Bogle's Adm'r v. Thompson

• Decision Date: 11 June 1929
• Citation: 20 S.W.2d 173,230 Ky. 538
• Parties: BOGLE'S ADM'R v. THOMPSON.
• Court: Kentucky Court of Appeals

20 S.W.2d 173

230 Ky. 538

BOGLE'S ADM'R v. THOMPSON.

Court of Appeals of Kentucky

June 11, 1929

As Modified, on Denial of Rehearing, Oct. 15, 1929.

Appeal from Circuit Court, Jefferson County, Common Pleas Branch Third Division.

Proceeding by the Kentucky Title Trust Company, as administrator of William Y. Bogle, against John B. Thompson. Judgment for defendant, and plaintiff appeals. Reversed and remanded.

Gordon & Laurent, and Squire R. Ogden, all of Louisville, for appellant.

Bruce &amp Bullitt, Leo T. Wolford, and Eugene B. Cochran, all of Louisville, for appellee.

HOBSON C.

The Kentucky Title Trust Company, as administrator of William Y Bogle, brought this action April 12, 1927, against John B Thompson upon 29 warehouse receipts issued by Thompson covering 145 barrels of Old Jordan whisky, alleging that by the receipts Thompson agreed to hold the whisky in a warehouse subject to the order of the holder of the warehouse receipts, and to deliver the whisky only upon the return of the receipts properly indorsed, but that, in violation of his agreement, Thompson had, without the consent of Bogle, the holder of the receipts, sold and delivered the whisky to others without the knowledge of Bogle or his representatives. Judgment was prayed for the value of the property. Thompson answered, denying the allegations of the petition, and pleading usury and the limitation of five years. At the conclusion of the evidence the court peremptorily instructed the jury to find for the defendant. The plaintiff appeals.

The receipts are all in the same words and as follows:

"Old Fort Spring Distillery.

No. 19847 Series A

Harrodsburg, Ky. March 10, 1913

Received in the Old Fort Spring Distillery Bonded Warehouse No. 63 Eighth District of Kentucky, for account and subject to the order of John B. Thompson, deliverable only on return of this receipt properly endorsed and on payment of all taxes on same and storage from the date of inspection at the rate of five cents per barrel per month outage guaranteed not to exceed one gallon in excess of the amount allowed by law: Five barrels Old Jordan whisky, entered into bond as follows: [Here follows serial numbers and description.]

This receipt is issued in deference to the laws of the United States and the State of Kentucky, defining and regulating the duties of warehousemen."

"[Signed] J. C. Wilson, Warehouseman.

[Signed] John B. Thompson, Distiller."

On the back of each receipt is this endorsement:

"Danville, Ky.

I hereby certify that the records of my office show that the within described packages numbered 102850-4 are on deposit in the within named warehouse and that this is the only warehouse receipt covering said packages upon which said facts have been certified by me.

Given under my hand this 1st day of April, 1916.

[Signed] Jno. W. Hughes,

Collector 8th Dist. Ky."

On January 7, 1916, Thompson executed to H. E. Williams in New York three notes each for $5,000, dated December 23, 1915. Williams on the same day sold these notes to William Y. Bogle. On April 24, 1916, Williams, who then owed Bogle $5,000 executed to Bogle a note for $20,254.17, with Thompson's note for $15,000, of that date, as collateral with 112 shares of the stock of the Great Neck Realty Company, and took up the three notes for $5,000 each, executed by Thompson on January 7. Thus things ran along until February, 1919. At that time Thompson owed the Hargate Corporation notes amounting to $34,795. Thompson wished to take up these notes, also the $15,000 note which Bogle held with the 112 shares of stock of the Great Neck Realty Company as collateral for the Williams note, $20,254.17, and by a writing on that day he agreed, among other things, to turn over to the Hargate Corporation $34,866.13 in negotiable warehouse receipts for Old Jordan whisky, 1913-4. By an indorsement on the contract the time was extended to March 10, 1919. Thompson delivered the warehouse receipts to the Hargate Corporation, and on March 11 the Hargate Corporation delivered to Bogle the warehouse receipts for 145 barrels of whisky, here in controversy, which Bogle took at $3.50 a gallon, he paying the corporation $559.91, being the balance of the price of the whisky over and above the amount of his debt and interest. Bogle then delivered to the company the 112 shares of stock of the Great Neck Realty Company, and it delivered to him the 29 warehouse receipts here in controversy. On July 15 Bogle wrote to the Old Fort Spring Distillery, Harrodsburg, Ky. as follows:

"Gentlemen: Please advise at what rate you could insure whisky for which I hold certificates #19847, #19849 and #20383 to #20409, inclusive.

Yours very truly."

On July 17, he received this answer, signed by J. B. Thompson, Distiller, by T. W. Latta:

"Dear Sir: Replying to yours of the 15th. We find that the insurance people are making a rate of $1.35 to insure whisky. We wrote you on April 19th in regard to insuring this whisky, and could have gotten a rate of 98c. for you at that time. If you desire to carry this insurance we will have it placed for you, but we believe the rate is too high for the risk. There is practically no risk and we would advise that you carry it yourself rather than pay such a high rate."

On July 21 Bogle wrote again as follows:

"Gentlemen: Your favor 17th at hand. Please have insured for $15,000, in name of William Y. Bogle, at rate quoted in your letter, the whisky covered by certificates #19847, #19849 and #20383 to #20409, inclusive, and send me policies with bill covering premium.

Yours very truly."

Several other letters passed between Bogle and some insurance agents at Harrodsburg. On December 7, 1921, Bogle wrote to Col. John B. Thompson at Harrodsburg, Ky. as follows:

"Dear Sir: You will perhaps remember the writer by name, in connection with exchange some years ago, of whisky certificates for your promissory notes held by the writer at that time. Have not yet disposed of the certificates (#19847, #19849 and #20383 to #20409 inc.) (29 certificates) covering 145 barrels 'Old Jordan' Whisky, and would very much appreciate your giving me the following information.

My understanding is the law requires that the distiller shall guage the whisky after it has been in storage seven (7) years, and presume you guaged the lots covered by above certificates; would like to know contents at that time. Will you also please advise me the present county and state taxes per gallon.

Any other information which you can give me, which would be of value in negotiating the sale of the certificates would be appreciated.

Thanking you for your courtesy.

Yours very truly."

No answer was received to this letter. In the meantime, in September, 1920, when Col. Thompson was in New York, he testifies that George A. Lee produced to him the receipts in question, and requested that the whisky be bottled and shipped, promising to send the receipts in. Thompson, on September 15, 1920, wired the distillery to bottle the whisky and ship it. After 92 barrels of the whisky had been shipped and the receipts had not come in, T. W. Latta, who was shipping the whisky for Thompson, concluded not to ship any more until he got the receipts. The remainder of the whisky remained in the warehouse until December, 1925, when Thompson had the whisky sold to pay the charges on it, and afterwards disposed of it in his own name. Bogle died December 15, 1924, and there was no notice to him or his representatives of the sale of the whisky, and no demand was made to pay the charges. The Eighteenth Amendment to the Constitution of the United States was adopted in 1919. The Prohibition Act took effect January 17, 1920 (27 USCA).

By the statute in force when this whisky was made, the whisky could remain in the warehouse only eight years without the payment of the federal tax thereon. U.S. Compiled Statutes, §...