Anderson v. Portland Flouring-Mills Co.

• Decision Date: 16 April 1900
• Citation: 37 Or. 483,60 P. 839
• Parties: ANDERSON v. PORTLAND FLOURING-MILLS CO.
• Court: Oregon Supreme Court

60 P. 839

37 Or. 483

ANDERSON v. PORTLAND FLOURING-MILLS CO.

Supreme Court of Oregon

April 16, 1900

Appeal from circuit court, Clackamas county; T.A. McBride, Judge.

Action for conversion of wheat by J.F. Anderson against the Portland Flouring-Mills Company. From a judgment in favor of plaintiff, defendant appeals. Affirmed.

The defendant is a corporation engaged in the business of buying selling, and storing wheat and manufacturing flour at Oregon City. During the years 1891, 1892, and 1893, John Gash George Anderson, William McAllister, R.T. McNichols, J.P Frizzell, and the plaintiff severally delivered wheat to W.E Loughmiller & Co., at Switzerland, and other stations on the Woodburn Branch of the Southern Pacific Railway, amounting in the aggregate to 4,250 bushels, which by permission of the owners was shipped to the defendant, at Oregon City, for storage in its warehouse. Loughmiller & Co. subsequently failed, and, being unable to replace the wheat or pay therefor, the claims of the respective parties were assigned to the plaintiff, who commenced this action to recover its value, on the theory that Loughmiller & Co., in receiving and shipping the wheat, were acting for and as the agents of the defendant, and it is therefore liable for their contracts. The complaint contains six causes of action, which are the same, except as to names, dates, and amounts. The first may therefore be used as a type of all. It alleges, in substance, that during the years 1891, 1892, and 1893 one John Gash, at the special instance and request of the defendant, did from time to time during such years, through Loughmiller & Co., its agents, ship from Switzerland, in Marion county, and deliver to the defendant, at Oregon City, 2,263 bushels of wheat; that such shipments were made, and wheat delivered to and received by defendant, subject to the conditions that defendant was to have the first privilege of purchasing the wheat for cash at any time Gash might desire to sell; that it should be subject to storage charges of 2 1/2 cents per bushel, and freight charges from the point of shipment; that upon demand, and the payment of freight, storage charges, and 4 cents per bushel for sacks, the defendant would deliver to Gash an equal number of bushels of good merchantable wheat, sacked; that in October, 1894, Gash, for a valuable consideration, assigned and transferred to the plaintiff all his claim to the wheat so shipped and delivered to the defendant; that after the assignment and transfer, and prior to the commencement of this action, the plaintiff duly notified defendant thereof, and demanded the wheat, accompanying the demand with an offer in writing to pay all freight and storage charges, and for sacks, but defendant refused to deliver the wheat, and positively denied that plaintiff or Gash was entitled to the same, or any part thereof. The defendant by its answer denies the receipt of the wheat as alleged in the complaint, and the contract therein set out, and, for an affirmative defense, avers that, during the times mentioned, Loughmiller & Co. were engaged in a general warehouse and storage business, bought and sold grain, and acted as agents for others in the sale thereof, at Silverton, Switzerland, and elsewhere, and during such time forwarded and sold grain to the defendant; that in the conduct of their business they received wheat from various persons, and, among others, from the plaintiff and his alleged assignors, upon the express condition and agreement that the identical wheat left with and received by them need not be returned, but the owner should have the privilege of returning a similar amount of the same quality of wheat instead, upon the payment of freight, storage charges, and 4 cents per bushel for sacks, as shown by receipts issued by Loughmiller & Co. to such persons; that, prior to any of the times stated in the complaint, the defendant entered into an agreement with Loughmiller & Co. for the purchase from and storage for them of wheat at its mills at Oregon City; that by such agreement it was expressly understood and agreed that the defendant was to deal solely and entirely with Loughmiller & Co., and they were not to be in any respect the agents of defendant in such transactions, or for any purpose whatever; that, from time to time, defendant purchased from Loughmiller & Co., under such agreement, large quantities of wheat, it being at the time ignorant as to the sources from which they received the same; that if any of the wheat received by it came from, or originally belonged to, the plaintiff, or any of his alleged assignors, it had no notice or knowledge thereof. The reply put in issue the allegations of the answer, and, the trial resulting in a judgment for plaintiffs, the defendant appeals; assigning as error the admission of certain testimony, and the overruling of its motion for nonsuit.

Geo. H. Williams and S.B. Linthicum, for appellant.

W.H. Holmes, for respondent.

BEAN J. (after stating the facts).

To support the first, third, and sixth causes of action, the plaintiff introduced in evidence five warehouse receipts dated at Silverton, Or., and signed by W.E. Loughmiller & Co., and was permitted, over defendant's objection and exception, to give evidence, aliunde the receipts, tending to prove that Loughmiller & Co., in signing and issuing them, were acting as the agents of defendant, and that such receipts were in fact the contracts of the defendant. The admission of this evidence constitutes the first assignment of error upon which the defendant relies for a reversal of the judgment. The wheat receipts referred to are identical, except as to dates, names, and amounts, and it will be sufficient for the purposes of this appeal to set forth one of them. It is as follows: "No. 1. Silverton, Ogn., Sept. 7, 1891. Received from John Gash one thousand two hundred and ninety-four 40/60 bushels of good, merchantable wheat, to be forwarded to Oregon City, Ogn., and stored with the Portland Flouring-Mills Co., subject to the following conditions: W.E. Loughmiller & Co. are to have the first privilege of purchasing this wheat for cash at any time the storer concludes to sell, and said wheat is subject to storage charges of two and one-half cents per bushel, and freight charges from shipping [point] to Oregon City. Upon demand, this quantity of good, merchantable wheat will be delivered to the storer, sacked, upon the payment of the above-mentioned storage and freight charges, and four cents per bushel for sacks; but no order of storer will be accepted by the Portland Flouring-Mills Co. unless countersigned by W.E. Loughmiller & Co. But in no case shall W.E. Loughmiller & Co. or the Portland Flouring-Mills Co. be held liable for accidental loss or damage to said wheat by the action of the elements. W.E. Loughmiller & Co., per J.A.L. 1,294 40/60 bushels." The defendant's contention is that, since warehouse receipts in this state are by statute made negotiable, the rule of law that the liability of a party upon a negotiable instrument must be established by the terms of the writing itself, and cannot be shown by evidence aliunde, is applicable to such receipts. It may be regarded as a settled rule of the common law that, if the person sought to be charged upon a negotiable instrument is not bound upon the face of the writing, he is not bound at all, and it cannot be shown that the maker was in fact the agent of another, and that such other is bound by the instrument. The observation of Andrews, J., in Briggs v. Partridge, 64 N.Y. 357, that "persons dealing with negotiable instruments are presumed to take them on the credit of the parties whose names appear upon them, and a person not a party cannot be charged upon proof that the ostensible party signed or indorsed as his agent," is a clear statement of the law, and supported by the authorities. Chit. Bills & N. *33; Heaton v. Myers, 4 Colo. 59; Arnold v. Sprague, 34 Vt. 402; Stackpole v. Arnold, 11 Mass. 27; Insurance Co. v. Covell, 8 Metc. (Mass.) 442; Manufacturing Co. v. Fairbanks, 98 Mass. 101; Rendell v. Harriman, 75 Me. 497; De Witt v. Walton, 9 N.Y. 571; Robinson v. Bank (Ohio) 8 N.E. 583. But this rule is, in our opinion, confined to commercial contracts, which represent, and, in a measure, pass as, money,--such as bills of exchange and promissory notes. Parol evidence is not admissible to charge an unnamed principal on such an instrument; for, in the language of the authorities, a note or bill or exchange "'is a courier without luggage,' whose countenance is its passport." 1 Daniel, Neg.Inst. (4th Ed.) § 303. And as said in an early case on the question: "It would be of dangerous consequence to trade, to admit of evidence arising from extrinsic circumstances. *** A bill of exchange is a contract, by the custom of merchants, and the whole of that contract must appear in writing." Thomas v. Bishop, 2 Strange, 955. Mr. Daniel, in the section already...