Court Opinion

ID: 8846323
Source: CourtListenerOpinion
Date Created: 2022-11-26 16:59:03.3293+00
Date Added: 2024-06-11T17:05:21.473621
License: Public Domain

Mr. Presiding Justice Barnes delivered the opinion of the court. This appeal is from a judgment entered on a verdict of guilty, and assessing plaintiff’s damages at $5,792.14. The declaration contains four counts, to which the plea of general issue was filed. To sustain the judgment plaintiff relied solely on the last count. That count charges that defendant, a warehouseman, on or about May 21,1923, issued to Deree & Company his negotiable warehouse receipt No. A304 for 600 bags of fine granulated sugar, to wit, lot 3023, from Lehigh Valley Car No. 87778, and thereafter said receipt was indorsed by Deree & Company, and negotiated for value to plaintiff, a purchaser in good faith, but that defendant, on or about April 8, 1924, informed plaintiff that he did not have possession, custody or control of said sugar, and by reason of its non-existence and by force of the statute (section 20 of the Uniform Warehouse Receipts Act) the defendant became liable, etc. Said section provides: “A warehouseman shall be liable to the holder of a receipt for damages caused by the non-existence of the goods * * Cahill’s St. ch. 114, H 255. The applicability of the section depends on whether under the evidence it can be said the goods were nonexistent at the time of the issuance of the receipt. The sugar was shipped in said Lehigh Valley car to Buffalo by the Franklin Sugar Refining Company to its own order, “Notify Deree & Co.,” and transferred at Buffalo to the Great Lakes Transit Company for water transportation to Chicago. On receiving notification, Deree & Company gave permission to the Transit Company to have the goods stored with defendant, and they were stored for the account of “Franklin Sugar Refining Company, Notify Deree & Co.,” defendant giving the Transit Company receipt for delivery. The bill of lading had been originally forwarded to the Continental Commercial & National Bank of Chicago with draft attached, and by the bank presented to Deree & Company for acceptance and payment. Said company failed to pay the draft and accept the bill of lading. Both documents were then returned to the shipper, which returned the bill of lading to its exclusive broker, Syme-Eagle Brokerage Company, of Chicago, duly indorsed for delivery to the broker, with instructions to deliver the bill of lading to defendant and obtain receipts covering the goods. -But defendant had already issued warehouse receipts covering the goods in question, including the receipt described above, and sought to recover them when receipts were demanded by the Syme-Eagle Company. Seven of the nine so issued were recovered and Deree, president of Deree & Company, professed to have no record or recollection of where the other two were, one of them being the receipt in question, which he had indorsed and pledged as security with plaintiff about June 21, 1923. Prior to plaintiff’s accepting the negotiable warehouse receipt as security as aforesaid, his employee telephoned to defendant’s manager and was informed that the goods were there and that it would be necessary in order to get possession of them to present said receipt properly indorsed. On its representative calling at defendant’s warehouse in May, 1924, to ascertain the condition of the sugar, plaintiff learned for the first time that the sugar had been delivered to SymeEagle Company, and defendant for the first time learned the whereabouts of said receipt, which previous inquiries had failed to disclose. Defendant then demanded the return of the receipt, which plaintiff refused to surrender, claiming that it was held as security for Deree & Company’s indebtedness. "Under this state of facts it must be conceded that the sugar, for which said receipt was issued, was at the time of its issuance in the physical possession of defendant. That defendant erroneously issued such receipts does not alter the fact of the physical existence of the goods they purported to cover. It follows there could be no right of action under section 20 of the Act in regard to warehouse receipts, which manifestly contemplates a state of facts where a warehouse receipt is issued for property that does not actually exist at the time of its issuance, a fraudulent act for which there would be civil liability to the holder under said section 20, and criminal liability under section 25 of the Act to Regulate Public Warehouses, etc. (Cahill’s St. ch. 114, If 225.) But the property here was in actual existence and in store when the receipts were issued. The evidence was conflicting as to whether plaintiff was any longer entitled to hold the receipt in question as security after discovery of the error in issuing it, as to which fact the finding of the jury was evidently in its favor. But even if plaintiff was so entitled we think it has misconceived its remedy as against defendant, and the judgment is reversed and the cause remanded. Reversed and remanded.