Arbuthnot v. Central Trust Co.

Citations

• 221 F. 16
• 1915 U.S. App. LEXIS 1281

Syllabus

<p>1. Pledges <®=^11—Pledge Distinguished from Other Transactions—“Security Title.”</p> <p>Certain bankers advanced the purchase price of coffee, imported by a Chicago merchant, under agreements for their security through the ownership of the coffee pending payment by the importer of such advances. The coffee, upon its arrival in New Orleans, was delivered by the bankers’ agents, who under the agreement received the bills of lading, invoices, etc., to the importer, in exchange for trust receipts, whereby he agreed to hold the coffee in storage as the bankers’ property, with the right to sell it and pay the proceeds to the bankers, until their advances were discharged ; the receipts stating that it was the intention of the agreement to preserve unimpaired the ownership, or, in the case of one of the receipts, the lien, of the bankers. One of them specified that it was an agreement to hold the coffee in trust for the bankers and sell it for their account. Each receipt disclosed the bankers’ title to be for security only, which would be divested at any stage on payment of the advances. The coffee was immediately forwarded by rail as consigned to its Chicago destination; the taking of the receipts and delivery to the importer at New Orleans effecting no stoppage of the coffee there. All of the invoices, bills of la ting, etc., coming to the hands of the bankers, indicated that the consignment was made for delivery to the importer at Chicago, subject to the arrangement for securing the bankers. The importer placed the coffee in warehouses in Chicago, receiving warehouse receipts therefor, part of which he negotiated to holders in good faith. Held, that the title of the bankers was a special form of “security title,” apart from any common-law form of security, arising out of modern conditions of trade and commerce, and not dependent upon possession as in the case of a common-law pledge or mortgage.</p> <p><g^>For other cases see same topic & KEY-NUMBER in all Key-Numbered