Hibbard v. Merchants' Bank of Detroit
| Citation | 11 N.W. 834,48 Mich. 118 |
| Parties | HIBBARD v. MERCHANTS' BANK OF DETROIT. |
| Decision Date | 12 April 1882 |
| Court | Supreme Court of Michigan |
A warehouseman having property of his own in store may pass title to it by the execution and delivery of an ordinary warehouse receipt.
He may also pledge it by such a receipt to secure the payment of his own indebtedness. And where the property is wheat, the pledge is not inoperative by reason of the wheat being part of a large mass and not separated or distinguished when the receipt is given.
A warehouse receipt pledged as security for a loan "18,000 bushels of No. 1 white and No. 2 red winter wheat, or an equivalent in flour." It was given by millers, who were engaged in manufacturing flour, and who in doing so mixed the white and red wheat. Held that the receipt was not void for indefiniteness, but the pledgee might take under it an equal proportion of each kind of wheat, or, if the wheat was not on hand, an equivalent in flour.
Error to Kent.
Blair, Kingsley & Kleinhaus, for plaintiffs in error.
Morris & Uhl, for defendant in error.
In this action of replevin the right to a certain quantity of wheat and to flour manufactured therefrom comes in question.
From the evidence incorporated in the record it appears that on the sixteenth day of January, 1880, the defendants with some others were doing a merchant milling business in the city of Grand Rapids under the copartnership name of Hibbard & Graff in two mills known respectively as the Crescent Mills and the Valley City Mills. On that day Mr. Hibbard one of the defendants made an application to the cashier of the plaintiff for the loan to their firm of the sum of $20,000 on the firm note indorsed by L.H. Randall and H.W. Hinsdale. The application was taken under advisement, and after consideration Mr. Hibbard was notified that the firm could have the desired loan provided that in addition to the proposed indorsements they would give a warehouse receipt for 18,000 bushels of wheat. These terms were accepted, and on May 17, 1880, a note and warehouse receipt were given in the following terms:
It further appears that at the date of these transactions, Hibbard & Graff were not only buying, storing, manufacturing, shipping, and selling wheat on their own account, but were also receiving into their mills wheat to be stored for others, for which they issued the customary warehouse receipt. At the time of the transaction with the plaintiff the firm had in store about 35,000 bushels of wheat of the kinds specified in the receipt issued to the plaintiff. The white and red wheat were kept separate in store, but were mixed for grinding in the proportion of one-half to two-thirds white to one-third to one-half red.
The market value of the red was superior to that of the white. The firm constantly manufactured from the stock on hand until they failed in March, 1880. There was evidence tending to show that at that time there were outstanding receipts for more wheat than the firm had on hand, but besides the receipt of the plaintiff only three small receipts were proved, and no question is made in this suit between the holders of those and the plaintiff. When Hibbard & Graff failed, one Philip M. Graff claimed the wheat and flour then in the mills under a chattel mortgage from the firm, but the bona fide of that mortgage was submitted to the jury and their conclusion was against it. It therefore cuts no figure in this case on appeal. Plaintiff demanded the wheat under its receipt when the firm failed, and not obtaining it otherwise, sued out a writ of replevin, on which a part of the specified quantity of wheat was delivered and an equivalent in flour for the remainder.
Upon these facts the jury found the defendants to be the general owners of the wheat and flour replevied, and the plaintiff to have a special property therein to the amount of $20,000. The value was found to be $21,322, and the defendants took judgment for this sum less the amount of the plaintiff's special property. The jury reached this conclusion under instructions from the circuit judge that the receipt issued by Hibbard & Graff to the plaintiff constituted a valid pledge of the property described therein as security for the note to which it referred. The appellants deny the soundness of these instructions.
It is agreed on both sides that the receipt did not constitute a mortgage of the wheat, and the plaintiff made no attempt to sustain it as a mortgage. On the part of the defendants it was contended that it did not constitute a pledge; for possession is essential to a pledge, and of this wheat possession was neither given nor contemplated. The defendants do not deny that title may pass by the delivery of a warehouse receipt in pursuance of an actual sale, nor, as we understand it, do they dispute that when one is owner of property represented by a warehouse receipt or other instrument of similar nature, he may make pledge of it and transfer constructive possession by delivering to the pledgor the instrument that represents his...
To continue reading
Request your trial
-
Hibbard v. Merchants' Bank of Detroit
...48 Mich. 11811 N.W. 834HIBBARDv.MERCHANTS' BANK OF DETROIT.Supreme Court of Michigan.Filed April 12, A warehouseman having property of his own in store may pass title to it by the execution and delivery of an ordinary warehouse receipt. He may also pledge it by such a receipt to secure the ......