Klock Produce Co. v. Diamond Ice & Storage Co.

• Decision Date: 29 February 1916
• Docket Number: 13212.
• Citation: 155 P. 414,90 Wash. 67
• Court: Washington Supreme Court
• Parties: KLOCK PRODUCE CO. v. DIAMOND ICE & STORAGE CO.

155 P. 414

90 Wash. 67

KLOCK PRODUCE CO. v. DIAMOND ICE & STORAGE CO.

No. 13212.

Supreme Court of Washington

February 29, 1916

Department 2. Appeal from Superior Court, King County; King Dykeman Judge.

Action by the Klock Produce Company against the Diamond Ice &amp Storage Company. Judgment for defendant, and plaintiff appeals. Reversed.

Mount J., dissenting.

Frank S. Griffith, of Seattle, for appellant.

James B. Howe and A. J. Falknor, both of Seattle, for respondent.

BAUSMAN J.

The Klock Company holds defendant's warehouse receipt for cheese. The statute on warehouse receipts (Laws 1913, p. 279) permits the warehouseman to make them either negotiable or non-negotiable, and prescribes for the former a definition. While this receipt does not conform to that definition, it was specially stamped 'Negotiable,' was so issued and was properly deemed negotiable by the lower court. After getting the receipt, plaintiff from time to time withdrew quantities which were regularly indorsed. On one such occasion, however, the warehouseman also indorsed, 'Subject to warehouseman's lien for storage charges amounting to $534.83.' Now, this sum was not due upon the cheese, but upon eggs also stored by plaintiff which the court found had been previously withdrawn. To this surcharge plaintiff objected, tendering this receipt, paying what was due on the cheese, and demanding delivery. The defendant, however, refused delivery of the cheese because the other charges were not paid, and, in this suit by plaintiff in damages for conversion, tried without a jury, was sustained by the lower court.

Had defendant a right thus to surcharge a negotiable receipt? He points to sections 27 and 28 of the act. The first gives a lien on the particular goods; the second, upon those goods also for charges on others belonging to the same depositor 'whenever deposited.' Both sections, though, announce the lien as 'subject to the provisions of section 30,' and this last section, which we italicize in part, reads as follows:

'If a negotiable receipt is issued for goods, the warehouseman shall have no lien thereon, except for charges for storage of those goods subsequent to the date of the receipt, unless the receipt expressly enumerates other charges for which a lien is claimed. In such case there shall be a lien for the charges enumerated so far as they are within the terms of section 27, although the amount of the charges so enumerated is not stated in the receipt.'

The extent of lien under a negotiable receipt is thus apparently clear. That kind of receipt may, indeed, carry a lien for other goods also; but, as distinguished from a nonnegotiable receipt, it must say so at the outset.

But, the warehouseman argues, the language 'whenever deposited,' in section 28, qualifies the provisions of section 30, and the two should be read together. This argument we reject. Neither policy nor natural construction supports that qualification. The words 'whenever deposited' have their application against nonnegotiable receipts, but not against negotiable. That is the reason why this section 28 expressly subjects itself to section 30, and not to the sections describing nonnegotiable receipts. So much on the very face of the statute. Now, as to its policy. Shall the depositor of a carload of fruit be unable to withdraw a few crates without suffering on the prior negotiable receipt entire surcharge for storage of a thousand barrels of cement of his deposited after that receipt, freely accepted by the warehouseman in the probability that the negotiable fruit receipt would be by assignment placed beyond surcharge, still in the warehouse, and themselves bound by this very statute for their own lien? This burdensome and yet logical conclusion from respondent's argument is wholly unnecessary to the warehouseman's protection, for he already has his lien on the cement. We cannot favor the theory of retroactive surcharge. As to negotiable receipts, previous charges on other goods may be noted, and they must be noted or they are lost. Future charges for subsequent goods are beyond noting in it at all. These two things are plain from both language and policy.

Nor do we overlook section 12, which provides that 'where a warehouseman delivers part of the goods for which he had issued a negotiable receipt and fails either to take up and cancel such receipt or to place plainly upon it a statement' of withdrawals, he shall be liable to transferees. We do not agree with respondent, who apparently concludes that this language permits two things: First, that the warehouseman may, on a partial withdrawal, force an exchange of receipts against the consent of the holder, and that the statute was not in that language contemplating such exchanges as might occur out of mere convenience by consent; second, that in any such exchange the warehouseman may issue the new receipt surecharged for other goods when the original was not surcharged. To neither conclusion can we now assent, nor is it necessary now to discuss an argument which might equally give the warehouseman a right to substitute then a nonnegotiable for a previous negotiable receipt; for, should we concede a privilege in that section, we do not see its limits.

These things may be considered when we have before us the issuing of a new receipt in exchange, not here; for what this warehouseman has done on the partial withdrawal is to alter the old receipt, and that in our opinion is not the same as issuing a new one. He chose for reasons of his own not to offer a new, but to alter the old, contract, which ...