Douglas v. Smith

• Decision Date: 17 May 1888
• Citation: 74 Iowa 468,38 N.W. 163
• Parties: DOUGLAS, STUART & FORREST v. SMITH.
• Court: Iowa Supreme Court

74 Iowa 468

38 N.W. 163

DOUGLAS, STUART & FORREST

v.SMITH.

Supreme Court of Iowa.

May 17, 1888.

Appeal from circuit court, Cedar county; C. HEDGES, Judge.

This is an action of replevin to recover possession of about 10,000 bushels of corn, which, at the commencement of the suit, was stored in three cribs at Garrison, in Benton county. The plaintiffs claim the right to said corn by reason of certain crib receipts or chattel mortgages upon the same, made by Ingersoll & Moulton, dealers in grain. The defendant was sheriff of Benton county, and levied attachments on the corn at the suits of certain creditors of Ingersoll & Moulton. There was a trial by jury, and a verdict and judgment for the defendant. Plaintiffs appeal.Mills & Keeler, for appellants.

Nichols & Burnham and Boies, Husted & Boies, for appellee.

ROTHROCK, J., ( after stating the facts as above.)

The plaintiff is a corporation organized under the laws of Iowa, and having its principal office at the city of Cedar Rapids. In 1880 and 1881 the corporation owned and operated mills, and was engaged in the manufacture of oat-meal at Cedar Rapids and Chicago. In connection with this business, they also carried on a commission business on the Chicago Board of Trade in 1880 and 1881. The partnership of Ingersoll & Moulton was engaged in buying grain at Laporte, in Black Hawk county, and other towns in that neighborhood. They bought grain quite extensively at Laporte, Washburn, Mount Auburn, and Garrison. Their purchases included large quantities of ear-corn, which they cribbed, shelled, and shipped to Chicago, and other markets. In the latter part of October, 1880, they made an arrangement with the plaintiffs at Cedar Rapids by which the plaintiffs undertook to furnish Ingersoll & Moulton with money to enable them to buy and crib 100,000 bushels of corn. It was not expected by the parties that the corn would be shelled and shipped as it was bought, but that it should be cribbed, and held during the winter, and marketed in the spring. Under this arrangement, Ingersoll & Moulton bought and cribbed from one hundred to one hundred and ten thousand bushels of corn during the fall and winter after the contract was made. Ingersoll & Moulton were not mere adventurers. They had been for some time engaged in the same business, and had some capital of their own, but not sufficient to carry on the business without credit, or the benefit of advances of money to pay for the corn as it was bought from the farmers of the country. To secure the plaintiffs for the money advanced to buy the corn, it was agreed that, as each crib was filled, Ingersoll & Moulton should make and deliver to the plaintiffs crib receipts or chattel mortgages upon the corn in the crib. As the form of these instruments present an important question in the case, we will here give a copy of one of them:

“LAPORTE CITY, IOWA, December 15, 1880.

For and in consideration of money advances made to Ingersoll & Moulton by Douglas, Stuart & Forrest, of Chicago, Ill., the receipt of which is hereby acknowledged, we do by these presents sell and convey to the said Douglas, Stuart & Forrest all our right, title, and interest in seven thousand bushels of good sound ear-corn, stored in good covered crib, numbered four, (4,) and located on lots 5, 6, and 7, block 11, belonging to B., C. R. & N. Ry. Co., and situated in the town of Garrison, county of Benton, state of Iowa; the said corn being at the time of this sale and transfer the property of the undersigned, and the same being free from all claims or incumbrances. And, in further consideration of the advances made and to be made by said Douglas, Stuart & Forrest for our account, we further agree, upon the request of Douglas, Stuart & Forrest, to procure said corn to be shelled and shipped to them, or their order, as they may direct, at our cost and expense, and until such shipment will keep said corn insured against loss by fire for the sum of two thousand dollars; loss, if any, payable to Douglas, Stuart & Forrest, as their interest may appear. Said Douglas, Stuart & Forrest to sell said corn, and from proceeds of sale pay freight, inspection, insurance, their advances on said corn, with interest at eight per cent. on the same, and on margins upon contracts that may be made for its sale, and commissions of not less than one-half cent per bushel for selling, and account to us for balance of proceeds, if any. The conditions of this sale and transfer are such that, should the undersignedcause to be paid to the said Douglas, Stuart & Forrest, on or before the 15th of June, 1881, all moneys and accounts due by the undersigned to the said Douglas, Stuart & Forrest, with interest on the same at the rate of eight per centum per annum, including commissions of one-half cent per bushel on the above-described corn, and on other grain which we have agreed to consign said Douglas, Stuart & Forrest, or pay commissions on, then this sale and transfer shall be void.

C. T. INGERSOLL,

G. F. MOULTON.”

These receipts and mortgages were duly acknowledged and recorded. At the time of entering into the arrangement, Ingersoll & Moulton had some corn in crib, and they ordered the plaintiffs, as their brokers, to sell for them, on the Board of Trade in Chicago, corn for delivery in May and June following. These sales were made from time to time, during the fall and winter, and upon their face would appear to be for a much larger amount of corn than Ingersoll & Moulton would have to deliver in fulfillment of their contracts of sale made through the plaintiffs; but, although these figures look large, it appears that many of the transactions amounted merely to extensions of the time of delivery of the corn actually contracted to be sold. In other words, at the request of Ingersoll & Moulton, their contracts were changed over so as to be performed at a later date. This was done by buying in on the Board of Trade and selling out again. These extensions of time were sometimes attended with a profit, and at other times loss, to Ingersoll & Moulton. They appear to have been made necessary by the fact that they apprehended that their corn would not grade No. 2, and this apprehension afterwards proved to be well founded as to a greater part of it. The result was that Ingersoll & Moulton became in debt to the plaintiffs and others; and on the 11th day of November, 1881, George F. Moulton, one of the members of said partnership, went to Cedar Rapids for the purpose of informing the plaintiffs of the condition of the affairs of the firm, so that they might protect themselves. The result of this interview was that on the next day the plaintiffs took actual possession of the corn in controversy; it being in certain cribs at Garrison, in Benton county, and on which they held three crib receipts or chattel mortgages, a copy of one of which we have above set out. Two days afterwards, the defendant, who is sheriff of Benton county, levied attachments on the corn at the suit of other creditors of Ingersoll & Moulton. The plaintiffs replevied the corn from the sheriff. No question is made as to the validity of the debts upon which the attachments issued. A short time after the suit was commenced, the parties entered into a stipulation by which the corn was shelled, shipped, and sold; and the contest at the trial involved the rights of the parties to the proceeds arising from the sale. We have not thought it necessary to set out the pleadings upon which the cause was tried. They are quite voluminous; but, as is usual in the trial of causes, as the trial proceeded, the rights of the parties upon the merits of the controversy turn upon a few well-defined and pivotal questions. Upon the face of these crib receipts, and in view of the fact that the plaintiffs were in open and notorious possession of the corn before and at the time the attachments were levied, it would appeal that, the receipts or mortgages not having been taken up, the plaintiffs were entitled to hold the corn until the receipts were paid. The defendant claims-- First, that nothing was due on these receipts or mortgages, but that they were fully paid and satisfied before the suit was commenced; second, that the real indebtedness to the...