Sampsell v. Security-First National Bank

DORAN, J. The instant controversy involves no disputed questions of fact. The appeal is concerned with the effect, if any, of section 1858(b) and (f) of the Civil Code upon certain warehouse receipts, and raises the question whether that code section was repealed by the Uniform Warehouse Receipts Act [Stats. 1909, p. 437; 3 Deering’s Gen. Laws, Act 9059], adopted in 1909.

According to appellant’s brief, the complaint sought recovery from respondents “for the value of building materials warehoused by a bankrupt corporation known as Hamill-Jones Corporation with the respondent, Lawrence Warehouse Company. This respondent, in turn, issued its (non-negotiable) warehouse receipts for such building materials to respondent bank, the pledgee, as security for an indebtedness from the bankrupt to such bank in the sum of $171,851.00 . . . All of these warehouse receipts were identical in form except that they covered different items. ...”

The warehouse company retained possession of the materials until a date between July 1, 1947, and September 10, 1947, after the bankrupt had become involved in the present proceedings, when it delivered possession to the respondent On September 30, 1947, pursuant to stipulation and for the purpose of taking advantage of an advantageous market, the bank sold the building materials for the sum of [650]in this action. The complaint alleged insolvency of the bankrupt and that “both respondents had reasonable cause to believe that the bankrupt was insolvent” at the time the warehouse company delivered the materials to the bank.

Appellant’s complaint was predicated upon the theory that the warehouse receipts were invalid for the reason, as stated in appellant’s brief, “that the warehouse company had failed to have the warehouse receipts show on their faces the rate of storage charges per month or per season, as required by Section 1858(b) "of the Civil Code of California. Section 1858(f) of the Civil Code makes it a felony to violate any of the provisions of Section 1858(b).” A demurrer to the complaint was sustained, appellant chose not to amend, and this appeal followed.

It is appellant’s claim that since the warehouse receipts were void, “the pledge of the warehouse receipts was, likewise void and that the bank acquired no lien on any of the building materials”; that the purpose of the suit “is to prevent such lender (the bank) from enjoying the preferential treatment as a valid lien claimant when its lien was void. ’ ’