Carter v. Arguimbau. for the price of the goods, and the receipt by them of the bills of lading which were to the shippers' order and endorsed, became vested with the title or general ownership of the goods to which Arguimbau, Wallis & Co. could become entitled only by remitting funds to cover the acceptances (Farmers' Bank v. Logan, 74 N. Y. 568; Dows v. Bank, 91 U. S. 618). The defendant's theory that upon the acceptance of the drafts the title passed from the shippers to Arguimbau, Wallis & Co., the intended ultimate owners, on whose order they were purchased, is inconsistent with the cases above cited, and the authorities on which they rest and with the fact clearly shown of the intention of the plaintiffs to hold the proofs of title in themselves till payment by the defendants. They transmitted the bills of lading and shipping documents, not to the defendants, but to their own agents in New York. The agreement between the plaintiffs and Arguimbau, Wallis & Co., evidenced by the receipt for the shipping documents and given to the plaintiffs' agents, Fabbri & Chauncey, whereby Arguimbau, Wallis & Co. agreed to remit the required funds and meanwhile to hold the goods "under lien" and "subject to the order of Messrs. Fabbri & Chauncey as agents of and for account of Messrs. Jno. W. Carter Sons & Co." . . . " or the proceeds of the same if sold," was a perfectly lawful agreement and gave the plaintiffs an equitable if not a legal lien on the goods. And in case of their sale on the specific proceeds thereof so long as those proceeds remained distinguishable from other funds. The objections to this conclusion made by the defendants are, that the plaintiffs were pledgees of the goods, and that the effect of the delivery of the subject of the pledge to the owner was that the pledge was discharged. It is further claimed that the words "under lien" in the agreement show that the plaintiffs asserted only a lien and not a title in the goods, and intended by the agreement Carter v. Arguimbau. simply to preserve their existing lien as pledgees and not to create by the agreement a new and different lien. The answer to these objections is twofold: (1st) that the plaintiffs were not mere pledgees, but owners, and that they delivered possession of the goods under a lawful condition, and (2d) that if they had merely the interest of pledgees, the delivery made under the conditions and for the purposes expressed in the agreement, was not such a delivery as would release the pledge. The delivery was to hold for the account and benefit of the plaintiffs till remittance should be made, and not for the benefit of the defendants with power of sale in the meantime. A pledgee may make the pledgor his agent to hold or sell the goods for his (the pledgee's) benefit (Thayer v. Dwight, 104 Mass. 254). Such was the effect of this agreement if the plaintiffs held only as pledgees. The criticism on the words "under lien," that they mean under the same precise kind of lien under which the goods were before held by the plaintiffs, is, however, in any view that may be taken of the plaintiffs' prior position and interest, an over-nice criticism on the construction of such an instrument, and it seems that these words would rather import that the defendants were to hold the goods subject to a prior claim of the plaintiffs for securing the performance of the agreement of the defendants to remit. In other words, they mean " under a lien to or in Carter & Co.," not " under the existing lien of Carter & Co.," whatever their interest was before, the intention was that the goods should stand thereafter as their security-or "under lien" to them. And if this is their meaning, the court will give effect to the language by declaring such a lien as will be lawful and effectual, rather than one that might be unlawful and nugatory. In the view taken of the case, however, the precise meaning of these words is not material. The defendant, Baldwin, as assignee of Arguimbau, Wallis & Co., for the benefit of creditors took the prop English Bank of Rio de Janeiro v. Barr. erty subject to all legal and equitable claims thereon under which the assignors held it. He is a mere trustee for their creditors and not a purchaser for value. The plaintiffs' rights are unimpaired by the assignment. So far as the goods remained unsold and so far as their proceeds can be traced in the hands of their assignee, the plaintiffs are entitled to judgment. ENGLISH BANK OF RIO DE JANEIRO v. BARR. N. Y. Supreme Court, First District, Trial before WM. NELSON CROMWELL, Referee; March, 1888. 1. Sales.] Coffee was purchased for export by a merchant upon the credit of a bank under an agreement that the bill of exchange drawn upon the bank therefor should be accompanied by the bill of lading for the coffee in the bank's name, the merchant also agreeing to deposit with the bank a sufficient sum to meet the bill of exchange. Before it become due, the bank surrendered the bill of lading to the merchant, taking a receipt therefor, by which the merchant agreed to hold the coffee as property of the bank, with liberty to sell the same, and to account to the bank for the proceeds until the bill of exchange should be paid. The merchant sold the coffee, and deposited the proceeds to his own credit in another bank. Held, that the bank having advanced the whole purchase money, it was the owner of the coffee, and was entitled to the proceeds as against the merchant's assignee for the benefit of creditors. 2. Trusts (and Trustees); Remedies of Beneficiary.] Proceeds of principal's property which an agent has deposited in a bank to his own credit may be recovered by the principal. 3. Evidence; Usage.] Where it is expressly agreed upon, the transfer of a bill of lading that the property shall be held as the property of the transferee, and if sold, that its proceeds shall be accounted for to him until certain bills of exchange are paid, it is not to be presumed that the parties contracted with reference to a custom by which the transferee should not look to the proceeds of the goods for payment. 4. Costs; in Discretion of Court.] Where an assignee for the benefit of creditors, defended in good faith an action to recover the English Bank of Rio de Janeiro v. Barr. proceeds of trust property which his assignor had deposited in a bank to his own credit,-held, upon plaintiff's recovery, that the assignee should be allowed a fair compensation for his own services and that of his counsel. Trial before a referee. Action by the English Bank of Rio de Janiero and others against Thomas T. Barr and others to recover the proceeds of the sale of certain coffee. The facts are fully stated in the opinion. WILLIAM NELSON CROMWELL, Referee. This is an action brought by the plaintiffs. The English Bank of Rio de Janeiro, Ld., German Bank of London, Ld., London and Brazilian Bank, Ld., all banking corporations organized and existing under the laws of the Kingdom of Great Britain, and Messrs. Morton, Bliss & Co., a banking house of the City of New York, to recover the proceeds of the sale of 3,032 bags of coffee. The defendants are J. M. Edwards & Co., who sold the coffee in question; Thomas T. Barr, their assignee for the benefit of their creditors, and the Bank of America, with whom the larger part of the proceeds of said coffee are on deposit. The cause of action arises out of the following facts: The case has been fully and carefully presented before me and from the testimony I find and conclude as follows: In February, 1887, the firm of J. M. Edwards & Co., doing busines in the City of New York, applied to the several plaintiffs for letters of credit, and in that month the English Bank of Rio de Janeiro, the German Bank of London, and the Brazilian Bank issued to the said firm their several letters of credit, each for £25,000, and the firm of Morton, Bliss & Co. their letter of credit for £15,000. At the time of issuing these letters of credit, the plaintiffs each received from the firm of Edwards & Co. a letter of advice or contract, setting forth the terms upon which the credit was granted. These letters or contracts of the several English Bank of Rio de Janeiro v. Barr. plaintiffs are similar in form. The following is a copy of the letter of credit issued by the English Bank of Rio de Janeiro: "No. 838. NEW YORK, FEBRUARY 23, 1887. "Christian R. Hopkins, Esq., or his appointees, Rio de Janeiro and Santos, are hereby authorized to value upon the English Bank of Rio de Janeiro, Limited, in London, at ninety days' sight for account of Messrs. J. M. Edwards & Co., New York, for any sum or sums not exceeding in all twenty-five thousand pounds sterling for the cost of coffee to be shipped from Rio and Santos to ports of United States on board any vessel or vessels. "The bill of lading must be made out to the order of the English Bank of Rio de Janeiro, Limited, and one of such bills of lading must be forwarded direct to Charles M. Fry, Esq., the bank's attorney in New York, by the ship taking the coffee drawn against, together with invoice properly certified. "The shipments must be completed and the bills of exchange drawn and negotiated within six months from. this date, the drawings of the bills must be advised to the drawees in original and duplicate, such advice being accompanied by bills of lading with abstract of invoice endorsed thereon, and the bills must contain the clause against Letter of Credit No. 838, dated New York, Feby. 23, 1887.' "And we hereby agree with the drawers, endorsers and bona fide holders of bills not exceeding the total amount of £25,000 drawn in compliance with the terms of this credit, that the same shall be duly honored on presentation at this bank in London. "FOR ENGLISH BANK OF RIO DE JANEIRO, Limited, "(Sd.) CHAS. M. FRY, "N. B. Please let a note of every bill be endorsed hereon at the time of drawing." |