Court Opinion

ID: 3624408
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:05:22.538107+00
Date Added: 2024-06-11T14:07:37.409703
License: Public Domain

The money of the plaintiff was loaned on the security of the bill of lading which was attached to and delivered with the bill of exchange drawn by Viets upon the defendants. The referee has so found the fact.
The evidence tending to establish the fact was contradictory, the cashier testifying to facts favorable to the plaintiff's claim in that respect, and H. Viets to the contrary effect for the defendants. The fact, as found, must be accepted by this court.
The money was used by Viets in the purchase of corn in the ear, which was shelled at Chicago and shipped by him to the defendants at New York. If the corn was purchased for the defendants, and they were in fact its owners, and Viets was their agent in purchasing, then the money was, in effect, borrowed and used by their agent for their account, and they are liable for it, as they would be to the seller for the corn purchased.
If Viets was the owner, and the effect of the agreement between him and the defendants for the shipment of the corn purchased was to enable them to realize their advances to Viets and commissions, then clearly the title was in him, and he had the most perfect power to pledge the bill of lading, which carried the title to the corn in question as security for the plaintiff's loan.
The purchase of corn by Viets for his own account, although made under an agreement with defendants that they would advance for its purchase, and that it should be shipped to them for sale at New York, from the proceeds of which their advances were to be repaid, would give the defendants no valid security for their advances upon the corn, as against a bona fide pledge for value of the bill of lading given on its shipment *Page 5 
at Chicago, and before the corn came to the possession of the defendants, or while it was in the possession of Viets. The whole of it results in this: Viets agreed to give the defendants security upon the corn which he was to purchase, prior to any other claim. He failed to keep his agreement with them. The defendants trusted him, and he, for some reason, broke his agreement. The defendants' lien was good as against him. The defendants do not thereby obtain any legal or equitable right to the corn, against a bona fide pledge of that or the bill of lading for it, made for value, while Viets had the corn in his possession. The defendants must look to Viets for their damages, but cannot hold the corn as against such pledge. If the referee had found the facts as claimed by the defendants, no valid defence against the right of the plaintiffs to hold the corn, or its proceeds, under the bill of lading, would have been established.
As to the advance of $1,220: The evidence did not indisputably prove that it was made for the freight and charges on this particular corn, nor that it was so applied. But if it were so, their equity would not stand against the pledge of the evidence of title to the corn for value. The defendants took no security against the corn. They relied on the promises of Viets alone. He has disappointed them, and they can look to him, and to the corn as against him, but not to the corn as against the pledge of the bill of lading for value. These principles are fully sustained by the cases of The Bank of Rochester v. Jones (4 Comst., 497), and Allen v. Williams (12 Pick., 297).
The judgment should be affirmed.
All concur.
Judgment affirmed. *Page 6