Case Name: F. T. Peitch Co. v. Hattiesburg Trust & Banking Co.
Court: Cuyahoga Circuit Court
Jurisdiction: Ohio
Decision Date: 1912-06-17
Citations: 31 Ohio C.C. Dec. 292
Docket Number: 
Parties: F. T. Peitch Co. v. Hattiesburg Trust & Banking Co.
Judges: Marvin, Niman and Metcalfe, JJ.
Reporter: Ohio Circuit Court Decisions
Volume: 31
Pages: 292–296

Head Matter:
COUNTER CLAIM AND SET-OFF.
[Cuyahoga (8th) Circuit Court,
June 17, 1912.]
Marvin, Niman and Metcalfe, JJ.
(Judge Metcalfe of Seventh Circuit Sitting in Place of Judge Winch.)
F. T. Peitch Co. v. Hattiesburg Trust & Banking Co.
Set-Off Disallowed where Claimed Against Assignee of Invoice and Bill of Lading.
When an invoice and bill of lading made out in the name of the consignee for goods sold the consignee are assigned by the consignor to a bank for an advance of 80 per cent, of the face value of the invoice, in an action thereon by the bank against the consignee, the latter can not off-set a claim against the consignor of which the bank had no notice, the course of dealing between the parties showing that the consignor reserved the right to ' control the goods shipped.
Error.
Hauxhurst & Sanger, for plaintiff in error.
Patiison é Austm, for defendant in error.

Opinion:
NIMAN, J.
The plaintiff in error was defendant, and the defendant in error was plaintiff in the court of common pleas. A jury was waived in the court below and the cause tried to the court. Judgment was rendered against the defendants there:
This proceeding in error is prosecuted to secure a reversal of said judgment.
On June 14, 1909, the F. T. Peitch Co. placed with the Forest Lumber Co. au order for lumber which was duly accepted and the lumber ordered was delivered to the carrier at Columbia, Miss., on July 15, 1909, by the Forest Lumber Co., through the agency of the Marion Lumber Co., which acted for the Forest Lumber Co. The lumber was consigned to the F. T. Peitch Co., at Cleveland, Ohio. . After the lumber was delivered to the carrier, the Forest Lumber Co.' assigned the invoice therefor and the bill of lading to the Hattiesburg Trust & Banking Co. and then received therefor a sum of money equal to eighty per cent. (80%) of the face value of said invoice.
On July 19, 1909, the Hattiesburg Trust & Banking Co. mailed the invoice, with an assignment written thereon by the Forest Lumber Co., together with the bill of lading to the F. T. Peitch Co., requesting a remittance therefor. The invoice and bill of lading were received by the F. T. Peitch Co. before the lumber reached said company. The F. T. Peitch Co. refused to remit for the amount of said invoice to the Hattiesburg Trust & Banking Co. for the reason that it claimed to have a set off against the Forest Lumber Co. on account of the failure of said company to deliver a certain shipment of lumber under a former order accepted by it, whereby the F. T. Peitch Co. was compelled to go into the open market and purchase lumber at a figure claimed to be $239.27 in excess of that which the Forest Lumber Co. had agreed to furnish the lumber.
After the refusal of the F. T. Peitch Co. to pay the invoice, the Hattiesburg Trust & Banking Co. brought suit against it to recover thereon, and said the F. T. Peitch Co. thereupon, in its amended answer, set up the damage it claimed to have suffered on account of the failure of the Forest Lumber Co. to fill the said former order and prayed that the amount of said damage be set off against the plaintiff's demand. This set-off was refused by the trial court and judgment rendered in. favor of the plaintiff for the amount representing the advance made by it on the assignment of said invoice and bill of lading together with interest thereon.
At the time the banking company took an assignment of said invoice and bill of lading and advanced eighty per cent, of the face value of the invoice, it had no knowledge of any set-off in favor of the F. T. Peitch Co. against the Forest Lumber Co.
We are therefore called upon to decide what rights the Hattiesburg Trust & Banking Co. acquired in the assignment of the invoice and the transfer of the bill of lading to it and the advancement thereon of eighty per cent, of the amount called for in the invoice, without notice on its part of any set-off in favor of the consignee of the lumber against the Forest Lumber- Co.
It is claimed on behalf of plaintiff in error that the title to the lumber passed to it upon its delivery to the carrier by the Marion Lumber Co., and that the -Hattiesburg Trust & Banking Co. became a mere assignee of an account which is subject to the equity which the plaintiff in error had against the Forest Lumber Co. on account of the set-off mentioned.
It is contended by the defendant in error that the bill of lading was the symbol of the property described in it and by the transfer of such bill of lading to the banking company, it in effect acquired a special ownership of the property as security for the advancement made by it.
We consider the case of Emery's Sons v. Irving Nat. Bank, 25 Ohio St. 360 [18 Am. Rep. 299], decisive of the question under consideration. In that case it was held :
"1. By the rules of commercial law, a bill of lading is regarded as the symbol of the property therein described; and in case the shipper reserves to himself the jus disponendi, he can transfer the title, at any time before the property is delivered by the carrier to the consignee, ás effectually by the delivery of the bill of lading as by the delivery of the property itself.
"2. If the consignment be made by a vendor to a vendee, the question whether the consignor reserved the jus disponendi is one of intention, to be gathered from all the facts and circumstances of the transaction.
"3. If the right to control the property be reserved by the shipper, the carrier must be regarded as his agent; if not, then as the agent of the consignee.
"4. On such question of intention, the terms of the bill of lading are to be taken as admissions of the consignor, and are entitled to great weight, but are not conclusive.
"5. Nor is the fact, that the consignee had contracted with the carrier for special rates of freight, conclusive that the goods were delivered by the consignor to such carrier as the agent of the consignee.
"6. Where the vendor of goods consigns them to the purchaser, taking a bill of lading from the carrier, and intending to reserve the right of control over them, at the same time draws upon the purchaser for the price, and delivers the bill of exchange, with the bill of lading -attached, to an indorsee, for a valuable consideration, the consignee upon receipt of the goods, takes them subject to the right of the holder of the bill of lading to demand payment of the bill of exchange, and can not retain the price of the goods on account of a debt due to him from the consignor."
In the opinion, on page 366; it is said:
"By the rules of commercial law, bills of lading are regarded as symbols of the property therein described, and the delivery of such bill by one having an interest in or a right to control the property, is equivalent to a delivery of the property itself. A consignor who has reserved the jus disponendi may effectuate a sale or pledge of the property consigned, by delivery of the bill of sale to the purchaser or pledgee, as completely as if the property were, in fact, delivered. If such a transfer of the bill of lading be made after the property has passed into the actual possession of the consignee, the transferee of the bill takes it subject to any right or lien which the consignee may have acquired by reason of his possession. But if the bill of lading be transferred by way, of sale or pledge to a third person, before the property comes into the possession of the consignee, the consignee takes the property subject to any right which the transferee of the bill may have acquired by the symbolic delivery of the property to him. ' '
We think the course of dealing between the parties here in previous transactions show that the right to control the lumber shipped was reserved by the Forest Lumber Co. even though the bill of lading was made out in the name of the F. T. Peitch Co.
On two previous occasions the Forest Lumber Co. had shipped lumber to the F. T. Peitch Co. and had assigned the invoice and bill of lading therefor to the Hattiesburg Trust & Banking Co. These invoices and bills of lading were mailed by the Hattiesburg Trust & Banking Co. to the F. T. Peitch Co. for collection and remittances were made.
Those transactions were sufficient to justify the trial court in reaching the conclusion that the right of control over the lum ber shipped was reserved to the Forest Lumber Co. The transfer of the bill of lading, together with the assignment of the invoice, was made to the banking, company before the lumber shipped had passed into the actual possession of the consignee and the consignee had notice of this fact before it received the lumber.
We think the necessary conclusion from these facts, applying the principles laid down in the case referred to, is that the F. T. Peitch Co. took the lumber when it arrived subject to the right which the Hattiesburg Trust & Banking Co. acquired by the symbolic delivery made through the transfer of the bill of lading.
The trial court, therefore, committed no error in refusing to allow the defendant's set-off, and the judgment is affirmed.
Marvin and Metcalfe, JJ., concur.'