Court Opinion

ID: 7809833
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:11:29.810329+00
Date Added: 2024-06-11T16:30:26.399122
License: Public Domain

HAET, J., (after stating the facts). The circuit court was right in directing a verdict for the plaintiff. The undisputed facts show that the plaintiff was the owner of the warehouse receipt for the bale of cotton in controversy and that he either lost it or that it was stolen from him. The party finding the receipt or stealing it could bestow no greater rights upon the transferee than he himself possessed. The defendants, Alexander Eccles & Company, therefore, acquired no greater rights than were transferred to them by the delivery to them of the warehouse receipt. In other words the finder of an indorsed warehouse receipt which on its face shows the name of the true owner, cannot by selling it transfer the title of the true owner. Citizens Bank v. Arkansas Compress & Warehouse Co., 80 Ark.. 601. The correctness of this holding depends upon the construction to be given to our uniform warehouse receipt law passed by the Legislature of 1915. See Acts of 1915, p. 983. Sections 4 and 5 of the act read as follows: ‘ ‘ Section 4. A receipt in which it is stated that the goods received will be delivered to the depositor, or to any other specified person, is a non-negotiable receipt. ‘ ‘ Section 5. A receipt in which it is stated that the goods received will be delivered to the bearer , or to the order of any person named in such receipt is a negotiable receipt. ’ ’ ¡ Our statement of facts shows that the receipt contained all the essential requirements prescribed by the statute and is therefore a valid one. The receipt states that the cotton belongs to the depositor, or at least to a specified person. It is, therefore, under the statute a non-negotiable receipt. It is true it is not marked on its face “non-negotiable” as required by section 7 of the act. That section provides that in case of the warehouseman’s failure so to mark a receipt, a holder of it who purchased it for value supposing it to be negotiable, may, at his option, treat such as imposing upon the warehouseman the same liabilities he would have incurred had the receipt been negotiable. The warehouseman, however, is not a party to this action, and this section, therefore, has no application to the present case. Section 39 of the act reads as follows: “Section 39. A receipt which is not in such form that it can be negotiated by delivery may be transferred by the holder by delivery to a purchaser or donee. “A non-negutiable receipt can not be negotiated, and the endorsement of such a receipt gives the transferee no additional right.” As we have already seen, the warehpuse receipt is non-negotiable, and it is apparent from the latter part of the section just quoted, that even if the receipt had been endorsed to the defendants they would not have acquired any greater rights than the transferer. As stated in Citizens Bank v. Arkansas Compress & Warehouse Co., supra, a thief who finds a compress receipt can give no more title to a purchaser from him than he could to property which he had found or stolen. It is also contended by counsel for the defendants that a long and well established usage of trade at Hope made the receipt negotiable and transferable by delivery and that the delivery thereof to the defendants, who were innocent purchasers for value, carried the title and right to the possession of the bale of cotton. It was proved by the defendants that it had been the custom for many years at Hope for cotton buyers, farmers, and merchants to treat and consider that a cotton ticket or warehouse' receipt would pass title to the cotton and the right to the possession of it by the delivery of the receipt from one person to another. Such a custom, however, could have no effect to set aside the statute, where the latter is designed to prohibit such a mode of transfer. As we have just seen, the receipt was a non-negotiable one, and under the terms of the statute, the transferee acquired no greater rights than the transferer. The defendants can not set up a custom whieh would be in violation of the express terms of the statute and in that way abrogate the statute. Citizens Bank v. Ark. Compress & Warehouse Co., supra. In a case note to 17 Ann. Cas. at 672, it is said that it is generally held that a statute making warehouse receipts negotiable by endorsement does not prohibit their •transfer by delivery, and that title to the property represented thereby will pass if the delivery is made with that intent. It is further stated that a. transfer without endorsement will merely transfer the title of the transferer and will not afford the transferee the greater rights which are granted under the statute-; and several cases are cited in support of the statement. It follows that the trial court was right in directing a verdict for the plaintiff, and the judgment will be affirmed.