Court Opinion

ID: 6989453
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:22:19.240887+00
Date Added: 2024-06-11T16:09:34.175358
License: Public Domain

McAllister, J. About noon of the 8th of August, 1884, the plaintiffs below, West, Andress & Co., sold on the Chicago Board of Trade to George B. Dickinson & Co. (both parties being members of said board) five thousand bushels of corn, at an agreed rate per bushel, for cash, the transaction to be closed up before three o’clock of the afternoon of that day. Dickinson & Go. then and for a long time previously, had been commission merchants in good credit, and customers of the Hide and Leather Hational Bank, the defendant below, and had an account therewith. Before three o’clock of that afternoon, said sale was closed up by Dickinson & Co. making and delivering to plaintiffs their two checks drawn upon said bank and payable to the order of said West, Andress & Co., one of which was for $1,636.85 and the other for $695-.49, said amounts together covering the price of the corn sold, and West, Andress & Co., at the same time, delivered to Dickinson & Co. the two warehouse receipts in question, as and for the corn so sold. West, Andress & Co. did not present said checks for payment to said bank on that day, but instead, deposited them in their own bank, so that by the usage of business they would go through the clearing house on the next day, August 9, 1884. When sent to the clearinghouse Dickinson & Co. had failed, and they were neither of them paid. It appears, however, that near the close of banking hours, August 8th, the day of the sale, Dickinson & Co. brought said warehouse receipts to the Hide and Leather National Bank, and their account there being then overdrawn, they made an arrangement with the cashier to transfer them to the bank and obtain credit for the sum of twenty-three hundred dollars thereby. This wps effected by Dickinson & Co. drawing a draft on New York for that amount, to which the warehouse receipts were pinned and all delivered to the bank, the latter giving Dickinson & Co. credit for that amount, and the undisputed evidence is that the bank had paid out the whole amount on checks of Dickinson & Co., except about two hundred and twenty dollars, before any of its offiSers or agents had any notice of the transaction or any part of it between West, Andress & Co. and Dickinson & Co., in respect to the sale of said corn. After the checks were thrown out at the clearing house-, which was after e’even o’clock, a. m., of August 9th, West, Andress & Co. went to the defendant bank and demanded the return of the receipts or the money on the checks, which, as it appears, is the first time the bank had any notice respecting the transaction between the parties to the sale of said corn. The bank refusing to comply, this aetion of trover was brought against the bank, resulting in a verdict and judgment against the latter, for the value of said corn. As between the plaintiffs below and Dickinson & Co., the sale being for cash, and the delivery of the warehouse receipts being with the expectation that the cheeks were good and would be paid, upon its turning out that they were not good, we think West, Andress & Co. were at liberty to regard such delivery as conditional, and at once reclaim the property. Paul v. Reed, 52 N. Hamp. 136; Canadian Bank v. McCrea, 106 Ill. 298. But we are also of the opinion that, under the circumstances of the case, if the bank stood in the relation of a bona fide purchaser, for a valuable consideration, without notice, then West, Andress & Co. had no right to reclaim the property in question, as against the bank. Seek M. C. R. R. Co. v. Phillips, 60 Ill. 190, where the questions involved in this branch of the ease are fully discussed and settled. We have examined the evidence preserved by the bill of exceptions, and are of opinion that from the clear weight and preponderance of the evidence, the hank stood in the relation of a bona fide purchaser of the warehouse receipts in questioii for a valuable consideration, and without notice of any of the matters between plaintiffs and Dickinson & Co. affecting the title of the latter thereto, and without any circumstances sufficient to put the bank upon inquiry. The case is totally barren of any evidence tending to show that Dickinson & Co. made any false representations to the plaintiffs or resorted to any trick or hrtifice at, the time of the purchase. B is true, the evidence shows that they were insolvent the next day, and might have been so at the time of the purchase. That mere fact, however, is not sufficient for the basis of a charge of fraud in the purchase. Cross v. Peters, 1 Greenl. 376; Chit. on Con., 10 Am. Ed., 430. There was no evidence sufficient to go to the jury, that the bank, or any of its officers or agents, acted in bad faith in acquiring or holding said warehouse receipts. Yet, by the instruction given for the plaintiffs (and set out in our statement of the facts of this case), the court assumed that Dickinson & Co. were guilty of some fraud in obtaining possession of the receipts, and submitted to the jury the question of bad faith, as defined by the instructions in acquiring and holding them. As the case stood upon the evidence, that instruction was well calculated to supplement what was wanting in the evidence, and to mislead the jury ; because it amounted to an assumption on the part of the court, by submitting such questions to the jury, that there was evidence tending to show that the bank had knowledge, at the time that it took a transfer of the warehouse receipts, that Dickinson & Co. were not the owners of the receipts or the corn represented by them, and had actual knowledge of some fraud by Dickinson & Co. upon the plaintiffs in getting possession of them, when in truth and in fact, there was no evidence tending to show any such knowledge on the part of the bank or any of its officers or agents ; but the evidence was the other way. We think the verdict was unsupported by the evidence, and that said instruction was fatally erroneous. For which reasons the judgment must be reversed and the cause remanded. Reversed and remanded.