State ex rel. Hart-Parr Co. v. Robb-Lawrence Co.

• Decision Date: 19 March 1908
• Citation: 115 N.W. 846,17 N.D. 257
• Parties: STATE, to Use of HART-PARR CO., v. ROBB-LAWRENCE CO. et al.
• Court: North Dakota Supreme Court

17 N.D. 257

115 N.W. 846

STATE, to Use of HART-PARR CO.,

v.ROBB-LAWRENCE CO. et al.

Supreme Court of North Dakota.

March 19, 1908.

Syllabus by the Court.

A public warehouseman licensed to do business in this state under the provisions of chapter 141, p. 180, Laws 1901, being sections 2262-2272, Rev. Code, may, as security for his indebtedness, issue and deliver to his creditor a warehouse receipt upon property actually contained in such warehouse and owned by him.

The execution and delivery of such receipt operates as a valid pledge of the property without the necessity of an actual change of possession; a symbolical or constructive delivery through the issuance and delivery of such warehouse receipt being sufficient.

Such a transaction operates in law to create the holder of such receipt a bailor and the warehouseman a bailee of the property under said warehouse statute during the time such property remains in such warehouse, and renders the surety on the warehouseman's bond liable for its gafe-keeping.

Following the rule announced by this court in the recent case of Sucker State Drill Co. v. Wirtz Bros., 115 N. W. 844, it is held, that plaintiff, a foreign corporation, did not violate the statute of this state (sections 4695-4697, Rev. Codes 1905) prescribing the conditions upon which such corporations may do business within our borders.

Certain alleged errors of law occurring at the trial in the rejection of testimony and in instructions to the jury examined, and held not prejudicial for reasons stated in the opinion.

Held, further, that such rulings and the giving of the instructions complained of, if error, cannot avail appellant, as the same were not properly specified in the notice of intention to move for a new trial; the motion for new trial being based upon the minutes of the court.

Appeal from District Court, Cass County, Chas. A. Pollock, Judge.

Action by the state of North Dakota, to and for the use of the Hart-Parr Company, against the Robb-Lawrence Company and the Northern Trust Company. Judgment for plaintiff, and the Northern Trust Company appeals. Affirmed.

Pierce & Tenneson and A. W. Cupler, for appellant. V. R. Lovell, for respondent.

FISK, J.

Plaintiff recovered judgment in the court below, and defendant the Northern Trust Company alone appealed from the judgment. The facts, briefly stated, are as follows: The Hart-Parr Company, for whose use this action is prosecuted, is a foreign corporation engaged in the business of manufacturing engines at Charles City, Iowa, and in selling the same throughout the country. The defendant Robb-Lawrence Company was organized as a corporation under the laws of this state, and duly authorized to do business as a public warehouseman under the provisions of chapter 141, p. 180, Laws 1901, being sections 2262-2272, Rev. Codes 1905; the appellant being a surety upon the bond of the Robb-Lawrence Company, as such warehouseman, given pursuant to such statute. In addition to its business as a public warehouseman, the Robb-Lawrence Company was a dealer in farm implements and machinery, and in 1903 and 1904 it handled plaintiff's goods under commission contracts at Fargo, and in certain specified territory adjacent thereto. On May 26, 1904, the Robb-Lawrence Company, being indebted to the plaintiff in a large sum, and for the purpose of securing such indebtedness by a lien upon certain property then contained in its public warehouse, and owned by it, executed and delivered to plaintiff the following warehouse receipt: “Robb-Lawrence Company. Office and Warehouse. Northern Pacific Ave. and Eighth Street. Phone 516. Warehouse Receipt No. 7. Fargo, N. D., May 26, 1904. Received in store from the Hart-Parr Company on account of themselves P. O. Address Chas City, Ia., the goods named below, subject to the conditions printed on the back of this receipt. Storage $ ------ paid for first month and $ ------ per month for each subsequent month or part thereof. Handling charges $ Paid. Advance charges $ ------. Insurance: Yes. Carried by R ------ L ------ Co. 1 30-horse Power Oil Cooled Gasoline Engine, No. 1211.1 7-horse Power Oil Cooled Portable Gasoline Engine, Style No. 5, enclosed. 1 No. 12 Farquhar separator. 1 Wood Bros. self-feeder. 1 Farquhar wagon loader and weigher. 5 Noyes & Surreys, No. 220-221, 390-391. Value of above estimated at $2,970.00. Robb-Lawrence Company, By Wilbur Lawrence, Sec'y. Original.” At the time of the issuance and delivery of such receipt there was no actual change of possession of the personal property covered by the receipt. Thereafter, the indebtedness aforesaid being past due, plaintiff tendered to the Robb-Lawrence Company the receipt aforesaid, and demanded the possession of said property, which demand plaintiff contends was refused for the reason that such property had theretofore been sold and disposed of by said defendant, and thereby converted to its own use. This action was brought against said Robb-Lawrence Company as principal, and the appellant, as surety, upon the bond aforesaid, pursuant to the provisions of section 2264, Rev. Codes 1905, which is as follows: “When any one licensed to do business as a public storage company or as a public warehouseman fails to perform his duty, or violates any of the provisions of this article, any person, persons or corporations injured by such failure or violation may, with the consent of the attorney general, bring an action in the name of the state, but to his or their own use, in any court of competent jurisdiction, on the bond of such company or warehouseman. In such action the person, persons or corporation in whose behalf the action is brought shall file with the court a satisfactory bond for costs, and the state shall not be liable for any costs.” The appellant, at the close of plaintiff's testimony, and also at the close of all the testimony, moved for a directed verdict, and thereafter moved for judgment notwithstanding the verdict and also for a new trial, each of which motions was denied, and these rulings constitute the basis of appellant's assignments of error.

Appellant's first contention is that a warehouseman cannot make a valid pledge of his own property by the issuance of a warehouse receipt, and hence that the holder of such receipt acquires no lien upon the property. Our attention is directed to section 6195, Rev. Codes 1905, which provides: “The lien of a pledge is dependent on possession and no pledge is valid until the property pledged is delivered to the pledgee or to a pledge holder as hereinafter prescribed.” Also to section 2248, Rev. Codes 1905, which prohibits the owners of grain elevators and warehouses from issuing warehouse receipts for grain not actually delivered into such warehouse. The latter section has no application to the case at bar, as it refers merely to the issuance of warehouse receipts for grain delivered in the elevator or warehouse. This section was enacted as a part of chapter 126, p. 321, Laws 1891, which deals solely with grain warehouses. For the statute law applicable to this case, we must look to chapter 141, p. 180, Laws 1901, being sections 2262-2272, Rev. Codes 1905, which relates generally to warehouses for the storage of goods, wares, and merchandise; grain in bulk being expressly excepted from the provisions of the act. It is a noticeable fact that this statute contains no provision corresponding with section 2248, Rev. Codes 1905, above referred to. This distinction in the two statutes is an important one. See opinion of Brown, J., in Re St. P. & K. C. Grain Co., 89 Minn. 98, 94 N. W. 218, 99 Am. St. Rep. 549. We are therefore squarely confronted with the proposition whether under the provisions of chapter 141, p. 180, Laws 1901, a warehouseman can by the issuance and delivery of a warehouse receipt for property owned by and contained in his warehouse create a valid pledge of such property to his creditor as security for his indebtedness, and thereby, without an actual change of possession of the property, become a lawful bailee thereof, under such statute. In order to hold the trust company liable as surety on the bond, it is, of course, necessary that the transaction should have operated to create the Robb-Lawrence Company a bailee of the property under the warehouse statute aforesaid; the bond being conditioned, in the language of the statute, “for the faithful discharge of the duties by the Robb-Lawrence Co. of a public warehouseman.” It is entirely clear that such would have been the result if the Robb-Lawrence Company had pledged the property to plaintiff be an actual delivery thereof to it, and the latter had then immediately deposited the same in such warehouse for storage or safe-keeping under the statute. Was such a formal transfer and retransfer of the actual possession necessary to create a valid pledge and deposit or bailment of the property, so as to render the appellant as such surety liable on the bond aforesaid? The statute is plain, it is true, that the lien of a pledge is dependent on possession, and that no pledge is valid until the property pledged is delivered to the pledgee or to a pledge holder; but is a literal compliance with this statute necessary? Does the law require a mere formal and apparently useless ceremony to be...