Court Opinion

ID: 8769126
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:36:59.03596+00
Date Added: 2024-06-11T17:02:05.634859
License: Public Domain

HOUGH, District Judge
(after stating the facts as above). The course of business above outlined is well known, and, were it not for the unusual circumstance of the draft and accompanying bills of lading falling into different hands, no formal opinion would seem necessary.
Tbe petition clearly asserts the supposed legal basis of petitioner’s demand, viz., that Rodriguez either discounted his draft with Glyn, or that Glyn purchased the same from Rodriguez. I perceive no legal difference in these two statements of petitioner’s position. To me the foregoing statement of the business arrangements made, the contracts entered into, and the cotemporaneous interpretation thereof by the parties, constitute a sufficient answer to the proposition. Rodriguez did not discount the draft with Glyn; he merely deposited it for transmission to Kessler, and obtained1 upon such deposit the entire amount of the draft, without diminution, discount, interest, or commission; and this was the result of an arrangement or contract between Glyn and Kessler, to which Rodriguez was not a party at all, and in which Sgobel was but indirectly interested. Nor did Glyn purchase Rodriguez’s draft; he merely advanced the money, not on the draft but on the letter of credit. He did nothing more than Kessler himself would have done had he personally had an office in Rondon, and what-. *510ever Glyn did was solely for Kessler’s account, and the immediate legal effect of his act was to make Kessler, and no one else, his debtor.
The acts of parties in interest, when they anticipate no trouble, is one of the best criteria for interpreting the contracts they make. To Glyn (when he paid out his money) it was a matter of‘ indifference whether the grapes mentioned in the bill of lading spoiled or whether they were worth the advance, or whether Sgobel was or was not good for the amount of the draft — these matters were for Kessler alone; it was he who chose to extend credit on the combined security of tfye marketability of the grapes and the solvency of Sgobel, no one else. If, as I think apparent, Glyn neither discounted nor purchased the draft, he did not own it when it was delivered to him, and there is nothing in the mere fact of Kessler’s subsequent failure to confer an owner’s title upon him. In this view it would have made no difference had Glyn retained in his possession both the draft and the bills of lading until after Kessler assigned; Glyn would still have owned none of these documents. Whether, in view of Kessler’s indebtedness to him, Glyn might, by appropriate legal proceedings, have recouped himself out of Kessler’s property in his hands, upon some theory of lien, need not be discussed; it is enough for this litigation that he did not own either the draft or the bill of lading, and the doctrine of Muller v. Pondir, 55 N. Y. 327, 14 Am. Rep. 259, does not apply.
This litigation, however, may, I think, properly be decided upon another and narrower ground. When Glyn paid Rodriguez certain money for Kessler’s account and charged up the amount so paid to Kessler, he took the bills of lading for the express purpose of forwarding the -same to Kessler in order that the latter might have the legal title thereto as collateral security for what Sgobel owed him, which was the same sum (in part) that Kessler owed to Glyn. This contractual arrangement was actually carried out, and the moment the bills of lading were deposited in the mail, duly directed to Kessler, the delivery to the latter was complete and Kessler’s title perfect, and whatever enforceable rights Glyn might have had while in possession of the bills of lading and after Kessler’s assignment were wholly extinguished by such delivery. The promised subsequent forwarding of the draft was something that Rodriguez might have áttended to himself, and, so far as Glyn was concerned, it was by his own statement a purely formal act. The bargain was complete, the contract was executed, when the bills of lading were received, paid for, and forwarded to Kessler. It is of course generally true that as between a draft secured by collateral and the collateral itself the former is the principal obligation, but there is nothing unlawful in the reversal of this situation by contract, and that was the case here.
The master’s report in. favor of the trustee in bankruptcy is confirmed, and final order directed in accordance therewith, including the recommendations as to costs and disbursements.