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Smith v. Clews

18 Abb. N. Cas. 477 Court N. Y. Court of Appeals ; English

Delivered by Peckham, J.

Contents

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p. 477
SMITH v. CLEWS.

Headnote

[Reversing 33 Hun, 501 .]
N. Y. Court of Appeals ;
April, 1887.
1. Agent's power to sell and give good title to tona fide purchaser.] The rule that one entrusted simply with the possession of personal property, with no power to sell or pass title, cannot give title to the property, even to a tona fide purchaser for value, does not apply where the seller is a dealer in that kind of property, and it is entrusted to him by the owner to show to customers, although a receipt is given by the agent requiring its return to the owner on demand.
2. The same ; ease stated.] Plaintiffs sent, through their agent, a pair of diamond earrings to a dealer in diamonds, who had previously told them- that he had a customer for the earrings, taking from him a signed receipt therefor, “ on approval to show to ray customers; said knobs to be returned to (plaintiffs) on demand.” Upon these facts appearing in an action of claim and delivery against a tona fide purchaser for value from the dealer,—Held, that plaintiffs had clothed the dealer with a power to sell, and that it was error to leave the question to the jury.
Appeal by the defendant from a judgment of the treneral Term of the Supreme Court, First Department, affirming judgment in favor of the plaintiff rendered upon a verdict of the jury, and an order denying motion for anew trial on the minutes.
p. 478
Alfred II. Smith and another, brought this action of claim and delivery under the Oodc of Civil Procedure, against Henry Clews and another, to recover a pair of diamond car-rings or their value. The complaint was dismissed as to the co-defendant of Clews at the trial, and a verdict recovered against Clews.
The Supreme Court affirmed the judgment upon appeal, upon the ground that the question whether the dealer of whom defendant purchased the property, was in fact authorized to.sell it, was submitted to the jury, and that this was all defendant was entitled to ask ; and that the jury having found that he had no actual authority, none could be implied from the mere fact of possession voluntarily transferred to him. Brady, J., dissented. Decision reported in 33 Run, 501[1]
Defendant appealed to this court
Albert A. Abbott (Abbott Bros., attorneys), for the defendant appellant.
Miers was actually authorized, as plaintiffs’ agent, to sell the diamonds, and their delivery, considering the other circumstances of the case conferred upon him apparent authority to sell them to a bona fide purchaser for value, without notice, either as agent of the owners or as being himself the owner. See Parker v. Baxter ( 86 N. Y. 586 ), where plaintiff had agreed to sell Baxter & Co. a cargo of corn, the bill containing a notice that title was not to pass “ until paid for, without regard to possessiou,” and Baxter & Co. having obtained a bill of lading from plaintiff without payment, parties who discounted drafts upon the faith of Baxter & Co’s, ownership of the cargo, were held protected, even though the bill of lading, the- indicia of title, was
p. 479
not actually shown to them, until after they had taken the drafts.' See, also, Fitzgerald v. Fuller ( 19 Hun, 180 ), sustaining title of bona fide purchaser of a wagon from owner’s agent under a written ..agreement for their return on demand, and that no title should pass until full payment.
Charles H. Woodbury, for the plaintiffs, respondents.
The finding of the jury is conclusive as to the fact that Miers had no authority whatever, real or apparent, express or implied, to sell the goods. The question was one of fact, properly submitted to the jury (Powell v. Powell, 71 N. Y. 71 ; Cowdin v. Gottgetreu, 55 N. Y. 650 ; American Life Ins. Co. v. Dobbin, Lalor's Suppl. to Hill & Den. 252; Comstock v. Willoughby, Id. 271; Wait v. Agricultural Ins. Co., 13 Hun, 371 , 374; Kavanagh v. Wilson, 70 N. Y. 177 ; Nicholson y. Conner, 8 Daly, 212 ). The contention of appellants that the delivery by the owner of a chattel to another, on approval, to show to the latter’s customers, and to be returned to the owner hpon demand, imports as matter of law-, a power of sale, not susceptible of any other construction, cannot be sustained. “ There is no rule of law to prevent this transfer of title taking effect according to the stipulation of the parties ” (Hurd v. Cook, 75 N. Y. 454 , 458 ; Boon v. Moss, 70 N. Y. 465 , 472, 473). The delivery of a chattel to show to another is not to sell to another, especially where it is stipulated that it shall be returned.
The legal relation between the parties was that of bailor and bailee. Where the identical thing delivered is to be returned, even though in an altered form, the contract is one of bailment and the title is not changed (Mallory v. Willis, 4 N. Y. 76 , 85 ; Foster v. Pettibone, 7 N. Y. 433 ). A bailee in possession of another’s chattels cannot give a good title thereto as against the true owner (Spraights v. Hawley, 39 N. Y. 441 ; Ash v. Putnam, 1 Hill, 302 ; Paddon v. Taylor, 44 N. Y. 371 , 376). The principle that where one of two innocent persons must suffer by the
p. 480
wrong of another, the one who enables the other to commit the wrong miist bear the loss, does not apply to the case. To put another in possession of one’s chattels does not enable such one to commit a wrong on a purchaser from him, for the reason' that the purchaser has no right to rely on possession as evidence of authority to sell (Spraights v. Hawley, 39 N. Y. 441 ; People v. Bank of N. A., 75 N. Y. 547 , 561. See Coggill v. Hartford & N. H. R. R. Co., 3 Gray, 545 , 549; Deshon v. Bigelow, 8 Gray, 159 , 160; Harkness v. Russell, 118 U. S. 663 ). One in possession of chattels under an executory contract of sale has not such indicia of ownership as to convey a good title to a bona fide purchaser, as against the true owners (Ballard v. Burgett, 40 N. Y. 314 ; Austin v. Dye, 46 N. Y. 500 ; approved in Comer v. Cunningham, 77 N. Y. 391 ; and in Barnard v. Campbell, 55 N. Y. 456 ; Puffer v. Reeve, 35 Hun, 480 ). The owner must go further than mere delivery of possession ; he must either transfer the title by a sale, or authorize the agent to make a sale, or do some act to mislead, upon the faith of which a bona fide purchaser has acted, before lie is estopped from asserting his title as against such purchaser (Fitzgerald v. Fuller, 19 Hun, 180 ; Fleeman v. McKean, 25 Barb. 474 ; Barnard v. Campbell, 55 N. Y. 456 ; Comer v. Cunningham, 77 N. Y. 391 ). A salo “ on approval ” does not transfer the title until the approval is given (Benjamin on Sales, 4 Am. ed. § 595 ; Knowlson v. Strong, 10 Weekly Dig. 81 ; Bulkley v. Matthews, 12 Weekly Dig. 229 ; Jessup & Moore Paper Co. v. Burr, 16 Weekly Dig. 415).

This is an action under the Code to obtain the delivery of personal property alleged to belong to plaintiffs and to be wrongfully withheld by defendant. The plaintiffs had a verdict, which was affirmed at general term, and the defendant has appealed here. The plaintiffs claimed to be the owners of what they called a pair of diamond ear knobs, of the value of $1,400, which came into

p. 481
the possession of defendant, as shown by the evidence, in the following manner;

Elijah Miers was a dealer in diamonds in Hew York. IBs business was to procure diamonds from the larger dealers and sell them to his customers. Before January 13, 1879, he had procured, from an authorized agent of the plaintiffs, a pair of diamond earrings, which, on that day, he had sold to the defendant for $300, and had received the check of defendant, payable to his order, in payment therefor.

Before January 23, 3879, Miers had procured another pair of earrings from plaintiff’s said agent, and sold them on that day to defendant for $450, receiving in payment the first pair of earrings and the check of defendant for the balance of $150.

Miers had paid to plaintiffs’ agent the price of these diamonds after the sale to defendant. The defendant had purchased them in good faith from Miers, assuming him to be the owner. lie intended the first pair as a present for his wife, bin when shown to her she preferred a more expensive pair, and hence the second purchase. These also proved unacceptable, and it was sometime after their purchase by defendant before the diamonds in question were presented to him for purchase, he having in the meantime kept the second pair, and upon the purchase of the diamonds in question of the same man, Miers, he gave back the second pair and paid $650 in addition, thus making up $1,100, the purchase price of these last diamonds.

There is no question of the bona fides of this series of purchases by the defendant. The evidence is uncontradicted as to the manner in which Miers obtained the last diamonds from the plaintiffs. They had delivered them to Plumb, the diamond broker, who had delivered the other diamonds to Miers. One of the plaintiffs was asked how it happened that he delivered these diamonds to Plumb, and he testified that he could not say whether it was at Miers’ request or not, but that Miers had called on him before he delivered

p. 482
them to Plumb and had said to him that he had a customer for a pair of diamond ear lcnobs, and although the plaintiff could not say that he told Miers that he would send him the diamonds through Plumb, yet he says lie stated to Miers that he would do so, and he did do so, and he authorized Plumb to deliver the diamonds to Miers, and that is the way Miers got them. The witness also said he knew Miers had the diamonds in his possession immediately that they were taken from the plaintiffs’ office and delivered to Miers by Plumb ; they were delivered to Plumb on April 12, and by him to Miers on that day. When Plumb delivered them to Miers he took from him a receipt in this form:
“New York, April 12, 1879.
“ Deceived from Alfred II. Smith & Co., by their representative B. W. Plumb, a pair of single stone diamond earrings, 10e carats, of the value of $1,400, on appi’oval, to show to my customers; said knobs to be returned to said A. II. Smith & Co. on demand.
“ E. Miers.”

Having thus become possessed of the diamonds, Miers, as has been stated, sold them to defendant, and the question is, Did he get a good title as against the plaintiff? Taking the undisputed evidence and reading this receipt in the light thereof, we cannot resist the conclusion that the plaintiffs conferred upon Miers the power to sell these diamonds, and of course to give a good title, and therefore the court should have directed a verdict for the defendant.

The plaintiffs were dealers in diamonds, and they knew Miers and that he was engaged in the business of a diamond dealer—a seller of stones to whomever he chose. They had on two former occasions entrusted, through their agent, diamonds to Miers, who had sold them and accounted for the proceeds of the sale without any fault being found, so far as appears, on account of any lack of authority to sell. They were informed by Miers on this particular occasion

p. 483
that he had a customer for a pair of diamond earrings, and these diamonds were then entrusted to Miers by the plaintiffs, through their agent Plumb.- Upon taking them Miers gives the receipt spoken of. Now, upon these facts, what other meaning can he attached to that receipt than that Miers liad power to take these diamonds, show them to his customer, and if approved of by the customer, sell them to him ? The fact that Miers agreed to return them to plaintiffs on demand must be construed with reference to the obvious purpose for which the diamonds were entrusted to him—viz. that of a sale—and so construed, the plain meaning is that if not already sold, the plaintiffs had a right to demand a return of the diamonds at any time, and Miers would then be bound to return them. The information given to plaintiffs by Miers, that he (Miers) had a customer for a pair of diamond ear knobs, is susceptible of no other interpretation than that he had a customer who wanted to buy a pair. Under such circumstances what could a dealer in diamonds mean by entrusting them to another dealer who had a customer who wanted to buy them, and who came to this dealer for the purpose of being supplied by him with diamonds of a kind which his customer wanted to buy ?

Enlightened by these facts, the interpretation of the receipt signed by Miers is an easy matter. It can mean nothing else than an authority to sell the stones to the customer if they met his approval, and if not actually sold before demand made, they should be returned to the plaintiffs npon such demand.

This conclusion as to what was the actual authority given to Miers docs not in the least affect the propriety of the decisions cited by the counsel for the respondents and in the opinion of the court at general term to the effect that one entrusted simply with the possession of personal property, with no power to sell or pass title, cannot give title to the property, even to a Iona fide purchaser for value.' The question here is simply what was the authority with which

p. 484
the man Miera was clothed, and upon the undisputed evidence in the case we hold it was an authority to sell.

The judgments of the general term and of the circuit should be reversed and a new trial ordered; costs to abide event.

All concurred.

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