St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1893-08-23
FARMERS HAVE @
THEIR WHEAT IN TIE ELEVATORS BE-
LONGS TO THEM ALONE,
CANNOT BE HYPOTHECATED.

Judge Williams Decides That the
Northern Pacific Elevator Com
pany Had No Right to Mort
gage Wheat in Store-Farmers
Should Be Treated as Pre-
ferred Creditors.
Judge Williams, of the United States
circuit court, has decided a cause of
great interest, especially to farmers
who had wheat stored in elevators that
went into the hands of a receiver. The
case decided is that of the application
of the receiver of the Northern Pacific
Elevator company. Mr.. Forbes. the re
ceiver, took the position that the wheat
placed in the elevators by the farmers
and for which receipts for so much wheat
had been issued should be returned to
the farmers-or rather that they should
be entitled to Withdraw the wheat or
its value without being compelled to
regard the elevator company as a COM
mon creditor, and they to share with
general creditors in the disburse-
ment of the proceeds. The general
creditors objected to the course
proposed by the elevators, and the
matter vas taken before Judge Will
Jams in June, when he first came here
to hold court. A number of attorneys
appeared in the case, and after a gen.
erai consultation the point was submit
ted for decision oil the claim made by
certain creditors who claimed that they
held warehouse receipts covering all
the wheat in the elevators as collateral
to C loans made to the elevator
company.
Judge Williams filed a decision yes
terday, the main point of which is that
the receiver of the elevator company
shall deliver the wheat 10 the farmers,
who stored it IN the elevators. or rather
that the farmers are to be considered as
preferred creditors aud are to receive
their pay before the general creditors
shall receive anything out of the pro-
ceeds. In his decision Judge Williams
says that the elevator company stands
in the relation of bailee to the farmers
who stored their wheat, and that tue
elevator company is bound to surrender
the grain upon the surrender of the re-
NNiPt IA W LIZ ndI ClOuSc IcCGlDlS
Issued to the persons who loaned the
money, it is decided that these were
merely given as security. and they are
chattel mortgages in effect. In cas- these
warehouse receipts were issued to the
lenders of the money before the wheat
was actually iii the elevator, such ac-
ton would constitute a fraud, and if
the wheat was on hand at the time the
receipts were issued, and it had been
subsequently disposed of, then the ele-
vator had Incorporated the wheat of
the farmers. The elevator CON-
pany claims that it had the
wheat on hand at the time the
warehouse receipts were issued, and
that the shortage arose by the settle
ment of the May corner in Chicago. The
decision releases over 800, 900 bushels of
wheat belonging to farmers and others
who actually owned wheat. The COM
pany had issued warehouse receipts
on 1,750,000 bushels of wheat, and
borrowed about 81, loo, 900 thereon. The
shortage is about 590.0 900 bushels of
wheat. This condition of affairs stirred
up the farmer owners of wheat and
there have been statements made that
are not complimentary TO the elevator
management, these comments have
even taken the form of statements as to
what might be done in case the matter
was not Strengthened out. Over seventy
creditors live in the Eastern states, and
some of the banks in New England
states loaned money to the elevator
company.