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DRAKELY v. GREGG.

December 1, 1868

DRAKELY
v.
GREGG.



243]

IN error to the Circuit Court of the United States for the District of Maryland.

The controversy grew out of the last of three shipments of pork products, in January, 1865, to Drakely & Fenton, of Baltimore, by McCabe & Co., of Chicago. Drakely & Fenton had agreed to receive, on consignment, from McCabe & Co., hams, shoulders, prime and new pork; to sell the property at the highest market price, and to advance, on each shipment, at certain specified rates. In pursuance of this understanding, McCabe & Co. made two shipments, one of barrelled meat, and the other of shoulders, in tierces, on which they drew drafts in favor of Gregg & Hughes to the amount of $59,000 which were paid.

Soon after this the hams were sent. On the day succeeding their shipment, the Baltimore firm received a telegram, which was followed by a letter from Gregg & Hughes, of Chicago, claiming title to all the property, and requesting that the bills of lading for the hams might not be negotiated until the whole matter was properly adjusted; and, until then, Drakely & Fenton did not know that Gregg & Hughes had any interest in the property consigned to them. It seemed, from Gregg & Hughes's letter, that they had furnished McCabe & Co. with money to cut and pack hogs, and had taken in security, the warehouse receipts on all the pork products, which afterwards came into the possession of Drakely & Fenton. The intervention of Gregg & Hughes resulted in nothing more being paid to McCabe & Co., and in a final direction from McCabe & Co. to Drakely & Fenton, to place the proceeds of all the pork products consigned to them, to the credit of Gregg & Hughes.

It appeared, from the conduct of the parties, that there was no apprehension, until long after Gregg & Hughes had intervened, that the portion of these products, covered by the two first shipments, would not bring, when sold, enough to reimburse Drakely & Fenton for what they had advanced on them. But it so happened, in the vicissitudes of trade, that the hog market greatly declined, and that the proceeds of the pork and shoulders were inadequate to repay the money which was advanced upon them. The hams having sold for a large sum over charges and advancements, Drakely & Fenton insisted that they were entitled to a lien on the proceeds, for their general balance arising out of the deficiency on the sale of the pork and shoulders, which right was denied by Gregg & Hughes, and hence this litigation.

The question depended, of course, upon the fact, whether the intervention of Gregg & Hughes had changed the relation of principal and factor, which had previously existed between McCabe & Co. and Drakely & Fenton, and separated the consignment of hams from the preceding consignments. This, of course, was a question depending on the terms on which the hams had been received.

The evidence, on this point, consisted of a long correspondence, and of some oral testimony. The transactions originated with a letter from McCabe & Co. to the Baltimore house, as follows:

CHICAGO, January 6th, 1865.

MESSRS. DRAKELY & FENTON, BALTIMORE.

DEAR SIRS: I have about one thousand tierces of pickled hams, and five hundred tierces of pickled shoulders, with some mess, prime mess, and extra prime, which I would like to send to you, provided you think you could sell for good prices. Please let me know what you could get for the above, to arrive, and what amount you would allow me to draw on the shipment.

Yours, truly,

R. McCABE & CO.

The property here referred to, pork, shoulders, and hams, was, all of it, confessedly, at the date of the letter, the property of Gregg & Hughes, by virtue of the warehouse receipts already mentioned. On the 10th January, Drakely & Fenton reply, as follows:

BALTIMORE, January 10th, 1865.

MESSRS. R. McCABE & CO., CHICAGO.

GENTLEMEN: Yours of 6th instant came to hand this morning. [Here prices are given.] We would be pleased to receive consignments from you, and would advance you as follows, on sight drafts, accompanied with bills of lading; on pickled hams, say $40 per tierce; do shoulders, $30 per tierce; mess pork, $30 per barrel; P. M. pork, $25 per barrel.

Very respectfully, yours,

DRAKELY & FENTON.

The present litigation had reference, mainly, to 983 of the 1000 tierces of hams, the first-mentioned article in both of the foregoing letters.

Satisfied, apparently, with the terms of Drakely & Fenton, McCabe & Co. write, as follows:

CHICAGO, January 13th, 1865.

MESSRS. DRAKELY & FENTON, BALTIMORE.

DEAR SIRS: Yours of 10th is before me; I will ship to you, by the 16th, fifteen hundred barrels pork, and, probably, will ship one thousand tierces of hams, and six hundred tierces of shoulders, next week. I will draw on the fifteen hundred barrels on the 16th, as directed by you, for about $42,000.

Truly yours,

R. McCABE & CO.

On the 16th of January, McCabe & Co. forwarded the pork described in letters of that date, of which the following is an extract:

'On the terms enumerated, I have drawn on you to the order of Gregg & Hughes for $41,000. I will ship to order about six hundred tierces of shoulders, and, on Thursday, I will ship the hams. I hope you will put the property in store, on arrival, until I come on, which will be in February.'On the 17th January, McCabe & Co. write again to Drakely & Fenton, informing them of a shipment of 'six hundred and three tierces of shoulders,' and saying: 'I will ship the hams next week, if I can get cars.'

The bill of lading for the nine hundred and eighty-three tierces of hams in dated January 23d, 1865, which was Tuesday; but the hams appear to have been forwarded, in fact, on Sunday; and on Monday, 22d, Gregg & Hughes telegraphed Drakely & Fenton, as follows:

CHICAGO, January 22d, 1865.

Don't negotiate bill lading for nine hundred and eighty-three tierces of hams, shipped yesterday by McCabe & Co., consigned to you; hams belong to us. Particulars by mail. Answer.

GREGG & HUGHES.

This was the first intimation that Drakely & Fenton had, of Gregg & Hughes's interest in the property mentioned in the original letter of McCabe & Co. of January 6th, or any part of it. The letter promised by the telegram, and of the same date, followed in course. It was thus:

CHICAGO, January 22d, 1865.

MESSRS. DRAKELY & FENTON, BALTIMORE.

GENTLEMEN: We have been advancing large sums of money, during the past winter, to R. McCabe & Co., of this city, to pack pork with, and have been getting from them their warehouse receipts, with policy of insurance, covering the same security. We have been shipping the property to New York on B. L. in our name, where it was held for our account. Some few days ago, Col. McCabe, of the firm named, handed us a letter from your house, authorizing them to make sight drafts on you, on the basis of certain figures therein named, the drafts to be accompanied by B. L. These shipments they made without our knowledge in their own name, and gave us only a portion of the proceeds of the drafts made on you, payable to our order, viz., one for $41,000, and another for $18,000. TO THIS WE DID NOT MAKE ANY SERIOUS OBJECTION, as they had been cutting a few hogs with money obtained from another source, and we presumed they wanted to close that account. There was still a considerable quantity of lard and hams remaining here, which we supposed was sufficient to secure us for our advances here, in addition to what we had in New York. Subsequently, they shipped the lard to you, on their own account, for which we got nothing yet. Col. McCabe, however, told us that we should have the benefit of anything that might be in your hands, from the sale of the property shipped you on B. L. in the name of McCabe & Co., the lard included, after your advances and charges were paid. We were satisfied with that arrangement, and on Friday last proposed that we would ship to you, in a few days, the hams that were still here, there being then about a thousand tierces in which we were interested, and we would not draw anything upon them until they were sold. Col. McCabe told us, at that time, he would leave on Saturday morning for New York, and we were to attend to the shipping of the hams ourself. To our surprise, this morning (Monday), we found that McCabe did not go to New York, as contemplated, but remained here and shipped the hams himself to your house, on yesterday (Sunday), and this morning left for your city himself. Now, the last move, to us, does not look right, and we are not satisfied with it. We, consequently, write to you all the facts in connection with our dealings with McCabe & Co., and will deem it an especial favor, if you will hold off making further advances to them, over and above the $41,000 and $18,000 sight drafts drawn in our favor. The property shipped you is virtually and legally ours, and we hold McCabe's warehouse receipts for it.. If you will delay the payment of anything further to McCabe & Co. until we can advise with them, and direct the property to be placed with you for our account, we will feel very grateful to you; and if they refuse to comply with our request, we can then take steps to make them surrender the property or reimburse us for our advances. . . .

We do not wish your interests in the matter to be impaired in the least; we want you to sell all the property consigned to you; but we do not want the proceeds paid over to McCabe & Co., until we are secured, nor do we want any sale for the future made, unless the sales are placed to our credit. McCabe & Co. may have the very best intentions in this matter, and we hope they have, but the course pursued is not exactly as we would have done, and we think very strange of McCabe & Co., for having moved property belonging to us without our consent. We desire that they shall have the benefit of everything the pork, lard shoulders, and hams bring over the amount we have in them. .....

Yours,

GREGG & HUGHES.

On the 31st of January, 1865, Gregg & Hughes write:

'We have in our former letter notified you that the property consigned to you by R. McCabe & Co., of this city, belongs to us. We again notify you that all the pork products shipped to you by McCabe & Co., is ours, and you must not negotiate for advances on the same with any other parties but us. We also notify you not to divest yourselves of the control of any of the property, by assigning B. L., or in any other way, as you, we are legally advised, are responsible to us. You will consequently please confer with us in future, in regard to the disposal of said property. ..... You will distinctly understand, that if you dispose of, in any way, the property consigned to you by R. McCabe & Co., without our consent, that we will hold you responsible for the value of it.'

Drakely & Fenton reply, February 3d, 1865, and say:

'We have decided to be governed by your instructions as to retaining the control of the goods, or proceeds of them, and we now assure you we have no wish to embarrass you, and will do all in our power to protect your interests.'

On the 6th February, Gregg & Hughes wrote to Drakely & Fenton, and after speaking of some lard, which McCabe & Co. were to have let them have, but did not, say:

'In place of it he agreed that we should not only have the proceeds of sale of the 983 tierces hams shipped to you, but also all property of the brand of R. McCabe & Co., in your hands. . . . We claim the whole property–the hams, pork, and shoulders. Our receipts cover them.'

On the 9th February, 1865, Drakely & Fenton, writing to Gregg & Hughes, say:

'In naming figures we would advance to McC. & Co., we based our calculation on at least 300 Ibs. tierces ham and shoulder (we have generally found 300 to 320 the net weight of Ohio and Indiana tierces) McC. & Co., we find so far as examined, weigh 280 to 290. We name this now, as we shall, when you and Mr. McC. get the matter straightened so that we shall know in whose name to keep our account, make a new estimate, based on the actual weight of the hams and shoulders, and the depreciated market for all the goods, so that if an advance is required on the hams, fix an amount low enough to give good margins on all the shipments.'

This letter refers to the letter of the 10th January, fixing the rate of advances, shown by R. McCabe to Gregg & Hughes.

The letter in reply is dated February 11th, and made no comment on the subject of the passage last above quoted in long primer.

The next letter is dated February 22d. This was also silent upon that subject.

The next, dated February 27th, says:

'We hand you memorandum of property in your hands which our order covers, subject to two drafts made by McCabe & Co. on you, with transportation and other regular charges,' and they add their thanks 'for the very liberal and just course' pursued by Drakely & Fenton in the premises. In this same they ask for ...


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