National Exch. Bank v. Graniteville Mfg. Co.

• Decision Date: 31 March 1887
• Citation: 3 S.E. 411,79 Ga. 22
• Parties: NATIONAL EXCHANGE BANK OF AUGUSTA v. GRANITEVILLE MANUF'G CO.
• Court: Georgia Supreme Court

3 S.E. 411

79 Ga. 22

NATIONAL EXCHANGE BANK OF AUGUSTA v. GRANITEVILLE MANUF'G CO.

Supreme Court of Georgia

March 31, 1887

Error from superior court, Richmond county; RONEY, Judge.

Foster & Lamar, for plaintiff in error.

Harper & Bro., for defendant.

HALL, J

M. A Stovall, a factor, a warehouseman, and commission merchant transferred, and constructively delivered, by warehouse receipts in the usual form, 26 bales of cotton to the National Exchange Bank of Augusta, as a pawn or pledge for the payment of a certain sum advanced by the bank to said Stovall. This cotton belonged to a customer of the warehouse, and was never removed from the actual custody of the warehouseman, or its location changed. Stovall had made advances on it, for which he claimed a factor's lien. The cotton thus pledged or pawned was subsequently bought, paid for, taken possession of, and removed by the Graniteville Manufacturing Company who had no notice of the pledge made by Stovall to the bank. The bank brought trover against the manufacturing company for the recovery of this property, and upon the trial the defendant in the action of trover had a verdict, which was rendered by the judge on an agreed statement of facts without the intervention of a jury. From that judgment this writ of error is prosecuted.

Various questions have been made and argued before this court, but the only one which we find it necessary to determine is whether the plaintiff, as pawnee or pledgee, had obtained by that transaction such a title as would enable it to recover in trover against a bona fide purchaser for value, and without notice, either actual or constructive, of its claim or lien. Whether this transaction amounted to a complete pledge or pawn, consummated by the delivery of such possession to the pawnee as the article pledged was capable of, we deem it unnecessary to determine, as between the parties to such pledge. The Code,§ 2138, makes the delivery of the property pledged essential to the bailment: declaring, further, that promissory notes and evidences of debt may be delivered in pledge; but providing, in express term, that the delivery of title deeds shall create no pledge.

In Bank v. Nelson, 38 Ga. 391, this court held that an agent for the sale of goods could not, as against the owner, pledge or mortgage them to a third party, to secure advances made on his own account; and that to constitute a pledge or pawn, under the Code, there must be a deposit of the thing pawned; and that this cannot be dispensed with by a written agreement that the party making the pledge will be the bailee of the pawnee. This section of the Code is considered and passed upon in this case, with the result above announced, (pages 398-402,) in an able judgment pronounced by McCAY, J. It should be remembered, too, that this was laid down in a suit between the owner of the goods and the pawnee. In that case, however, there does not appear to have been any advance made by the factor upon the goods pledged; and that circumstance distinguishes it somewhat from the case under consideration. That this pawn, if perfected by delivery, and if the pawner had the title to the property, and the right to pledge it, created a lien in favor of the pawnee for the money he advanced when it was thus pawned, is clear; but the pawn did not convey title to the pawnee. Code, § 2141. It is also true the pawnee, if he had possession, might transfer his debt, and with it the possession of the thing pawned; and in that case the transferee from him would stand precisely in his situation. Id. § 2143. That the warehouseman who made this pawn had a lien upon the property pledged for his advances, and that he might transfer that lien, is unquestioned; but, in order to make that transfer of the lien effectual in the hands of the transferee, the assignment had to be made in writing, and it could not be made otherwise. See Code, § 1996, and citations. There was, however, no attempt made by Stovall to pledge or pawn anything but the property itself. The defendant, the Graniteville Manufacturing Company, found the cotton in the warehouse, and purchased it without notice of any of these incumbrances. It had no notice of any actual or visible change of the possession of the property from the pawner to the pawnee. And although the plaintiff might, in equity, have succeeded to the lien of the pawner upon the property, yet the defendant was a bona fide purchaser of the goods claimed to be pledged, for value, without notice, or without any circumstances being brought to its notice which should have put it upon inquiry.

In Frazer v. Jackson, 46 Ga. 621, this court held that a bona fide purchaser of the absolute title to personal property, without notice of any unforeclosed statutory lien upon it, takes the same divested of any such lien; that our statutory lien laws secure priority of judgment to favored classes of debts out of certain property of the person who incurred the debts. But when such property passes into the hands of a bona fide purchaser without notice, and before foreclosure, it is no longer the property of the person incurring the debt, and, not having gone into the possession of one affected with notice, the lien is lost. The same principle is announced and adjudged in Beall v. Butler, 54 Ga. 43.

But even if this had been a valid transfer of Stovall's lien to the plaintiff, we do not think that it could have maintained trover against the defendant for the recovery of the property. No title was conveyed to the plaintiff by this transaction. To enable the plaintiff to maintain trover, he must have either a general or special property in the chattel, and the actual possession, or the right of possession. It is questionable, to say the least, if this is not one of the cases in which actual possession is essential to create such special property in the thing pawned as to entitle the plaintiff in any case to maintain this action. The general property in the goods pawned remains in the pawner, but the pawnee has a special property for the purposes of the bailment. Code, § 2142. And this special property gives him a right of action against any one interfering with his possession. Id. § 2141. It is undeniably true that trover is founded on a conjoint right of property and possession, and that any act of the defendant which negatives, or is inconsistent with, such right, amounts in law to a conversion. Liptrot v. Holmes, 1 Kelly, 381. The plaintiff in this case had neither title nor such possession as that which the law contemplates, when the defendant, by a fair sale, acquired the property, and as would give the right to maintain the suit. There was no error in holding that the action, under these circumstances, could not be maintained.

It is perhaps necessary to remark that we have purposely abstained from considering any other questions than such as were essential to the final disposition of the case made upon the record. Although invoked to do so, we must respectfully decline, as we do not conceive that we have the authority to respond to such an invitation.

The following authorities are cited in the brief of counsel for the plaintiff in error: Bank v. Nelson, 38 Ga. 391, 402; Colquitt v. Smith, 65 Ga. 341; Manning v. Mitcherson, 69 Ga. 451; Hillyer v. Brogden, 67 Ga. 24; Meredith v. Knott, 34 Ga. 225; Patten v. Baggs, 43 Ga. 173; Hardeman v. Battersby, 53 Ga. 36; Tison v. Howard, 57 Ga. 410; Story, Bailm. (6th Ed.) § 297, p. 272, citing 2 Term R. 462; Jewett v. Warren, 12 Mass. 300; Badlam v. Tucker, 1 Pick. 389, 396; Whitaker v. Sumner, 20 Pick. 405; Tuxworth v. Moore, 9 Pick. 347 349; Tannahill v. Tuttle, 61 Amer. Dec. 481; Casey v. Cavaroc, 96 U.S. 477; Coleb. Coll. Secur. § 420, p. 565, citing Bank v. Hibbard, 48 Mich. 118, 11 N.W. 834; Cochran v. Ripy, 13 Bush, 495; Greenbaum v. Megibben, 10 Bush, 419; Stampofski v. Steffens, 79 Ill. 305; Presbyterian Church v. Emerson, 66 Ill. 270; Parshall v. Eggert, 54 N.Y. 18-21; Horr v. Barker, 8 Cal. 614; Bank v. Walbridge, 19 Ohio St. 424; Shepardson v. Cary, 29 Wis. 42, 44; Story, Bailm. (6th Ed.) § 299, p. 274; Macomber v. Parker, 14 Pick. 497, 505, 509; Hays v. Riddle, 1 Sanf. 248; Coleb. Coll. Secur. 531, 558; Code, §§ 2059, 2091, 2094, 2129, 2139, 2141, 3030; 2 Add. Torts, 692, 1292; Adams v. O'Connor, 1 Amer. Rep. 137; De Wolf v. Gardner, 12 Cush. 19; Bank v. Hibbard, 42 Amer. Rep. 465; Papot v. Gibson, 7 Ga. 530, 534; Gibson v. Stevens, 8 How. 399; Cochran v. Ripy, 13 Bush, 495; Bank v. Wilder, 20 Reporter, 625; Braintree v. Battles, 6 Vt. 400; Daniel v. Swift, 54 Ga. 114; Armory v. Delamirie, 1 Smith, Lead. Cas. 696, 701, 703; Harpes v. Harpes, 62 Ga. 394; Lockhart v. Railroad, 73 Ga. 472; Scott v. Singer, 54 Ga. 689; Miller v. Surls, 19 Ga. 333; Wiece v. Marbut, 55 Ga. 613; Griffin v. Sheffield, 77 Amer. Dec. 649; Griffin v. Sheffield, 38 Miss. 359; Code, § 2111; Warner v. Martin, 11 How. 225, 226; Daubigny v. Duval, 5 Term R. 604; McCombie v. Davies, 6 East, 538, 7 East, 5; 3 Chitty, Commer. Law, 193; Coleb. Coll. Secur. § 409, p. 550, citing Bank v. Boyce, 78 Ky. 42: Donald v. Suckling, L. R. 1 Q. B. 599; Johnson v. Stear, 15 C. B. (N. S.) 330; Newberry v. Trowbridge, 13 Mich. 267; Briggs v. Railroad, 6 Allen, 246; Clark v. Dearborn, 103 Mass. 335; Whitney v. Beckford, 105 Mass. 267; Chinery v. Viall, 5 Hurl. & N. 287; Brierly v. Kendall, 17 Q. B. 937; Halliday v. Holgate, L. R. 3 Exch. 299; Bailey v. Colby, 66 Amer. Dec. 755; Anderson v. Baker, 60 Ga. 600; McCalla v. Clark, 55 Ga. 53; Daniel v. Swift, 54 Ga. 114, 115; Code,§§ 2112, 2143; Tyus v. Rust, 43 Ga. 529, 533; Stafford v. Mercer, 42 Ga. 556; 1 Benj. Sales, 13, 29, 30; Bank v. Nelson, 38 Ga. 398; Code, § 2639; Seago v. Pomeroy, 46 Ga. 230, 231; Lynes v. State, Id. 210; Flanders v. Maynard, 58 Ga....