First Nat. Bank of Kan. City v. Mt. Pleasant Milling Co.

• Decision Date: 27 October 1897
• Citation: 103 Iowa 518,72 N.W. 689
• Parties: FIRST NAT. BANK OF KANSAS CITY, MO., v. MT. PLEASANT MILLING CO. ET AL.
• Court: Iowa Supreme Court

103 Iowa 518

72 N.W. 689

FIRST NAT. BANK OF KANSAS CITY, MO.,

v.MT. PLEASANT MILLING CO. ET AL.

Supreme Court of Iowa.

Oct. 27, 1897.

Appeal from district court, Henry county; T. M. Fee, Judge.

Action at law for the conversion of two cars of wheat. The defendants claimed the property under a writ of attachment issued in an action wherein the Milling Company was plaintiff and the Moffatt & Lee Commission Company was defendant, and alleged that plaintiff was not the owner thereof, but that it belonged to the Commission Company. The trial court directed a verdict for the defendants, and plaintiff appeals. Reversed.Power, Huston & Power and W. I. Babb, for appellant.

McCoid & Finley and Blake & Blake, for appellees.

DEEMER, J.

The appellant will be designated as the “Bank,” the appellee as the “Milling Company,” and the Moffatt & Lee Commission Company as the “Commission Company.” January 3, 1895, the Commission Company, having contracted to sell and deliver two cars of No. 2 wheat to the Derby Roller Mills, of Burlington, Iowa, drew its draft on the Roller Mills for the net proceeds, in favor of plaintiff; delivered the bill of lading for the wheat, indorsed in blank, with weighmaster's certificates attached, to the plaintiff; and at the same time received credit on the books of the Bank for the amount of the draft, less $1.20 discount or exchange. The Bank at once entered the draft upon its books, charged the same to its correspondent at Burlington, Iowa, and sent it forward, with the attached papers, for payment. The wheat was shipped immediately, and while en route, and at Mt. Pleasant, Iowa, in the custody of the carrier, was seized by the sheriff on a writ of attachment in favor of the Milling Company and against the Commission Company. The Derby Roller Mills learned of the seizure of the wheat, and refused to pay for the same. The draft was protested and returned to the Bank. The Bank thereupon demanded the wheat from the sheriff, but he refused to surrender. This action was then commenced.

As a general rule, a bill of lading represents the goods while in the possession of the carrier for transportation, and its assignment operates as a transfer of the title, and a symbolical delivery of property. Garden Grove Bank v. Humeston & S. Ry. Co., 67 Iowa, 526, 25 N. W. 761;Weyand v. Railway Co., 75 Iowa, 573, 39 N. W. 899;Ayres, Weatherwax & Reed Co. v. Dorsey Produce Co. (Iowa) 70 N. W. 111.

The statutes of Missouri (Rev. St. 1879, §§ 558, 559), where the transfer was made, also provide that:

“558. All bills of lading, transportation receipts and contracts of affreightment issued or given by any person, boat, railroad or transportation or transfer company, for goods, wares, merchandise, grain, flour or other produce, shall be and are hereby made negotiable by written endorsement thereon, and delivery in the same manner as bills of exchange or promissory notes, and no printed or written conditions, clauses or provisions shall in any way limit the negotiability or effect of any negotiation thereof, nor in any manner impair the rights and duties of the parties thereto, or persons interested therein; and every such condition, clause or provision purporting to limit or affect the rights, duties or liabilities created or declared in this chapter, shall be void and of no force or effect.

How Transferred--Lien Created--Exception.

559. All bills of lading and transportation receipts of every kind, given by any carrier, boat, vessel, railroad, transportation or transfer company, may be transferred by endorsement in writing thereon, and the delivery thereof so indorsed; and any and all persons to whom the same may be so transferred shall be deemed and held to be the owner of such goods, wares, merchandise, grain, flour, or other produce or commodity, so far as to give validity to any pledge, lien or transfer given, made or created thereby, on the faith thereof, and no property so stored or deposited, as specified in such bills of lading or receipts, shall be delivered, except on the surrender and cancellation of such receipts and bills of lading.”

Appellee contends, however, that the Bank did not purchase the bill of lading; that it has no lien upon it or upon the property, except to the extent of advances made; and that as it did not advance anything on the strength of the bill of lading, but merely gave the Commission Company credit upon its account,--which at the time showed a balance in its favor,--it cannot recover. This contention is based upon a rule applicable to the transfer of negotiable paper, to the effect that a mere discount and credit do not of themselves amount to a bona fide purchase for value. The rule is announced and applied in the following, among other, cases: Dresser v. Construction Co., 93 U. S. 92;Mann v. Bank, 30 Kan. 412, 1 Pac. 579;Fox v. Bank, 30 Kan. 444, 1 Pac. 789. The trouble with this position, as applied to the facts of this case, lies in the assumption that a bill of lading is to be treated in all respects as a negotiable instrument, and subject to the same rules, as to its transfer and negotiation. The authorities speak of such an instrument as “quasi negotiable,” and the statutes of Missouri say that it is negotiable by written indorsement and delivery, in the same manner as bills of exchange. What is meant by this, as we understand it, is to give to such documents negotiability and assignability by indorsement and delivery, so that the indorsee may sue thereon in his own name. It does not necessarily follow that, because a statute has made bills of lading negotiable, all the consequences of an indorsement and delivery of bills and notes before maturity ensue, or are intended to result, from such negotiation. Bills of lading represent property, and, when indorsed or assigned, operate as a symbolical delivery to the indorsee or assignee of the property covered thereby. Such a transfer is quite different from the negotiation of a bill of exchange or a promissory...