
    The Wabash Elevator Company v. The First National Bank of Toledo.
    1. Where one agrees to sell and another to buy articles at a specified price, and there is no other stipulation as to payment, it is presumed to be a cash sale, and the delivery of the goods and payment of the price are to be simultaneous and concurrent acts.
    
      2. The delivery of the goods on such sale, with the expectation of receiving immediate payment, is not an absolute delivery, and no title vests in the purchaser till the price is paid.
    Motion for leave to file a petition in error to the District Court of Lucas county.
    The original action was brought in the Court of Common Pleas of Lucas county, by the First National Bank of Toledo, against the Wabash Elevator Company, to recover the value of five thousand bushels of corn.
    The case was tried to the court and decided in favor of the bank. The elevator company moved for a new trial, which was overruled. A bill of exceptions was taken, embodying all the evidence, which shows substantially the following case:
    E. C. Smith & Co. and Hamilton & Goldsmith were two firms of commission merchants, doing business at Toledo, Ohio. Smith & Co. owned a large quantity of corn, for which they had taken warehouse receipts of the elevator company where it was stored. These receipts had been deposited with the bank as security for advances of money in payment of the grain.
    On the 30th of February, 1872, Smith & Co. offered for sale, on ’Change, at Toledo, five thousand bushels of corn, at a price named. The offer was accepted by Hamilton & Goldsmith, and nothing further was said; but, according to the custom on ’Change, they were regarded as the purchasers of the grain to be paid for on delivery of warehouse receipts for the quantity sold.
    For the purpose of completing the sale, Smith & Co. applied to the bank for warehouse receipts for the quantity of corn so sold, which the bank permitted them to take, upon the understanding that the money received for the grain should be returned to the bank.
    Smith & Co. sent to Hamilton & Goldsmith, by their clerk, the warehouse receipts for the five thousand bushels of corn so purchased by them, with a statement of the amount due therefor. These were handed by the clerk to Mr. Goldsmith, who took them and gave them to his bookkeeper; but, instead of paying the amount due, as expected by Smith & Co., Mr. Goldsmith informed the clerk that he would give Smith & Co. credit for the amount on their account with Hamilton & Goldsmith. Thereupon the clerk left.
    At the date of the purchase of the corn and delivery of the receipts, Smith & Co. were indebted to Hamilton & Goldsmith in a sum exceeding the price of the corn. The amount of this indebtedness had been adjusted between, them ; but Smith & Co. were not then prepared to pay it, and were negotiating with Hamilton & Goldsmith for time. There was no understanding between the parties that the price of the grain should be applied on the debt. On the contrary, the evidence strongly tends to show that the grain was offered for cash, and was so understood by both parties to the sale.
    On the return of the clerk to the office of Smith & Co., Mr. Smith went to Hamilton & Goldsmith’s, and demanded •either the return of the receipts or a check for the price of the corn. Mr. Goldsmith insisted that the amount should be applied in reduction of the indebtedness due from Smith .& Co. Angry words ensued, and Mr. Smith attempted to snatch the receipts from the book-keeper. He succeeded in tearing off and carrying away with him a portion of all. the receipts but one. The remaining portions of the torn receipts, and the one not torn, were retained by Hamilton A Goldsmith.
    The warehouse receipts had been issued in the usual negotiable form by the Wabash Elevator Company, and were usually transferred by delivery merely.
    The elevator company was immediately notified by both parties of the whole transaction.
    The bank claimed the corn of the elevator company, and insisted that the receipts bad been pledged to the bank for .advances made by it; but the company delivered the com to Hamilton A Goldsmith. Thereupon the bank brought suit against the elevator compauy for the value of the corn.
    
      The judgment of the Common Pleas, in favor of the bank,, was affirmed, on proceedings in error, by the District Court. To reverse these judgments, leave is now asked to file a petition inerror in this court.
    
      Scribner & Hurd, for the motion:
    1. Possession is essential to the validity of the pledge; A surrender of the pledge is a waiver of the lien. 2 Kent, 639; Story, Bailments, secs. 287, 288, 299, 364; Kimball v. Hildreth, 8 Allen, 167; Wolcott v. Keith, 2 Foster, (N. H.) 196; Russell v. Fillmore, 15 Vt. 130; Walker v. Staples, 5 Allen, 34; Ward v. Sumner, 5 Pick. 59; Howes v. Crane, 2 Ib. 607; Cortelyou v. Lansing, 2 Caine’s Cases, 200; Jarvis v. Rogers, 15 Mass. 389, 397; Sumner v. Hewlet, 12 Pick. 76, 81; 8 Pick. 236; Ryall v. Rolle, 1 Atk. 165; Day v. Swift, 48 Maine, 368; May v. Davidson, 12 Gray, 465; Badenhammer v. Newson, 5 Jones, (N. C.) 107; Barrett v. Cole, 4 Ib. 40; Ib. 43; Whitaker v. Sumner, 20 Pick. 399; 37 Maine, 543.
    2. There are cases in which the possession of the pledgor is in fact the possession of the pledgee; as where the pledgor is the servant of the pledgee. In such cases, the lien is not' lost, as the possession of the pledge is not in fact surrendered or lost. For instances of this, see Reeves v. Capper, 5 Bing. N. C. 136; Macomber v. Parker, 14 Pick. 497 (note the illustrations stated in this ease). See these cases explained upon this point in Walker v. Staples, 5 Allen, 34.
    3. Where the pledgor wrongfully, or by fraud, gets possession of the pledge, the rights of the pledgee are not lost. Wolcott v. Keith, 2 Foster, (N. H.) 196.
    4. And where the property pledged is placed in the hands-of the pledgor by the pledgee, as the bailee or agent of the latter, to exchange it for other property to be substituted, or to sell for the pledgee, and the pledgor converts the property or refuses to account for it, the pledgee may maintain an action against the pledgor for the conversion. Hays v. Riddle, 1 Sandf. S. C. 248; May v. Davidson, 12 Gray, 465; White v. Platt, 5 Denio, 269.
    
      5. And if, in such case, the pledgor, openly acting as the agent of the pledgee, sells to a person who has knowledge of the facts, and who agrees to pay the price to the pledgee, the latter may recover the price from the purchaser. Natlebohn v. Maas, 8 Rob. 249.
    6. But ordinarily, where the pledgor assumes to sell in his own right the goods returned to him, the lien of the pledgee is gone as against the purchaser. May v. Davidson, 12 Gray, 465; Day v. Swift, 48 Maine, 368; Eastman v. Avery, 23 Maine, 248; Smith v. Sasser, 4 Jones, (N. C.) 43, 45; Badenhammer v. Newson, 5 Jones (N. C.) Law, 107; Story, Bailments, sec. 364.
    7. The fact is undisputed that E. C. Smith & Co. -were fully authorized to sell at such times and for such prices-as they saw proper, the bank trusting to their promise to return the proceeds, to be credited to the account of E. C. Smith & Co., in their cash account with the bank. They were permitted to deal with the property as principals — as owners.
    Now, it is clearly established, that if the bank had been the general, instead of the special owner of the receipts, and had constituted Smith & Co. their agents to dispose of the property, as the evidence shows it was disposed of by them, the purchaser, dealing with the agent as the principal, has a right to set off a debt owing him by the agent against an action for the price or value of the goods. Story on Agency, secs. 390, 444; 2 Smith’s L. C., 6 ed. 428; George v. Clagett, 7 Term, 355, and note, p. 356; Carr v. Hinckliff, 4 Barn. & Cress. 547; 10 Eng. C. L. 697; Ring v. Norton, 4 Cal. 355; Limerick Bank v. Plimpton, 17 Pick. 159.
    8. If the plaintiff authorized the pledgor to sell the grain, and he made the sale accordingly, and if, in consummation of the sale, the plaintiff authorized the pledgor to deliver the receipts, and they were delivered accordingly, the defendant, who was a mere depositor of the grain, had nothing to do with the question of payment. That is a matter between the pledgor and the purchaser alone. The sale and delivery of the receipts, by the authority of the-plaintiff, entitled the purchaser to the possession of the grain as against the warehouseman. The question as to whether payment had been made or not, is one in which the warehouseman can not be involved. See Benjamin on Sales, 217; Tarling v. Baxter, 6 B. & C. 358; 13 Eng. C. L. 169.
    
      Bissell & Gorrill, contra:
    The elevator company, as warehouseman, was obliged to hold the corn for the party legally entitled to possession. If after notice of the bank's claim, it delivers to those who have no title, such delivery is a conversion.
    The sole question then for decision is: "Were Hamilton & Goldsmith entitled to the possession of this grain?
    Had the grain belonged to Smith & Co., no title would have vested in Hamilton & Goldsmith.
    By universal usage this sale was a cash transaction.' Smith’s proposition was to sell for cash to be delivered in return. Goldsmith’s acceptance was coupled with a secret intention to appropriate the grain, toward the payment of a debt which Smith had repeatedly declared himself unable to discharge. There was no meeting of the minds of these men on the same proposition. There was no contract of sale.
    The delivery of the receipts into the manual possession of Goldsmith was solely for purposes of inspection. There was no intent to pass title.
    Even had the grain itself been deposited by Smith in Hamilton’s warehouse, no title would have passed until the cash was paid. And upon Hamilton’s refusal to pay, Smith or his assignee would have replevied the property. See Gholson, J., in Warner v. Porter, 2 Disney, 125; Kraft v. Dulles, 2 Taft, 116, 124; Powell v. Bradley, 9 Gill & J. 220.
    When a debtor refuses payment, the law provides a mode whereby the creditor, by appropriate judicial procedure, may sell that debtor’s property in satisfaction of his claim. It nowhere permits such creditor to set a trap for his debtor. It gives him no license to entice that debtor’s property into his own possession under pretense of a cash purchase, all the while intending when the purchase money is demanded to repudiate the payment. The title to personal property in this state can be transferred in no such way. The transaction, so far as the purchaser is concerned, is a fraud — an acted lie. It tends directly to produce such breaches of the peace as occurred in the case now under consideration. If the creditor ignore the processes of the law in his effort to collect his debt, it is not to be wondered that the debtor, stung by the malice and insult implied in such deception,, should prove equally unscrupulous in his attempts to regain possession.
    We repeat, then, that had this grain belonged to Smith,, it would have remained his property, and if he, for the first time, on the 13th day of February, had delivered to the bank those mutilated warehouse receipts with intent to pass the title, and the elevator company thereafter delivered the grain to Hamilton & Goldsmith, it could have made no defense to the suit which the bank instituted.
    But the grain was not Smith’s property. It belonged ultimately to Smith’s correspondents. The special property was in the bank as pledgee.
    The warehouseman must hold for the party entitled to possession. If Hamilton & Goldsmith were not entitled to such possession, this elevator company can base no objection upon the fact that the bank was the special owner. So' far as their right to possession is concerned, the title of the pledgee is superior to that of the pledgor.
    Smith held the receipts merely as agent for the bank, in order by a cash sale of the pledged property to convert the pledge into money for the bank’s use.
    The elevator company (or rather Hamilton & Goldsmith standing here in their stead) say that Smith could not act in this capacity; because he, as factor for the owners, had pledged the grain to the bank in his own name. We reply that the commission merchant is always understood to be' acting for others. No rule of law forbids that after, as factor of the owner, giving the pledge, he should, with the consent of such owner, act as factor of the pledgee in selling the pawn to pay the debt. Even if the pledgee select the pledgor as his agent to make sale, his title to the pledge will be good, except against a bona fide purchaser for value. See Edwards on Bailments, chap. 5, p. 211.
    Even if Smith had desired to transfer the title iu payment of his old debt to Hamilton & Goldsmith, he could not have defeated the bank’s title; for in such case they would lose nothing by a decision in favor of the bank: their claim upon Smith would be unaltered. See S. & C. 421, secs. 3, 4, 5, and 8.
    But Smith did not consent to such appropriation. He was acting in the line of his duty by making what he believed a cash sale. Hamilton & Goldsmith obtained manual possession under the deceptive pretense that they would pay the cash.
    Smith had told them that he could not pay this debt for a year to come. When he offered this grain for sale on ’Change, they had reason to know, from the nature of his business, that it was the property of others. They knew from the general usage of their trade that this grain was probably hypothecated to some bank in their city.
    They knew that this grain had been intrusted to Smith by principals who relied upon his integrity in accounting for the property or its proceeds.
    The facts of this case show how the cereal products of the country are transported from the producer to the consumer by the agency of our banking capital, upon the security of the property while in transit.
    The title of banks or capitalists, advancing money for such purposes upon such security, has received the favorable consideration of our courts, from Gibson v. Chillicothe Bank, 11 Ohio St. 317, 318, down to this day.
    For the purposes of the exchange of the industrial products of our country, the agency of factors is indispensable. We are all interested in the principle, that so long as they act in good faith our title to our goods in their hands can not be jeopardized. That, as against our right, no man save a bona fide purchaser for value can assert a successful claim.
   Day, J.

There is no question but that the elevator company, before it delivered the corn to Hamilton & Goldsmith, had notice of the rights of all the parties; nor is there any doubt but that, as between Smith & Co. and the bank, the latter was entitled to the corn. The only question, then, is, as to the right of Hamilton & Goldsmith to the grain, for the elevator company defends upon their title. They claim by purchase of Smith & Co. Upon the supposition that Smith & Co. were the sole owners of the grain, did Hamilton & Goldsmith acquire title thereto ? If not, they have no ground upon which to question the correctness of the decision in favor of the bank.

When the grain was offered for sale by Smith & Co. at a specified price, and the proposition was accepted by Hamilton & Goldsmith, if the sellers understood it to be a salo for cash, and the buyers understood it to be in payment of a debt, the minds of the parties did not meet, and there was no agreement or contract of sale.

But there was no such misunderstanding. The sellers offered the grain for cash, and were so understood by the buyers. But the latter accepted the proposition, and took the warehouse receipts with the intention of not paying cash. They did not undeceive the sellers until the receipts were delivered and the cash demanded. The possession of the receipts was obtained fraudulently, and, had the title to the grain thereby passed, authorities are not wanting to sustain the sellers, on discovery of the deception, in avoiding the sale and reclaiming the grain. Story on Sales, sec. 176, and authorities there cited.

But the title did not pass. Under the circumstances disclosed in the evidence, there can be no doubt but that the transaction was understood by the parties as a cash sale. At all events, the proposition was made by one party and accepted by the other, and no time of payment was mentioned. When this is the case, the sale is presumed to be

for cash. The obligation of the seller to deliver the goods, and of the buyer to pay, “are concurrent conditions in the nature of mutual conditions precedent.” Benjamin on Sales, 438. Delivery and payment are to be simultaneous acts. A delivery with the expectation of receiving immediate payment is not absolute, but conditional until payment is made, and, where there is no waiver of payment, no title vests in the purchaser till the price is paid. Adams v. O’Connor, 100 Mass. 515; Whitwell v. Vincent, 4 Pick. 449; Leven v. Smith, 1 Denio, 571; Conway v. Bush, 4 Barb. 564; Merrill v. Stanwood, 52 Maine, 65; Keeler v. Field, 1 Paige, 312; Russell v. Minor, 22 Wend. 659; Hanson v. Meyer, 6 East, 614; Hays v. Currie, 3 Sandf. Ch. 585; Conger v. Railroad Company, 17 Wis. 477; Powell v. Bradlee, 9 Gill & Johns. 220; Haggerty v. Palmer, 6 Johns. Ch. 437; Acker v. Campbell, 23 Wend. 372; Coggill v. Railroad Company, 3 Gray, 545.

In this case there was no waiver, as between Smith & Co. and Hamilton & Goldsmith, of the mutual concurrent conditions of the contract between them. Hamilton & Co., being'in default of performance on their part, can not therefore claim any title under the contract. We think the courts below were warranted by the evidence in so holding, and that there is, therefore, no error in the judgments rendered in the case.

Motion overruled.  