REVIEW OF IMPORTANT DECISIONS
By C. L. YOUNG
Stutsman v. Cook et al.
A warehouseman gave a statutory warehouseman’s surety company bond covering a two years’ period and a like personal bond for the subsequent two years’ period. Grain was stored prior to the first two years’ period and a storage ticket issued therefor. Other storage tickets were issued during the periods when the bonds were in force. All of the grain stored prior to and during the first period was shipped and sold before the end of the first period, and the proceeds were applied to the warehouseman’s indebtedness to the buyers. The warehouseman was unable to redeem the tickets either by delivery of the grain or by payment of its value and was found insolvent. The warehouseman turned over to the sureties on the personal bonds, notes, life insurance and bills receivable, the proceeds of which were to redeem outstanding receipts issued during the life of the personal bond. The action is on the two bonds for the use and benefit of all holders of outstanding storage tickets. HELD: That a warehouseman who ships all grain stored in his warehouse out of the state, sells the same and applies the proceeds thereof on his own indebtednesss, when he is insolvent and has no grain in his warehouse nor in terminal elevators for the redemption of outstanding storage tickets, converts the grain so stored and he and his bondsmen are liable for the value thereof; that since a demand would have been unavailing, it was unnecessary; that the warehouseman’s bond having been given for a period of two years, the sureties thereon are liable for all conversions of the warehouseman during that period only; that there is no right of contribution between sureties on bonds for different periods; that the sureties on the second bond in the case must account strictly for all property and money turned over to them which may be left after the storage tickets for which said bond is liable are redeemed; and that the surety on the first bond is subrogated to the rights of the warehouseman for any balance of such property remaining after such redemption of tickets for the second period.
Huether v. McCall-Dinsmore Company, a corporation, et al.
Grain was stored in a public warehouse and sold in the terminal markets by the named defendant, a corporation, engaged in the grain commission business, such defendant having knowledge that the grain shipped to it was stored grain. The owner knew that the grain would be commingled with other grain and shipped out of the state. Recourse was had against the warehouseman’s bond, and a part of the owner’s aggregate claim was realized therefrom and thereafter this suit was commenced for the entire claim. HELD: That the defendant engaged in the grain commission business having knowledge that the grain shipped to it was stored was liable for a conversion thereof; that where the owner of grain stores it in a public warehouse with knowledge that the warehouseman will commingle it with other grain and ship it out of the
