Court Opinion

ID: 3517679
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:29:05.955827+00
Date Added: 2024-06-11T14:19:17.391085
License: Public Domain

It is difficult for me to reconcile what is said in the majority opinion with what was said in Weil Bros., Inc., v. Keenan, 180 Miss. 697, 178 So. 90, 94. That case held:
"A prime purpose of the Uniform Warehouse Receipts Act is to make the standard receipt issued by warehousemen for chattels documents of title so that people who honestly purchase these documents for value will be protected by the terms of the act as purchasers in good faith."
As I see it, the rights and duties of all of the parties here are settled by the terms of the Uniform Warehouse Receipts Act, Title 19, Chapter 16, Code 1942. Section 5048, Code 1942, provides that negotiable warehouse receipts, payable to bearer, may be negotiated by delivery. The receipts here involved were issued to Lane, or bearer.
Section 5051, Code 1942, provides that: "A negotiable receipt may be negotiated: (a) By the owner thereof, or, (b) By any person to whom the possession or custody of the receipt has been entrusted by the owner, if, by the terms of the receipt, the warehouseman undertakes to deliver the goods to the order of the person to whom the possession or custody of the receipt has been entrusted, or if at the time of such entrusting the receipt is in such form that it may be negotiated by delivery." *Page 244 
Section 5052, Code 1942, provides that a person to whom a negotiable receipt has been duly negotiated acquires such title to the goods as the person negotiating the receipt to him had or had ability to convey to a purchaser in good faith for value, etc.
Section 5058, Code 1942, provides:
"The validity of the negotiation of a receipt is not impaired by the fact that such negotiation was a breach of duty on the part of the person making the negotiation, or by the fact that the owner of the receipt was induced by fraud, mistake, or duress to entrust the possession or custody of the receipt to such person, if the person to whom the receipt was negotiated, paid or a person to whom the receipt was subsequently negotiated, paid value therefor, without notice of the breach of duty, or fraud, or mistake or duress."
Section 5069, Code 1942, has, among other definitions, the following: "A thing is done in `good faith' within the meaning of this article when it is in fact done honestly, whether it be done negligently or not."
Section 5068, Code 1942, provides: "This article shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states which enact it."
To my mind, the facts in this case are uncontrovertible that Box, the landlord, confided in and trusted his tenant, Lane. From the beginning of the harvesting season and continuously thereafter he was looking to Lane for the payment of the rent, either out of the sale of the crops or otherwise. He never instructed Lane, the tenant, to store the cotton crop in the Warehouse and take negotiable receipts in the name of the landlord. The only fair inference that can be placed on the testimony in this case is that Box expected Lane to pay the rent and he did not care if Lane sold the crops in his own name, and out of the proceeds paid the rent. He didn't care in whose name Lane warehoused the cotton or in whose name the negotiable receipts were issued. Box, the landlord, *Page 245 
was silent on this in all of his dealings with his tenant, Lane. It is inescapable from the proof here that Box, the landlord, did nothing to procure the issuance of warehouse receipts in the name of the landlord and he never even suggested such a method to his tenant. Box never demanded of Lane that he deliver him the cotton or the warehouse receipts therefor. It is inescapable from the evidence here that Box entrusted Lane to have the negotiable warehouse receipts issued in the name of the tenant Lane or in any name he desired. When the landlord entrusted Lane to receive negotiable warehouse receipts in the name of Lane, he thereby clothed Lane with the indicia of ownership. As was said by the Supreme Court of the United States in Commercial National Bank of New Orleans v. Canal-Louisiana Bank  Trust Co., 239 U.S. 520, 36 S. Ct. 194, 195, 60 L. Ed. 417, Ann. Cas. 1917E, 25:
"But if the owner of the goods has permitted another to be clothed with the apparent ownership through the possession of warehouse receipts, negotiable in form, there is abundant ground for protecting a bona fide purchaser for value to whom the receipts have been negotiated. . . . Aside from this, the intention is plain to facilitate the use of warehouse receipts as documents of title. . . . The warehouse receipt represents the goods, but the intrusting of the receipt, as stated, is more than the mere delivery of the goods; it is a representation that the one to whom the possession of the receipt has been so intrusted has the title to the goods. . . . The clear import of these goods provisions is that if the owner of the goods permits another to have the possession or custody of negotiable warehouse receipts running to the order of the latter, or to bearer, it is a representation of title upon which bona fide purchasers for value are entitled to rely, despite breaches of trust or violations of agreement on the part of the apparent owner." *Page 246 
In Consolidated Gin Co. v. Graybill, Tex. Civ. App.,46 S.W.2d 471, J.A. Minter, Landlord, and E.L. Ellison, tenant, ginned three bales of cotton and stored it in warehouse and three negotiable warehouse receipts were issued, one for each bale, to the tenant, Ellison, and in his name. Ellison sold the cotton to Graybill and delivered to him the negotiable warehouse receipts. Minter owned a one-fourth interest in the cotton for rent but the warehouse receipts contained no notation showing any interest in Minter. The lower court held Graybill to be an innocent purchaser for value in good faith and that he acquired title against the landlord, who had permitted receipts to be issued to the tenant. This action was affirmed on appeal.
In Mason et al. v. Exporters  Traders Compress Co. et al., Tex. Civ. App., 94 S.W.2d 758, 761, the court had under consideration the provisions of this same Uniform Warehouse Receipts Act, that we are here considering) Adopted by Texas Legislature in 1919) and there the court said:
"Therefore, the Legislature has by statute made possible the use of negotiable warehouse receipts as documents of title, and where the owner of the goods has permitted another to have the possession or custody of warehouse receipts negotiable by delivery, a purchaser in good faith for value can rely on the title of the apparent owner, or the person who is clothed with indicia of title, notwithstanding the apparent owner may have breached his duty in negotiating the receipt. Commercial National Bank of New Orleans v. Canal-Louisiana Bank  Trust Co.,239 U.S. 520, 36 S. Ct. 194, 60 L. Ed. 417 [Ann. Cas. 1917E, 25]."
Let us also note, in passing, that Commercial National Bank of New Orleans v. Canal-Louisiana Bank  Trust Co., supra, was cited with approval by this Court in Weil Bros., Inc, v. Keenan,180 Miss. 697, 178 So. 90, where this Court held that an owner of cotton who entrusts the negotiable warehouse receipts therefor to another, such *Page 247 
owner thereby vests the holder of such receipts with every indicia of ownership and on holder's sale of receipts to a cotton buyer, who purchases receipts in good faith for value without notice, such purchaser becomes rightful owner of receipts and of cotton.
In Marine Bank  Trust Co. v. Greenville Savings Bank  Trust Co., 1923, 133 Miss. 91, 97 So. 526, this Court declined to apply the rule later applied in Weil Bros., Inc., v. Keenan, supra, which is set out in the paragraph next hereinabove, for the reason that the agreed statement of facts therein showed the mortgagor had made repeated demands on the producer for the delivery of the cotton and receipts.
In the case before us, had the landlord, Box, made repeated demands on Lane for the delivery of the cotton and receipts, he would have preserved his landlord's lien under the rule announced in Marine Bank  Trust Co. v. Greenville Savings Bank, supra, but there is not one scintilla of proof in this record that Box ever demanded of Lane the delivery of the cotton and warehouse receipts and by not demanding the warehouse receipts Box entrusted the negotiable warehouse receipts to his tenant, Lane, and under the holding of this Court in Weil Bros., Inc., v. Keenan, supra, and the cases hereinabove cited, Box thereby vested Lane, as the holder of such receipts, with every indicia of ownership and when Lane sold and negotiated the receipts to Phillips, the cotton buyer, who purchased in good faith and for value without notice, Phillips, as such purchaser, became the rightful owner of the receipts and of the cotton as against the landlord Box, who had so clothed his tenant, Lane, with indicia of ownership and by so doing had made possible the sale by Lane to an innocent purchaser for value.
In my judgment, the judgment of the lower court should be reversed and judgment entered here for Phillips. *Page 248