Luhrs v. Valley Ranch Co., Inc.

This is an action in replevin instituted by plaintiff, George H.N. Luhrs, to recover possession of four bales of cotton from defendant, Valley Ranch Company.

Defendant answered, setting up that it was a public warehouseman, and as such received the cotton replevied, for which it issued to one James V. Harrison its negotiable warehouse receipts, and that by virtue of the Uniform Warehouse Receipts Act it could not be compelled to surrender the seized property until the receipts were either surrendered or impounded by the court, and further asked that Harrison be enjoined from negotiating the receipts, and that they be impounded.

Harrison intervened, setting up ownership of the cotton by reason of purchase from one Franklin, and that he had delivered it to defendant for ginning and storage, and held defendant's negotiable warehouse receipts therefor. The cotton was agreed to be of the value of $700.

The case was tried to the court without a jury, and resulted in judgment for the defendant. The judgment presented by the defendant to the court, and, although objected to by plaintiff, signed by it, failed, however, to enjoin Harrison from disposing of the warehouse receipts, and, although they were introduced in evidence, they were released to Harrison.

The intervener, Harrison, was apparently satisfied with the judgment, as he did not appeal therefrom, and the issue is between plaintiff and defendant below.

The whole case turns on the construction of section 25 of the Uniform Warehouse Receipts Act (Sess. Laws 1921, c. 47), which reads as follows:

"Section 25. (Attachment or Levy upon Goods for WhichNegotiable Receipt has been Issued.) If goods are delivered to a warehouseman by the owner or by a person whose act in conveying the title to them to a purchaser in good faith for value would bind the owner, and a negotiable receipt is issued for them, they cannot thereafter, while in the possession of the warehouseman, be attached by garnishment or otherwise or be levied upon under an execution, unless the receipt be first surrendered to the warehouseman, or its negotiation enjoined. The warehouseman shall, in no case, be compelled to deliver up the actual possession of the goods until the receipt is surrendered to him or impounded by the court."

— and on the sufficiency of the evidence to sustain the judgment.

Plaintiff makes the following contentions in support of his appeal: First, section 25, supra, does not cover an action of replevin by the real owner of the goods; second, the evidence conclusively shows plaintiff was the real owner; third, if it be held that section 25 does cover the action of replevin, it only protects the warehouseman when goods are delivered by "the owner or by a person whose act in conveying the title to them to a purchaser in good faith, would bind the owner"; fourth, the evidence conclusively shows the goods were not delivered to the warehouseman by a person within said section 25; fifth, the defendant, by failing to have the receipts impounded, is estopped from claiming the benefit of the last sentence of the section.

It is conceded in effect by defendant that the cotton belonged to plaintiff at the time of its alleged sale by Franklin, so we need not discuss that question, nor the effect of the so-called "Cropper's Contract" offered in evidence.

Does section 25 of the Uniform Warehouse Receipts Act include the action of replevin? We are of the opinion that it does. The whole purpose of the section is to protect the warehouseman who comes into the possession of the property as set forth in the section and issues a negotiable receipt therefor from being liable to two parties. To allow the owner to do by replevin what could not be done by attachment or execution would defeat its whole purpose. Kershaw v. Booth Fisheries Co., 177 Ill. App. 117.

But this protection only applies to the warehouseman when he brings himself within the first part of the section, viz., when the goods are delivered "by the owner or by a person whose act in conveying the title to them to a purchaser in good faith, would bind the owner."

In an action of this nature plaintiff, to make a prima facie case, must show himself to be the owner of the goods at the time of the delivery and that he did not cause them to be delivered. The warehouseman, in such case, must then show, in order to prevail, that he comes within the other condition; that the goods were delivered to him by "a person whose act in conveying the title to them to a purchaser in good faith, for value, would bind the owner."

It is admitted in effect that, at the time of the alleged sale by Franklin to Harrison, Luhrs was the true owner of the cotton, and, of course, he did not deliver it to defendant. But under all the evidence was Franklin "a person whose act . . . would bind the owner"? That Harrison was "a purchaser in good faith for value" cannot be doubted.

Paragraph 5174, Revised Statutes of Arizona of 1913 (Civ. Code), deals with the transfer of title to personal property so far as pertinent to this case. It reads as follows:

"Subject to the provisions of this title where goods are sold by a person, who is not the owner thereof, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell."

Had Luhrs by his conduct precluded himself from denying Franklin's authority to sell? The evidence of Luhrs himself shows that for three years Franklin had practically entire charge of the ranch, including selling most of the products thereof; plaintiff being apparently interested only in getting the proceeds of the sales. He evidently had entire confidence in Franklin and even the pickers' receipts were in the name "Franklin and Luhrs" under plaintiff's express instructions.

Harrison testified he had known Franklin was running the ranch and selling the products for three or four years, and supposed he had a right to do so, or he would not have bought the cotton. There is no evidence anyone knew of the precise nature of the relations between Luhrs and Franklin except themselves.

To hold that on such evidence as this the law conclusively presumes the outside world had notice that Franklin was merely a hired man, and not an ordinary tenant with the rights of such, would be imposing an almost intolerable burden on all purchasers of farm products.

We cannot say that on this evidence the trial court was not justified in finding that Harrison took a good title from Franklin under paragraph 5174, supra.

If such be the case, the defendant was clearly within section 25, supra, and the judgment of the court was correct.

We do not see where defendant's failure to impound the receipts makes any difference. The judgment of the court was that Harrison was the owner of the cotton, and, if so, he was certainly entitled to the receipts, and the warehouseman had no reason for asking that they be impounded, but quite the contrary.

Finding no prejudicial errors in the record, the judgment is affirmed.

McALISTER, C.J., and ROSS, J., concur.