Dean v. Driggs

• Decision Date: 28 February 1893
• Citation: 33 N.E. 326,137 N.Y. 274
• Parties: DEAN et al. v. DRIGGS.
• Court: New York Court of Appeals Court of Appeals

137 N.Y. 274

33 N.E. 326

DEAN et al.

v.DRIGGS.

Court of Appeals of New York.

Feb. 28, 1893.

Appeal from supreme court, general term, first department.

Action by Robert J. Dean and another against Marshall S. Driggs to recover for damages sustained by reason of alleged false representations in warehouse receipts. Plaintiffs had judgment, which was affirmed at general term, (18 N. Y. Supp. 67,) and defendant appeals. Reversed.

The other facts fully appear in the following statement by PECKHAM, J.:

The plaintiffs are brokers in the city of New York, and the defendant a warehouseman in that city. The defendant, on the 28th of March, 1885, issued to one Max Von Angern two warehouse receipts similar in all respects except as to the name of the vessel in which the merchandise was imported and the quantity which was delivered. One of the receipts reads as follows:

‘M. S. Driggs & Co.'s Warehouse.

‘New York, March 28, 1885.

‘Received from Max Von Angern, ex Grimaldo, in store 278-80 South street, to be held by us on storage, and to be delivered to his order on return of this receipt and payment of storage and charges, fifteen hundred barrels Portland cement.

‘Storage per month 4.

‘Labor.

‘M. S. Driggs & Co.’

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The second receipt named the vessel Ruth as bringing the merchandise, and stated it to be 963 barrels of cement, (Portland.) There had been actually delivered to the warehouseman the number of barrels of what was on each barrel described as Portland cement, as stated in the warehouse receipts. Von Angern, having obtained the receipts, went with them to the plaintiffs, and there executed a note for $3,500, and indorsed the warehouse receipts, and authorized the plaintiffs to deliver the note and the guaranty of payment indorsed thereon by plaintiffs at his request, together with the collateral securities, (the warehouse receipts,) to the Chemical National Bank of New York, and to receive the proceeds of the discount of such note. The plaintiffs did so, and received the moneys from the bank arising upon such discount, and delivered them to Von Angern. The note was not paid by Von Angern when due, and upon his default the plaintiffs paid the same to the bank, because of their guaranty of payment, and took back the note and the warehouse receipts. At the time when the plaintiffs indorsed the note at Von Angern's request, they testified that they relied in doing so upon the statement contained in the warehouse receipts that defendant had received the stated number of barrels of Portland cement. After the note had been paid by the plaintiffs, they inquired as to whereabouts of Von Angern, but were unable to find him, and in fact he had absconded. The plaintiffs then went to the warehouse of defendant, and there opened and examined a number of the barrels, and the result of the examination was the discovery that the contents of the barrels were not Portland cement. The material which had been packed in the barrels was a hardened substance, like clay or mortar, coarse in its grain, and different from any cement, and practically worthless, while Portland cement was worth from $2.25 to $2.50 per barrel. The plaintiffs then commenced this action against defendant, and set up the above facts, and that they relied upon the defendant's statement in the warehouse receipts that he had on storage Portland cement, as therein stated. The complaint seems to have been founded also upon some allegations of negligence in the care of the barrels on the part of the defendant, so that by his fault the article was rendered worthless; but that allegation was not proved, and the case rests upon the other facts alleged. The plaintiffs claimed to have been bona fide purchasers of the warehouse receipts for value, and that the defendant was bound to make good the truth of the statement therein contained that he had Portland cement on deposit, and they claimed damage to the amount of the Von Angern note ($3,500,) which they had paid, with interest from the time of such payment. The defendant denied all carelessness, and set up that he had received on storage from the importer the goods covered by the warehouse receipts referred to, and they had remained and then were on storage with him.

The question whether the article deposited was or was not Portland cement was litigated at the trial, and the case was submitted to the jury, upon the charge of the judge that, if the contents of the barrels were Portland cement of any description, however inferior in quality, the plaintiffs could not recover. Upon that issue the verdict was with the plaintiffs. The court also charged the jury that the plaintiffs had the right to demand in this case that the article should be Portland cement, and, if it were not, then they were entitled to recover from the defendant the principal of the Von Angern note, with interest. The defendant asked the court to charge that to entitle the plaintiffs to recover on the receipts the jury must find the defendant knew the article was not Portland cement, and willfully issued the receipts knowing that fact; also that a warehouseman incurs no liability to the holders of a receipt issued by him whenever the goods are described according to their outward appearance, marks, and description, except for their safe custody and return, unless he has knowledge or reason to believe that such description is untrue; and that a warehouseman is simply a custodian of the goods deposited with him on storage, and his liability does not extend beyond the proper care of the goods, and return of the same, on demand, on payment of storage, unless he willfully misrepresents the character or condition of the goods. The requests were denied. Proper exceptions were taken to the charge as made and to the refusals to charge as requested. The jury found a verdict for the plaintiffs for the full amount claimed, and, judgment having been entered, an appeal was taken to the general term of the first department, and from an affirmance by that court an appeal by the defendant has been taken, and the case brought before this court for review.

WAREHOUSEMEN-LIABILITIES-FALSE DESCRIPTION IN RECEIPT.

Though Laws 1858, c. 326, as amended by Laws 1866, c. 440, s 1, prohibits warehousemen from issuing a receipt for any goods not actually received, a warehouseman who issued his receipts for a number of barrels held ‘on storage,’ described as containing ‘Portland Cement,’ is not liable to the indorsee of the receipts because the barrels contained a worthless substance, unless it be shown that he had knowledge of that fact when the receipts were issued. 18 N. Y. Supp. 67, reversed.

John Berry, for appellant.

Palmer, Boothby & Warren (L. E. Warren, of counsel,) for respondents.

PECKHAM, J., (after stating the facts.)

The question in this case is as to the meaning of the receipt issued by the defendant. Does it mean that the warehouseman acknowledges and asserts the fact that the merchandise delivered to him, and consisting of 2,500 barrels, does in truth contain the genuine article, Portland cement, or does it mean that the warehouseman has received that number of barrels bearing the usual appearance of barrels in which Portland cement is packed, and with the usual marks and signs thereon, and represented to him to be Portland cement, and which he in good faith supposes to be that article? The defendant, at the time he received this merchandise, was a warehouseman, and in connection with his business he had a bonded warehouse, under license from the United States government, and in it he received on storage imported, dutiable merchandise which could not be delivered until the duty was paid. The goods in question came to the defendant from the vessels named in the two receipts, which vessels came from Marseilles, France, from which place Portland cement is imported. The barrels came on trucks licensed to transport bonded merchandise, and when they came in the duty had not been paid. They were stored in the bonded warehouse under the joint custody of the defendant and a government officer. The duty was subsequently paid. The defendant testified that the warehouseman had no authority to open goods stored in a bonded warehouse without permission of the government. These barrels, the defendant testified, were in character, appearance, and style the same as those in which Portland cement was imported. The brand on the barrel heads was ‘Wil, Neight & Co. Portland Cement. Trade-Mark.’ There was also a label on each barrel to the same effect, and also some other signs and letters, all of them consistent with the idea that the barrels contained genuine Portland cement, and in brief the whole external appearance of the barrel was that of one in which Portland cement was usually imported. Upon these facts, the court charged as above stated.

We think the language of the receipts is merely descriptive of the barrels which defendant received. It is meant to describe their outside appearance, and that they were in truth marked and represented to be Portland cement. It cannot be that the language, properly construed, could mean that the warehouseman warranted such contents. If that were the meaning to be attributed to such a statement the warehouseman could be safe only after he had examined critically and cautiously the contents of each box or barrel which he received. To do so would consume a great deal of time, and frequently necessitate the employment of experts who dealt in or were judges of the particular article claimed to be delivered, and they would have to make such an examination of the article as its nature demanded before an opinion could be arrived at. Any one at all familiar with the business of a warehouseman knows that he could not transact business if he were first to examine the contents of each package, barrel, or box of merchandise which was delivered to him, and so packed as to cover and conceal the...