Nicholson v. H. Poehler Co.

• Decision Date: 10 November 1922
• Citation: 284 F. 992
• Parties: NICHOLSON v.. H. POEHLER CO.
• Court: U.S. District Court — District of South Dakota

284 F. 992

NICHOLSON v.. H. POEHLER CO.

United States District Court, D. South Dakota, Southern Division.

November 10, 1922

James M. Brown, of Aberdeen, S.D., for plaintiff.

H. V Mercer, of Minneapolis, Minn., for defendant.

ELLIOTT District Judge (in memorandum).

I have determined the issues in Charles L. Nicholson v. H. Poehler Company, in favor of the defendant and against the plaintiff.

The provisions of the statutes of this state, and especially of sections 9751, 9753, 9754, 9758, and 9760, define the rights duties, and obligations of warehousemen. I can find no basis in the decisions of this state or the decisions of the state of North Dakota construing similar provisions, for a construction of the rights and obligations of warehousemen that justify the contention of the plaintiff in this case. In the light of the decision of the Supreme Court of this state in Street v. Farmers Elevator Co., 33 S.D. 601, 146 N.W. 1077, and National Bank v. Elkins, 37 S.D. 479, 159 N.W. 60, it cannot consistently be urged that one who holds a storage ticket is entitled to the restoration of the identical grain stored by him. In the former case the right to 'market' the grain so deposited is recognized. Nor can it be seriously contended under the provision of this law, that the grain stored can be demanded at the elevator where it was stored. The North Dakota Supreme Court has said plainly that the provisions of this warehouse law recognize the usual and necessary custom of shipping grain out of the warehouse as the business may require, and it might well have added that the section recognizes the condition universally existing throughout the entire Northwest, to wit, that the elevators issuing storage receipts under these provisions of law are only large enough to accommodate sufficient grain to facilitate shipment of the grain under normal conditions, and that, whenever there is a shortage of cars or an obstruction of transportation, the elevators are blocked, and the marketing of grain necessarily ceases.

The statutes specifically provide that, as between the bailor and bailee, the title to the particular grain remains in the bailor. Only a casual reading of this statute demonstrates that, by the terms of the storage tickets, the person holding such tickets has a right to demand possession of the wheat of the grade deposited at the elevator, and, if the company storing it had it on hand, it would be compelled to turn the same over to him; but, if such storage company had not such grain in its possession, it would then be required to deliver an equal number of bushels of like grade, either there or at the terminal market. I am convinced that the purpose of the provision of the statute requiring a bond is a recognition of the necessity for the transfer of the wheat to a terminal market and the sale by the person storing it.

The statute provides a punishment for the warehouseman who fails to comply with his duties as such warehouseman, and by statutory enactment he shall be guilty of larceny; but there is neither default nor guilt until he has failed to deliver the wheat or pay the market price upon demand. The mere fact of the sale of the wheat, or transfer of the wheat to the terminal market, is nowhere suggested a violation of the rights or duties of the warehouseman. It seems clear to me that the provisions of this law were enacted for the very purpose of permitting the warehouseman to take the grain, sell it, and carry it at a reasonable price for the producer, giving him the benefit of storage, knowing that, under the conditions that exist in this country, there is absolute impossibility of carrying the actual grain in the warehouse; that there are no warehouse facilities anywhere in this country to hold and carry the grain of the producers; that the warehouse facilities as I have stated above, are only sufficient for the ordinary marketing of the grain as it comes in, and not sufficient for that if anything out of the ordinary occurs to burden or hinder transportation.

Clearly, if the warehouseman had a right to ship to the terminal market and sell, the defendant commission merchant incurred no liability in making the sale for him. I think this construction is entirely consistent with the provisions of the statute that, as between the parties, the title to the particular grain remains in the bailor, as quoted in State v. Daniels, 35 N.D. 5, 159 N.W. 17, and Marshall v. Andrews, 8 N.D. 364, 79 N.W. 851. I am of the opinion that under these statutes, neither the shipping nor selling of the grain represented by the storage tickets in question constituted a conversion of the grain, and therefore that the defendants receiving and selling the same on commission could not be guilty of conversion thereof.

The warehouseman cannot be held liable for conversion under these statutes until he has failed to comply with his obligation to the owner of the storage receipts by delivering to him an equal quantity of like grain at the elevator where it was stored, at the terminal market, or pay the value of the grain, and the failure is not sufficient because no duty to deliver the grain or pay its value is involved under this statute until there is a demand; at least, no present duty, and his failure to comply with his obligations as a warehouseman at the time of the demand constitutes the wrong, and that wrong is defined in this statute as larceny. This view is supported by the Supreme Court of North Dakota in First National Bank of Fargo v. Minneapolis & Northern Elevator Co., 11 N.D. 280, 91 N.W. 439, where it is said:

...