text:
Woodruff v. Hough

ERROR to the Circuit Court of the United States for the Northern District of Illinois.

On the 5th of July, 1871, a contract was entered into between John Allen and the Board of Supervisors of Winnebago County, Ill., for the erection of a county jail, according to certain plans and specifications; the work to be done under the control of a building committee, which should have the right to make changes in the materials or construction of the building upon giving reasonable notice thereof. The contract also provided that all materials used and work done should be subject to the approval of a superintendent appointed by the supervisors; and if at any time, in his judgment, the work or materials were not in accordance with the requirements of the contract, he should have power to stop the work until the difference should be adjusted by arbitration.

On the 18th of the same month, Allen made a contract with the defendants in error, who were the plaintiffs below, whereby they agreed to 'furnish the material, manufacture, deliver, and erect in its proper position, all the wrought-iron work' for the jail, according to certain plans and specifications mentioned in his contract with the supervisors. It set forth the terms of payment by him, and a provision for an increase or decrease in cost occasioned by any changes in the materials or in the construction of the iron-work which might be made by the building committee.

The plaintiffs in error entered into a written guaranty with the defendants in error for the faithful performance by Allen of his agreement.

During the progress of the work, differences arose between Allen and his sub-contractors, growing out of the refusal of the supervisors to accept the work furnished by the latter, on the ground that it was not in compliance with the specifications of his contract with the supervisors and with defendants in error. After much of the work was done and put in place, it was condemned, and the work abandoned by defendants in error, who brought this suit against Allen's sureties for his failure to pay as they had guarantied he would.

The defendants below asked the court to instruct the jury, that if it appeared from the evidence that the plaintiffs had abandoned their contract with Allen before its entire completion, and after only a partial performance, they could not recover in an action on the special contract.

That even if it appeared from the evidence that the plaintiffs, after commencing work under their said contract, had been improperly obstructed in or prevented from the performance of the same, they could not maintain an action on the special contract sued on without proving a tender to Allen of the balance of the work required to be done by them by their said contract with him.

That if it appeared from the evidence that the payments actually made to the plaintiffs by Allen, added to the amounts required to be paid by him, under a subsequent contract with a third party for a completion of the wrought-iron work (if such contract was the most economical one that he, under the circumstances, could make for the completion of said work after the same was abandoned by the plaintiffs), equalled or exceeded the whole price at which the work was to be done by the plaintiffs, then there could be no recovery.

That the defendants, being mere sureties upon a special written contract, were not necessarily liable, even though an action might be sustained against Allen.

That, under the facts as disclosed by the evidence, no action was sustainable upon the written contracts mentioned in the declaration, but that the plaintiffs' remedy was limited to an action upon an implied contract on the part of Allen to pay for the value of such work as had been retained by him, after it was furnished by the plaintiffs in alleged partial performance of their contract.

That the defendants were not liable upon their guaranty, if the plaintiffs were not entitled to recover upon their written contract with Allen.

But the court refused to so charge the jury, and thereupon gave its charge substantially as follows:--

To fully understand the obligations and liabilities of the parties, it is necessary to ascertain definitely the duties and obligations which plaintiffs and Allen had respectively assumed under their contract of July 18. The contract recites in substance that Allen had entered into a contract with Winnebago County to build and complete a jail at Rockford, according to certain plans and specifications.

The plaintiffs agreed to furnish the material for, manufacture and deliver, and erect in its proper position, all the wrought-iron work for said jail mentioned, and provided for in said plans and specifications under the caption of 'Specifications for wrought-iron work.'

These specifications, it will thus be seen, are an important element in the contract between Allen and plaintiffs; and it is only by reference to them that we are able to ascertain definitely what plaintiffs agreed to do.

The first requisite as to the character of the wrought-iron work is, that it is all to be made of the best quality Lake Superior iron, unless otherwise ordered in writing by the superintendent.

The plaintiffs claim that they proceeded, according to the terms of their agreement, to provide the materials and manufacture the iron-work required substantially in the manner called for, and had proceeded to put the iron lining and five of the window-frames in place, and were ready to proceed to put the open-work partition, and cell-doors, and other parts of the work, in place, when they were stopped by Allen and the building committee.

The defendants, besides interposing several technical, or rather legal defences, arising out of what they claim to be the law of the case on the admitted facts, insist that the work brought upon the ground and offered to be put in place did not conform to the plans and specifications, and that the same was therefore rightfully rejected.

It is admitted that the lining furnished by plaintiffs has been built into the wall since they were stopped in the performance of their contract, and has become apparently a part of the structure, without objections from the superintendent or building committee.

It is conceded on the part of the plaintiffs, that, in several important particulars, this work is not in accordance with the specifications; but it is also insisted that a literal compliance with the specifications and plans in those respects is practically impossible; and they are, therefore, excused in the premises.

For want of conformity to the specifications, and by reason of the imperfection in workmanship, Allen claimed the right to reject the work tendered by plaintiffs; and it becomes your duty to determine, under the law and the evidence, how far he was right in so doing.

As to the provision requiring all the iron-work to be made 'of best quality Lake Superior iron,' it is for you to say, as a matter of fact, from the evidence, whether it was possible for the plaintiff to have literally complied with this condition, or whether, by using iron made partly from Lake Superior ores, this condition has been substantially complied with. Conditions of this nature in contracts or specifications must be construed in the light of practical affairs; and if you find from the evidence that there was no such distinctive article as 'Lake Superior iron' known to persons engaged in the iron trade, then you will be justified in assuming that the parties in using the term really meant and intended to describe iron manufactured partly from Lake Superior ores; and, if the plaintiffs used such iron, they have so far complied with their contract.

In connection with this branch of the case, and as throwing some light upon the construction the parties intended to put upon the term used to describe the material, I call your attention to the fact, that there is no proof that any objection was made to the material or kind of iron employed, with the exception of the lining-plates.

As for failure to use the kind of plates and T iron bars in the iron lining called for by the specifications, the plaintiffs mainly depend upon the consent of Allen and the building committee to accept the building as made, rather than upon their right to insist that they have complied in that regard with the specifications.

If you find from the evidence that they did so agree, then the work as made should be deemed by you to have been substituted by agreement of parties for that described in the specifications; the jury taking into consideration, in fixing the value of the work as made, any imperfections in the workmanship, and the work yet remaining to be done at the time it was abandoned by plaintiffs.

In other words, the jury are to determine from the evidence the value of the lining to Allen for the purpose of completing his contract as plaintiffs left it.

Having heard the testimony in relation to the open-work partition, and had the plans shown and explained to you, it is for you to say, under the proof, whether this part of the work complied with the contract. If it did not, then Allen was not bound to accept it, and had the right to forbid plaintiffs from putting it up.

A word here in regard to the degree of perfection to which work of this character must be carried to comply with the drawings and plans. There should always be a substantial compliance with the model. In all essential particulars, the thing represented must be produced and come as near to the standard as the state of the act will allow. The plaintiffs' contract binds them to this, and they should not have undertaken the task if they had not the skill or means to accomplish it.

So in regard to the cell-doors, window-frames, and gratings. If the testimony satisfies you that these portions of the work were made substantially as required in the drawings, and that, if the doors are too large for the openings left to receive them, it is due either to the mistake of the mason or to a mistake in the scale on which the drawings were made, then plaintiffs ought not to suffer, and should recover for the value of the window-frames put in place, and also for the value of that ready to be put in place, if it was made in conformity with the drawings, but subject to this reservation.

The contract was an entirety; and the plaintiffs had no right to put in the window-frames, cell-doors, &c., even if they complied in all respects with the drawings and specifications, if they at the same time insisted on putting in the partition also, which did not conform to the plans.

If you believe from the evidence that the plaintiffs insisted on putting in a partition which was not made according to the plans, then they cannot recover for the doors and window-frames not put up and used, even though they may be properly constructed.

If you find from the evidence that the contract has been partially performed by the plaintiffs, and that they have been prevented from performing the remainder of the work by Allen, and that he has adopted or used a portion of the work, then it will be your duty to ascertain from the evidence the value of the work thus done and appropriated, and the plaintiffs will be entitled to recover the value so found as damages: but you should also deduct from the amount thus found any sums due from plaintiffs to Allen for advances made by him on their account; also any damages which Allen has sustained by reason of the non-performance of said contract between plaintiffs and himself, provided you believe there was any breach of contract which entitles Allen to damages; and, in estimating Allen's damages, you must be governed by the evidence in the case, applying it in the same manner as you would do if Allen had not a suit for damages on said contract.

Thereupon the jury gave their verdict in favor of the plaintiffs for $5,000 damages, and judgment was rendered therefor.

The defendants having excepted to the refusal of the court to charge the jury as requested, and also to the charge as given, sued out this writ of error.

Mr. H. K. Whiton for the plaintiffs in error, and Mr. John N. Jewett for the defendants in error.

Mr. JUSTICE MILLER delivered the opinion of the court.

title: Woodruff v. Hough


text: Talk:Woodruff v. Hough

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title: Talk:Woodruff v. Hough


text:
Woodruff v. Hough/Opinion of the Court

The errors assigned relate to the charge of the court, and the refusal to charge as requested by plaintiffs in error.

The main ground of error seems to be, that the court did not treat Hough & Butler, the sub-contractors under Allen, as bound by all Allen's contract with the supervisors. But, while they accepted the specifications for the wrought-iron work which were in Allen's contract with the supervisors, they did not agree to be bound by the supervisors' acts in accepting or rejecting the work as coming up to these specifications.

This Allen did in his contract with them; and no doubt this has led to the present controversy. The supervisors reserved the right to decide as between them and Allen whether the work conformed to the specifications. Allen reserved no such power in his contract with defendants. These latter had a right, in the event of a difference on that subject, to have the difference settled by a court of law; and Allen ran that risk if he rejected any of their work. But the supervisors could reject work without such hazard, because Allen had agreed to submit to their judgment in case of such a difference.

The plaintiffs desired to have the court give the jury a more specific construction of the contract than it did as to the kind of work required, and also as to the failure of defendants in error to perform the work as so construed.

The court repeated the details of the contract on the points where the failure was alleged, and then told the jury, that unless the contractors had complied substantially with these specifications, or a strict compliance therewith had been waived, they could not recover. The charge was very full, and covered the whole ground necessary to enable the jury to apply the law to the matters in issue. We do not find in it any error The fact that Allen will, under the judgment recovered by defendants in error, taken in connection with the amount he has had to pay to others to complete the wrought-iron work, be a loser to the amount of several thousand dollars, does not prove the instructions of the court to be wrong. If there was any error, it was committed by the jury, and not by the court. It is only another one of those cases, so common from that circuit, in which, with the whole charge of the court and much of the testimony in the bill of exceptions, this court is expected to retry the case as if it were both court and jury. Our repeated refusal to do this will be adhered to, however counsel may continue to press on our attention the mistakes of juries. They are beyond our jurisdiction.

Judgment affirmed.

title: Woodruff v. Hough/Opinion of the Court


text: Talk:Woodruff v. Hough/Opinion of the Court


text:
Gilman v. Illinois and Mississippi Telegraph Company

THESE cases come here from the Circuit Court of the United States for the District of Iowa,-the former by appeal, and the latter by writ of error.

In 1857, the Des Moines Valley Railroad Company, by its then corporate name, in order to secure the payment of its bonds, executed to certain trustees a mortgage of its road, property, and franchises, 'together with the tolls, rents, and profits to be had, gained, or levied therefrom.'One of the provisions of this mortgage was as follows:--

'It is hereby further provided, that until failure to pay the interest on said bonds, or to pay the principal at maturity, or to apply, appropriate, set apart, and deposit the several sums of money to be applied, appropriated, set apart, and deposited, as hereinafter provided, the said party of the first part shall have the sole right to the possession, use, management, and control of the said mortgaged property and premises, and of the receipts and revenues thereof, as if this instrument had not been made; but if the said party of the first part shall fail to pay or cause to be paid the principal of the said bonds, or any of them, at the maturity thereof, or shall fail to pay or cause to be paid the interest on the said bonds, or any of them, or any part thereof, on any day whereon the same is made payable by the terms of the said bond, and the same shall remain unpaid for the space of six months after having been demanded, whereby at the option of the holders of one-third in amount of all the outstanding unconverted and unredeemed bonds the principal sum secured thereby shall become immediately payable, or shall fail to apply, appropriate, set apart, and deposit the several moneys required to be applied, appropriated, set apart, and deposited, as hereinafter provided, then and in that case it shall be lawful for the said parties of the second part, their survivor or successor or successors, and it shall be their duty, to enter upon and take possession of all and singular the property, premises, and franchises hereby granted and conveyed, or so expressed or intended to be, and by themselves, or their agent or agents, substitute or substitutes, duly constituted, have, use, operate, and employ the same, making from time to time all needful repairs, alterations, or additions, collect and receive all the tolls, rents, or profits to be had or gained therefrom, and apply all the moneys arising therefrom to the payment of the interest due and to grow due on all the said bonds which may be outstanding, unconverted, and unredeemed, and to the payment of the principal of all and each and every of such bonds when such principal shall become due and payable.'

In 1868 the company executed a second mortgage to certain other trustees, in which was conveyed the road with its appurtenances, and 'also all rents, issues, income, tolls, profits, currency, moneys, rights, benefits, and advantages derived or to be derived, had or received therefrom by said company in any way whatever."To have and to hold the above granted and bargained premises, with the appurtenances thereof, unto the said trustees, and to the survivors and survivor of them, and to their and his successors and successor, and their and his assigns, in trust, and upon the trust, uses, and purposes hereinafter expressed, of and concerning the same, for the use and benefit of the person or persons, firm or firms, bodies politic or corporate, who shall hereafter at any time become the purchasers of holders, owners or bearers, of any or either of said bonds, subject to the terms, provisions, and stipulations in said bonds contained, and also subject to the possession and management of said railroad and property by said eompany, and its successors and assigns, so long as no default shall be made in the payment of either interest or principal of said bonds, or in any or either of them, or in payment of the amount of money, as is herein provided for the sinking fund, and so long as the said company shall well and truly observe, keep, and perform all and singular the covenants, agreements, conditions, and stipulations in said bond and in this indenture contained and set forth, and which are to be observed, kept, and performed by and on the part of said company.

'And it is agreed, in case of the default of the payment of the semi-annual interest as above provided, that said trustees and the survivor or successors of them are hereby expressly authorized and empowered, upon the request in writing of a majority in interest of the owners or holders of said bonds, to enter into and upon, and to take actual possession of, all the property, real and personal, rights, franchises, and privileges, of the premises hereby conveyed, and each and every part thereof, and by themselves, or by their attorneys or agents, have, hold, use, and enjoy the same, and from time to time make all repairs and replacements, and all useful alterations, additions, and improvements thereto, as fully as the parties of the first part might have done before such entry, and to collect and receive all tolls, freight, incomes, rents, issues, and profits of the same, and of every part thereof.'

The trustees never took possession; but, default having been made in the payment of interest on both mortgages, the trustees in the second mortgage, in July, 1872, commenced suit to foreclose in one of the State courts, making the railway company the trustees in the first mortgage, and various judgment and lien creditors of the company parties defendant, and, among others, the Illinois and Mississippi Telegraph Cpmpany. No receiver was applied for or appointed pending the foreclosure proceedings, except as hereinafter stated.

On May 31, 1873, a decree of foreclosure was entered by the State court, fixing the priorities of the several parties, and holding that the telegraph company's judgment, hereinafter mentioned, was a lien subject to the mortgage in suit and to other specified liens.

The decree ordered a sale of the mortgaged property by the sheriff on special execution, but, as originally entered, made no provision as to the possession or earnings of the road (which was still in the possession of the railroad company, and operated by it) between the date of the decree and the sale which the decree ordered.

On the thirteenth day of June, 1873, the telegraph company issued execution on a judgment for $23,734.10, which it had on the 24th of May, 1872, obtained against the railroad company in the Circuit Court of the United States for the District of Iowa, and garnished, under the statute of the State, moneys in the hands of the agents of the railroad company at its various stations, received by them from the income and earnings of the road.

The trustees in the first and second mortgages filed, June 20, 1873, the present bill in equity against the telegraph company to enjoin the said proceedings upon the execution under its judgment. The bill was, the twenty-seventh day of June, 1873, amended so as to make the Des Moines Valley Railroad Company a defendant; and a temporary injunction, as prayed for, was allowed.

On Sept. 9, 1873, after a sale had been advertised by the sheriff, application was informally made to the State court, by the trustees under the first mortgage, for a modification of the decree of May 31, 1973; and the same was modified by appointing a 'special receiver of all the income and earnings of the road' between the date of the decree or sheriff's first publication of notice of sale and the sale to be made by him. This was done, saving the rights of the telegraph company.

The special receiver took possession Sept. 15, 1873. The sale by the sheriff under which the purchasers were let into possession took place Oct. 17, 1873, and left a large amount of the mortgage bonds unpaid.

Between the date of the decree of May 31, 1873, and Sept. 15, 1873, when the special receiver took possession, the road was operated by the railroad company; and, during this period, the net earnings were $27,147.96.

Coykendall, who was garnished, had received $27,000; and judgment in the suit at law was rendered against him for that amount.

The Circuit Court dismissed the bill of the complainants.

Mr. George G. Wright for the appellants and the plaintiff in error.

The railroad company had legal capacity to mortgage, and did mortgage, its future earnings; and they became as much part of the bondholders' security as did the road-bed, rolling-stock, or any other part of the mortgaged property. Act of March 31, 1858; Rev. Stat. of Iowa, 1860, p. 222; Pennock v. Coe, 23 How. 117; Jessup et al. v. Bridge et al., 11 Iowa, 573; Dunham v. Isett, 15 id. 284; 2 Redf. on Railws. 455, 485; Galveston Railroad v. Cowdry, 11 Wall. 453.

It may be urged by counsel for defendant, that the lien of the mortgage became merged in and extinguished by the decree. The foreclosure proceeding is not for the purpose of obtaining a better or higher order of lien, but simply for the purpose of enforcing an already existing and sufficient one. The lien of a mortgage is not extinguished by decree of foreclosure. Riley's Adm'r v. McCord's Adm'r, 21 Mo. 287; State of Iowa v. Lake, 17 Iowa, 215.

If it be true generally, that a mortgage lien is merged in a foreclosure decree, it will, in exceptional cases, be kept alive for reasons similar to those that operate to prevent merger in other similar cases. It is familiar law, that although ordinarily, when the mortgage interest and the equity of redemption unite in the same person, the former will become merged in the latter, yet, when the interest of the common owner requires that they shall remain distinct and separate, such will be presumed to have been his intention, and the lien of the mortgage will be kept alive for the purpose and to the extent of upholding such interest.

The same rule, for the same reason, should be held to apply in favor of the dondholders in the case at bar to the extent of keeping alive the mortgage lien as to the item of earnings to whatever extent their interest requires.

If by foreclosure the mortgage lien becomes merged, it can only be so to the extent that the mortgaged property is, by the proceedings and the terms of the decree, sought to be subjected to the payment of the mortgage indebtedness. The bondholders may enjoin a judgment creditor of the road, who, by garnishment, seeks to subject its income and tolls to the payment of his debt. Dunham v. Isett, 15 Iowa, 284; Long v. Matheison, 2 Giff. 71; Furness v. Chaterham Railway, 29 Beav. 358; State v. North Central R.R. Co., 18 Md. 193.

Mr. J. Scott Richman and Mr. J. D. Caton, contra.

The general laws of Iowa provide, that, in the absence of stipulations to the contrary, the mortgagor of real property retains the legal title thereto, and the right to the possession thereof. His estate is the subject of a lien, of a sale under execution, or of his conveyance. Curtis v. Millard et al., 14 Iowa, 128.

This estate is not covered by any general mortgage. It can only be parted with by special contract,-by 'stipulations to the contrary.' If they provide, that, under certain circumstances, this right shall be surrendered in a particular form or way, that form must be followed. Until the claim is made therefore, the possession and the rents and profits of the road belong rightfully and legally to the mortgagor, subject to execution, lien, or sale. Curtis v. Millard et al., supra.

The decree is now the evidence of the lien of the bondholders upon the the railroad. If their lien is not thereby fixed upon the earnings of the road between the date of the decree and the time when the purchaser thereunder would be entitled to the possession of the road, then there is no such lien; and the court below could not give the complainants the relief which the State court withheld, in adjudicating their rights under their mortgage. The debt is the principal thing. The mortgage is a security merely. Whatever satisfies the debt merges the security. If the debt is barred by the statute of limitations, the mortgage is barred also. Newman v. De Lorimer, 19 Iowa, 214. The appellants, having a lien by virtue of their mortgage, instituted a proceeding to have it enforced. Having failed to take or demand possession of the railroad, or to pray for the appointment of a receiver, they obtained such relief as they were entitled to upon the case made by the pleadings and proofs. Their mortgage having been merged, it cannot defeat the rights of the telegraph company, which attached by the levy of its execution. Goodrich et al. v. Dunbar, 17 Barb. 644; Freem. on Judg., sect. 125; Green v. Sarmiento, 1 Pet. C. C. 74; Butler v. Miller, 1 Den. 407; Carson v. Montino, 2 Johns. 308; United States v. Price, 9 How. 83-94; Willings & Francis v. Consequa, 1 Pet. C. C. 393; Ward v. Johnson, 31 Mass. 140; Robertson v. Smith, 18 Johns. 459; Eldred v. Bank, 17 Wall. 545; Mason v. Eldred, 6 id. 231; Jones v. Johnson, 3 W. & S. 276; The People v. Beebe, 1 Barb. 388; Ayres v. Cayce, 10 Tex. 99.

It is well settled in Iowa, that a party cannot have greater relief than he asks for in his petition, or than the averments of his petition entitle him to. Code, sect. 2885; Cameron v. Boyle, 2 Gr. 164; Haven v. Birch, 5 Iowa, 503; Stadler v. Parmelee, 10 id. 23. If, as in this case, the right to the earnings depends upon a contract, or a stipulation which provides the mode in which they shall be received and applied, that mode must be pursued, or there must be some attempt to pursue it by a demand made of whatever may be necessary to secure them. If such demand is refused, then the law points out the remedy; but there must be a foundation laid for the appointment of a receiver by averment and proof of the necessary facts. Insurance Co. v. Stebbins, 8 Page, 565; Aston v. Turner, 11 id. 436; Mitchell v. Butler, 51 N. Y. 447; Classen v. Cooley, 5 Sandf. 447; Strong v. Dallner & Potter, 2 id. 444. The cases of Galveston Railroad v. Cowdry, 11 Wall. 459-482, Noyes v. Rich, 52 Me. 115, and City of Bath v. Miller, 51 id. 341, are precisely in point.

As to the judgment against the garnishee, it is submitted that only such rulings of the court below as are excepted to at the time, and duly presented by bills of exceptions, can be reviewed here. Dickinson v. The Planters' Bank, 16 Wall. 250.

This would be the law, if this case had been tried under the act of March 3, 1865; but it was not. A case at law, in which there were questions both of law and fact to decide, was submitted to the court. The judgment below must, therefore, be presumed to be right; and it will be affirmed. Campbell et al. v. Clement Boyean, 21 How. 223; Gould et al. v. Frontin, 18 id. 135; Saydam v. Williams et al., 20 id. 432; Kelsey et al. v. Forsyth, 21 id. 85; Kearny v. Case, 12 Wall. 273, 284; Phillips v. Preston, 5 How. 290.

Mr. William M. Evarts in reply.

In advance of the direct consideration of the equities of the plaintiffs, under their mortgage and subsequent to their foreclosure decree, as against this judgment creditor, under his execution it is well to define and understand these equities as between the plaintiffs and the railroad company (the mortgagor to the plaintiffs and the judgment debtor).

There seems but little controversy on this preliminary relation. The growing income and earnings were, by words most comprehensive and explicit, made a part of the subject mortgaged; and the right of the mortgagee, upon the mere condition of default in payment of interest, to subject the income and earnings to the satisfaction of the mortgage debt, was as clear as such right in respect to the body of the real and personal estate of the company. This was a clear and absolute right by the contract of the mortgage; and the only function of a court of equity, if the mortgagor resisted the execution of this right by the mortgagee taking possession, was to execute the right by its process, accomplishing the specific performance of the contract in this behalf. This clear right under such a railroad mortgage must not be confounded with an equity raised by a chancery court out of special circumstances, and grafted upon a mere mortgage of the fee. Thus, in case of a mortgage of productive property conveying the fee, upon the concurring circumstances of insolvency of the mortgage debtor, and the insufficiency of the fee to satisfy the principal debt and the accumulating interest and costs, the Court of Chancery finds a ground for a special equity to lay hold of the rents in aid of the failing security of the fee. This equity springs into existence from these extraneous facts, and dates from the judgment of the court thereon. Necessarily, therefore, all competing liens antedating this judgment of the court, legal or equitable, must be respected and maintained in their priority; but when the right of the mortgagee springs from his contract, and dates from the default of the mortgagor for its actionable completeness, no competing lien which does not antedate the mortgagor's default in its asserted priority will be respected and upheld by a court of equity. If the competing lien be asserted by process of a common-law court, the Court of Chancery appealed to for relief rescues the property from its sequestration, because the perfect equitable lien of the contract of the mortgage has rested on the property from the date of default in the debtor, and so the legal process has been anticipated by the equitable lien.

This proposition cannot be disputed. ''Gal. & Ch. Un. R.R. Co. v. Menzies'', 26 Ill. 121.

It cannot be doubted, that if the debtor recognized this equitable lien, and administered the income and earnings of the road in obedience to it, paying thereout the running expenses, and applying the surplus to the mortgage debt, the mortgagee has no occasion to disturb the possession of the mortgagor by the interposition of a receivership. No doubt the mortgagee may, by want of vigilance, suffer the income and earnings to slip away irrecoverably from his equitable lien, and, by intervening through the powers of a court of equity, can only secure the proper application of the future income or earnings. Whether this will happen or not will depend wholly on the state of things when he intervenes. If he is in season to intercept the income and earnings before they have been collected or expended, as between himself and the debtor, he is in time. If the interference comes from a creditor of the mortgagor, the like rule applies. If the mortgagee intervenes in time to arrest, by equitable process, the diversion of the income and earnings from under his equitable lien, in point of fact his intervention is seasonable in point of law.

The stress of the argument against the plaintiffs' equity, and is support of the prevalence of the execution at law over it, rests upon the singular suggestion, that the judgment of foreclosure has limited and superseded the plaintiffs' equitable lien, and given license to the operation of the judgment creditor's execution, which, but for this consequence of the actual judgment of foreclosure, it would not have had. The reasoning upon which this proposition rests is wholly technical and artificial. It confessedly is without equity, and attempts an advantage from the course of the foreclosure suit which was uncontemplated and unnecessary, and is as surprising as it is unjust.

In the case at bar, the lien of the mortgage and its continuance up to the sale of the mortgaged premises is the very life and support of the decree up to its final execution by such sale. As to this judgment creditor, the lien of its judgment upon the mortgaged premises, and every part thereof, had been adjudicated in this decree, its subordination to the plaintiffs' lien established, and the possibility of interference with, or disparagement of, the plaintiffs' lien by or through that judgment, precluded.

But, subsequent to the decree in foreclosure, process on this judgment against income of the mortgaged premises, to accrue between the decree and its execution, issues, on the ground that the income, during this interval, is not covered by the decree, and the subordination of the judgment to the mortgage in this behalf has not been adjudicated; in other words, that the execution raises a new lien upon a new subject.

It is submitted that the decree in foreclosure is no bar to a suit to restrain an inequitable interference with the income of the road, first threatened after the decree, and in respect of income arising thereafter. The injunction suit is ancillary to the objects of the principal suit, and to suppress an inequitable subtraction of a portion of the mortgaged property from the equitable lien of the mortgagee.

If any circumstance were wanting to exhibit the falsity of reasoning and the injustice in result by supporting this garnishee process, it is supplied by the evidence in the principal cause, that the fund sought to be applied in satisfaction of the judgment comes from earnings, for the most part, accruing after this injunction bill was filed by the plaintiffs. In effect, an equitable execution is given by the Circuit Court to the judgment creditor to sequestrate income confessedly covered by the prior express lien of the plaintiffs' mortgage, after suit begun to enforce the lien of the latter.

MR. JUSTICE SWAYNE delivered the opinion of the court.


text: Talk:Gilman v. Illinois and Mississippi Telegraph Company


text:
Gilman v. Illinois and Mississippi Telegraph Company/Opinion of the Court

These cases have been argued together, and will be decided together. The case at law will be first considered.

On the 24th of May, 1872, the telegraph company recovered in the Circuit Court of the United States for the District of Iowa a judgment for the sum of $23,734.04 and costs. On the 13th of June following, execution was issued. On the 17th of that month, the marshal to whom the process was directed served it by attaching as garnishees several persons, one of whom was Coykendall, the plaintiff in error. On the 27th of October, 1873, he filed his answer; and on the 27th of October, 1874, he filed a further answer.

By the first answer he admitted, that, since he was garnished, he had received for and paid over to the railroad company more than $37,000. In his second answer he set forth that he was the agent of the railroad company at Des Moines; and that his duties were to sell tickets and receive and ship freight, and to receive the charges upon such freight. For the moneys received both for tickets and freight a large proportion belonged to other companies, but how much he did not know. All the moneys he received were regularly transmitted to the assistant-treasurer of the Des Moines company.

The proper apportionment of the moneys was made by the officers of that company at Keokuk, and the Des Moines company was accountable to the other companies for what belonged to them. He was not in the employment of any other company or person during the time mentioned, and was not responsible to any other company or person for the moneys which he received, as before stated.

The gross amount received by him, between the time he was garnished and the appointment of the receiver who took possession of the road, was $27,000.

The case was submitted to the court, and argued by the counsel upon both sides. The next day it was stated to the court by the counsel for the defendant that proof could be adduced of the proportion of the moneys in question which belonged to other companies, and time was asked to procure it. The application was overruled, and the court gave judgment for $27,000 and costs. The garnishee thereupon excepted to the ruling of the court refusing further time.

The case having been submitted to the court and argued by the counsel of both parties, the garnishee not asking for a jury, the record in this respect shows no error. It is to be taken that both parties waived a trial by jury, and they are bound accordingly. Phillips v. Preston, 5 How. 278; Campbell v. Boyreau, 21 id. 224; Kelsey v. Forsythe, id. 86. The proceeding not having been according to the act of March 3, 1865, this court has no power to examine any ruling of the court below excepted to during the progress of the trial. Campbell v. Boyreau, supra; Guild et al. v. Fontin, 18 id. 135; Kearney v. Case, 12 Wall. 275; Dickinson v. The Planters' Bank, 16 id. 250. The only point attempted to be presented by the bill of exceptions was the refusal of the court to give time for the production of further evidence. If this subject was before us in such a shape that we could consider it, it would be a conclusive answer that the matter was one resting in the discretion of the court. Its determination, therefore, could not be reviewed by this tribunal.

This brings us to the examination of the case in equity.

The bill was filed to prevent, by injunction, the collection of the moneys upon which the judgment in favor of the telegraph companies was founded. There is no controversy between the parties as to the facts.

On the 16th of February, 1857, the railroad company, by its then corporate name, executed a mortgage; and on the 1st of October, 1868, by its corporate name as altered, executed another. Both were given to secure the payment of its bonds as set forth. A part of the premises described and pledged by both mortgages, besides the road, was its income.

In case of default in the payment of interest or principal, the mortgagees were authorized to take possession, and collect and receive the income and earnings of the road, and apply them to the debts secured, and, upon the request of one-third of the bondholders, to sell the mortgaged premises.

The conditions of both mortgages having been broken, the mortgagees in the second mortgage filed their bill of foreclosure in the Circuit Court of Polk County, in the State of Iowa. The mortgagees in the second mortgage-various judgment and lien creditors, among the former the telegraph company-were made defendants. On the 31st of May, 1873, a decree of foreclosure and sale was rendered. It fixed the priorities of the several parties, and held that the judgment of the telegraph company was a lien subject to the mortgage in suit and other specified liens. It ordered a sale of the mortgaged property. The road was still in possession of the company. The decree made no provision for disturbing their possession, and none whatever as to the income of the road between the time of the decree and the time of the sale. The telegraph company proceeded, as we have stated, in disposing of the case at law. On the 20th of June, 1873, the appellants, who are the trustees in the two mortgages, filed this bill. On the 9th of September, 1873, after the sheriff had advertised the mortgaged premises for sale, the decree in the State court was amended by providing for the appointment of 'a special receiver of all the income and earnings of the road' between the date of the decree and the time fixed by the sheriff for the sale to be made by him. This was done with a saving of the rights of the telegraph company. The special receiver took possession on the 15th of September, 1873. The sale by the sheriff was made on the 17th of October, 1873. The road was operated by the company up to the time when the receiver took possession.

During this period, the fund was received for which judgment was given against Coykendall.

The proceedings in the case at law having been held valid, the telegraph company is entitled to the fund in controversy, unless the appellants have shown a better right to it. The question arises upon the mortgages. The civil law is the springhead of the English jurisprudence upon the subject of these securities. Originally, according to that jurisprudence, mortgages of the class to which those here in question belong vested the fee, subject to be divested by the discharge of the debt at the day limited for its payment. If default was then made, the premises were finally lost to the debtor. In the progress of time more liberal views prevailed, and the debt came to be considered as the principal thing, and the mortgage only as an incident and security. In the present state of the law, where there is no prohibition by statute, it is competent for the mortgagee to pursue three remedies at the same time. He may sue on the note or obligation, he may bring an action of ejectment, and he may file a bill for foreclosure and sale. 1 Hill. on Mort. 9, 62; id. 104, 111; Andrews v. Sutton, 2 Bland, 665.

The remedy last mentioned was resorted to in the State court by the mortgagees in the second mortgage, those in the first having been made parties, and that mortgage thus brought before the court. That court, therefore, had full jurisdiction as to the rights of all the parties touching both instruments. It would have been competent for the court in limine, upon a proper showing, to appoint a receiver, and clothe him with the duty of taking charge of the road and receiving its earnings, with such limit of time as it might see fit to prescribe. It might have done the same thing subsequently, during the progress of the suit. When the final decree was made, a receiver might have been appointed, and required to receive all the income and earnings until the sale was made and confirmed, and possession delivered over to the vendee.

Nothing of this kind was done. There was simply a decree of sale. The decree was wholly silent as to the possession and earnings in the mean time. It follows that neither, during that period, was in any wise affected by the action of the court.

They were as if the decree were not.

As regards the point under consideration, the decree may, therefore, be laid out of view.

The stipulation renders it unnecessary to consider the amendment to the decree.

Without that stipulation, the result would have been the same. It could not affect rights which had attached before it was made.

Nothing was done in the exercise of the right which the mortgages gave to the mortgagees to intervene and take possession. We may, therefore, lay out of view also both these topics.

This leaves nothing to be examined but the effect of the mortgages, irrespective of any other consideration.

A mortgagor of real estate is not liable for rent which in possession. 2 Kent's Com. 172. He contracts to pay interest, and not rent. In Chinnery v. Black, 3 Doug. 391, the mortgagor of a ship sued for freight earned after the mortgage was given, but unpaid. Lord Mansfield said, 'Until the mortgagee takes possession, the mortgagor is owner to all the world, and is entitled to all the profit made.' It is clearly implied in these mortgages that the railroad company should hold possession and receive the earnings until the mortgagees should take possession, or the proper judicial authority should interpose. Possession draws after it the right to receive and apply the income. Without this the road could not be operated, and no profit could be made. Mere possession would have been useless to all concerned. The right to apply enough of the income to operate the road will not be questioned. The amount to be so applied was within the discretion of the company. The same discretion extended to the surplus. It was for the company to decide what should be done with it. In this condition of things, the whole fund belonged to the company, and was subject to its control. It was, therefore, liable to the creditors of the company as if the mortgages did not exist. They in no wise affected it. If the mortgagees were not satisfied, they had the remedy in their own hands, and could at any moment invoke the aid of the law, or interpose themselves without it. They did neither.

In Galveston Railroad v. Cowdrey, 11 Wall. 459, substantially the same question arose as that we are considering. The mortgage there contained provisions touching the income of the road similar to those in the mortgages before us.

This court held, that, at least until after a regular demand was made, those who received the earnings were not bound to account for them. See also The City of Bath v. Miller, 51 Me. 341; Noyes, Receiver, v. Rich, 52 id. 115.

Upon both reason and authority, we think the appellants have no right to the fund in controversy.

''Decree affirmed. Judgment affirmed''.


text: Talk:Gilman v. Illinois and Mississippi Telegraph Company/Opinion of the Court


text:
Dows v. National Exchange Bank of Milwaukee

ERROR to the Circuit Court of the United States for the Southern District of New York.

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 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 indorsement on the back of each bill of lading. The indorsement 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 indorsement, 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 indorsements 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:--'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.

McLaren & Oct. 5 7,500.00 exg.

McLaren & Oct. 20 7,500.00 exg.

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 indorsed bill of lading, and surrender only on payment of the drafts drawn against it, holding you responsible for the same in case of non-payment 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.


text: Talk:Dows v. National Exchange Bank of Milwaukee


text:
Dows v. National Exchange Bank of Milwaukee/Opinion of the Court

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 safe keeping 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.'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 non-payments of drafts, and shall charge 3/8 per cent 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.

McLaren & Co., Oct. 5 7,500.00 and exg.

McLaren & Co., Oct. 20 7,500.00 and exg.

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.

McLaren & Co., Oct. 5 7,500.00 and exg.

McLaren & Co., Oct. 20 7,500.00 and exg.

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.'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 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 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.

Mr. C. Van Santvoord for the plaintiffs in error.

The transmission of the invoice on the shipment to the consignment of the Merchants' Bank, on their acceptance of the terms and conditions of the contract, was, by the acts of both parties, an appropriation of the wheat shipped to the use of Smith & Co., which passed the property. Richardson v. Dunn, 2 Ad. & E. N. S. 217; Alexander v. Gardner, 1 Bing. N. C. 671.

This invoice, which has the strength of a bill of sale, was documentary evidence of title placed in the hands of Smith & Co. as the purchasers. Their right in the wheat shipped upon acceptance and payment of the sight and acceptance of the time drafts as noted in the invoice was thereby acknowledged: they were thus furnished with the means of asserting that right, and authorized to receive the wheat on delivery through the Merchants' Bank for their own account. The Merrimack, 8 Cr. 318, 329, 330.

Conceding that this property of Smith & Co. was subject to a possessory right or legal title, and right of possession, acquired by the plaintiff by the delivery to it of the bills of lading for the wheat, with the drafts attached, on its discounting them, that right or title, with the right of possession, was transferred to the Merchants' Bank on transmission and delivery of the bill of lading to it, in furtherance of the arrangement that the property should go forward to it, as the consignee named by Smith & Co., for delivery to them. Upon its agreement that it would be responsible for the wheat if the drafts were not paid, it had the legal title, and right of possession, in trust for Smith & Co. as the general owners. The plaintiff, having neither a general nor special property in the wheat, can, therefore, not recover in an action of trover. 1 Ch. Pl. 7 Am. ed. 170; 2 Saund. 47 A, n. 1; Brown on Actions at Law, 426; Dillenback v. Jerome, 7 Cow. 294; Hotchkiss v. McVicar, 12 Johns. 403.

The transmission and delivery of a bill of lading to the consignee, or the indorsement of it for a valuable consideration, without notice to the consignee or indorsee of any title better than that of the consignor or indorsor, passes the property. Dows v. Rush, 28 Barb. 158; Dows v. Greene, 24 N. Y. 638; Wilmshurst v. Bowker, 7 Man. & G. 882.

The transfer and delivery of the bill of lading by the plaintiff, in consideration of the absolute agreement of the Merchants' Bank to be responsible for the wheat if the drafts were not paid, effectually passed the possessory right, or legal title and right of possession, to that bank. The instructions by indorsement on the bill, and by letter respecting the disposition of the wheat after the title had passed, had no operation except as matter of contract or condition subsequent. They could not affect the property. It had previously thereto vested.

If a draft, drawn on a shipment, and payable a certain number of days after sight, is sold with the bill of lading appended to it, the holder can, in the absence of proof of any local usage to the contrary, or of the imminent insolvency of the drawee, only require the latter to accept it on the delivery of the bill of lading. Lamphear v. Blossom, 1 La. Ann. Rep. 148. This doctrine, in its application to a case where the bill, taken to the order of the consignee, is to go forward, and is transmitted to the consignee designated by the purchaser in the arrangement for the purchase, stands upon the plain obligation of the contract, however it may be when the bill is taken to shipper's order on the shipment, and is indorsed to the purchaser of the draft.

The Constantia, 4 C. Rob., is a direct authority, that, in the stage of the transit, such instructions as were indorsed on these bills are unauthorized, except as a means of exercising the right of stoppage in transitu in case of insolvency.

When the owner of property or goods, or choses in action, not negotiable, confers upon another only an apparent title or power of disposition over it, he is estopped from asserting his title as against an innocent third party who has dealt with the apparent owner in reference thereto, without knowledge of the claim of the true owner. McNeil v. The Tenth National Bank, 46 N. Y. 325; Moore v. Metropolitan Bank, 55 id. 41; Pickering v. Buske, 15 East, 38.

The claim of the defendants to protection stands on ground as strong as, if not stronger than, that of a bona fide purchaser from a mortgagor in possession of merchandise with power of control under an unrecorded mortgage, as in Thompson v. Blanchard, 4 Coms. 303; or of a bona fide purchaser from a vendee in possession obtained by fraud, as in Paddon v. Taylor, 44 N. Y. 371; Rawle v. Deshler, 3 Keyes, 575; s. c. 28 How. Pr. 66; Griswold v. Sheldon, 4 Coms. 581; Edgell v. Hart, 5 Seld. 213; Ford v. Williams, 24 N. Y. 359; 3 R. S. N. Y., 5 ed. 222, sects. 9, 10; Com. Dig. Covin (A), (B 1), (B 3); Vin. Abr. Fraud, L.

Smith & Co. were in possession of the correspondence containing the contract for the purchase for their immediate use, and on a credit, and the invoice with the letters enclosing them, showing a purchase and shipment of wheat for their account, with no other condition than the acceptance or payment of the sight and the acceptance of the time drafts. Knowing that it was shipped under their arrangement with McLaren & Co. for delivery to them through the Merchants' Bank as their bank, and under the agreement of that bank to be responsible for it if the drafts were not paid, they might conclude that these instructions, of which they were notified, were unauthorized, or were intended either to secure the appropriation of the proceeds in payment of the drafts, or to secure the responsibility of the Merchants' Bank to plaintiff. Its engagement so to be responsible was made in reliance upon Smith & Co.'s responsibility. But certainly no one of mercantile education or ordinary sagacity, in their situation, would, under the circumstances, infer that the intention was that the wheat should be held according to the literal import of these instructions until the time drafts matured and were paid; for this would defeat the very object and purpose of the purchase and consignment for their immediate use.

The effect of the documentary evidence relied on by the plaintiff depending on collateral facts in pais and extrinsic circumstances, the inferences from them should have been drawn by the jury. Etting v. Bank of the U.S., 11 Whart. 59; Richardson v. Boston, 19 How. 263; Railroad v. Stout, 17 Wall. 657; Brown v. McGrau, 14 Pet. 479; Barreda v. Silsbee, 21 How. 147.

Mr. H. M. Finch for the defendant in error.

By the transactions between McLaren & Co. and the National Exchange Bank of Milwaukee, the title to the wheat became vested in that bank. The Aurora, 4 C. Robinson, 218; The Frances, 8 Cran. 354, 418, 9 id. 183; The Merrimack, 8 id. 317; The San Jose Indians, 1 Wheat. 208; Seymour v. Newton, 105 Mass. 273; Cayuga Bank v. Daniels, 47 N. Y. 632; Turner v. Trustees Liverpool Docks, 6 Exch. 543; Ward v. Taylor, 6 Ill. 494; Shepard v. Harrison, L. R. 4 Q. B. 195; Bailey v. Hudson R.R. Co., 49 N. Y. 75; Tilden v. Minor et al., 45 Vt. 96; Wait v. Baker, 2 Exch. 1; Jenkins v. Usborne, 49 Eng. Com. Law, 698; Williams v. Littlefield, 12 Wend. 362; Moakes v. Nicolson, 115 Eng. Com. Law, 296; Ellershaw v. Magniac, 6 Exch. 570; Jenkins v. Brown, 68 Eng. Com. Law, 495; Brandt v. Bowlby, 2 B. & Ald. 632; The Thames, 14 Wall. 98; City Bank v. R. W. & O. R. Co., 44 N. Y. 136; Marine Bank v. Wright, 48 id. 1; Dent v. N. A. Steamship Co., 49 id. 391; De Wolf v. Gardiner, 12 Cush. 19.

The Merchants' Bank was a special agent for a specific purpose, and clothed only with limited powers to do a particular act with certain parties expressly named. Its acts, beyond the scope of its delegated authority, would not have bound its principal. Russell v. Minor, 22 Wend. 659; Lyon v. Kent, 45 Ala. 664; Wooster v. Sherwood, 25 N. Y. 287; Wilson v. Nason, 4 Bosw. 155; Parsons v. Webb, 8 Me. 38; Conan v. Adams, 10 id. 374-380; Hodge v. Coombs, 1 Black, 192; Doubleday v. Kress, 50 N. Y. 410.

The Merchants' Bank had an undoubted legal right to select the Corn Exchange Elevator as the warehouse in which to store the wheat until the maturity of the time drafts. Kimberly v. Patchin, 19 N. Y. 330; Burton v. Curyea, 41 Ill. 320; Gibson v. Stevens, 8 How. 384; Thayer v. Dwight, 104 Mass. 257; Wooster v. Sherwood, supra; Hamilton v. Bell, 10 Exch. 544; Whitefield v. Brand, 16 M. & W. 282; Lickbarrow v. Mason, 1 Sm. L. C. pt. 2, 1039; Coggill v. H. & N. H. R. Co., 3 Gray, 545; Couse v. Tregent, 11 Mich. 65; Dehon v. Bigelow, 8 Gray, 159; Brown v. Haynes, 52 Me. 578; Hotchkis v. Hunt, 49 id. 213; Parmlee v. Catherwood, 36 Mo. 479; Ulmann v. Barnard, 7 Gray, 554; Miller v. Stevens, 100 Mass. 518; Hirschen v. Cunney, 98 id. 150; Herring v. Hoppock, 15 N. Y. 409; Palmer v. Hand, 13 Johns. 434; Cragin v. Coe, 29 Conn. 52; Ballard v. Burgett, 47 Barb. 646; Kimball v. Jackman, 42 N. H. 242; Fisk v. Ewen, 46 id. 173; Buckmaster v. Smith, 22 Vt. 203; Holmark v. Malin, 5 Coldw. 482; Moakes v. Nicholson, 115 Eng. Com. Law, 290; Hunter v. Warner, 1 Wis. 141; Ballard v. Burgett, 40 N. Y. 314; Austin v. Dye, 46 id. 500; McGoldrick v. Willits, 52 id. 318; Clark v. Well, 45 Vt. 4; Brook v. Hook, L. R. 6 Exch. 93; Ranny v. Higby, 5 Wis. 70; Esser v. Lindermann, 71 Penn. 80; United States v. Shaw, 1 Cliff. 321.

The letters of the Merchants' Bank, and the orders to the captains of the lake-vessels, clearly show that the wheat was to be delivered to the Corn Exchange Elevator for the account of William G. Fitch, cashier, subject to the order of the Merchants' Bank. No title to the wheat vested in the proprietors of the elevator beyond that of warehousemen; and the plaintiffs in error, therefore, acquired no property, right, or claim, under their purchase. McNeil v. Tenth National Bank, 46 N. Y. 329; Taylor v. Pope, 5 Cold. 416; McGoldrick v. Willits, 52 N. Y. 318; Wright v. Ames, 2 Keyes, 221; Ballard v. Burgett, 40 N. Y. 314; Austin v. Dye, 46 id. 502; Fawcett v. Osborn, 32 Ill. 411; Linen v. Cruger, 40 Barb. 636; Saltus v. Everett, 20 Wend. 275; Spraights v. Hawley, 39 N. Y. 441; Cork v. Beale, 1 Bosw. 497; Williams v. Aberle, 11 Wend. 80; Evans v. Wells, 22 id. 324; Andrews v. Dietrich, 14 id. 31; McMahon v. Jones, 12 Penn. 229; Bailey v. Shaw, 24 N. H. 297; Brown v. Wilmerding, 5 Duer, 225; Anderson v. Nichols, 5 Bosw. 129; Wooster v. Sherwood, 25 N. Y. 286; Warner v. Martin, 11 How. 209; Leckey v. McDermott, 8 S. & R. 500; Stanly v. Gaylord, 1 Cush. 228; Hotchkis v. Hunt, 49 Me. 213; Roland v. Gundy, 5 Ohio, 127; Strahan v. Union S. T. & T. Co., 43 Ill. 424; Burton v. Curyea, 41 id. 320; Hartop v. Hoore, 2 Stra. 1187; Taylor et als. v. Taylor et als., 5 Coldw. 413; Lehigh Co. v. Field, 8 S. & R. 232.

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 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 pretence 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, Ap. Cas. 116, and Newcomb v. The Boston & Lowell R.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 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 the 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 indorsing 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. The Trustees of the Liverpool Docks, 6 Exch. 543; Schorman v. Railway Co., Law Rep., 2 Ch. Ap. 336; Ellerslaw v. Magniac, 6 Exch. 570. 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 indorsement 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 & 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 et al. 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 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 any thing 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 indorsements 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 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. The 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 indorsement 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 indorsed 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 indorsement 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.

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 safe keeping 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 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 et al. 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.'


text: Talk:Dows v. National Exchange Bank of Milwaukee/Opinion of the Court


text:
Knotts v. Stearns

APPEAL from the Circuit Court of the United States for the Eastern District of Virginia.

Submitted on printed arguments by Mr. John Johns, Jr., for the appellants, and by Mr. John A. Meredith for the appellees.

MR. JUSTICE FIELD delivered the opinion of the court.

title: Knotts v. Stearns


text: Talk:Knotts v. Stearns

title: Talk:Knotts v. Stearns