Howland v. Woodruff — 16 Abb. Pr. 411

Majority

p. 411

HOWLAND against WOODRUFF.

Court of Appeals,

February, 1875.

Headnote

Ease and Exceptions.—Factor’s Act.—Cause oe Action.

The practice of printing the stenographer’s minutes of the trial at length and without a revision as a case for use on appeal reproved. The possession of merchandise contemplated by section 3 of the factor’s act (L. 1830, p. 203, c. 179), as essential to the power of factors to pledge the goods to their principal, is the actual and not a constructive possession.

Where the factor obtained an advance while the goods were still in the carrier’s possession, held, that the persons making the advances did not obtain title as against the consignors.

The action was brought in the city court of Brooklyn by Slocum Howland, Leonard Searing, and W. F. Bancroft, against Franklin Woodruff and others, to recover possession of over four thousand bushels of barley, and damages for their detention, &c.

It appeared that - the barley was consigned by plaintiffs to Griffin & Willetts, their factors. The bill of lading was not signed by the captain, but by Brown & Smith, shippers, and contained a clause that the captain was to hold the load five days without charging, and after five days, to hold at a per diem charge.

The captain on arrival in New York showed the bill of lading to the consignees, who made some en

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tries of its contents in their books. While the barley was still on board, the consignees agreed with the defendants to store the barley with them, and the defendants, on the faith of the arrangement, made an advance of money, and the consignees thereupon directed the barley to be unloaded at the defendants’ store-house, which was done. At the trial, the court dismissed the complaint, and afterwards denied a motion on the minutes for a new trial.

Plaintiffs appealed from the judgment.

In the court below at general term the following opinions were rendered:

McCue, J.—I think the instrument offered in evidence, though perhaps somewhat informal, contained all the essential requisites of a bill of lading.

It was signed not by the captain of the vessel, but by the shippers, and contained the name of the consignors (the plaintiffs), and the name of the consignees, “to Griffin & Willets, Ho. 10 South Street, New York.”

Contracts for the freighting of goods on our canals are usually less full and formal than when the property is to be carried by sea, but they must have all the essential qualities, or else they can not have the full effect of a bill of lading (Covill v. Hill, 4 Den., 330 ). A written instrument identical in form was so held to be a bill of lading in Dows ®. Rush ( 28 Barb., 158 ). Also authorities referred to at page 172 and 183.

There was a substantial delivery to the consignees of bill of lading.

The captain being asked:

“ Immediately on your arrival in New York, did you see Griffin, Willets & CoJ” replied :

“Yes, sir ; I reported there the same morning.

“Had this bill of lading with you ?

“Yes, sir.

“You gave them or showed them this bill of lading,, didn’t you ?

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“Yes, sir.

“And they made memorandum from it?

“Made entries in their books %

“Yes, sir.”

The instrument was not executed in duplicate as is ■usual, and this may account for the fact that it was .retained by the captain, or it may have been retained, and probably this is the true explanation because the bill of lading contained entries as to the shipment of ■other grain, for the account of other parties. There was, nevertheless, a substantial compliance with the law.

The captain of the boat reported his arrival, exhibited his bill of lading, and held himself and his cargo subject to the orders of the consignees, and in obedience to their direction, the next morning, by the assistance of a tug sent to him by the consignees, arrived with his boat at the warehouse of the defendants, and reported to the owner of the warehouse, meaning probably the person in charge.

This was between nine and ten o’clock in the morning of the day on which the defendants made the advance to the consignees.

The advance—four thousand dollars—was made about noon of that day, and about one o’clock in the afternoon the delivery of the cargo was commenced, and was completed that afternoon.

I think the evidence shows a delivery, in fact as well as in law, of the cargo to the consignees.

The two cases referred to by appellant’s counsel, Shindler v. Houston ( 1 N. Y., 261 ), and Stephens v. Santee ( 49 N. Y., 35 ), are not in point as to question as ■to what constitutes a complete delivery.

In both cases something yet remained to be done before the acceptance by the vendee of the merchandise agreed to be purchased. In the case under ex-

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animation, the consignees had assumed the custody and control of the grain, and had arranged for its storage

It is hardly possible to state any other or further possession of merchandise of this kind.

Even if it should be held that the consignees had not been “ entrusted with the bill of lading,” so that they had not the documentary evidence of title, ‘ ‘ the-facts in the case show that they were entrusted with the possession of the merchandise” to such an extent as to constitute them the true owners thereof, and to give validity to contracts made by them for advances.

The judgment and order appealed from should be affirmed, with costs.

Reynolds, J., dissenting.—It is evident that Grif-" fin, Willets <& Co., had no right as between themselves and the plaintiffs to pledge the grain in question for an advance for their own benefit.

The question is whether the defendants made the advance under such circumstances as to entitle them to protection. I understand that the defendants claim such protection under the provisions of the statute, commonly known as the New York Factors’ Act.

First. On the ground that the factors, G. W. & Co., were intrusted with the possession of a bill of lading, or failing this: Second. That they were entrusted with the possession of the grain, and should, therefore, “be deemed to be the true owners thereof, so far as to give validity” to the arrangement by which the defendants advanced thereon. As to the first ground, even if the document set out at pages 8 and 9 of the case is to be regarded as a bill of lading, it was not intrusted to the possession of Griffin, Willets & Co. ; it was merely exhibited to them so that they could make memorandum from it; but it was not inquired for by the defendants, and if inquiry had

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been made it conld not have been shown for the simple reason that Gr., W. & Go. did not have it to show ; so it seems to me very clear that the defendants did not make their advance “ upon the faith thereof.”

The question then arises, did they make the advance upon the faith of possession intrusted Gr., W. & Co.

At the time the agreement was made for the advance, the barley was on board the vessel in the mass with three thousand bushels of barley, consigned to other parties. The five days, it is true, had expired during which the captain was to hold without charge, but he was still holding at a specified charge, till the consignees should remove the load. Under such circumstances, G., W. & Co. had no actual possession of the grain (see Bonito v. Mosquera, 2 Bosworth, 453). They did not and they could not exhibit any such possession.

The defendants trusted them entirely upon their word, and not from seeing in their hands either the grain, or any documentary evidence of title.

Griffin told the defendant Woodruff, that they had a load of barley, and afterwards that the boat was at defendant’s warehouse, and upon that the check was given ; but the grain was still in the actual possession, and under the control of the captain, who could yet have refused to deliver ; and if his testimony is to be believed, he would have refused if he had then been informed of the true state of the case; for he says his instructions were to “hold it until sold,” and that Griffin told him that morning that the barley was sold.

I do not see, therefore, how the defendants have acquired any title as against the plaintiffs, the true owners of the grain.

I think, therefore, a new trial should be granted.

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R. TI. Huntley and Rufus L. Scott, for appellants.

S. Boardman, for respondents.

—If by any protest on our part the profession could be induced to abandon the machine-made cases, which under the present system have taken the . place of the methodical and carefully-prepared cases ,and bills of exception of former days, the court would plead earnestly for such a reform, as it would be a great .relief to every court of review, and aid in the dispatch .of business and an intelligent administration of justice. Stenographers have taken the place of the attorneys whose duty it is to prepare, and of counsel whose .duty it is to peruse and examine, and of the judge who should settle cases and exceptions for the purposes of review. The rough, ill-digested, defective, .and frequently unintelligible transcripts and translations of the stenographer’s minutes of the trial, without correction or explanation, are stitched together .and labelled a case or exceptions as may suit the fancy ; ,and the labor is thrown upon the court to wade through a mass of stuff, and dig out the kernel of facts, or the point of an exception which may be buried up beneath it. Some parts of the case before us are entirely unintelligible, and the exceptions taken in the course of the trial are so interjected, that it is not easy to place or apply them. It is very likely that parties may sometimes suffer by this process, which, while it saves the labor of the profession, very greatly adds to that of the court, and not unfrequentiy embarrasses it in arriving at a certain and definite understanding of the merits.

A rule of the supreme court might correct this • evil to a great extent. The practice of printing the ■ evidence by question and answer in most cases only ¡benefits the printer. There are but few cases in which

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for any purpose this method of setting forth the evidence is necessary or proper. It ought in justice to the attorneys for the present appellants to be said, that the record before us compares favorably with the mass of those brought into this court, and is more perfect than many of them.

Without scanning very closely the precise relations between the plaintiffs and Griffith & Willets in respect to the grain in controversy, as evidenced by the documentary evidence, and disclosed by the testimony, it will be assumed that the latter firm, commission merchants in New York, were the factors of the plaintiffs, the owners, and that the same was consigned to them for sale for a commission. It is conceded that the consignors were the owners of the grain, and that the defendants were merely the factors of the owners, without, so far as the case discloses, any lien upon or interest in the property, except as they might earn a commission upon its sale. The consignors might have at any time changed the destination of the barley, or, revoking the agency of the consignees, assumed the actual possession and control of it (Mitchel v. Ede, 11 A. & $,, 888). No property was at any time vested in Griffith & Willets. The consignors did not intend to, and did not by the delivery of the grain to the carrier at its place of shipment vest the property in the ■consignee. During its transit there was no apparent ownership in Griffith & Willets, which would have enabled them to pledge the barley to a third person, and there was no change in the possession or apparent ownership after the arrival of the barley in New York prior to the transaction with the defendants, which can affect the rights of the parties, or give effect to the factors’ act so as to validate that transaction as against the plaintiffs. The title of the defendants must, therefore, rest entirely upon the provisions of the act of 1830, ch. 179, known as the “Factor’s Act”

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(4 N. Y. Stats, at Large, 461), and unless upon a just interpretation of that statute they acquired a valid title, the plaintiffs as the rightful owners were entitled to repossess themselves of their property.

The first question is as to the precise extent to which the plaintiffs intrusted their factors with the possession of the property, or the documentary evidence of title. It is claimed that Griffiths & Willets pledged the barley to defendants as a security for the repayment of a loan of money upon the faith and credit of the pledge. At common law, a factor could not pledge the goods of his principal, and the statute referred to is designed for the protection of those who, in good faith and in ignorance of any defect of title in the pledgor, or of the claims of others to it, advance money or incur liability upon the faith of the merchandise and the ownership thereof by the pledgor, as evidenced by the possession of the property, or the documentary evidence of title with which he has been intrusted by the owner. It is the act of the owner in intrusting the factor with the possession of the goods or the documentary evidence of ownership; the apparent ownership and right of disposal, in connection with the fact that innocent third persons deal with him upon the faith of such apparent ownership, that estops the owner from following his property into the hands of bona fide vendees or pledgees, and gives the latter a better title than their vendor or pledgor had.

I am aware that there has been some criticism upon section 3 of the factor’s act, and a doubt expressed as to what phrase or subject the last words of the section “upon the faith thereof,” refers. But reading the section in view of the clearly-expressed intent of the legislature, and the general scope of the act, which was not to deprive owners of their property without any fault or act of theirs, or to protect any but bona fide purchasers for value, it is very evident that the money

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must be parted with upon the faith of the property, and the apparent title of the party assuming the right to deal with it, manifested either by the possession of the property, or the usual documentary evidence of title. The act was intended for the security of those who deal with a factor or agent in the belief that he is the true owner; and that belief must be induced by the act of the owner in intrusting the factor or agent with the apparent ownership (Stevens v. Wilson, 6 Hill, 512 ; S. C. in error, 3 Den., 472 ). A factor is an agent for the sale of merchandise, and ordinarily has the possession, management, and control of the property, the subject of the agency ; but the actual possession is not essential to constitute an agency which would pass under that name, as it is ordinarily applied to distinguish it from agencies of other descriptions.

The plaintiffs had not intrusted Griffiths & Willets with any bill of lading, custom-house permit, or warehouse keeper’s receipt for the delivery of the grain, and the latter firm had no documentary evidence of title.

The manual possession was in the master of the canal boat 0. F. Jewett, “in which the barley was mingled with more than three thousand bushels of other like grain, belonging to, and consigned by and to other persons. The possession of the master of the boat, in the absence of evidence of title, or interest in others, was that of the true owner. The grain was in the boat under a special agreement, making a part of the shipping bill in the possession of the master, and which was the only document in evidence tending to show the relations and rights of the parties, that the master was to hold load for five' days without charge, and after five days he was to hold it at one dollar and fifty cents and wharfage per day, until consignees removed load, to be paid pro rata by the

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owners of all the grain. The boat had taken the grain to New York on the last trip for the season, and the owners of the grain had therefore provided for storage in their own names until-the grain should be sold.

The jury would have been authorized upon the evidence to find that this was well understood by the consignees, and that the grain was not to be removed until sold. The factors did not even assume any right to control or direct as to the storage of it, and only directed its removal from the boat upon a representation that it was sold. It was not intended to entrust the consignees with the possession. It was not necessary to their agency—there was no possession vested in them. They could not have obtained possession for the purpose of storing grain elsewhere, except by violating the orders to the master of the boat, which the jury might well have found were known to them, and consistent with the directions to them from the plaintiffs directly. Possession for certain purposes may be either actual or constructive, and the circumstances must determine which is sufficient in a particular case to change or affect the rights of parties or the title to property. But as the possession intended by the act is that which may enable a fraud to be perpetrated upon one acting on the faith of it as evidence of ownership, it is self-evident that actual possession is required as distinguished from constructive possession. The act is in harmony with, and many of its provisions, including those of the third section, are based upon the maxim, that he who by his own act has put it in the power of another by an apparent ownership of property to deceive others shall suffer, rather than those who innocently part with value upon the faith of such appearances. It is the open, visible appearances that give effect to the transaction, and estop the owner from claiming his goods. The plaintiffs, so far from entrusting their factors with the possession,

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did not contemplate a possession of the property by them. They gave authority to sell, and perhaps an incidental power to control and direct the bailee having the possession. A constructive possession can not, without the aid of some documentary evidence showing that the manual possession of one is for the benefit of another, deceive any one. It is difficult to spell out a constructive possession of this barley in Griffiths & Willets, who had a mere agency to sell, without authority to change the place of deposit, or to provide storage, or to direct its removal, except upon a sale. A constructive possession can only be claimed in support of, and based upon, some interest in, lien upon, or title to property in the possession of one as bailee or agent for a special purpose. It is the ownership, absolute or qualified, that draws to it the possession. But here it is sought to claim it as against the rightful owners as to property in the hands of a bailee selected by the owners, and in behalf of those having and claiming no interest in, or lien upon it. This would be to build up a constructive possession inequitable and unjust, and which would deprive the owner of his property for the benefit of one who did not act upon the faith of any apparent possession or right of possession, but upon the mere word and promise of the person with whom he dealt. This was not the object of the statute, and it can not legitimately be so construed as to accomplish such a result. If Griffiths Willets had, before a sale of the barley, taken possession of it, and removed it to another place of storage, and taken a receipt in their own name, and upon the faith of that receipt obtained an advance from the defendants, it could not be said then, that they had been entrusted with the possession by the plaintiffs; and this is required by the statute to enable the factor to pledge the property, or deal with it as his own.

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The factor’s act was considered by the superior court of New York in Bonito v. Mosquera (2 Bos., 401), and an elaborate and exhaustive opinion prepared by Chief Justice Dues, and concurred in by Justices Bosworth, Slossqh, and Woodrtjee. The learned chief justice reviews most of the reported cases bearing upon the construction and effect of the act, and among the propositions deduced from an examination of the subject, and formally advanced by the court is this : that the possession of goods by a factor “not having the documentary evidence of title,” that can alone enable him to create a pledge valid as against the owner, is an actual, as distinguished from a constructive possession. The principle was applied in that case. The decision is criticised in the same court by Chief Justice Robertsoh in Pegram v. Carson (10 Bos., 505), concurred in by Judge White, and dissented from by Judge Mohell. But the latter case is not in conflict with the proposition referred to, or with the plaintiffs’ title to recover in this action. There the factors to whom merchandise was consigned by the owner for sale, with bills of lading making it deliverable to them, received the merchandise and stored it according to the usage of business, with a store-keeper employed by themselves, taking receipts in their own name, thereby having not only the virtual control of the property, but the documentary evidence of such control, and the right of possession. That case was probably rightly decided, but the circumstances were essentially different from those which exist in the present. Cartwright v. Wilmerding ( 24 N. Y., 521 ), was similar in its facts and circumstances to Pegram v. Carson, and neither is applicable to the case in hand.

The position that the possession of merchandise contemplated by the third section of the factor’s act as essential to the. power of factors to pledge the

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goods of their principal, is the actual and not a constructive possession, commends itself as reasonable, as in entire harmony with, and all that is needful to give effect to the design of the act and prevent fraud, and is the only interpretation of the act, which while it protects bona fide dealers with the factor, at the same time gives due protection to the innocent owner of merchandise.

Judge Reynolds, in his dissenting opinion in the court below, we think took the proper view of the case and the rights of the parties.

The defendants’ claim to have advanced their money upon the faith of the grain, is at least doubtful, but we do not consider it.

The judgment must be reversed, and a new trial granted, costs to abide the event.

All concur, except Rapadlo and Andbews, JJ., dissenting.