Overview
Case summary
This case involves a dispute over title to 100 bales of hops. A. F. Luening & Co. ordered hops from Kuehn, Metzler & Co., with payment required before shipment. Luening arranged with Merchants’ Exchange Bank to guaranty a draft, using the hops, bill of lading, and invoice as security. The bank telegraphed a guaranty to First National Bank of Seattle. Kuehn, Metzler & Co. purchased hops from Livesley & Co. and Catlin, consigned them to Luening via railroad, and a bill of lading was issued naming Luening as consignee. Livesley & Co., learning of Luening's involvement, attached the hops as sheriff McGraw levied on them on December 8, 1890. After attachment, Kuehn, Metzler & Co. delivered the draft and bill of lading to the Seattle bank, which cashed it as the plaintiff's agent. The bank forwarded documents to plaintiff, but Luening refused payment due to overcharge and attachment; a corrected draft was later paid. Plaintiff sued sheriff for wrongful conversion. At trial, jury found for defendant. On appeal, the Circuit Court of Appeals held that delivery of the bill of lading as security vested a bankers' title in plaintiff, superior to the attachment, as intent of parties controlled title passage and Washington law did not change common law rules. The court reversed and remanded for new trial, but noted that exceptions to most jury instructions were forfeited due to untimely filing, though exceptions to instructions given after jury retired in absence of counsel were preserved.
Abstract
Buyer ordered hops with payment guaranteed by a bank using the hops, bill of lading, and invoice as security, while seller consigned them to the buyer. Creditor attached the hops after consignment but before document delivery, leading to refusal of payment and a suit for wrongful conversion against the sheriff. Appellate court held that delivery of the bill of lading as security vested superior title in the bank, reversing the judgment and remanding for new trial.
Opinion of the court
opinionHAWLEY, District Judgejoined by GILBERT, ROSS
- Delivery of bill of lading as security creates bankers' title.
- Intent of parties governs title passage, not mere issuance of bill of lading.
- Washington statute does not alter common law rule.
- Exceptions to jury instructions must be timely taken.
Jurisdiction
not challenged- Action for wrongful conversion of hops
- Parties from different states (Wisconsin and Washington)
Procedural posture
- Exceptions to jury instructions given in absence of counsel after jury retired
- Exceptions to general charge and refused instructions taken after jury retired
- Review of general charge and refused instructions due to untimely exceptions
Subsequent history
Legal categories
Case record
Issues & holdings
de novo
Washington statute does not change common law rule; symbolical delivery of bill of lading with intent to transfer property creates bankers' title.
Issue preserved for review
de novo
Bill of lading raises presumption of title but is controlled by special clauses or external evidence; intent of parties governs.
Issue preserved for review
de novo
Facts showed intent for title to remain with seller until payment; plaintiff's security interest via bill of lading delivery was valid and prior to attachment.
Issue preserved for review
de novo
Exceptions to general charge and refused instructions taken after jury retired are forfeited; exceptions to instructions given in absence of counsel after jury retired are preserved.
Issue not preserved
Holdings of the court
Error analysis
- Jury instructions misstated law on title passage and delivery, ignoring intent of parties. — jury instruction · error foundInstructions likely misled jury on central issue of title and priority. · not harmless
- Failure to take exceptions to jury instructions before jury retired. — procedural · error forfeited
Statutory interpretation
1Burden of proof
- Presumption of title from bill of lading shifts burden to plaintiff to rebut with evidence of intent.
Standards of review
- Interpretation of legal rules and statutes — de novo Questions of law, including application of common law principles and statutory interpretation, reviewed de novo.
- Jury instructions and exceptions — de novo Review of whether exceptions were timely taken under federal procedural rules.
Timeline
Sheriff McGraw sold hops under execution from judgment in attachment suit.
Outcome: Hops sold
Conversion completed, forming basis for damages claim.
Plaintiff received documents, presented draft to Luening who refused payment due to overcharge and attachment; draft protested.
Payment issues arose, leading to corrected draft and continued dispute over title.
Luening & Co. ordered 100 bales of hops from Kuehn, Metzler & Co., with cash payment required at Seattle before shipment.
Establishes initial contract terms and intent for payment before title transfer.
Corrected draft paid by plaintiff after Luening endorsed bill of lading; plaintiff retained bill of lading.
Outcome: Plaintiff paid for hops, held security
Plaintiff completed advance, asserting bankers' title.
Kuehn, Metzler & Co. purchased hops from Livesley & Co. (69 bales) and Catlin (31 bales), marked them, and placed them in freight warehouse.
Goods acquired for resale to Luening, setting stage for delivery and attachment.
Livesley & Co. obtained writ of attachment against Luening & Co. and sheriff McGraw levied on the hops.
Outcome: Hops attached
Attachment occurred before bill of lading delivered to bank, central to priority dispute.
Kuehn, Metzler & Co. delivered draft, bill of lading, and invoice to First National Bank of Seattle, which cashed draft as plaintiff's agent.
Outcome: Draft cashed, documents forwarded to plaintiff
Plaintiff's security interest perfected via symbolical delivery of bill of lading.
Hops billed via Northern Pacific Railroad to Luening & Co. in Milwaukee; bill of lading issued naming Luening as consignee.
Bill of lading created, raising presumption of title in consignee but subject to party intent.
First appeal: Circuit Court of Appeals reversed nonsuit and remanded for new trial.
Outcome: Reversed and remanded
Established precedent on title passage and intent.
Facts & evidence
Incident
Key facts
9 facts- A. F. Luening & Co. ordered 100 bales of hops from Kuehn, Metzler & Co., to be paid in cash at Seattle before shipment.
- Luening lacked funds and arranged with Merchants’ Exchange Bank to guaranty a draft, with the hops, bill of lading, and invoice as security.
- The bank telegraphed a guaranty to First National Bank of Seattle.
- Kuehn, Metzler & Co. purchased hops from Livesley & Co. (69 bales) and Catlin (31 bales), marked them, and consigned them via Northern Pacific Railroad to Luening & Co. in Milwaukee.
- A bill of lading was issued naming Luening & Co. as consignee.
- Livesley & Co., learning Luening was involved, attached the hops as sheriff McGraw levied on them around 1:20 PM on December 8, 1890.
- After attachment, around 3 PM, Kuehn, Metzler & Co. delivered draft, bill of lading, and invoice to First National Bank, which cashed the draft as plaintiff's agent.
- The bank forwarded documents to plaintiff, but Luening refused payment due to overcharge and attachment; a corrected draft was later paid.
- Plaintiff demanded hops from sheriff, who refused and sold them under execution.
Disputed questions
- Whether title to hops passed to Luening & Co. before attachment
- Intention of parties regarding transfer of title and security interest
Procedural history
4 steps- First trial: nonsuit granted at close of plaintiff's testimony.
- First appeal: reversed and remanded (Bank v. McGraw, 8 C. C. A. 420, 59 Fed. 972).
- Second trial: jury verdict for defendant.
- Current appeal: from judgment on second trial.
Evidence in the record
- Telegram from plaintiff to Seattle bank guarantying draft
- Bill of lading and invoice
- Draft drawn by Kuehn, Metzler & Co.
- 100 bales of hops
- Testimony regarding agreements between parties
- Intent of Luening, Kuehn, Metzler & Co., and bank
- Bill of lading
- Invoice
- Draft
- Telegrams
- Checks
- Marking of hops with Luening's name
- Delivery to carrier
- Payment arrangements
Jury
- Instructions on title passage based on intent
- Instructions on delivery to carrier as delivery to consignee
- Instructions on plaintiff's security interest
- [object Object]
- [object Object]
- Juror asked about period when title passed
- Juror asked what constitutes possession
Objects of relevance
Policy considerations
- Protection of commercial transactions and credit security
- Need for certainty in symbolical delivery via bills of lading
- Importance of party intent in title transfer
Authorities
Cited authorities (5)
Related cases (1)
Statutes
- St. Wash. 1885-86, p. 121 (Hill’s Ann. St. §§ 2407-2413)
Standards & doctrines
- Bankers' title doctrine
- Symbolical delivery doctrine
- Presumption from bill of lading
Legal principles applied
- Delivery to carrier is delivery to consignee unless contrary intent
- Bill of lading raises rebuttable presumption of title
- Exceptions must be taken before jury retires
Notable quotes
“The delivery, by an owner of goods, of a common carrier’s receipt for them, as security for an advance of money with the intention to transfer the property in the goods, is a symbolical delivery of them, and vests in the person making the advance a special property in the goods.”majority — Explaining common law principle on bill of lading as security.Establishes bankers' title doctrine.
“The intention of the seller and the purchaser governs the question of whether title passes by delivery or not.”majority — Jury instruction on title passage.Highlights central role of party intent in commercial transactions.
“Common honesty demands that agreements of this character, made in good faith, should be protected by the courts.”majority — Emphasizing need to secure commercial credit.Policy rationale for protecting security interests.