Case ID: wash_18/html/0246-01.html
Source: Caselaw Access Project
Author: {"author": "Soott, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[No. 2592.
    Decided December 11, 1897.]
    S. S. Yarwood et al., Respondents, v. Cyrus Happy, Appellant.
    
    WAREHOUSE RECEIPT—NEGOTIABILITY — RIGHTS OP TRANSFEREE — REPEAI. OF STATUTE.
    A statute making warehouse receipts negotiable by indorsement cannot be construed as. making an. indorsement of a warehouse receipt effective otherwise than as a transfer of the interest of the holder in and to the property represented by the receipt.
    Gen. Stat., §2408 (Bal. Code, §3599), passed by the legislature in 1886, and providing that “all the title to the freight which the first holder of a bill of lading or warehouse receipt had, when he received it, passes to every subsequent indorsee thereof in good faith, . . . with like effect and in like manner as in the case
    of a bill of exchange,” must be construed as modified or repealed by the enactment in 1891 of section 2407, Gen. Stat. (Bal. Code, §3598), which provides that “all checks or receipts given by any person, operating any warehouse . . . for any grain . . . are hereby declared negotiable, and may be transferred by indorsement, . . . and such indorsement shall be deemed a valid transfer of the commodity represented by such receipt.”
    Appeal from Superior Court, Spokane County.—Hon. "William E. Righardsor, Judge.
    Affirmed.
    
      
      Cyrus Happy, for appellant:
    In the state of "Washington warehouse receipts are negotiable instruments in such degree that the London and San Francisco Bank acquired title to the same free from the claims and equities set up by the plaintiffs in this case to the same, and that the said London and San Francisco Bank having acquired such title can hold said warehouse receipt and the grain represented by it, not only to the extent of the money advanced at the time said receipt was hypothecated with it, but also as to a pre-existing indebtedness, which it was likewise pledged to secure. Whitlock v. Hay, 58 N. Y. 487; Chicago Dock Co. v. Foster, 48 Ill. 507; Bishop v. Fulkerth, 68 Cal. 607; Price v. Wisconsin Marine Fire Ins. Co., 43 Wis. 267; First National Bank v. Dean, 32 N. E. 1108; Allen v. Maury, 66 Ala. 11; Fourth National Bank v. St. Louis Cotton Compress Co., 11 Mo. App. 333; Central Savings Bank v. Garrison, 2 Mo. App. 58; Davenport National Bank v. Homeyer, 45 Mo. 145 (100 Am. Dec. 363); Farmers’ & Mechanics’ National Bank v. Hazeltine, 78 N. Y. 107 (34 Am. Rep. 518).
    
      Mount & Merritt, for respondents:
    A warehouse receipt simply represents the commodity therein described, and its indorsement has the effect only of transferring the title to such commodity, and that such a transfer would stand in exactly the same light as if the property itself were pledged as the warehouse receipt in this case is shown to have been pledged, and that there was no such negotiable character to the instrument as to cut off defenses of the original holder of such warehouse receipt. Shaw v. Railroad Co., 101 U. S. 557; Hale v. Dock Co., 29 Wis. 482 (9 Am. Rep. 603); Solomon v. Bushnell, 3 Pac. 677 (50 Am. Rep. 475); Burton v. Curyea, 40 Ill. 327 (89 Am. Dec. 350); Insurance Co. v. Kiger, 103 U. S. 356; Second National Bank v. Walbridge, 19 Ohio St. 419 (2 Am. Rep. 408); Burton v. Wilkinson, 18 Vt. 186 (46 Am. Dec. 145); Luckbarrow v. Mason, 1 Smith, Leading Cases, 755; Dows v. Perrin, 16 N. Y. 333. A factor cannot pledge as security for his own debt the goods of his principal except to the extent of his own interest. Wright v. Solomon, 19 Cal. 72 (79 Am. Dec. 196); Payne v. Bensley, 8 Cal. 260 (68 Am. Dec. 318); First National Bank v. Boyce, 39 Am. Rep. 198.
   The opinion of the court was delivered by

Soott, C. J.

Plaintiffs were the owners of 3,122 sacks of wheat and stored the same in the warehouse of C. D. Prancis & Co., receiving .a warehouse receipt therefor, and thereafter assigned the same to the Northwestern Milling & Power Co. as collateral security for the payment of a note executed by them to said company. Afterwards said Mining & Power Co., without the knowledge of the plaintiffs, assigned said warehouse receipt to the London and San Prancisco Bank of Portland, Oregon, to secure a loan then obtained and other indebtedness owing by said company to said bank. By-subsequent transfers said warehouse receipt was assigned to the defendant. The plaintiffs paid their note given to the Northwestern Milling & Power Co., and demanded the return of the receipt, and, not obtaining it, this action was brought to recover the same, or its value. The plaintiffs were successful, and the defendant has appealed. The question to be determined is whether the Northwestern Milling & Power Oo. could transfer the receipt to the bank aforesaid and convey the title to the grain represented by it, and the decision of this question calls for a consideration of sections 2407 and 2408, volume 1, of the Code (Bal. Oode, §§ 3598, 3599). The respondents contend that they cannot both stand and, as the act containing section 2407 was passed after the enactment of section 2408, it had the effect of repealing that section. The appellant first contends that both sections are' in force, but further urges that the transfer in question was a valid one, even under section 2407. But it will be observed that section 2408, in addition to providing for a transfer of warehouse receipts by indorsement, declares that it should he with like effect and in like manner as in the ease of a bill of exchange, while section 2407 provides that such a receipt shall be negotiable by indorsement, which shall he deemed a valid transfer of the commodity represented by the receipt, but contains no declaration as to the effect of it otherwise. We are of the opinion that section 2407 provided that such a transfer of the receipt should be effective only to pass or transfer the interest of the holder in and to the property represented by the receipt, and that under that section the Northwestern Milling & Power Co. having only a lien thereon could not mtke a valid transfer of the property to another party, as was attempted. The use of the word “ negotiable ” in the statute does not necessarily imply or give power to make such a transfer. Por a more full discussion thereof and of a similar statute, see Shaw v. Railroad Co., 101 U. S. 557. Evidently, considering the prior law, it was not intended to have that effect, for everything it provided for could be done under such prior law then in force, and, unless it was intended as a limitation of the law as expressed in section 2408 or as a repeal thereof, it had no effect at all, and we fail to see any purpose whatever in passing.it. Consequently it must he given the effect intended, and it follows that the judgment should be affirmed.

Gordon, Dunbar and Beavis, JJ., concur.