WELLS, FARGO & CO. V. OREGON BY. & NAV.OO.
(Ot''l'cuit Court. N. D. Cqlijornia.
Where a shipper attaches his bill of lading to a draft upon the consignee, he thereby expresses his intentio,n to deliver the goo,ds upon payment of SUCh, draft, and to retain control of them until such payment, and the carrier who, under such circumstances, delivers them while in transit to the shipper, is liable to the consignee whq has duly taken up the draft.
DAMAGEs-ExPENsE INCURItED rN PURSUIT OF PROPERTY-EVIDENOE.
DISPONENDI-LIA1ULITY OF CARRIER FOR MISDEl.IVERY.
, muder Civil Code Cftl. § 3836, that, in an action brought by a con· signee against a carrier for wrongfully delivering up goods in transit to a party other than the consignee, the measure of damages shall be the highest market value of, the property at any time between the conversion and the verdict, without interest; and a fair compensaUonfor the time and money properly expended in of the property, it is incumbent on ihe plaintiff to show the, Circumstances tinder which the expenditure claimed by him to 'incnrred'was :m.ade;so that the court can decide whether it was proper.
for plaintiffs. Wilson and Messick
Maxwell, for defenqant.
Ross, J. From August, 1885, to some time in the early partof1886, the ;firni of 'Mills & Co. and one William Jones were dealing largely in wheat; Mills & Co. being located in San Francisco, California, and Jones at Walla. Walla, Washington Territory. During the same period. the plaintiffs berein were carrying on business as bankers in San Francisco, and defendant was engaged in the transportation of passengers and freight between various points in Oregc}ll, Washington Territory, ,and California. At different times between the dates mentioned Jones sold wheat to Mills & Co. In doing so, the method adopted-except in one instance, which oocurred early in their dealings, and which it is not importantto notice further-.--was this: The respective parties wonld,by telegram or letter, agree upon a sale, whereupon Jones would ship the wheat on the defendant's cars, taking therefor a carrier's receipt, reciting defendant's agreement to deliver the merchandise to consignee or owner; Mills & Co. being therein designated as consignees. Jones would then draw' a draft on Mills & Co. in the approximate amount of the purchase price,---notexceeding, however, according to the agreement of the parties; 95 per cent. thereof, in order to guard against shortage or damaged wheat; attach to it the carrier's receipt; discount the same with Baker & Boyer, bankers of Walla Walla, who would send the draft, with annexed receipt, to the First National Bank ofSan Francisco for acceptance and collection. That bank, on receipt of the po.pers,would notify Mills & 00. of their arrival; and Mills & 00. would accept the draft, and, on maturity, pay it with their check on Wells, Fargo & Co., duly certified j the check being certified and paid by Wells, Fargo & Co. pursuant to an agreement between them and Mills & Co. that they would advance the money upon the earril;lr'8 receipt, which, in each ,instance, was indorsed and by
MWs & Co. to them. It was further understood between Mills & Co. and Wells, Fargo & Co. that the receipts should also stand as security for a general balanr.e standing against Mills & Co. on the bank's books. Up to and including January 11, 1886, Jones had in this manner shipped and sold to Mills & Co. in the aggregate. 190,000 bushels of wheat, all of which was delivered by defendant to· the order of plaintiffs. Subsequent to, but soon after,January 11th, the wheat in controversy in the present action was shipped by Jones, through defendant, to Mills & Co.; the carrier's receipts, in the same form as those previously given, (except that in one, for 390 sacks, Mills & Co., care of Taylor, Young & Co., Portland, Oregon, and in another, for 310 sacks, Mills & Co., Portland, were named as consignees,) were taken by Jones; drafts were drawn by him on Mills & Co. in the approximate value of the wheat; the carrier's receipts attached to themi and sent through Baker & Boyer to the First National Bank of San Francisco for acceptance 'and collection. These drafts were accepted by Mills. & Co., and paid in the same way, and upon the same agreement, as the previous drafts; that is to say, with money advanced by Wells, Fargo & Co. upon the security of the carrier's receipts, which, as in the previous instan:ces, wereiildorsed and delivered by Mills & Co. to them; Of the wheat sued for, numbering in all 5,363 sacks, 1,023, it was proved on the trial, were delivered by defendant in San Francisco; and as to that lot, plaintiffs, on the hearing, conceded that they had failed to make good their claim. The remaining 4,340 sacks were never delivered to plaintiffs, and for those they contend they are entitled to recover. After the wheat in controversy had been shipped in the manner stated, Jones came to San Francisco; and finding Mills & Co. insolvent, and that he had not been paid in full for the wheat sold and delivered prior to January 11, 1886. stopped in transit all of that in controversy, except the two lots consigned to Portland. Of those lots, that embracing 310 sacks, and consigned to Mills & Co., Portland,-at which place there was no shch firm,-was upon request of Jones delivered by defendant to Caesar & Co. for Jones, and by him received; and that embracing 390 sacks, and consigned to Mills & Co., care of Taylor, Young & Co., Portland, was delivered by defendant to Taylor, Young & Co., at Portland, for Jones, and by him received. The remaining 3,640 of the 4,340 yet in dispute were delivered by defendant directly to Jones, pursilant to notice given to, and demand made on, defendant by Jones, to the effect that he was the owner of the wheat, had not been paid for it, and that the consignees (Mills & Co.) were insolvent. For the defendant nominally, but in reality for Jones,-he being the real party in interest,-it is contended that Jones contracted to sell Mills & Co. 190,000 bushels of wheat, the ownership of which passed to them atthe time the wheat was delivered to the carrier, and for which he has never been paid in full; that the wheat in controversy was shipped by Jones through the mistake of his clerk "i.n running up figures;" that the drafts drawn by him on Mills & Co. "Ve're not drawn against any specific
WELLS, FARGO &: CO. V. OREGON RY. &: NAV. CO.
oHpment of wheat, but against his general account; and that the money of the plaintiffs that went to pay the drafts that accompanied and were annexed to the carrier's receipts for the wheat in controversy, and which was advanced upon the security of those receipts, was properly credited by Jones to the general account of Mills & Co., which still left a small balance due for the 190,000 bushels,-from all of which the deduction is attempted to be drawn that the wheat in controversy was never sold by Jones to Mills & Co., and that neither that firm nor the plaintiffs ever acquired any property or interest in it. Although Jones, in his testimony', and hie counsel, in their argument, irequently speak of a contract between Jones and Mills & Co., by which he agreed to sell them 190,000 bushels Of wheat, the case clearly shows that no such contract was ever made. There were a series of contracts made between the parties for the sale by Jones to Mills & Co. of wheat, between August, 1885, and the eleventh of January, 1886, which,up \C and including the last-mentioned day, aggregated 190,000 bushels. In no instance,however, was the eale consummated, as is argued by , tlel for Jones, when the wheat was delivered to the carrier, but only when the draft that was drawn against the wheat was paid. Whether the property passes to the vendee upon delivery to the carrier depends upon the circumstances of the particular case. It never does when the vendor manifests the intention to retain the jus di."ponendi. IIi respect to the sales inquestion, that intention was clearly manifested by the fact that the vendor attached the carrier's receipts to the drafts, and deposited them with bankers who discounted the drafts; and this, as he himself testified, was purposely done "for hia own security," and because he "wanted to know that they [Mills & Co.] would not get the receipts until they had paid the drafts." See Benj. Sales, (4th Ed.) §§ 381-399, and authorities there cited. In view of these facts, no importance can be attached to the further statement of Jones that he did not draw against any specific shipment, but against his general account. He drew against the wheat in controversy, and attached to the drafts the shipping receipts therefor, in precisely the same way that he did in respect to the wheat shipped prior to January llth,j the evident purpose, and, indeed, the admitted purpose,it was done "for his own security,"-being to retain the ownership of the wheat until payment of the draft against it. It is not pretended that any of the wheat was shipped to Mills & Co. on commission; for .Tones himself testified: "I did not intend to send them any I did not sell them." I can discover no distinction in the dealings of the parties between the shipments made prior and those made subsequent to January 11, 1886. Nor do see how the statement that the wheat in excess of 190,000 bushels was' shipped through the mistake of the clerk "in running up figures," can be reconciled with the undoubted fact that .here never was a contract for 190,000 bushels, but a series of contracts, J1lade by w offer on Jones' part to furnish a certain number of bushels, Rnd an acceptance on the part of Mills & Co. to take the number mentioned at a given price; nor with the further fact that on the sixteenth of
FEDERAL Ri:PORTER. ,
January, after 190,000busbels bad been shipped arid sold, Jones wrote to Mills & Co.: "I wired you lsst night, asking you if I was safe in buying on the basis of the last figure, 53;" and in the same letter notified them that he had drawn on them for $1,550, for 1,484 sacks, the same being a part of the wheat in dispute. In my opinion, all of the wheat in controversy, that is to say, 4,340 sacks, was sold by Jones to Mills & Co., and the ownership of the respective lots passed to them upon the payment of the respective drafts. Thatbeing so, there can be no doubt, in view of other undisputed facts, that the title to the -wheat vested in the plaintiffs.. Bank of Rocheste:r v·.Jones, 4 N. Y; 497. The extent of their interest therein need not be considered in this case. rt results from these views th'at, as to the 3,640 sacks, certainly, defendant was not justified in the delivery to Jones, and is consequently responsible to plaintiffs for the conversion. So, also, 1 think, is defendant responsible for the 390 and 810 sacks delivered to Taylor, Young & Co.; and Caesar & Co., respectively. In each iJ;lstance, without , requiring the surrender of the shipping receipts which it had issued, and which it was shown at the trial were always treated by the companyas negotiable, defendant delivered the property to others than those claiming under that title. For such misdelivery it must answer to the true owner. The Thames, 14 Wall. 107; Oity Bank v. Railway 00., 44 N. Y. 141. It only remains to consider the question of damages. By virtue of section 3336 of the Civil Code, plaintiffs are entitled to. recover the highest market value of the property at any time between .the conversion and the verdict, without interest, and a fair compensation for the time and money properly expended in pursuit of the property. The most satisfactory testimony in regard to the highest market value reached by Walla Walla wheat since February, 1886, is that of Sinclair, who fixes it at $1.581 per cwt.; and that value will be allowed, less freight at the rate of $8.70 per ton. Kavanaugh's testimony in regard to the highest value is too speculative. The evidence is insufficient to show that plaintiffs properly expended anything in pursuit of the property. The only evidence on that point is that of Wadsworth, cashier of plaintiffs, who was asked: "Question. Ha,'e you paid out anything inthe pursuit of this property? Anawer. We paid saine fees, yes, sir; and some costs. Q. To what amount? A. My recollection is, $650,-wepaid a fee; and about $50 costs. Q. $650 fees for what? A. Attorneys." It devolves upon the plaintiffs to show the circumstances under whioh the payments were made, so that the court may determine whether the money waf?, propfJl'ly expended or not. Counsel for plaintiffs will prepare findings in 'accordance with this opinion, submit them to opposite counsel for such suggestions as they may think proper to make, and then' to me for settlement.
SCHUTZ '0. JORDAN.
and others v.
(Circuit Court, S. D. NelJ) York. August 17, 1887.) 1.
PRINCIPAL AND AGENT-PURCHA.8ING AGENT-RATI1!'ICATION By-RETENTION OF GOODS SOLD.
In an action for goods sold and delivered, the evidence showed that defendants, engaged in a latge mercantile business, employed a superintendent in their retail cloak and suit department, with authority to purchase goods as needed for that department, and to whom invoices of and all correspondence relating to such goods were intrusted; that defendants had discovered that the superintendent was inclined to carry more goods in that department than was desirable, and that he had been ordered to keep down the stock: wl:!.en plainti!l's salesman. applied to him shortly after for orders, he ,told than the firm allowed, but that, hIm that he was alrelLdy carryJDg more if the plaintiffs would not have any statements of account or dunning letters Bent to the house, the goods might be sent, and the invoices might be sent as usual, for they would come to him anyhow; and that he would pass the invoices as fast as he could. This scheme was communicated to the and assented to by them, and, in pursuance thereof, large quantities of goods . weresb,ipped, received by the superintendent, some of the bills paid by his direction, and many of the goods disposed of in the llsual course of trade. When defendants at last discovered what the superintendent had been doing, and with knowledge that plaintiffs claimed that all the goods had been sold to the house, they laid out,lIll the goods remaining on hand which had come from plaintiffs, in order to ascertain whether any of them were goods which had not been paid for, but were unable ,to determine whether they were, or not, and they were thereupon put back into the stock, and sold; that after the discovery other goods were received from plaintiffs, under the'samearrangement. and were refused and returned. Held, that the defendants did not ratify the unauthotized acts of the superintendent by retaining and selling the p;oods after discovery, and that plaintiffs could Dot recover the price of
SAME-KNOWI,EDGE OF PRINCIPAL-MAILING INVOICE-'-COURSE OIl' BUSINESS.
In such action,it was sought to charge the defendants with knowledge by showing:that the invoices for goods purchased by the superintendent under the Ul\authorized arrangement had been mailed to the defendants at their place of bus,iness. The jury were Instructed that the fact that the invoices were so Bent would not in law establish the fact that the defendants received them, and would not be proof of that fact, and that the preiiumption arising from mailnotices in <lases ofllegotiable instruments did not apply. Herd, in view of the evidence showing the course of business to be that such invoices were received by the superintendent, and not by the defendants personally, that the instruction was practically correct. . In the trial of a case,. a correct apprehension by tbecourt of all the principles of law involved is not demanded: but it is sufficient if the instructions are. correct, as applicable to the case presented, and that the court should not be wrong to the extent of misleading the jury.
TRIAL-INSTRUCTIONS TO JURY.
Blumenati.el « Hir8ch, for plaintiffs.
M'l/eT8, for defendants.
lAs to what will constitute a ratification by a prmclpal or the unauthorized acts of an and the effect of such 'a ratification. see Nichols v. Shaffer, (Mich.) 30 N. W. Rep. 383, and note; Stillman v. Fitzgerald, (Minn.) 33 N. W. Rep. 564; Forcheimer v. Stewart, (Iowa,' 32 N. W. Rep. 665; Mortgage Co. v. Henderson, (Ind.) 12 N. E. Rep. 88; Metcalf v. 'Williams, (Mass.) 11 N. E. Rep.700; Shinn v. Hicks, (Tex.) 4 S. W.Rep. 486; Trhread Co. v. Manufacturing Co., (Pa.) 8 At!. Rep. 794; Culver v. Warren, (Kan.) 13 Pac. Rep. fJ77.