BANK OF BRITISH
MARSHALL.
eonveyanee. It was probably a mere make-weight. Nine years later the property, being then of the value of $20,000, the defendant and its grantors having been all the time in possession, Tevis conveyed to the plaintiff, upon the nominal consideration, as expressed in the deed, of one dollar. Under the circumstances, Norris and his grantees, during all the time, could have had but little confidE:nce in the title. It must have been considered by them, as well as by those taking the adverse title, as determined by the decision of the supreme court referred to. It is difficult to account for this long acquiescence on any other hypothesis. It should certainly, under the circumstances, require a very clear case-a much clearer one than the present-at this late date, to justify overruling the case of Billings v. Morrow, which has become a rule of property, or to justify evading it, if that were admissible at all, upon the parol testimony introduced. In either aspect, the case made either upon the law or evidence is, in my judgment, insufficient to justify such action. Let there be findings and judgment for the defendant.
BANK OF BRITISH COLUMBIA 'V. MARSHAI..L (Oircuit Oourt, D. Oregon.
and others.
March 21, 1882.)
1.
PLEDGE.
Whether a transaction by which personal property is given as security for a. debt or an engagement is a pledge or a mortgage may bf;l a question; but the law, in case of doubt, favors the conclusion that it,was intended as a pledge· .2. PLEDGEE-RIGHTS AND DUTIES OF.
.
Although the pledgee is ordinarily entitled to the possession of the pledge, and therefore bound to use due diligence to preserve it from loss or injury, yet the rights and oblig-ations of the parties to a pledge may be modified by special agreement, and then they are to be measu,red aud ascertained by the particular intent of the parties, rather than any gcneral rule applicable to a simple and unqualified pledge; and such intent may he gathered from the circumstances of the transaction, including the conduct of the parties to the pledge during its continuance, as well as their express agreements.
S.
SAME-CASE STATED IN OPINION.
M. & Co. were whcat dealers in Portland, and purchased wheat from the interior, and stored it in certain warehouses on the river front for sale to shippers, upon which the B. of B. C. from time to time,made'aavances under a written contract that it should be secured by the delivery orthe Warehouse receipts therefor, with a power of sale in case of receipts containing a clause that in case of .. flood" the property was at the risk of the" owner." 'fho advances were repaid from time to time as M. & Qo. disposed of ·the wheat With the consent of the B. of B.O.,l)ut while: a portlpn of it, was still in the
20
FEDERAL REPORTER.
warehouse it was injured by a rise in the Wallamet river, and while M. & Co. were assuming to care for it. The security for this reason proving insufficient to satisfy the claims of the B. of B. C., it brought this action to recover the balance due, and the defendants set up the loss by the injury to the wheat as a counter-claim thereto. Held, that the transaction was essentially a 'pledge, and the wheat remained the property of M. & Co.; but that, notwithstanding this, it appears that it was the intention and understanding of the parties that M. & Co. should care for the wheat in case of flood, and therefore the plaintiff was not liable for the loss. 4. QUESTIONS OF FACT-DISCRETION OF COURT. It is in the discretion of the court to snbmit to or withhold from the jury a
particular question of fact. 5. tlAME-FINDING THEREON-EFFECT OF.
The court being of the impression that upon the written eontract of bailment, and the conduct of the parties under it, as testified to by the defendant 1tl., that the plaintiff was not bound to care for the pledge, instructed the jury to find a for it for the balance due; and also instructed them to find whether the plaintiff was guilty of negligence in respect to the Wheat, assuming that it was its duty to care for it as a pledgee in unqualified possession. The jury, in addition to the general verdict for the plaintiff, answered the particular question in the negative. The defendants moved for a new trial. Held, that the special finding was a fact in the case to which the court must give legal effect in any stage thereof, and that, therefore, the motion must be denied, even if the court is now satisfied that its instruction to the jury, as to which of the parties was bound to care for the wheat in case of flood, is erroneous, because it appears from such finding that the plaintiff, if even bound to care for the pledge, was not guilty of negligence, and therefore is not liable to the defendants for the loss sustained by the injury to it in any view of the matter; and also that it is not an error, if error at all, of which the defendants caIl complain, that the court assumed in its charge to the jury that the uncontradicted testimony given in the case by one of them was true.
Action for Money. W. H. Effinger and Joseph N. Dolph, for plaintiff. H. Y. Thompson and George H. Williams, for defendants. DEADY, D. J. On September 27, 1880, the plaintiff was a foreign corporation doing a banking bnsiness at Portland, Oregon, and the defendants George Marshall and J. M. Ten Bosch, as George Marshall & Co., were engaged in the business of buying and selling wheat at the same place. They usually purchased wheat from the dealers and producers in the interior of the state, and shipped it in sack by boat and rail to Portland, where they stored it in the warehouses on the river front until disposed of for shipment abroad. When so disposed of, the vessels carrying the grain were usually loaded directly from the warehouse. On that day, the defendants being desirous of procuring money from time to time to· be used in their business during the wheat season, and the plaintiff being also desirous of furnishing the same, the
BANK OF BRITISH OOLUMBIA 'V. MARSHALL.
21
parties came to an understanding, in pursuance of which the ants signed and delivered to the manager of the plaintiff a. printed letter, addressed to and previously prepared by him, to the effect following: " In consideration of a(lvances made and to be made to us from time to time, we hereby agree to repay the same, with interest thereon at the rate of ten per cent. per annum; and we further agree that all moneys and securities for moneys, warehouse, shipping, or other receipts or other securities, which may from time to time be handed in to you by us, whether indorsed over or simply delivered, shall, during the whole time they are in your possession, stand to you as security for any balance that may then be due from us to the said Bank of British Columbia as for said advances or otherwise; we p.ereby giving to you, for said bank, a lien not alone upon the moneys or other securities now in your hands, but also upon all such to be hereafter and hereunder delivered to you. "WE: hereby irrevocably authorize and empower you, for the said bank, to sell and dispose of all such personal property, or any part thereof, at pUblic or private sale, after the eJlpiration of ten days' notice to us, and from the proceeds arising therefrom to paythe principal and interest, and all cI/arges't!Hl.t shall be then due, and the costs of sale. and the balance, if any, to' pay over to us or our representatives on demand."
Then follows a clause stating that "by the schedule hereto annexed we [the defendants] enumerate the securities referred to herein." The proposition contained in the letter was accepted by the plaintiff. The schedule referred to is written below the letter upon the same sheet, and simply consists of a list of various lots of wheat and flour, the warehouse receipts for which were issued and delivered by the warehouseman to the manager of the plaintiff by direction of the defendants, and of certain promissory notes made or indorsed by them to the plaintiff. The first entry in these schedules is dated September 28,1880, and reads, "5,272 sks. wheat; No. R[eceipt] 99; Greenwich" [dock]; and the second is dated October 1, 1880, and reads, "1,630 sks. wheat; No. R. 105; Pacific." The last one is dated February 2, 1881. Between these dates the defendants caused to be issued and delivered to t,he plaintiff's manager warehouse receipts from Portland warehousemen for 90,484 sacks of wheat, 13,096 half sacks of flour, and also the promissory note of the defendant Marshall for $1,000, and that of Lent for $275, from which the bank realized the sum of $192,745.30. During the Bame period the plaintiff advanced to the, defendants sums of money which, with the interest charged there, amount to $204,943.48. And
22
FEDERAL8EPOBTER.
this action is brought to recover the difference between the realized from the securities and the account for money loanednamely, . The defendants, by their answer, ailege that this wheat was "deposited" with and "pledged" to the plaintiff as security for the advances aforesaid, and it carelessly and negligently caused said wheat to be stored upon the lower tier of certain Portland wharves, known as the Pacific, Jones',and Smith's wharves, at a place where the Wallamet river was accustomed to overflow; that about the middle of January, 1881, it did negligently permit 27,690 sacks of said wheat, of the value of $47,501.76, to be damaged by a rise in the water of said Wa.llamet river, whereby the value thereof was diminished by $20,046.75; and pleaded the saml'l as a counter-claim against &he demand of the plaintiff, and pray judgment against the bank for the balance of $8,748.57. The answer also contains allegations to the effect that certain of said securities were sold· by the plaintiff without notice to the defendants, and that a portion of the wheat represented by said securities was sold for less than its fair market value, whereby the latter were damaged in the additional sum of $814.20. But on the trial these allegations were abandoned. ' The plaintiff replied and denies that the defendants ever deposited "with or pledged" to the plaintiff the property mentioned in the schedules aforesaid; denies that it stored. the wheat on said wharves carelessly or at all, or 80 neglected to care for it while there, or that the defendants suffered any damage by the negligence of the plaintiff concerning said wheat, and alleges that the warehouse receipts for said wheat were issued and delivered to the plaintiff's manager, W. W. Francis, in his own narpe, who thereupon indorsed them to the plaintiff, who thereby acquired, under and by virtue of the stipulations contained in the letters aforesaid, "a lien as by mortgage or hypothecation upon the wheat represented" by them; that the defend· ants selected the wharves upon which said wheat was stored; and stored the same thereon, and had the same in their "actual possession" all the time it was so stored, and cared for it as they could or thought best, to prevent it from being injured by a rise in the river, and that the plaintiff was under no obligation to take any care thereof; that in January, 1881, the Wallamet river "suddenly and ul1expectedlyrose to a great and unusual height," by means of which said sacks of wheat were damaged 8S alleged without the negligence or fault of anyone.
BANK OF BJU'I,'ISH' OOLUMBLA ' 'V. MARSHALL.
On. the trial the defendant Marshall testified, in substance, that when he proposed to Mr. Francis to open an account with the plaintiff,and give wheat receipts as security for advances, the latter said tha,t he would take such receipts if issued to him directly by good wnreho\lsemen in Portland, but ,none other; and on being asked if receipts issued by Capt. George Flanders, of the Greenwich dock, and Mr. Z. J. Hatch, of the Pacific docks,-which phrase colloquially includedthe Jones and Smith wharves, aforesaid,-were good, he answered they were; that when and as the defendants sold wheat for shipment, the receipts for which had been issued to Mr. Francis, they obtained an order from the plaintiff to the warehouaeman for the removal of the, same, and as soon as it was delivered to the buyer on the wharf or on shipboard they delivered the money or bills of lading received therefor to the plaintiff, and, received from iUhe warehouse receipts, which they surrendered to the warehouseman who iss.ned that on ,the eleventh, twelfth, thirteenth, and .fourteenth of January the water rose in the Wallamet river until it was within 17 inches of the lower tier or floor of the Pacific docks, and that in the afternoon of the latter day it was first ascertained from the dalles that the Columbia river was rising, and that if was quite probable that the wheat was in dal).ger,but it ,was too late ,to remove it with the means at hand; that Marshall watchEld the rise ,in the river day and night, and was of the opinion that the wheat was not in danger-at least to justify the expense of its'remo\Tal-until the unexpected rise in the Columbia was heard from, and ththe then communicated the news to Mr. Francis aIj.d conversed with him OIj. the subject,who told him that he had no suggestiQns to m{i.ke,. whereupon Marshall com,menced to remove ,the wheat as quickly as he could to the, Greenwich dock, a distauce of over a mile, but only succeeded in saving 1,500 sacks before the wharf overflowed on the evening of the fourteenth of January and prevented further operations. It is a matter of common knowledge and general notoriety in this country, and was so assumed by couJ,lsel in their arguments and by in its charge to the jury, that the Columbia river does not the generally then at a lower stage than rise in the winter season, its southern tributary, the Wallamet, and that the 8ud!len overflow Qf the latter on the Pacific docks outbe evening of January 14th was to rise in the Columbia, which, by tha.t time,hll.!l reached the mouth of the Wallamet and baGked up the water·
24
It was also generally known and admitted that for some days before January 14th telegraphic communication up the Columbia had been suspended by the falling of the wires from an extraordinary sleet storm, and that, therefore, the rise in the Columbia and the unprecedented warm rain to the eastward of the Cascade mountains, which produced it, were not known in Portland until the afternoon of January 14th, when a rise of some eight feet had already passed the dalles -a distance of about 100 miles east of the mouth of the Wallamet. Receipts were issued to Mr. Francis by the direction of the warehouseman of the Pacific docks for the 1,500 sacks of wheat removed to the Greenwich dock, and the wheat was afterwards sold by the plaintiff on due notice to the defendants, and the net proceeds applied on their account. The sacks of damaged wheat were afterwards removed from the Pacific docks, and the contents poured out and dried by Marshall with the consent of the plaintiff, and theu sold by the latterl upon due notice to the defendants, and the net proceeds applied in the same way. The receipts given by the Pacific docks to the plaintiff's manager were to this effect: "Received of W. W. Francis, manager, sacks of wheat for account of W. W. Francis, manager," upon the conditions, among others, that storage is paid each month, that damage by flood is at owner's "risk," and that the receipt is returned before delivery made. Mr. Francis died before the trial came off, and his testimony was not heard, and the defendant Ten Bosch had removed to Liverpool without leaving his deposition, so that the testimony of Marshall was the only evidence, outside of the writings, as to the conversations or intercourse between the plaintiff and the defendants on the subject of the action; nor was there any evidence in the case tending to show that the defendants, prior to this action, ever claimed or asserted that it was the duty of the plaintiff to care for the wheat. On the argument of the case it was contended for the plaintiff that the issue and delivery of the warehouse receipts, under the letter of the defendants, constituted a mortgage of the property therein described to the plaintiff, by which the right of property in the grain was vested in it, while the possession, with the corresponding duty of caring for it in case of a flood or other danger, remained with the defendants. On the contrary, the defendants insisted that the plaintiff thereby became the pledgee of the property, with the control of the possession thereof, and was, therefore, bound to the use of reasonable care and diligence to prevent it from being injured.; and