Davis v. Russell

California Supreme Court Jul 1, 1878 No. No. 5410Published

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Holding. The court held that a warehouse receipt indorsed in blank is presumptive evidence of ownership, and that a principal who allows an agent to assume apparent ownership of property is estopped from asserting title against a good-faith pledgee who takes the property for value, including for a pre-existing debt.

Issues

Whether a warehouse receipt indorsed in blank constitutes presumptive evidence of ownership of the underlying goods.
Whether a principal is estopped from asserting title against a good-faith pledgee when the principal allowed an agent to assume apparent ownership of the property.
Whether a pre-existing debt constitutes valuable consideration for a pledge of property under the Civil Code.

Disposition. reversed

Quotations verified verbatim against the opinion

“If an assignment of the receipt will transfer the title to the goods, it must necessarily follow that the possession of the receipt, indorsed in blank, is presumptive evidence of the ownership of the goods by the holder of the receipt.”

“one who has allowed another to assume the apparent ownership of property, for the purpose of making any transfer of it, cannot set up his own title to defeat a pledge of the property made by the other to a pledgee who received the property”

Synopsis

Warehouse Beceipt.—The transfer of a warehouse receipt in good faith, and in the ordinary course of business, operates to transfer to the holder the title to the goods covered by the receipt.

Idem.—There is no difference between a warehouse receipt and a bill of lading in this respect.

Consideration.—A pre-existing debt is a sufficient consideration.

Insteuction.—Where there is evidence tending to establish a fact, the Court should not refuse a proper instruction in reference to that fact.

Idem.—Under the facts of this case, the refusal of the following instruction held to be error: “The possession of the instrument in writing produced in evidence, dated August 18th, 1875, and called a warehouse receipt, covering this wheat in controversy, together with the plaintiffs indorsement thereon, is of itself presumptive evidence of the ownership of the grain, hy the person having such possession of such receipt so indorsed.”

I. The Court erred in point of law in the instruction given at the request of plaintiff, and excepted to by defendants—because, if Davis did not sell the wheat to Barney, still the indorsement and delivery of the warehouse receipt did invest Barney with the title to the property. (Vide secs. 1459, 2991, Civil Code, Cal.; 8 Cal. 609.)

II. The indorsement and delivery of the warehouse receipt vested the title in Barney, and a hypothecation by Barney to an innocent pledgee would protect such pledgee from any action upon the part of Davis. ( Vide Horr v. Barker et al. 8 Cal. 609; Ghirardelli v. McDermott, 22 Cal. 539; Thompson v. To-land, 48 Cal. 99; Gibson v. Stevens, 8 How. U. S. Rep. 399 and 400; Conaud v. Atlantic Ins. Co. 1 Peters, 445; Story on Sales, 5th ed. secs. 310, 311; secs. 1142,1459, and 2991, Civil Code, Cal.)

Terry, McKinne <6 Terry, Budd & Son, and F. T. Baldwin, for Respondent.

I. A factor cannot pledge as security for his individual debt the goods of his principal intrusted to him for sale.

“ A power to sell for the benefit of his principal (says Mr. Chief Justice Field, in Wright v. Solomon, 16 Cal. 72) can in no way be stretched into a power to pledge for his own benefit; nor does it make any difference whether the party taking the pledge Was ignorant as to the extent of the factor’s authority, or that the factor was not the real owner of the property. Whoever deals with an agent, constituted for a special purpose, deals [613]at his peril when the agent passes the precise limits of his power. * *' To pledge the goods of the principal is beyond the limits of the factor’s powers, and every attempt to do it under color of sale is tortious and void. If the pawnee will call for the letter of advice, or make due inquiry, he can discover (say the cases') that the possessor held the goods as factor and not as vendor, and he is bound to know at his peril the extent of the factor’s power.”

A pledge by a factor of the goods of his principal confers no right at common law, not even that of the factor to be reimbursed. (Patterson v. Tash, 2 Strange, 1178; Kinder v. Shaw, 2 Mass. 398; Odiorne v. Maxcy, 13 Mass. 178; Newbold v. Wright, 4 Rawle, 195; Shaw v. Stone, 1 Cush. 228.)

II. .The indorsement and delivery of a warehouse receipt is a mere symbolic delivery of the possession of the property mentioned in it, and although the possession of personal chattels is evidence of ownership, it is still merely evidence, and will not supply the want of title when it does not actually exist. (1 Smith’s Leading Cases, 1197; Dows v. Perrin, 16 N. Y. 335.)

Davis v. Russell

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