Danforth v. McElroy

Danforth v. McElroy. Action of Detinue. 1. Gambling contracts void. — By force-of the statute gambling con- ' tracts are void, and invalidity follows the contract int'o the ' hands of a bona fide holder 'for value. ' ... 2. Warehouse receipts; when not contracts. — In respect of their use as authorized .by statute — Code,. § 4222 — in the disposi- ; tion of property, warehouse receipts are not contracts; hence the transfer of a warehouse receipt for cotton, made hy virtue of the statute, by one who acquired it hy gambling to another, who was ignorant of the consideration of the first transfer, is not the transfer of a void contract, but the transfer of the cotton itself specified in the receipt. 3. Transferror of warehouse receipt when estopped to deny consideration of his transfer. — If the original owner of a ware-, house receipt indorses and delivers it to another, and that other transfers it for a valuable consideration to one who is ignorant of the consideration Of the first transfer, the original owner is held to have induced the second purchase by his indorsement, and is estopped to assert as against the second transferree the claim which he might have asserted against his immediate transferree, that the transfer was for. a gambling considration. 4. Warehouse receipts; transferable in blank.- — Warehouse receipts may be transferred by indorsement in blank; and if one is so transferred by the original owner, his transferree may again transfer it by delivery only. Appeal from tbe Circuit Court of Jefferson. ■ Tried before tbe Hon. S. J. Banks. Lizzie McElroy brought suit in detinue for one bale of cotton: She became possessed of tbe warehouse receipt for tbe cotton for a valuable consideration, and ■without knowledge of tbe manner in which her trans-ferror obtained it. Tbe defendant in the suit suggested that A. P. Danforth claim tbe cotton sued for. Hé‘ appeared in tbe case and filed bis plea, alleging that the cotton was bis, and that bis endorsement of tbe receipt was made in fulfilling a gambling contract: Tbe cause was tried by tbe court without a jury; and judgment was rendered for tbe plaintiff. Tbe claimant appeals and assigns as error tbe rendition of tbe judgment. V. L. Allen, for appellant.— (1). An endorsement to tbe party bolding a warehouse receipt is necessary under our statute to give tbe right to sue. — Code, Sec. 4222. (2). Tbe transfer and endorsement are void under our Code, because made for a gambling consideration; Mrs. McElroy cannot set up her ignorance of this fact. — Ivy v. Nicies, 14 Ala.- 564; Manning v. Manning, 8 Ala. 138; Finn v. Barclay, 15 Ala. 624; Brewer & Solly v. Morgan, 13 Ala. 551; Whitlock v. Heard, 16 Ala. 336. ■ No brief for'appellee came to tbe bands of tbe reporter. [MAJORITY — SHARPE, J.] SHARPE, J. — By force of tbe statute gambling contracts are void, and it lias been held that invalidity follows tbe contract into tbe bands.of .a. bona fide\ bolder for value. — Hawley v. Bibb, 69 Alá. 52. In respect of tbeir use as. authorized by statuté in tbe disposition of property warehouse receipts are not contracts. • By tbe statute unless stamped “not negotiable,” they “may be transferred by tbe indorsement thereof, and any person to whom tbe same is transferred must be deemed and taken to be tbe owner of tbe things or property therein specified so far as to give validity to any pledge, lien or transfer made or created by such person.” — Code, § 4222. In such use tbe receipts, do not represent money or value, but are tbe.representatives of property, symbolizing its delivery into tbe possession of tbe assignee, investing him with such rights.as it is tbe intention of tbe parties to pass in tbe property itself.—Commercial Bank of Selma v. Hurt, 99 Ala. 130. .The agreed statement of facts shows that tbe warehouse receipts for tbe cotton -in suit was transferred by the claimant Danforth to Grey in payment, of a gambling debt, that thereafter Grey sold and transferred it without further. indorsement to the • plaintiff, and that tbe receipt “bad on it only .the indorsement of Danforth.” The .facts do not otherwise show-the form of tbe-indorsement, but since an indorsement is.made by wonting tbe transferror’s name only tbe statement that the receipt bad on it only the indorsement of Danforth is equivalent to tbe statement that tbe indorsement was in blank. As in tbe case of other instruments which may be transferred, by indorsement, such blank indorsement carried wdtb it authority to tbe plaintiff to complete tbe form of transfer to herself, and no further indorsement by Gray or Danforth wras necessary. ... Tbe facts further .show that tbe plaintiff bought for value and, witbput. notice that ■ Grey’s, requisition rested upon a gambling consideration.. The transfer to her' under. tbe claimant’s indorsement was precisely of tbe character to which the statute in terms, gives validity. It was not the transfer of a void contract, but a transfer to the plaintiff of the cotton specified'in the receipt. The purchase having been induced by the claimant’s indorsement, he is estopped to assert as against the plaintiff the claim which under the statute he might have assertéd against Grey. The judgment of the circuit court will be affirmed;