
    Second National Bank of Toledo v. Horace S. Walbridge et al.
    
    1. A warehouse receipt is not, in a technical sense, like a bill oí exchange, a negotiable instrument; it merely stands in the place of the property it represents; and a delivery of the receipt has the same effect in transferring the title to the property as the delivery of the property.
    3. A warehouseman, on application of the owner, by mistake issued to the latter, at different dates, two warehouse receipts for the same property, the last of which the owner assigned for value to the plaintiff, to whom the defendant, the warehouseman, on demand delivered the property. Afterward, the assignee of the first receipt recovered the property in replevin from the plaintiff. The plaintiff instituted the present suit to recover from the defendant the value of the property. Held:
    There being no privity of contract between the defendant as maker and the plaintiff as assignee of the receipt, the defendant, in the absence of all fraud, is not estopped from showing as against the plaintiff the mistake in the giving of the last receipt, as a defence to the action.
    Error to the court of common pleas of Lucas county. Reserved in the district court.
    Previous to the 13th of January, 1866, R. Lewis & Son, manufacturers of oil at Toledo, had placed in store with H. S. Walbridge & Co., the defendants, doing business as ware-housemen, fifty-seven barrels of oil. At the same time, they were indebted to the Second National Bank of Toledo, the plaintiff, in a large amount of money, and were seeking further loans, which were refused unless additional security was provided. Thereupon, Richard Lewis, the senior member of the firm of Lewis & Son, went to the warehouse of Walbridge & Co. with the cashier of the bank, and found there the fifty-seven barrels of oil, lying in one lot in the house. Previous to this time, Walbridge & Co. had issued to Lewis & Son a warehouse receipt for fifteen barrels, part of the fifty-seven, which had been assigned to and was then held by the bank. Lewis and the cashier went from the warehouse to the office of Walbridge & Co., where they found one of the firm, and requested him to take up the receipt for the fifteen barrels, and issue a new one to Lewis & Son for the whole fifty-seven. After ascertaining for himself that the whole number of barrels was in store, he took up the old receipt as requested, and delivered a new one to Lewis, as follows:
    “ Toledo, Jan. 13, I860.
    Received in store, for the account and at the risk of R. Lewis & Son, fifty-seven barrels oil, subject to their order on return of this receipt and storage.
    
      “ H. S. Walbridge & Co.”
    This receipt was, on the same day, indorsed and assigned by Lewis & Son to the bank, to secure the further loans requested, and also to secure the prior indebtedness of the firm. On the credit of the receipt, the bank loaned them $620.94, for which- they have no other security and no other means of obtaining payment. The receipt was given, transferred and assigned, and the loan made in the usual course of business. On the 15th of January, the bank presented the receipt to Walbridge & Co., and demanded the oil, which was at once delivered.
    Previous to the 13th January, Walbridge & Co. had issued a warehouse receipt, in the usual form, to Lewis & Son, for forty-two barrels of tbe oil, and this receipt had been by tbe firm transferred for value to tbe First National Bank of Toledo. After tbe delivery of tbe oil to tbe Second National Bank, it was taken from its possession by replevin, at tbe suit of tbe First National Bank; and, on tbe trial, tbe title of that bank was maintained against tbe Second National Bank.
    When tbe receipt for tbe fifty-seven barrels was given, on tbe 13th of January, neither Walbridge & Co., Lewis & Son, nor tbe Second National Bank bad any actual knowledge of tbe existence of tbe receipt for tbe forty-two barrels. That receipt bad been obtained and transferred by a former clerk of Lewis & Son, without tbe knowledge of tbe partners, and was not entered on tbe books of tbe firm. It was issued by a clerk of Walbridge & Co., who was absent from tbe office when that for tbe fifty-seven barrels was called for and issued.
    Upon this state of facts, judgment was given in favor of tbe defendants, and to reverse that judgment this petition in error was filed.
    
      W. Baker for plaintiff in error:
    These warehouse receipts, it is well known, are in universal use in this country; and, especially in all our commercial cities, form tbe basis of a very large proportion of tbe discount and banking business of the countiy.
    Their character is recognized and defined in tbe case of Gibson, Stockwell & Co., 11 Ohio St. R. 311, citing Gibson v. Stevens, 8 How. Rep. 384.
    Tbe First National Bank having, by its purchase of the receipt first issued by Walbridge & Co., acquired title to tbe oil, we claim to recover of tbe defendants tbe damages we have sustained in relying upon their certificate and receipt. And this upon tbe doctrine of estoppel, which happens, as Blackstone says, “ where a man bath done some act, or executed some deed, which estops or precludes him from averring anything to tbe contrary; ” or, as Lord Coke says, “ when a man is concluded, by bis own act or acceptance, to say tbe truth,”
    
      A case which has frequently arisen, and which is identical with this in principle, is where a teller or other officer of a bank has certified a check to be good, and, thus certified, it has been transferred to a third party, when in truth the drawer had no funds in the bank, and the certification was fraudulently made. The courts have almost uniformly affirmed the liability. Storey v. The Am. Life Ins. Co., 11 Paige, 635; Safford v. Wyckoff, 4 Hill, 442; North River Bank v. Aymar, 3 Hill, 262; Farmers' and Mechanics' Bank v. Butchers' and Drovers' Bank, 14 N. Y. 623; same case, 16 N. Y. 125.
    Another class ■ of cases involving the same principle is where a partner, gives a note for his individual debt or for other unlawful consideration, and signs the firm name; though it is void in the hands of the party to whom it is given, as being ultra vires, yet, in the hands of a bona-fide indorsee it is good. Lansing v. Gaine, 2 John. 300; Gansvort v. Williams, 14 Wend. 133.
    This rule, so far as I am aware, is of universal application in all cases where one party makes a statement of a material fact to another, upon which he relies and acts, and whether the statement is made mediately or immediately, provided there is privity.'
    In negotiable paper, the privity exists as to all holders of the paper.
    In this case, the paper or receipt is negotiable: “subject to their order on return of this receipt.” And the whole usage of trade is based upon their negotiability. Indeed, that is the main object and office of these receipts — to enable the holders to procure advances upon them.
    The estoppel is always enforced where the parties are in privity, either by a negotiable instrument or directly.
    But tins principle has been applied to the very case before us in Griswold v. Haven et al., 25 N. Y. 595, in which the whole doctrine is reviewed.
    
      M. B. c& B. Waite for defendants in error:
    The bank occupies no better position than Lewis & Sou would occupy, if there had been no assignment of the receipt by them. In that case, they would have no right of action against Walbridge & Co. Burton et al. v. Wilkinson et al., 18 Verm. 186.
    423
    Walbridge & Co. made no misrepresentation. The execution of the receipt alone does not make out a misrepresentation. There is in the receipt no warranty of title. There is no liability without warranty, unless there is fraud.
    The title to the property has not been impaired by the act of the defendants. The previous receipt for the forty-two barrels did not transfer the title. It was the sale of that forty-two barrels by Lewis which made the subsequent receipt worthless in the hands of the plaintiff. Lewis sold the oil; not Walbridge.
    Warehouse receipts are not negotiable instruments in a commercial sense, so as to bind the maker to the assignee in all cases. Bows v. Perrin, 16 N. Y. 333. They at most only represent the goods, and may be used upon a sale for a symbolical delivery. Gurney v. Behrend, 25 E. L. and E. 137, 3 Ellis & Bl. 622. A transfer of the receipts operates as a delivery of the goods, so long as the goods remain in the possession of the warehouseman. In fact, the possession of the receipts is, in legal effect, the possession of the goods, and enables the holder of’ the receipts to transfer his title to the goods, without an actual manual delivery of the goods themselves. They do not add to his title. They simply give him the possession. American note to Luckbarrow v. Mason, 1 Smith, Lead. Cases, 755. They are assignable, and in that sense susceptible of negotiation. But their negotiation does not necessarily impose upon the parties to them all the obligations of parties to negotiable commercial paper.
    The assignee of a warehouse receipt takes, as against the maker of the receipt, only the rights of his assignor, except in cases where there has been some frcrnd on the part of the maker.
    This case is not analogous to that of certified checks. In those cases the certification of the check is equivalent to the acceptance of a-bill of exchange drawn, on the bank. Farmers' and Mechanics' Bank v. Butchers' and Drovers' Bank, 16 N. Y. 128.
   White, J.

If Lewis & Son had retained the receipt, it is clear that they, upon the facts, could have maintained no action against the defendants.

In Burton et al. v. Wilkinson et al., 18 Verm. 186, it was held, if a warehouseman receive goods, and the bailor had no title to the goods, and they are taken from the custody of the warehouseman by the authority of the law, as the property of a third person, the warehouseman may show this in defence of an action brought against him by the bailor of the goods.”

The only question for our determination is, whether the plaintiff, as the assignee of the receipt, occupied a better position than Lewis & Son would have occupied had they retained the receipt.

A receipt given by a warehouseman for property placed ■in his possession for storage, is not, in a technical sense, like a bill of exchange, a negotiable instrument, but it merely stands in the place of the property it represents, and &• delivery of the receipt has the same effect in transferring the title to the property as the delivery of the property. Burton v. Guryea, 40 Ill. R. 320.

The question has frequently been brought under consideration in regard to bills of lading.

Thus in Thompson v. Dominy (14 Mees. & Welsb. 403) it was held, that a bill of lading is not negotiable like a bill of exchange, so as to enable the indorsee to maintain an action upon it in his own name; the effect of the indorsement being only to transfer the right of property in the goods, but not the contract itself.

Park, .13., in delivering the opinion in that case,.said : I never heard it argued that a contract was transferable, except by the law merchant; and there is nothing to show that a bill of lading is transferable under any custom of merchants. It transfers no more than the property in the goods ; it does not transfer the contract.”

And Alderson, B., in his concurring opinion, added, that the word “ negotiable,” as applied to a bill of lading, “ was not used in the sense in which it is used as applicable to a bill of exchange, but as passing the property in the goods only.”

To the same effect is Gurney v. Behrend, 25 E. L. and E. 136, S. C. 3 Ellis & Bl. 622; Howard v. Shepherd, 9 Man., Grang. & S. 298, S. C. 67 E. C. L. 297; and Blanchard v. Page, 8 Gray, 296.

Nor is there any force in the claim made in argument, that the receipt in this case was negotiable because, by its terms, the property was declared to be subject to the order ” of the bailor. In this class of instruments the property is usually made deliverable to “ order ” or “ assigns; ” and such was the fact in all of the cases above cited.

This ease is clearly distinguishable from the cases urged upon our attention, where negotiable paper, invalid between the original parties, has been enforced in favor of a honájide holder for value; also, from the cases where the representation of the defendant has been made directly to the plaintiff, with thp view of influencing his conduct.

In the former class of cases, the negotiable character of the paper affords the holder protection; in the latter class, when the other necessary elements are found, there exists good ground for the application of the doctrine of estoppel.'

The issuing of the receipt in this case involved no element of bad faith, but was simply a mistake of the defendant, which he was influenced to commit by the application of Lewis, whose conduct distinctly implied that no receipt had before been given for the forty-two barrels.

In Caldwell v. Ball (1 D. & E. 205) it was held, that where several bills of lading have been signed, no reference is to be had to the time when they were signed by the captain; but the person who first gets one of them by legal title from the owner or shipper has a right to the consignment. Also, that when such bills, though different upon the face of them, are constructively the same, and the captain has acted honá fide, a delivery according to such legal title will discharge him from them all.

The action was trover, brought by the assignee against the captain for the goods embraced in the bill of lading first issued.

It was contended for the plaintiff that the contradictory claims of the assignees of the different bills of lading resulted from the defendant’s own wrong, and could not have happened without, and that he was therefore liable to the plaintiff.

In speaking to this point, Buffer, J., said: The defendant acted fairly, and it could only happen by the subsequent conduct of Thompson [the shipper], namely, by his afterwards indorsing the bill of lading to another party, that any difficulty could arise.”

And Ashurst, J., also declared, that If it could be proved, or there was any reason to infer, that the defendant meditated a fraud on any person, that would afford an argument against him; but no fraud can be presumed here.”

The plaintiff was held not entitled to recover.

The decision in Griswold v. Haven (25 N. Y. 596), cited and relied upon by the plaintiff’s counsel, does not sustain him. The estoppel in that case was held to arise on the false representation of Wright, one of the defendants, that the grain mentioned in the receipts was in store and in good order. -This representation was made directly to and was relied upon by the plaintiff in making the advances.

That this was the ground of the estoppel enforced in that case, is apparent from the comments made upon the cases of Grant v. Norway (10 C. B. 665) and Coleman v. Riches (29 E. L. & E. R. 323), and from' page 607 of the report, where Selden, J., in delivering the opinion of the court, says: I have no hesitation, therefore, in holding that, under the circumstances of this case, the defendants were bound by the representations of Wright. I mean the verbal representations ; not the representations contained in the receipt.”

In the present case, it is to be observed, that we have, in this State, no statute affecting the rights of the parties; and, in' the absence of such statute, we are of opinion that the defendant is not estopped from showing, as against the plaintiff, the mistake in the issuing of the receipt as a defence to the action.

Judgment affirmed.

Brznkerhoee, C.J., and Scott, Welch, and Day, JJ., concurred.  