Valley Nat'l Bank v. Frank

• Decision Date: 27 June 1882
• Citation: 12 Mo.App. 460
• Parties: VALLEY NATIONAL BANK, Appellant, v. LEOPOLD FRANK ET AL., Respondents.
• Court: Missouri Court of Appeals

12 Mo.App. 460

VALLEY NATIONAL BANK, Appellant,

v.LEOPOLD FRANK ET AL., Respondents.

St. Louis Court of Appeals, Missouri.

Jun. 27, 1882.

1. One who takes a receipt for portions of a stock in trade upon which he has made advances of money, cannot recover the value thereof from one who, without notice, purchases them from the original owner in whose possession they remained and from whose goods they were never separated.

2. The innocent purchaser has a better equity than he who, having advanced money on part of a stock in trade, leaves them in possession of the original owner.

3. A receipt, given by the owner of a stock in trade to one who has advanced money on a portion of the goods, stating that the goods are held on storage, is not a warehouse-receipt.

4. The delivery of such a receipt is not such a delivery as will constitute a pledge of the property therein described.

APPEAL from the St. Louis Circuit Court, HORNER, J.

Affirmed.

J. M. & C. H. KRUM and WALTER B. DOUGLAS, for the appellant: The indorsement and delivery of the receipts gave the bank full control of the goods, and gave it a possession sufficient to uphold the pledge.-- Cochran v. Ripy, 13 Bush, 495; Gibson v. Bank, 11 Ohio St. 311; Comp v. Tuchels, 5 Reporter, 623; Carpenter v. Snelling, 97 Mass. 452; Macomber v. Parker, 14 Pick. 497; Lickbarron v. Mason, 1 Smith's Ld. Cas. 1084. The fact that the title passes to the pledgee does not prevent the creation of a pledge, provided the most convenient way of giving constructive possession be by passing title also, and provided the debtor have the right of restitution of the property upon payment of the debt.-- Wilson v. Tuttle, 2 N. Y. 443; Brewster v. Hartley, 37 Cal. 15.A. BINSWANGER, for the respondents: A bailee must retain possession of the goods in order to preserve his lien upon them.-- Homer v. Crane, 2 Pick. 607; Jarvis v. Rogers, 15 Mass. 389. The owner may also follow and reclaim his goods from a party receiving them wrongfully and with full knowledge.-- Colt v. Lasmer, 9 Cow. 320. An honest purchaser from a party having the power to sell will acquire the title.-- Bugert v. Hertell, 4 Hill, 492. Where the pledgee permits the property to go back into the hands of the owner and remain there indefinitely, the lien ceases against the third persons.-- Day v. Swift, 48 Me. 368. And a bona fide purchaser from the pledgeor in possession will hold the property.-- Smith v. Sasser, 4 Jones L. 43. The receipts given in this case were not warehouse-receipts.-- McGrade v. German Savings Instn., 4 Mo. App. 334; Adams v. Bank, 19 Am. L. Rep. 714. Possession of the personalty pledged with other indicia of ownership is sufficient in this case to give title to the purchaser as against the bank.-- Vickers v. Hertz, L. R. 2 H. L. 115; International Bank v. Bank, 71 Mo. 197.

BAKEWELL, J., delivered the opinion of the court.

The petition alleges that plaintiffs, a banking corporation, were the owners of thirty-two bales and twenty thousand pounds of dry hides, worth $6,000, which defendants, who are co-partners, converted to their own use. The answer was a general denial. At the close of plaintiffs' case, the court instructed the jury that, on the pleadings and evidence, plaintiffs could not recover. There was a verdict and judgment accordingly.

In 1879 and 1880, Bienenstok & Trieber were engaged in buying and selling hides, furs, wool, and feathers in St. Louis; and, for that purpose, occupied a building on Second Street. In order to enable them to carry on their business, they made an arrangement with plaintiffs by which plaintiffs were to advance money on pledge of merchandise.

That arrangement is thus described by the president of plaintiffs: “In the winter of 1879, or commencement of 1880, Trieber came to the bank. He said he would like to borrow money on such goods as he might get in store, and arrange to keep them in store. I finally arranged with him that we should select a man whom he should employ as clerk in the store; and, at the same time, this man was to act as agent for us, take charge of those goods, and hold them for our benefit, and give the firm of Bienenstok & Trieber receipts, which receipts were to be indorsed by them, handed to the bank, and what money they wanted, borrowed on them. We selected William G. Wolff, and they employed him. He was to be paid by Bienenstok & Trieber. He was subject to the directions of the bank in all matters pertaining to the property, and was to take charge of, watch, and hold, subject to our order, such property as we held his warehouse-receipts for. He was not to surrender it except on surrender of the receipts.”

It was further shown by this witness, that three receipts, dated March 11, March 29, and April 16, 1880, were signed by Wolff and indorsed by Bienenstok & Trieber, and delivered to the bank by Trieber, for advances of $7,500 ($1,500 on the first, and $3,000 on each of the others) made by the bank to Bienenstok & Trieber, which have never been repaid. The loans had been renewed, from time to time, for periods of fifteen days. The last renewal matured on September 23rd.

These receipts were alike in form. The first was as follows: “St. Louis, March 11, 1880. Received of Charles Bienenstok & Trieber, twelve bales of dry hides on storage at Nos. 100 and 102 South Second Street; the same to be delivered only on return of this receipt properly indorsed.” Signed: “W. G. Wolff.” Indorsed: “Chas. Bienenstok & Trieber.”

On the recommendation of the bank, Bienenstok & Trieber engaged Wolff. They paid him $75 a month. He was paid nothing by the bank. He acted as one of the clerks in the general business of Bienenstok & Trieber. There was nothing whatever to indicate that Wolff was in any way in charge for the bank. Bienenstok & Trieber desired that the matter should be kept secret, and this was done. They went on with their business. Their shipping mark was Diamond B; and all goods purchased by them, and all goods coming into the store, were so marked, except a few, now and then received in exchange. The hides included in the receipts in question, were mixed up with the other hides in the store, with nothing to distinguish them. They were treated as the other hides--placed at first on the first floor, then taken to the...