Chapman, Moody Johnson, for appellants.
This case presents two questions:
I.
THE RIGHT OF THE APPELLANT TO FILE A BILL, IN THE NATURE OF AN INTERPLEADER, AGAINST THE APPELLEE AND ALL KNOWN CLAIMANTS, REQUIRING THEM TO LITIGATE THEIR RESPECTIVE RIGHTS TO THE COTTON DEPOSITED WITH IT AND FOR WHICH NEGOTIABLE RECEIPTS WERE ISSUED; AND, AS INCIDENTAL THERETO, ENJOIN THE PROSECUTION OF THE ACTION OF REPLEVIN THERETOFORE INSTITUTED BY THE APPELLEE, UNTIL THE RESPECTIVE RIGHTS OF ALL PARTIES TO THE IMMEDIATE POSSESSION OF SAID COTTON SHOULD BE FINALLY ADJUDICATED BY THE COURT. This question relates solely to that feature of the bill whereby an action of replevin, instituted by the appellee against the appellant, was enjoined, in order that all known claimants, named in the bill as defendants, might contest with the appellee the right to the possession of the cotton, the subject of this action.
The first question is: Has the appellant, as defendant in said action, a full, adequate and complete remedy at law: and, if not, what remedy has it? Section 555, Hemingway's Code, only applies where the defendant disclaims any interest in the subject of the action, to which there are two or more claimants, to either of whom he is ready to deliver the property, but is unable to decide which is the rightful owner. Snodgrass v. Butler, 54 Miss. 283 ; McAllister v. Sanders, 107 Miss. 283 , 65 So. 249.
Ample remedy is afforded, in the action of replevin, if there is no interpleader, to protect the lien for storage charges of the appellant, for "In a suit between the bailee and general owner the judgment should be limited to the value of the specific interest of the bailee in the property." Jones v. Hicks, 52 Miss. 682 .
Yet, in order to protect its lien on the property, for such charges, the benefit of said section 555, is, as a remedy, denied to it. Therefore, in said action of replevin, a full, adequate and complete remedy is not afforded the appellant, if it be desired to protect its lien, for storage charges, and, at the same time protect itself against the adverse claim of the other defendants, named in the bill, and the holder of the receipts, if negotiated.
If it be borne in mind that the cotton, the subject of the action of replevin, was deposited in the public warehouse of the appellant by the owners thereof, for which negotiable receipts were issued, and as the record discloses, the appellee does not claim the right to the possession of said property through those parties, it is obvious that the Uniform Warehouse Receipt Act (chapter 218, Laws 1920), affords a remedy. Special attention is directed to the construction of sections, identical in terms, appearing in the Uniform Warehouse Receipt Act of New Jersey. New Jersey Title, etc., Co. v. Rector, 72 A. 968; New Jersey Title, etc., Co. v. Rector, 75 A. 931.
Under section 19, except as is provided in sections 17 and 18, the appellant could not, in said action of replevin, prove that the cotton, even if the appellee was the original owner, has been entrusted by it to another to obtain negotiable warehouse receipts, who, in violation of the trust imposed, negotiated the receipts to a purchaser in good faith for value, and that such holder has the right to the immediate possession of said cotton, by virtue of the negotiation of said receipts. Commercial National Bank, etc., v. Canal La. etc. Bank, 60 L.Ed. (U.S.) 417.
II.
THE RIGHT OF THE APPELLANT TO AN INJUNCTION RESTRAINING THE APPELLEE FROM INSTITUTING SIMILAR ACTIONS OF REPLEVIN FOR COTTON IN THE POSSESSION OF THE APPELLANT AND FOR WHICH NEGOTIABLE RECEIPTS HAD BEEN ISSUED AND WERE OUTSTANDING, UNTIL SUCH RECEIPTS WERE FIRST TENDERED TO IT, OR THEIR NEGOTIATION ENJOINED OR IMPOUNDED BY THE COURT. (a) The appellee, under no circumstances, had the right to the immediate possession of the cotton, deposited with the appellant and for which negotiable warehouse receipts have been issued by it, other than by virtue of such receipt.
In neither of the two affidavits, on which the writs of replevin were issued, nor in the cross-bill, does the appellee unreservedly make oath that it is entitled to the immediate possession of the cotton, delivered to the appellant and for which negotiable warehouse receipts were issued. To the contrary affidavits are made that the appellee is entitled to the immediate possession of said cotton "under and by virtue of its marketing agreement," with one of its members, a copy of which is attached to the affidavit in replevin.
Therefore the question squarely presented to the court is whether, under and by virtue of its marketing agreement and not as holder of the receipts, the appellee is entitled to the immediate possession of cotton, deposited in the warehouse of appellant and for which negotiable warehouse receipts were issued?
Thus the question arises would the negotiation of a warehouse receipt to a purchaser in good faith for value, in violation of the trust conferred on the member, be binding on the appellee. As bearing on this particular question, attention is directed to sections 40, 41 and 47 of the Warehouse Act, chapter 218, Laws of 1920.
Referring to the possession of the marketing agreement, heretofore quoted, it is obvious that the original title, or, at least, the possession of the cotton was in the member; that, by the express terms of the agreement, he
was directed to deliver the cotton at the nearest public warehouse, taking the receipt therefor which he was to endorse and deliver to the appellee. Thus, there can be no question but that the said warehouse receipts were entrusted to the member. Therefore, the question arises would the negotiation of the receipts by him, to a purchaser in good faith for value, be binding on the appellee, assuming that it was the owner, under an executory contract of sale.
An answer to this question demands an interpretation of the sections quoted above. This identical question, involving the construction of said sections, was presented to the supreme court of the United States and convincingly answered in the affirmative. Vid. Commercial National Bank of New Orleans v. Canal La. Bank Trust Co., et al., Ann. Cas. 1917E, 25, and 239 U.S. 520 ; Campbell v. Farmers Bank, 90 So. 436.
While it has been conceded, for the sake of argument solely, that the ownership of the cotton was in the appellee, by virtue of the marketing agreement, yet, we most earnestly contend, that the ownership of the cotton was not in the appellee, at the time said cotton was delivered to the compress, but in the member. 35 Cyc. 274-276; 35 Cyc. 276, Subdivision b; Berry v. Waterman, 71 Miss. 497 , 15 So. 234; Wachstetter v. Brown, 58 So. 530.
Therefore, we insist, the appellee, solely by virtue of its marketing agreement, has no right whatever to the immediate possession of cotton, deposited in the warehouse of the appellant. To the contrary, if it has any such right, the same must be based on the warehouse receipt, duly endorsed to it.
b. As the appellant cannot claim, as owner, under the executory contract, it can only claim, as agent, but, as agent it can only have a right to the possession of the cotton, under and by virtue of the receipt. Therefore,
1. If such receipt be lost or destroyed an action of replevin cannot be maintained for the cotton. The sole remedy given is that "a court of competent jurisdiction
may order the delivery of the goods (cotton) upon satisfactory proof of such loss or destruction, and upon its giving a bond with sufficient sureties to be approved by the court to protect the warehouseman (the appellant) from any liability or expenses, which he or any person injured by such delivery may incur by reason of the original receipt remaining outstanding;" section 14. 2. As the holder of such receipt, by virtue of which the immediate possession of the cotton can only be claimed, an action of replevin cannot be maintained unless the receipt be first surrendered (or tendered) to the warehouseman (the appellant); or 3. If such receipt, only by virtue of which the immediate possession of said cotton can be claimed, be held by a third party, an action of replevin therefor cannot be maintained unless its negotiation be enjoined or impounded by the court.
In support of our contention to the effect that a public warehouseman who delivers the goods without obtaining a surrender of the receipt, is liable to the holder of the receipt we direct attention to Manufacturers' Mercantile Co. v. Monarch Refrig. Co., 107 N.E. 885.
Section 25, referred to in the opinion and which is the same section that appears in our act, applies to an action of replevin. When the section does apply a judgment against the warehouseman, for the goods deposited, will not relieve it from liability to the holder of a receipt therefor. As throwing light on the interpretation of section 25, we direct attention to Salant v. Pa. Ry. Co., 178, N.Y. Sup. 285; Salant v. Pa. Ry. Co., 177 N.Y. Sup. 475; Goldstein v. Banker, et al., 183 N Y Sup. 460. As to the proper interpretation of the words "or otherwise," appearing in section 25, of the Uniform Warehouse Receipt Act, we call special attention to Hawkes v. Anderson, 70 Miss. 639 ; and Miller v. Delta Pine Land Co., 74 Miss. 110 .
If the conclusions stated are sound, then the appellee, under no circumstances, has the right to maintain an action of replevin against the appellant for cotton in its possession, deposited by the owner and for which negotiable
warehouse receipts are issued, unless the receipts are tendered, their negotiation enjoined or impounded by the court. If that be sound, then the following is presented.
c. The bill charges, and the answer admits, that the appellee has instituted two actions of replevin, against the appellant, for cotton in its possession; that it does not claim the right to the possession thereof by virtue of receipts, issued therefor; that it has not tendered the receipts or had their negotiation enjoined or impounded by the court; that, under the same conditions, the appellee will continue to carry out its threats and institute additional actions of replevin, against the appellant, for cotton in its possession. Therefore, a court of equity, by injunction, should protect the appellee in its right to be exonerated from liability to the holder of the receipts, and also from such vexatious and harassing litigation, especially when it appears that the appellee has no right to the subject of such actions, and such actions are expressly prohibited by the statute.
The right of the appellee to prevent, by injunction, a continuity of replevin suits, by the appellee against it, when it appears that, under no circumstances, has such appellee the right to the possession of the cotton for which said actions are and are threatened to be, instituted, is based not altogether on the theory of a multiplicity of suits, or as vexatious and harassing litigation. It is based, as we shall endeavor to make clear, on the said right vested in the appellant, as a public warehouseman, by the law, under which it is doing business, which right is, and is threatened to be, invaded.
Before directing attention to the principles of law, relied on, we deem it necessary to call attention to the right invaded, and threatened to be invaded, by such acts, that you may see that it is not a mere abstract right, but one, the invasion of which, results in irreparable damage to the appellant. The amount of charges, for storage or storage and compression, to which the complainant would be entitled, in handling cotton, is of minor consequence
as compared with the attorney's fees it would be forced to pay, in defending such actions, which fees, so paid, would be an irreparable loss, in that it would have no right of action therefor against the appellee, as plaintiff, in such actions.
We admit that the relief sought, by injunction, to protect the appellant from the invasion of its rights, is, to some extent, novel, yet "It is not a fatal objection that the use of the writ for the particular purpose for which it is sought is novel. Courts may amplify remedies and apply rules and general principles for the advancement of substantial justice. If this was not so, and courts were confined to particular precedents, there would be no power to grant relief in new cases continually occurring." 32 C.J. 34, sec. 13.
Though asserting that equitable, as well as legal, rights are entitled to the protection of equity by injunction, yet, we recognize that: "The existence of a right violated is a prerequisite to the granting of an injunction." Ib. 34, sec. 14. In not one of such actions, instituted in violation of the provisions of said section 25, could an attorney's fee be recovered from the appellee, or for that matter, in a subsequent suit. Therefore, as to the amounts necessarily expended, including an attorney's fee, in the defense of such action, the injury is irreparable, notwithstanding the solvency of the appellee, though its solvency may be doubted, owing to the nature of the appellee, as a corporation. Such an irreparable damage is "due to the nature of the injury itself," or at any rate "to the nature of the right — injured."
Section 25 of the Warehouse Act, heretofore quoted, is more than a mere prohibition. By its express terms a right is vested in the warehouseman, to be exonerated from the obligations imposed on it by the act, to retain the cotton until the receipt therefor is surrendered. Therefore, when such right is invaded and threatened to be invaded, a court of equity, by injunction, will protect the same, if, as a consequence, irreparable damage to it will result.
R.C. McBee, for appellee.
WHEN THE ANSWER DENIES THE FACTS IN THE BILL THE INJUNCTION FAILS. Gibson's Suits in Chancery, 655-656; Bowen v. Haskins, 45 Miss. 188 , 7 Am. Rep. 728; Richardson May v. Lightcap, 52 Miss. 508 .
The owner of goods can maintain a replevin suit when his goods are deposited with a warehouseman, without his authority, knowledge or consent, even though the warehouseman has outstanding warehouse receipts for such goods. In re Dreuil Co., 205 Fed. 568; Williston on Sales (2 Ed.), 993, 1038, 1041, 1080, 1081, 1043; Preface, Williston on Sales; Section 57, Williston on Sales; Commercial Nat. Bank v. Canal-Louisiana B. T. Co., 239 U.S. 520 , 60 L.Ed. 417; Burrage v. Melson, 48 Miss. 237 ; Williston on Sales (1 Ed.), 640; Insurance Co. v. Kiger, 103 U.S. 352 , 26 L.Ed. 433, cited in Williston on Sales (2 Ed.), 1040; Merchants Nat. Bank v. Bales, 41 So. 516; Hentz v. The Idaho, 93 U.S. 575 , 23 L.Ed. 978; 3 Am. Eng. Enc. of Law (2 Ed.), 762; Section 25, Uniform Warehouse Law; Salant v. Pennsylvania R.R. Co., 177 N.Y.S. 475; Scottsdale Ginning Co. v. Longan, 209 P. 877; Campbell v. Farmers' Bank of Boyle, 90 So. 436; Marine Bank Trust Co. v. Greenville Savings Bank T. Co., 133 Miss. 91 , 97 So. 526; Section 10, Uniform Warehouse Law; Section 275, Laws of Mississippi 1924, secs. 1 2; Brown v. Staple Cotton Co-operative Assn., 131 Miss. 859 -889; Cole-McIntyre-Norfleet Co. v. Dubard, 135 Miss. 20 -32; Lloyd v. Goodwin, 12 S.
M. 223; Buck v. Payne, 53 Miss. 27 ; Scarborough v. Lucas, 119 Miss. 128 ; Berry v. Waterman, 71 Miss. 497 ; Wachstetter
v. Brown, 58 So. 530; Section 3071, Hemingway's Code; Woolner
v. Spalding, 65 Miss. 204 , 3 So. 583; Manufacturers' Mercantile Co. v. Monarch Refrig. Co., 107 N.E. 885; Goldstein v. Societa Veneziana, etc. (1920), 193 App. Div. 168 , 183 N.Y.S. 460.
THE LAW OF INTERPLEADER. 33 C.J. 420; Sections 555 and 3061, Hemingway's Code; Scarborough v. Lucas, .
AN INJUNCTION CANNOT BE MAINTAINED AGAINST A SUIT AT LAW WHEN THE DEFENSE URGED MAY BE USED IN THE ACTION AT LAW. High on Injunctions, 100, 103; Pickett v. Filer Stowell Co., 40 Fed. 313; Covell v. Heyman, 111 U.S. 176 , 28 L.Ed. 390; High on Injunctions, 75; Insurance Co. v. Warren-Gee Co.,
60 So. 1010; R.R. Co. v. Walker, et al., 60 So. 1014; Newton Oil Co. v. Sessums, et al., 59 So. 9; Telegraph Co. v. Williamson et al., 101 Miss. 1 , 57 So. 559; High on Injunctions, 106; Farrell v. Harlem Terminal Storage Warehouse Co., 127 N.Y.S. 306; Ludwig v. Roth, 123 N.Y.S. 191; Young
v. Colyear, 201 P. 623 .
Argued orally by C.C. Moody, for appellant, and R.C. McBee
and Leroy Percy, for appellee.