Nat'l Newark Banking Co. v. Del., L. & W. B. Co.

• Decision Date: 20 June 1904
• Citation: 70 N.J.L. 774,58 A. 311
• Parties: NATIONAL NEWARK BANKING CO. v. DELAWARE, L. & W. B. CO.
• Court: New Jersey Supreme Court

58 A. 311

70 N.J.L. 774

NATIONAL NEWARK BANKING CO.

v. DELAWARE, L. & W. B. CO.

Court of Errors and Appeals of New Jersey.

June 20, 1904.

(Syllabus by the Court.)

Error to Supreme Court.

Action by the National Newark Banking Company against the Delaware, Lackawanna & Western Railroad Company. Judgment for plaintiff, and defendant brings error. Affirmed.

Robert H. McCarter, for plaintiff in error.

Richard V. Lindabury and John O. H. Pitney, for defendant in error.

SWAYZE, J. This is an action of trover. As finally presented to the trial court, the controversy was limited to eight cars of grain, which had been consigned to one Archer, trading as A. E. Howe & Co. Archer, in pursuance of a practice continued for several years, had surrendered the bills of lading to Remer, freight agent of the defendant at Newark, prior to the arrival of the grain, and had received in exchange therefor what are called "certified orders." The case turns upon the validity and effect of these certified orders. They were in the following form: "Newark, N. J. Aug. 18th, 1902. Agent D. L. and W. R. R.: On arrival of car oats No. 12043 or its transfer, please deliver same to J. R. Bradner & Son or ourselves or order, on presentation of this order. A. E. Howe & Co. Freight Paid. Invoice No. 47143." Upon surrender of the bill of lading, the cashier in Remer's office stamped across the face of the order the following words: "Car to be delivered on this order same as B. of L. B. of L. taken up at Newark. John Remer, Agt, per J. H. Burrell, Cashier." Archer had contracted to sell the grain in advance of its arrival, and the name of the purchaser was inserted in the order. After the order was stamped by Burrell, Archer drew a draft on the purchaser, and upon these drafts, accompanied by the certified orders indorsed by Archer, obtained advances of money from the bank. The practice of issuing these certified orders in lieu of the bills of lading arose from the fact that Archer sold grain by the car load at points along the line of the railroad between Dover and Washington and Newark, and in order to avoid having the grain transported through to Newark, its original destination, the bill of lading was surrendered, and the car transferred, formerly at Dover, but later at Washington, and sent to the station at which it was to be delivered to the customer to whom Archer had agreed to sell it. In August, 1902, Archer absconded. The eight car loads of grain now in question had then been delivered by the railroad company to the purchasers from Archer, upon his written instructions. The bank held the certified orders, and demanded delivery of the grain, with which demand the railroad company was unable to comply. The terms of the contracts between Archer and the purchasers of the grain do not appear, but in each case the sale was of grain en route, and the drafts drawn upon purchasers by Archer were payable upon arrival of the grain, and the fair inference, in the absence of proof to the contrary, is that Archer was to deliver the grain at Newark. The contracts of sale between Archer and the purchasers antedated the arrangement made by Archer with the bank, and the arrangement with the bank antedated the arrival of the grain. A verdict was directed for the plaintiff for the amount advanced on the drafts.

The fact that the grain was en route and to be delivered by Archer to his customers at Newark, in the absence of other proof as to the terms of their contract, requires the inference that the title to the grain did not pass immediately upon the sale. 1 Benjamin on Sales (Corbin's Ed.) 333. The contract between Archer and the purchaser was an executory contract, and not a present bargain and sale. The subsequent arrangement with the bank passed title to the grain. Whether it was an absolute title, or by way of pledge, or by way of mortgage, is, we think, not material to the present case. The arrangement with the bank, by whatever name it may be called, was consummated by the delivery to the bank of the certified orders. The effect of the certified orders, as between the railroad company and the bank, is a question to be hereafter determined upon another branch of the case; but, even if invalid against the railroad company, they were symbols of title as between Archer and the bank. The reasons for holding that title passes by a delivery of a symbol of title are well stated by Chief Justice Taney in Gibson v. Stevens (1850) 8 How. 384, at pages 309, 400, 12 L. Ed. 1123. The documents with which he was there dealing were two bills for goods sold. To one the sellers had added a receipt stating that they held the goods mentioned therein in store; the other was a mere receipted bill. Upon these documents the purchasers indorsed orders for the delivery of the goods, and obtained advances thereon. The Chief Justice said: "The delivery of the evidence of title and the orders indorsed upon them was equivalent, in the then situation of the property, to the delivery of the property itself. This mode of transfer and delivery has been sanctioned in analogous cases by the courts of justice in England and in this country." After citing cases, he adds: "The rule is not confined to the usages of any particular commerce, but applies to every case where the thing sold is, from its character or situation at the time, incapable of actual delivery." Other cases in point are: Ex parte Fitz, 2 Low. 519, Fed. Cas. No. 4,837; Tuxworth v. Moore, 9 Pick. 347, 20 Am. Dec. 479; Carter v. Willard, 19 Pick. 1; Pratt v. Parkman, 24 Pick. 42; First National Bank of Green Bay v. Dearborn, 115 Mass. 219, 15 Am. Rep. 92; Merchants' Bank v. Hibbard, 48 Mich. 118, 11 N. W. 834, 42 Am. Rep. 465; Whitney v. Tibbits, 17 Wis. 359; Barber v. Meyerstein, L. R. 4 H. L. 317, 39 L. J. C. P. 187, 4 English Ruling Cases, 798; Young v. Lambert L. R. 3 P. C. 142, 39 L. J. P. C. 21. It is not, however, necessary to hold that the certified orders were symbols of property, so that their transfer by indorsement was equivalent to an actual delivery of the goods. There was certainly an agreement between the bank and Archer by which the bank obtained a present right in the grain. Bryan v. Nix, 4 Meeson & W. 775 (Baron Parke's opinion, at page 790). Whether the title of the bank was absolute, or by way of pledge or mortgage, the action is maintainable, and the...