 22.— Right to use water to injury of mill owner, $ 23,— Rights of purchasers of public lands; act of 1866, SS 24, 26. — Certain streams held to be natural water-courses, 25.— Parties holding possession and beneficial interest, $ 27.Right of action without showing actual damage, $ 28.- Use for irrigation; diversion to injury of another; title by adverse use, & 28.— Diverting, retarding and throwing back, $ 29.- Temporary diversion; relief in equity, $ 30.- Relative rights of riparian proprietors and owners of mills on trench or canal, 8 31.
$ 1. To divert a stream from its natural channel into an artificial one, for the purpose of affording improved navigation and benefiting commerce, may be a work of public concernment and advantage, but if thereby a riparian owner is wholly or injuriously deprived of the use of its waters, which he is employing advantageously as an incident to his land, it is taking the private property of such owner in and to the use of that water for public use, and, unless compensation is made, is against both the principles of the common law and the provisions of the constitution of the United States. Avery v. Fox, SS 32–40.
S 2. A state may authorize the improvement of a pavigable stream by widening the same, changing its course, etc., in any manner that will not interfere with the rights of riparian proprietors or deprive them of such enjoyed use as they are entitled to have continued in the water. And whenever it is necessary to take or destroy property of a riparian proprietor in order to effect the improvement compensation must first be made. Ibid.
$ 3. The public have the right to use such streams as are navigable as higliways, and the owner of the bed of a stream has no rights in the water thereof which will permit him to use it to the injury of the public. His right and the right of the public to the use of the water of such streams are to remain unimpaired as far as possible, but the right of the public for purposes of navigation is paramount, and there can be no use by a riparian proprietor inconsistent with the public easement. Ibid.
& 4. The owner of land bordering on a navigable stream, in which the tide does not ebb and flow, owns the land beneath the water to the center thereof. Neither the nation nor the state has any ownership therein. Ibid.
$ 5. A riparian proprietor has a property in the use of water flowing by his premises and may use it in its flow in any manner not inconsistent with the rights of others to its use. Ibid. $ 6. Where a lake is not navigable for a distance from shore the owner of adjoining land VOL. XXVIII - 44