Court Opinion

ID: 3601123
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:47:33.204399+00
Date Added: 2024-06-11T09:54:03.709455
License: Public Domain

I dissent on the ground that the Eastern States Warehouse Co. was the agent of the plaintiff to receive payment. The merchandise stored, for which warehouse receipts were issued, consisted of eggs. The bank taking the collateral warehouse receipts knew, or should have known, that the eggs were to be taken out by the merchants storing them, and sold in the market. They were stored until sales could be made. The storehouse was in Jersey, across the river from the city of New York. The merchants were in the city of New York. The bank which held this collateral was in Massachusetts. When it gave consent to the substitution of collateral, it must have known that the substitution was to be occasioned by the withdrawal of eggs, and could not have expected that upon each withdrawal the parties would have to wait for the mailing of papers from Massachusetts before deliveries of eggs could be made. Business in New York could not be done in any such way. The warehouse company was doing business with the merchants. The banks were doing business with the warehouse company. In fact the banks and the warehouse company were closely identified financially. They had a common interest. The warehouse company received the money in full for all the goods stored, and now this bank seeks to collect the money once again from the merchants. I think under the circumstances as they appear here, considering the nature of the business and the notice which the instruments gave to the bank, that it constituted the warehouse company its agent to receive payment. The loss should fall upon it and not upon innocent third parties.
I also agree with the Appellate Division that it was *Page 335 
competent to prove the method in which egg merchants do business. How can we say that a custom is not material or relevant until we know what it is? What do courts know about the egg business? It is their place to listen and ascertain how merchants conduct business, and frame their decisions accordingly.
CARDOZO Ch. J., POUND, ANDREWS, LEHMAN and O'BRIEN, JJ., concur with KELLOGG, J.; CRANE, J., dissents in memorandum.
Ordered accordingly.