Sunflower Compress Co. v. Staple Cotton Co-Op. Ass'n

• Decision Date: 04 May 1925
• Docket Number: 24680
• Parties: SUNFLOWER COMPRESS CO. et al. v. STAPLE COTTON CO-OP. ASS'N. [*]
• Court: Mississippi Supreme Court

103 So. 802

139 Miss. 200

SUNFLOWER COMPRESS CO. et al. v. STAPLE COTTON CO-OP. ASS'N. ^[*]

No. 24680

Supreme Court of Mississippi

May 4, 1925

Division A

1 INJUNCTION. Injunction will not lie to restrain prosecution of replevin to recover property by claimant not holder of warehouse receipts issued therefor.

The right of a warehouseman to decline to deliver property stored with it unless and until the receipts issued by it therefor are surrendered, or their negotiation enjoined, can be fully protected in an action of replevin. Consequently an injunction will not lie to restrain the prosecution of such an action for the recovery of the property by a claimant who is not the holder of the receipts issued therefor.

2 INTERPLEADER. Bill, not framed on theory that complainant wishes to interplead, can be maintained only if based on ground of equitable jurisdiction other than conflicting claims.

A bill not framed on the theory that the complainant desires only to be permitted to bring the fund or property, the subject of litigation, into court, and thereupon be discharged from liability to the adverse claimants thereof, can be maintained only when based on a ground of equitable jurisdiction other than conflicting claims to the fund or property involved.

HON. E. N. THOMAS, Chancellor.

APPEAL from chancery court of Sunflower county, HON. E. N. THOMAS, Chancellor.

Suit by the Sunflower Compress Company against the Staple Cotton Co-operative Association and others. From decree dissolving injunction, complainant and others appeal. Affirmed and remanded.

Decree affirmed and cause remanded.

Chapman, Moody & Johnson, for appellants.

This case presents two questions:

I.

THE RIGHT OF THE APPELLANT TO FILE A BILL, IN THE NATURE OF AN INTERPLEADER, AGAINST THE APPELLEE AND ALL KNOWN CLAIMANTS, REQUIRING THEM TO LITIGATE THEIR RESPECTIVE RIGHTS TO THE COTTON DEPOSITED WITH IT AND FOR WHICH NEGOTIABLE RECEIPTS WERE ISSUED; AND, AS INCIDENTAL THERETO, ENJOIN THE PROSECUTION OF THE ACTION OF REPLEVIN THERETOFORE INSTITUTED BY THE APPELLEE, UNTIL THE RESPECTIVE RIGHTS OF ALL PARTIES TO THE IMMEDIATE POSSESSION OF SAID COTTON SHOULD BE FINALLY ADJUDICATED BY THE COURT. This question relates solely to that feature of the bill whereby an action of replevin, instituted by the appellee against the appellant, was enjoined, in order that all known claimants, named in the bill as defendants, might contest with the appellee the right to the possession of the cotton, the subject of this action.

THE first question is: Has the appellant, as defendant in said action, a full, adequate and complete remedy at law: and, if not, what remedy has it? Section 555, Hemingway's Code, only applies where the defendant disclaims any interest in the subject of the action, to which there are two or more claimants, to either of whom he is ready to deliver the property, but is unable to decide which is the rightful owner. Snodgrass v. Butler, 54 Miss. 283; McAllister v. Sanders, 107 Miss. 283, 65 So. 249.

Ample remedy is afforded, in the action of replevin, if there is no interpleader, to protect the lien for storage charges of the appellant, for "In a suit between the bailee and general owner the judgment should be limited to the value of the specific interest of the bailee in the property." Jones v. Hicks, 52 Miss. 682.

Yet, in order to protect its lien on the property, for such charges, the benefit of said section 555, is, as a remedy, denied to it. Therefore, in said action of replevin, a full, adequate and complete remedy is not afforded the appellant, if it be desired to protect its lien, for storage charges, and, at the same time protect itself against the adverse claim of the other defendants, named in the bill, and the holder of the receipts, if negotiated.

If it be borne in mind that the cotton, the subject of the action of replevin, was deposited in the public warehouse of the appellant by the owners thereof, for which negotiable receipts were issued, and as the record discloses, the appellee does not claim the right to the possession of said property through those parties, it is obvious that the Uniform Warehouse Receipt Act (chapter 218, Laws 1920), affords a remedy. Special attention is directed to the construction of sections, identical in terms, appearing in the Uniform Warehouse Receipt Act of New Jersey. New Jersey Title, etc., Co. v. Rector, 72 A. 968; New Jersey Title, etc., Co. v. Rector, 75 A. 931.

Under section 19, except as is provided in sections 17 and 18, the appellant could not, in said action of replevin, prove that the cotton, even if the appellee was the original owner, has been entrusted by it to another to obtain negotiable warehouse receipts, who, in violation of the trust imposed, negotiated the receipts to a purchaser in good faith for value, and that such holder has the right to the immediate possession of said cotton, by virtue of the negotiation of said receipts. Commercial National Bank, etc., v. Canal La. etc. Bank, 60 L.Ed. (U.S.) 417.

II.

THE RIGHT OF THE APPELLANT TO AN INJUNCTION RESTRAINING THE APPELLEE FROM INSTITUTING SIMILAR ACTIONS OF REPLEVIN FOR COTTON IN THE POSSESSION OF THE APPELLANT AND FOR WHICH NEGOTIABLE RECEIPTS HAD BEEN ISSUED AND WERE OUTSTANDING, UNTIL SUCH RECEIPTS WERE FIRST TENDERED TO IT, OR THEIR NEGOTIATION ENJOINED OR IMPOUNDED BY THE COURT. (a) The appellee, under no circumstances, had the right to the immediate possession of the cotton, deposited with the appellant and for which negotiable warehouse receipts have been issued by it, other than by virtue of such receipt.

In neither of the two affidavits, on which the writs of replevin were issued, nor in the cross-bill, does the appellee unreservedly make oath that it is entitled to the immediate possession of the cotton, delivered to the appellant and for which negotiable warehouse receipts were issued. To the contrary affidavits are made that the appellee is entitled to the immediate possession of said cotton "under and by virtue of its marketing agreement, " with one of its members, a copy of which is attached to the affidavit in replevin.

THErefore the question squarely presented to the court is whether, under and by virtue of its marketing agreement and not as holder of the receipts, the appellee is entitled to the immediate possession of cotton, deposited in the warehouse of appellant and for which negotiable warehouse receipts were issued?

Thus the question arises would the negotiation of a warehouse receipt to a purchaser in good faith for value, in violation of the trust conferred on the member, be binding on the appellee. As bearing on this particular question, attention is directed to sections 40, 41 and 47 of the Warehouse Act, chapter 218, Laws of 1920.

Referring to the possession of the marketing agreement, heretofore quoted, it is obvious that the original title, or, at least, the possession of the cotton was in the member; that, by the express terms of the agreement, he was directed to deliver the cotton at the nearest public warehouse, taking the receipt therefor which he was to endorse and deliver to the appellee. Thus, there can be no question but that the said warehouse receipts were entrusted to the member. Therefore, the question arises would the negotiation of the receipts by him, to a purchaser in good faith for value, be binding on the appellee, assuming that it was the owner, under an executory contract of sale.

An answer to this question demands an interpretation of the sections quoted above. This identical question, involving the construction of said sections, was presented to the supreme court of the United States and convincingly answered in the affirmative. Vid. Commercial National Bank of New Orleans v. Canal La. Bank & Trust Co., et al., Ann. Cas. 1917E, 25, and 239 U.S. 520; Campbell v. Farmers Bank, 90 So. 436.

While it has been conceded, for the sake of argument solely, that the ownership of the cotton was in the appellee, by virtue of the marketing agreement, yet, we most earnestly contend, that the ownership of the cotton was not in the appellee, at the time said cotton was delivered to the compress, but in the member. 35 Cyc. 274-276; 35 Cyc. 276, Subdivision b; Berry v. Waterman, 71 Miss. 497, 15 So. 234; Wachstetter v. Brown, 58 So. 530.

THErefore, we insist, the appellee, solely by virtue of its marketing agreement, has no right whatever to the immediate possession of cotton, deposited in the warehouse of the appellant. To the contrary, if it has any such right, the same must be based on the warehouse receipt, duly endorsed to it.

b. As the appellant cannot claim, as owner, under the executory contract, it can only claim, as agent, but, as agent it can only have a right to the possession of the cotton, under and by virtue of the receipt. Therefore,

1. If such receipt be lost or destroyed an action of replevin cannot be maintained for the cotton. The sole remedy given is that "a court of competent jurisdiction may order the delivery of the goods (cotton) upon satisfactory proof of such loss or destruction, and upon its giving a bond with sufficient sureties to be approved by the court to protect the warehouseman (the appellant) from any liability or expenses, which he or any person injured by such delivery may incur by reason of the original receipt remaining outstanding;" section 14. 2. As the holder of such receipt, by virtue of which the immediate possession of the cotton can only be claimed, an action of replevin cannot be maintained unless the receipt be first surrendered (or tendered) to the warehouseman (the appellant); or 3. If such receipt, only by virtue of which the immediate possession of said cotton can be claimed, be held by a third party, an action...