Delaware, Lackawanna & Western R. R. Co. v. Corwith — 37 N.Y. St. Rep. 728

Majority

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The Delaware, Lackawanna & Western R. R. Co., App’lt, v. Nathan Corwith, Jr., et al., Resp’ts.

(Supreme Court, General Term, First Department,

Filed April 17, 1891.)

Headnote

Warehousemen—Receipts issued to a person not the real owner.

The plaintiff, a common carrier, issued arrival notices for certain merchandise upon which the consignees endorsed, “ Deliver to S. & Sons for our account, N. Corwith & Co., per G. Corwith,” and delivered the same to S. & Sons. The latter, without having the merchandise in their possession, issued warehouse receipts for the property to G. Corwith, in his own name, who sold said property and delivered said receipts to Russell & Co. S. & Sons subsequently purchased and received the receipts from Russell & Co. In the meantime N. Corwith & Co. sold the merchandise to other parties. In an action brought to determine the conflicting claims, Held, that as no authority by the consignees to S. & Sons to issue the receipts to G. Corwith individually was shown, said receipts were void, and that as S. & Sons thereafter purchased said receipts for value, knowing that they were invalid, they could not hold the property as against the purchasers from N. Corwith & Co.

Appeal from judgment entered upon decision after trial by the court without jury.

C. F. Birdseye, for app’lt; E. S. Cowles, for resp’ts.

The only question presented to the court upon the trial of this action and which is involved in this appeal, was as to the ownership of five carloads of lead delivered by the plaintiff to the defeddants F. H. Stetler & Sons.

It appears that at the times hereinafter mentioned the then defendants, Nathan Corwith and Nathan Corwith, Jr., were copartners, doing business as N. Corwith & Co., and the defendants F. H. Stetler and H. I. Stetler were copartners, doing business as warehousemen in the city of New York.

In October, 1888, the plaintiff received at Hoboken the five car loads of lead in question, consigned to N. Corwith & Co. and, in the usual course of business, the plaintiff issued arrival notices as they are called for this lead, and on the face of the notice was printed a direction to return this notice with order for delivery endorsed on the back.

The next day the usual messenger from Corwith & Co. presented these receipts to the warehouse of Stetler & Sons, each of which contained the following endorsement:

“ Deliver the within to F. H. Stetler & Sons for our account. N. Corwith & Co., per G. Corwith.” G. Corwith meaning Gurden Corwith.

On the same day Stetler & Co., without actually receiving the lead upon the premises or having the same under their control, issued and delivered to said Gurden Corwith five warehouse receipts in his own name. Two days afterwards and while the lead itself was still in the actual possession and control of the plaintiff Gurden Corwith sold the lead in question to John Russell & Co., and delivered to them the warehouse receipts duly endorsed, in

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blank, receiving from Bussell & Oo. a check drawn to his own order which appears to have been deposited to his own credik Ñ. Oorwith & Oo. subsequently transferred their interest in the lead to other parties.

Anri Stetler & Oo. purchased from Bussell & Co. the warehouse receipts above mentioned, they being endorsed over to them.

The question presented is whether the defendants Stetler & Sons acquired any title to the lead or whether the title to such lead was vested in the assignees of IST. Oorwith & Co.

The answer to this question depends entirely upon whether or not Grurden Oorwith had authority to sell the lead to Bussell & Go.

The learned court in its opinion in the disposition of the case says : “ There is no allegation to show that Grurden Oorwith was not authorized to'take the receipt in his own name (referring to the warehouse receipts,) or that it was sold to Bussell & Co. without the authority of N. Oorwith & Go. On the contrary it expressly appears that Bussell & Co. purchased this lead from Oorwith & Oo. and the money paid therefor was paid to Oorwith & Co., and received by them for their own benefit.”

We have searched the record in vain to find any proof that Oorwith & Oo. either authorized the sale of this lead or received any part of the proceeds arising therefrom.

It is true that the evidence shows that in a large number of transactions Grurden Oorwith had been accustomed to endorse these delivery notices in the name of Oorwith & Co. But there is no evidence whatever that upon any other occasion Stetler & Co. upon a delivery notice so endorsed had ever issued a warehouse receipt for the property therein mentioned to Grurden Oorwith. All that the endorsement of these delivery notices imported was. that the transportation company should deliver to Stetler & Co. for the account of Oorwith & Oo. the goods mentioned therein.

Some argument is used by the respondent to show that the words “ For our account ” mean nothing upon the endorsement of the notice because they are in prink We are not aware that any portion of an instrument is to be disregarded merely because it is printed.

Stetler & Sons knew that this lead been consigned to Oorwith & Co.; they knew that the transportation company had been directed to deliver it to them for the account of Oorwith & Co., and they in violation of their duty, not having possession of the lead, issued a warehouse receipt therefor, and in addition issued a warehouse receipt to somebody other than the consignees when they had no evidence whatever that the consignees bad transferred their title to anybody else. If they had issued warehouse receipts, as they were in duty bound to do, to those whom they knew to be the owners of the merchandise this difficulty never would have occurred.

But receiving an order from Oorwith & Co. to get for them from the railroad company certain goods, they issued warehouse re-therefor to a third who was in a to

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the transaction so far as the legal rights of the parties are concerned; and thus placed it in the power of Gurden Corwith to perpetrate the fraud he did by the sale of the lead.

But it is said that Gurden Corwith was the agent of Corwith & Co., and had the right to dispose of the lead. As already stated, the case does not furnish a scintilla of evidence showing that he had ever sold for Corwith & Co. a pound of lead prior to this transaction. It did appear that he had signed other delivery notices for merchandise to be delivered to the warehousemen for the account of his principal, which is done every day by the clerk of a mercantile house, who it is not supposed for a moment has a right to sell the property of the house because he has the-right to receive it and direct its storage. And this is the strongest evidence showing the authority which Gurden Corwith had in respect to the affairs of Corwith & Co.

We are also referred to the evidence of a witness who testified that he was a clerk in the employ of E. A. Caswell; that he knew the signature of Corwith & Co., and that the signature of Corwith & Co. upon the back of the delivery notice was their signature by Gurden Corwith.

He is then asked the question, “What do you know about his authority to sign?’’ He answers: “Well I on several occasions have gone down to the office on important matters and they referred me to Mr. Gurden Corwith.

“ Q. To him? A. Yes, sir, told me he had the power to act for them.

“ Q. Mr. Hathan Corwith did? A. Yes, sir.”

To act in what capacity the witness does not say; what the important matters were, or what their nature was, he fails to disclose ; and that Gurden Corwith from this evidence is to be assumed to have the right to sell the property of Corwith & Co. would be straining his authority considerably beyond that which the evidence would justify.

Another witness, Mr. Casey, was asked if he knew whether Gurden Corwith was then acting as their agent or not; and he said he did; and his authority for this statement was the fact that the firm for which he was a clerk sold to Corwith &• Co., through Gurden Corwith, certain merchandise which was paid for by the check of Corwith & Co., a transaction very far from establishing the authority of Gurden Corwith to sell the property of Corwith & Co.

This is substantially all the evidence tending to show that Gurden Corwith had any authority whatever in connection with the affairs of H. Corwith & Co. It seems to us to be clear that there is an utter failure of proof to show that Gurden Corwith had the right to dispose of any portion of the property of Corwith & Co. And even if he had, the warehousemen in this case would be liable for the goods, because, knowing that Corwith & Co. were the ownners, they issued a warehouse receipt in the name of Gurden Corwith.

If the warehousemen had issued the receipt in the name of the real owners of these goods, this fraud never could have been per

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petrated, as Russell & Co. would naturally have drawn their check to the order of the owners, and then the money would have gone to the credit of Corwith & Co., and there is no evidence that Cur-den Corwith had any authority to endorse checks payable to the order of Corwith & Co. or to draw checks upon their bank account.

It is clear that Gurden Corwith, having no authority to sell this lead, could confer no title upon Russell & Co., and Russell & Co. could confer no title upon Stetler & Sons; and that the subsequent transferees of Corwith & Co. of. that lead were the owners thereof and entitled to its possession.

The judgment should be reversed and a new trial ordered, with costs to the appellant to abide event

Daniels, J., concurs.