State v. Robb-Lawrence Company, a Corp.
| Decision Date | 19 March 1908 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Cass County; Pollock, J.
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.
A warehouseman cannot pledge his own property by the issuance of a warehouse receipt. Sexton v. Graham, 4 N.W 1090; Yennie v. McNamee, 45 N.Y. 614; Franklin Natl. Bank v. Whitehead, 39 L. R. A. 725; Bank v Nelson, 95 Am. Dec. 400; Adams v. Merchants Natl Bank, 2 F. 174; Greenleaf v. Dows, 8 F. 550.
There must be a delivery of possession. Section 6195, Revised Codes, 1905; Willard v. Elevator Co., 10 N.D. 400, 87 N.W. 996.
State cannot impose restrictions upon a foreign corporation where its business is interstate or foreign, or it is a federal agent. Pembina Con. S. M. & M. Co. v. Pennsylvania, 125 U.S. 181, 31 L.Ed. 650; Clark & Marshall, Priv. Corp. volume 3, page 2706.
A foreign corporation may be doing business within the state, in the sense of the statute although it has no office or place of business therein. Clark & Marshall, Priv. Corp., supra; Lamb & Lamb, 6 Biss. 420, Fed. Cas. No. 8018; Farriar v. New England, etc., 7 So. 200; People v. Horn Silver M. Co., 105 N.Y. 76; People v. Wemple, 27 Am. St. 542; Com. & Gloucester Ferry Co., 98 Pa. 105.
Receiving proceeds of converted property waives the wrongfulness of the act. 28 Am. & Eng. Enc. of Law, 739.
V. R. Lovell, for respondent.
A pledge is created by actual or constructive delivery; in the latter case, as by warehouse receipt, possession of actual property pledged must be retained by warehouseman. Merchants v. Hibbard, 48 Mich. 118; National, etc. v. Wilder, 24 N.W. 699; Egger v. Hayes, 40 Minn. 182; Milliorn v. Clow, 42 Ore. 169; Alabama, etc. v. Barnes, 82 Ala. 607; Broadwell v. Howard, 79 Ill. 303; Horr v. Barker, 8 Cal. 614; National v. Wallbridge, 19 Ohio St. 424.
A consignment of goods by a nonresident manufacturing corporation to a resident commission merchant within this state is not in violation of the law regulating doing business by foreign corporation therein. DeWitt v. Berger, 81 S.W. 334; Bell City v. Frizzell, 81 P. 58; Coit v. Sutton, 25 L. R. A. 819; Penn. etc. v. McKeever, 87 N.Y.S. 819; Oakland v. Fred, etc., 118 F. 243; Milan v. Gorton, 27 S.W. 971; Wolf v. Bigler, 43 A. 1092; Miller v. Goodman, 40 S.W. 719; Kilgore v. Smith, 15 At. 698; Cummer, etc. v. Associated, etc., 73 N.Y. 668; Huppman, etc. v. Western, etc., 36 S.W. 306.
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, page 180, Laws 1901, being sections 2262-2272, Revised 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 26th, 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: 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, Revised Codes 1905, which is as follows: 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 assignment 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, Revised 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, page 321, Laws 1891, which deals solely with grain warehouses. For the statute law applicable to this case, we must look to chapter 141, page 180, Laws 1901, being sections 2262-2272, Revised 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, Revised 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, page 180, Laws 1901, a warehouseman can by the issuance and delivery of a warehouse receipt for property owned by him 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 by 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...
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