{ "id": 1456525, "name": "Commodity Credit Corporation v. Usrey", "name_abbreviation": "Commodity Credit Corp. v. Usrey", "decision_date": "1939-12-04", "docket_number": "4-5622", "first_page": "406", "last_page": "409", "citations": [ { "type": "official", "cite": "199 Ark. 406" }, { "type": "parallel", "cite": "133 S.W.2d 887" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "17 L. Ed. 282", "category": "reporters:federal", "reporter": "L. Ed.", "case_ids": [ 3465341 ], "opinion_index": 0, "case_paths": [ "/us/67/0372-01" ] } ], "analysis": { "cardinality": 469, "char_count": 7246, "ocr_confidence": 0.505, "pagerank": { "raw": 6.848989183728895e-08, "percentile": 0.4174457661431226 }, "sha256": "c16bf1b9ae3804b460be99ff329aecffbef025b2c075263f599d4d453c672d84", "simhash": "1:98df843704289388", "word_count": 1231 }, "last_updated": "2023-07-14T16:09:45.659289+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Commodity Credit Corporation v. Usrey." ], "opinions": [ { "text": "Grieein Smith, C. J.\nThe appeal questions correctness of a decree that Mrs. M. 0. Usrey had not lost a landlord\u2019s lien by reason of certain transactions in the handling and sale of cotton. Her tenant was Neely Curtis, whose indebtedness on his rent account was found to be $479.15. Of this sum $300 was cash rent. The balance was for one-fourth of the cotton disposed of.\nOther controversies relating to sales of relatively small quantities of cotton are disregarded in this opinion because appellant\u2019s prayer is that the judgment in favor of Mrs. Usrey be reversed and that the court below be directed to find that the intervener, Commodity Credit Corporation, has a prior lien on 17 bales of cotton represented by warehouse receipts pledged as security; or, in the alternative, that liability be decreed against Farmers Bank & Trust Company of Blytheville.\nCurtis had rented lands of Mrs. Usrey in 1935, 1936 and 1937. The acts which gave rise to this litigation relate to cotton grown in 1937 and delivered by Curtis to the Shaver-Foster Gin Company. The gin company, acting through Farmers Bank & Trust Company, negotiated loans from Commodity Credit Corporation. Proceeds were retained by the gin company, and it became insolvent.\nMrs. Usrey testified that she made several trips to see Curtis, urging him to get a government loan on the cotton \u201cso she could get her money,\u201d The following appears in her testimony:\n\u201cQ. I believe you told Mr. Foster [of the Shaver-Foster Gin Company] to pay you directly; and you told Mr. Curtis you wanted them to pay you directly; did you mean \u2018as they saw fit,\u2019 and \u2018as they saw fit to sell the cotton, \u2019 or how \u2014 or as it was. handled in the loan \u00cd A. If handled, I was to be paid as soon as the cotton was sold. My check was to come to me. [It was] not to be held, or anything ofvthat kind.\u201d\nMrs. Usrey also testified that the gin company was not to sell the cotton without notifying her.\nThe bales in dispute -were stored with Federal Compress & Warehouse Co. Receipts were delivered to the gin company, and on the strength of these $791.72 was procured from Commodity Credit Corporation. Primary obligations were Curtis\u2019 notes. He admitted signing one for $407.25. Four others, aggregating $384.47, were apparently executed by Curtis, but he denied the signatures. All of the notes were transmitted by the bank with the indorsement, \u201cWithout recourse.\u201d\nLegal title to the cotton until disposed of was in Curtis. The landlord had a lien, enforcible within six months from due date of the rent. Pope\u2019s Digest, \u00a7 8845. The gin company knew of Mrs. Usrey\u2019s lien, and officials doubtless intended, after receiving the loan checks, to correctly prorate amounts. But this was not done.\nAuthority by which the gin company obtained possession of the cotton, and in sequence received warehouse receipts, was the concurrence of Mrs. Usrey and Curtis. While Curtis disclaims having\u2019 signed four of the notes, he admits directing that advances be procured from the government agency. He knew the receipts would be pledged, and does not repudiate the notes.\nAppellees rely upon \u00a7 8849 of Pope\u2019s Digest to sustain their contention that there can be no innocent holder of the warehouse receipts as against the right of the landlord to enforce her lien. Appellants reply that the lien statute was -repealed by \u00a7 14453 of Pope\u2019s Digest \u2014 the Uniform Warehouse Eeceipts Act, passed in 1915.\nIt is not necessary to determine this phase of the controversy. If Mrs. Usrey and Curtis authorized the gin company to consummate the loan there was no wrongful disposition of the receipts. The wrong occurred when there was failure to account for proceeds.\nIn the light of Mrs. Usrey\u2019s testimony that she talked with Curtis and with Ollie Poster of the gin company about procuring a government loan; that she urged them to \u201churry it up\u201d; that the gin company was authorized to sell Curtis\u2019 cotton and to retain for her account a sum equal to one-fourth of the rent payable in kind, it must be held that she entrusted the gin company with the receipts. She says there was the condition that she be notified when sales were made, and that \u201cpapers\u201d be executed in her name and in that of 'Curtis.\nAs expressed, supra, the breach of faith occurred not in the bank\u2019s manner of' handling the loan application, nor in acceptance of the receipts by Commodity Credit Corporation, but in failure of the gin company to account to Mrs. Usrey and Curtis when the loan remittance was received.\nThe gin company was Mrs. Usrey\u2019s agent. It was permissively in possession of the cotton, with authority to sell and to remit one-fourth to her. She is charged with knowledge of a custom, and therefore must have known that the ginners did not long retain the physical property, hut either sold it or stored it in a warehouse. Commodity Credit Corporation had no notice of the reservations Mrs. Usrey says attached to the authority of her agent, and it is not bound thereby.\nIn American Jurisprudence, v. 2, \u00a7 105, Chapter on Agency, it is said: \u2018Although a principal may limit the authority of his agent in any manner he pleases and make' his limitations binding and obligatory between himself and his agent, such limitations are not necessarily binding upon third parties. Special or secret instructions or limitations upon the authority of an agent, whose powers would otherwise be coextensive with the business intrusted to him must be communicated to the party with whom he deals, or the principal will be bound to the same extent as though they were not given. Such instructions or limitations are not binding upon a third person who deals with the agent in good faith without knowledge of such instructions or limitations, and in reliance upon the apparent authority with which the principal has clothed him. \u2019 \u2019\nIn Calais S. B. Co. v. Scudder, 2 Black (U. S.) 372, 17 L. Ed. 282, it was said: \u201cNo secret agreement between the principal and agent can effect third persons who purchase from the agent, where the agent was in possession of the property and documentary evidence of ownership, and was thus held out to the world as the legal owner. \u2019 \u2019\nThat part of the decree holding that Commodity Credit Corporation and Reconstruction Finance Corporation were not innocent purchasers of the warehouse receipts is reversed, and the cause is remanded with directions to enter an order holding that the two government agencies are not bound by the liens. In all other respects the decree is affirmed.\n\u201cThe purchaser or assignee of the receipt of any ginner, warehouse-holder or cotton factor or other bailee for any cotton, corn or other farm products in store or custody of such ginner, warehouseman, cotton factor, or other bailee shall not be held to be an innocent purchaser of any such produce against the lien of any landlord or laborer.\u201d\nFor Arkansas cases on the subject, see West Publishing Company\u2019s Arkansas Digest, vol. 14, \u201cPrincipal and Agent,\u201d subdivision 116 \u2014 \u201cUndisclosed Limitation of Authority.\u201d", "type": "majority", "author": "Grieein Smith, C. J." } ], "attorneys": [ "JoJm ID. Goodloe and Roy Penix, for appellants.", "G. M. Buck, Reid & Evrcmrd, Henderson, Meek & Hall and Harry E. Meek, for appellees." ], "corrections": "", "head_matter": "Commodity Credit Corporation v. Usrey.\n4-5622\n133 S. W. 2d 887\nOpinion delivered December 4, 1939.\nJoJm ID. Goodloe and Roy Penix, for appellants.\nG. M. Buck, Reid & Evrcmrd, Henderson, Meek & Hall and Harry E. Meek, for appellees." }, "file_name": "0406-01", "first_page_order": 424, "last_page_order": 427 }