Majority
p. 354Audas and others vs. Nelson.
Headnote
After the money secured by a mortgage upon a canal boat had become due and the mortgage forfeited by reason of non-payment, and the mortgagees had a right to take immediate possession of the boat, the mortgagor executed to the mortgagees a bill of sale of four horses used in towing the boat, and the lines and furniture then on the boat, which was given and taken as a further security for the mortgage debt; and in consideration thereof the mortgagees agreed with the mortgagor that he might retain possession of the boat, horses, lines and furniture until he had made the trip upon which he was then bound. Held that the giving of this bill of sale was a good consideration for the contract by the mortgagees to let the mortgagor go on with the boat, and complete Ms trip; and the same was a valid contract, and precluded the mortgagees from enforcing the mortgage debt against the boat by depriving the mortgagor of the possession of the same before the requisite time for completing the trip and delivering the cargo, and returning, had elapsed.Held, also, that in this view of the facts, the shipper of the cargo could not be guilty of a conversion of the boat, horses, <&c., by simply directing the mortgagor to go on, and complete his trip, and furnishing him. money to defray his expenses. That the possession of the mortgagor was not unlawful, and he having the right to proceed and -complete his trip, it was not unlawful for the sMp’per to advise and aid him to do so.
APPEAL from a judgment entered upon the report of a referee.
The action was brought to recover for the conversion of a canal boat and other property, of the value of some $3,000. The answer was a general denial.
p. 355
The action was referred to a referee, who found the following facts:
First. That on the 30th day of May, 1870, the plaintiffs sold and delivered to one John H. Cook the canal boat called the Gol. Grouse, for the price of $2,550, and at the same time to secure the payment of such purchase price, the said John H. Cook executed and delivered to the plaintiffs a mortgage of said boat. The boat remained in the possession of Cook, the mortgagor, who used her in the business of carrying property for hire, upon the canals and Hudson river. During the summer and fall of 1870, he paid to the plaintiffs, on account of the mortgage, the sum of $248, which is the only sum paid thereon'by him.
Second. In the month of June, 1871, the boat was in the harbor of Oswego. Cook had failed to make payment of the debt secured by the mortgage as it became due, and the plaintiffs caused a notice to be left on the boat, addressed to Cook, in substance forbidding him to run the boat out of the harbor until he had settled with them for the sums due and unpaid upon the mortgage. Substantially on the same day Cook had an interview with Garret Andas, one of the plaintiffs, which resulted in Andas giving consent that the boat might take another load, upon condition that Cook would, within ten days from that time, pay to the plaintiffs, to apply upon the mortgage, the sum of $250. It was contemplated by both parties that such payment would be made from the sum which should be advanced on account of the freight, and that Cook was to be at liberty to take such load at Oswego or at Buffalo.
Third. On the 22d day of June, 1871, some ten days after this interview, Cook applied to Kelson & Hosmer, produce commission and shipping merchants, doing business at Oswego, (of which firm the defendant was a member,) to purchase a cargo for transportation on his boat. During the negotiation for such carguf Cook in
p. 356
formed Mr. Hosmer, one of the firm, that there was a mortgage upon the boat; that he had seen Andas, one of the mortgagees, a few days before; that.he, Andas, was willing that he should go on with the boat, and that there would be no trouble from the mortgage. Thereupon Nelson & Hosmer delivered, upon the boat, a cargo of corn, consisting of 8,100 bushels, to be carried to the city of New York and there delivered to Jesse Hoyt & Co., the consignees, at and for the freight'of seven cents per bushel. Duplicate bills of lading of this cargo were executed by and between Cook and Nelson & Hosmer. Among other provisions, the bill of lading contained the following : “Three week days, regardless of weather, after arrival and notice of the same, to be allowed consignees to discharge this cargo, after which time the cargo or consignees are to pay demurrage at the rate of two per cent per day upon the Height (including tolls) for each and every day of such demurrage over the three days as above specified, until the cargo is fully discharged.” . Nelson & Hosmer advanced to Cook, at Oswego, on account of the stipulated Height, the sum of $467. Cook did not pay to the plaintiffs any portion of this sum thus advanced, and made no further payment whatever upon the mortgage.
Fourth. The boat, under the command of Cook as master, left Oswego with the cargo of corn on or about the 22d day of June, and at a place called New Bridge, upon the Oswego canal, the plaintiff Gfarrit Andas came on board and remained on her until she reached Lodi, upon the Brie canal. During the passage from New Bridge to Lodi, negotiations took place between Cook and Andas, which resulted in the former executing to the plaintiffs a bill of sale of four horses, used for towing the boat, and the lines and furniture then on the boat. Such bill of sale was given and taken as a further security for the mortgage debt, and in consideration of the mortgage debt; and in consideration thereof the
p. 357
plaintiffs agreed with Cook that he might retain possession of the boat, horses, lines and furniture, until he had made the trip upon which he was then bound.
Fifth. Two or three days after the giving of the bill of sale, the plaintiffs caused the boat to be stopped at Little Falls, and advertised for sale under their mortgage, and the same was sold, upon a previous notice of three days, and the plaintiffs became the purchasers, at the price of $2,000. The boat was the only property sold. At the time of the sale, two of the horses were on the boat, and the other two in the bam of one George H. Christie, who kept a barn for the boarding of canal horses at that place. Christie was requested by the plaintiffs to take charge of boat and horses for them.
After the sale and on the same day, or the next, the defendant went to the place where the boat lay, and directed Cook to go on and complete his trip, and deliver the corn according to the bill of lading. He at the same time advanced to Cook the sum of $15, with which to defray expenses of the trip; thereupon, Cook paid Christie his bill for horse keeping, took the horses from the barn, and proceeded with the boat to New York.
Cook was at no time actually dispossessed of the boat or horses by the plaintiffs, but during the time the boat lay at Little Falls, he remained on board of her with his crew, and has continued in possession of the boat and horses since that time. He offered no active resistance to the proceedings of the plaintiffs, for the foreclosure of their mortgage, but he insisted that he had given them the bill of sale, for the privilege of running the boat around that trip.
Aside from the direction given to Cook, as above stated, the defendant has never, in any way, interfered with the boat, or assumed to exercise any control over her.
As conclusions of law, the referee decided:
1st. That the plaintiffs were not estopped by the consent given to Cook, that he might load the boat at
p. 358
Oswego, from asserting arid exercising, as against the defendant, their right as mortgagees, to take the boat from the possession of Cook, before the cargo was delivered at its place of destination.
2d. That the giving of the bill of sale by Cook to the plaintiffs, was a good and sufficient consideration for the agreement on their part, that he might retain possession of the boat, horses, lines and fixtures, until he had completed the trip upon which he was bound at the time, and that by such agreement, the plaintiffs transferred to Cook, the right to the possession of said property during the time required for performing said trip.
3d. That inasmuch as the right of possession of said property was in Cook, and not in the plaintiffs, at the time of the alleged conversion by the defendant, the direction given by the latter to Cook, was not an unlawful interference with the plaintiffs’ property, and the defendant is not liable to them as for a conversion.
4th. That the plaintiffs’ complaint should be dismissed, with costs of this action to the defendant; and judgment was ordered accordingly.
The referee, at the request of the plaintiffs, on the settlement of the case, found the following additional facts:
First. That the defendant was immediately informed by the plaintiffs, of the foreclosure of the mortgage, and of the stopping of the boat, and requested to take off their cargo.
Second. On receiving such information, the defendant sent his agent to the boat, one of whom was present and forbid the sale of the boat.
Third. That the defendant, at the time he sent the boat on, gave the captain directions in regard to it, and knew of the foreclosure and sale.
Fourth. That said boat and property had not, at the time of the trial, been returned to the plaintiffs.
The plaintiffs appealed from the judgment.
p. 359
Sanders & Beach, for the appellants.
I. The plaintiff’s right to take the boat by virtue of the mortgage after the freight was on, up to the meeting of Audas and Cook on the boat, when the writing was made, is found by the referee. But if Audas then consented that Cook might run through to New York, and afterwards changed his mind and took the boat, Cook using no means to hinder his doing so, that failure could not be made available to the defendant. That was a question between Audas and Cook. The defendant had no right to assume that a contract existed between the plaintiffs and Cook, and take the law into Ms own hands and enforce a specific performance. Audas had reduced the property to possession; and whether a contract existed by wMch Cook could have defeated the proceedings of the plaintiffs for that purpose, can make no difference with the defendant, Or give him any right that he did not have independent of the contract.
II. But the main, or more important question in the case, perhaps, is whether the taking of the property by the defendant and sending Cook away with it, by reason of which the plaintiffs were deprived of their property, was such an interference, or act of control or dominion, • that would make him liable in tMs action. That he did become so liable, we think there can be no doubt. Had it not been for Ms interference and directions, we should have had our property. But by Ms directions, not advice, and furnishing means for the purpose, the property was taken and has never been returned. It was not necessary to the liability of the defendant that he should have applied the property to his own use, or that he should have acquired the actual possession. “But the assuming the right to dispose of it, or exercising acts of ownersMp or dominion over it to the exclusion of the plaintiffs’ right, is a conversion.” (Bristol v. Burt, 7 John, 254 . Murray v. Burling,
p. 360
10 id. 172. Reynolds v. Shuler, 5 Oowen, 323. Con-nah v. Hale, 23 Wend. 462 .)
III. The plaintiffs’ right of action does not necessarily depend upon their having reduced the property to possession. As mortgagees, after forfeiture, they had become absolute owners of the property, and the defendant would have been' equally liable if his interference hindered or had the effect to defeat the plaintiffs’ possession. (F ox v. Burns, 12 Barb. 677 . Dane v. Mallory, 16 id. 46. Burdick v. Me Vanner, 2 Denio, 170 . Brown v. Bement, 8 John. 96 . Ackley v. Finch, 7 Cowen, 290. Langdon v. Buel, 9 Wend. 80 . Ferguson v. Lee, 9 id. 258. Patchin v. Pierce, 12 id 61. Case v. Boughton, 11 id. 106. Bryant v. Woodruff, 5 N. Y. Leg. Ob. 139. Butler v. Miller, 1 N. Y. 496 .)
Stephens & Pardee, for the respondent.
I. From the facts found by the referee, his second, third and fourth conclusions of law are correct. The principles of law which govern these findings, are the same that govern all contracts, and are elementary; there were all the requisites of a valid contract. 1. The parties capable of contracting. 2. The subject matter, viz. the right of possession of the canal boat for a - definite time, to wit, for the trip on which she was then engaged. 3. The consideration, the transfer by Cook to the plaintiffs of four horses, with all the lines and furniture on the boat, valued by the plaintiffs in their complaint, at $750. If, then, the negotiations amounted, as we insist they do, to a valid contract between the plaintiffs and Cook, the plaintiffs, at the time Garrit Audas left the boat at Lodi locks, had neither the possession or the right of possession of the boat. Again, may not the transaction at Lodi locks be regarded as a bailment % A mortgagor in possession is a mere naked bailee. (Fuller v. Acker, 1 Hill, 473 , 475.) At
p. 361
the time, then, that the plaintiff, Grarrit Andas, went upon the boat at New Bridge, the relation oí bailor and bailee existed between the parties. The thing bailed was the canal boat, but it was a mere naked bailment. Cook wanted “to go on;” plaintiff says, “If you will give me a bill of sale of the horses and stuff, you may go on.” Cook executes the bill of sale. Now the positions of the parties are changed—Cook is no longer a mere naked bailee, but is a bailee for hire. The transaction is no longer a mere naked bailment, but locatio rei. (Story on Bailments, § 368.) Cook had the exclusive right to the use of the boat during that trip, and the plaintiffs had no right to interfere with such possession. This principle is elementary. (Story on Bailm. § 395. Redfield on Carriers and Bailm. 541. 1 Pars. on Cont. 607.) We therefore insist that Cook was rightfully and legally in possession of the boat and property when the plaintiff Grarrit Audas, left the boat at Lodi locks; rightfully and legally in possession of the same when the boat arrived at Little Falls ; rightfully and legally in possession of the same when she was bid off by the plaintiffs under the mortgage; rightfully and legally in possession of the same when the defendants gave him the direction “to go on with the boat and complete the trip, and deliver the corn according to the bill of lading,” and rightfully and legaEy in possession of the same during the entire trip,
II. The defendant’s rights to the possession of the boat during the trip were identical with those of Cook. Cook, on executing the biE of lading, had agreed with Nelson & Hosmer, the shippers, not only to transport the corn received on board the boat to its destination in New York, but had further agreed that said shippers should “have three week days, regardless of weather, after arrival of and notice to discharge the cargo,” and a further tune by paying a certain stipulated sum. We submit that under this biE of lading, Nelson & Hosmer
p. 362
acquired the rights which Cook had or might acquire to the possession of the boat during the trip. Had Cook, during the progress of the trip, voluntarily undertaken to discharge the cargo from the boat into another and inferior boat, an injunction would lie in behalf of the shippers against Cook, restraining his so doing. Therefore, it is competent for the defendant to show that Cook was rightfully and legally in possession of the boat at the time he gave the direction for him to go on and complete the trip. 'The defendant in an action of trover, may show that the property in the goods was in a third person. (Rotan v. Fletcher, 15 John. 206 . Bush v. Lyon, 9 Cow. 52 .) In Wood v. Orser, ( 25 N. Y. 348 ,) at page 351, the court say: “To warrant trover, the plaintiffs should have had a present right of possession in the chattels.”
III. The plaintiffs never had possession of the boat, under their mortgage, up to the time the defendant told Cook “to go on and complete his trip according to the bill of lading.” Neither the plaintiff nor Cole, on the foreclosure, did one act which, had they done without the mortgage, would have rendered them trespassers. Cole did not go on board of the boat, but saw Cook in the collector’s office; Cook ran the boat to Fink’s Ferry. Cole advertised the boat for sale, but Cook was in possession. Cole told Christie to look to a boat and horses that lay at the dock, but Cook remained in possession. In short, Cook swears, and the referee finds as a fact in the case, that he was at no time dispossessed.
TV. If the transaction on the boat cannot be construed as an agreement to waive the right of possesion for a specified time, then we say that it was an agreement, for a valuable consideration, to extend the time of payment of the amount due upon the mortgage for that trip. The postponing of the time of payment for a valuable consideration, precludes the enforcing of the
p. 363
mortgage during the time of suoh postponement. (Newsam v. Finch, 25 Barb. 175 .)
Upon the findings of fact of the referee, I think the judgment in this case must be affirmed. The plaintiffs were mortgagees of the canal boat in question, and the money such mortgage was given to secure being unpaid, said mortgage was forfeited, and the plaintiffs had the clear right to take immediate possession of said boat, when she was at Oswego, in June, 1871, and up to the time' they received the bill of sale from Cook for the horses, harness and furniture of said boat, on the 25th day of June, 1871, the day of the date and excution of said bill of sale. The boat had previously been loaded with corn by Nelson and Hosmer, at Oswego, of which firm the defendant was a member, and the mortgagor had started with the same on the route for New York, and had proceeded some distance eastwardly of Syracuse, between which place and Canastota, the bill of sale in question was executed. One of the plaintiffs overtook the boat after it left Oswego, and left it near Canastota, upon the execution of said bill of sale. The bill of sale covered property not embraced in the mortgage, valued by the plaintiffs, as stated in their complaint, at $750. The referee finds that the consideration for this bill of sale was, and the same was given and taken as a further security for, the mortgage debt, and in consideration thereof the plaintiffs agreed with Cook (the mortgagor) that he might retain possession of the boat, horses, lines”and furniture until he had made the trip upon which he was then bound. This finding is fully warranted by the evidence. Cook testifies to it unqualifiedly, and that he gave one of the plaintiffs $5 to pay for the insurance of the boat during the trip. Garrit Audas, one of the plaintiffs, admits the receipt of this money, and testifies “that he could not get the boat insured.” The giving
p. 364
of this bill of sale was clearly a good consideration for the contract by the plaintiffs to let Cook go on with the boat and complete his trip, and the same was a valid contract and precluded the plaintiff from enforcing the mortgage debt against the said boat by depriving the mortgagor of the possession of the same before the requisite time had elapsed to complete his trip and deliver his cargo in ¡New York and return. The proceedings by the plaintiffs, a few days afterwards, to foreclose their mortgage do not, I think, essentially affect or change the rights of the parties in respect to this question, inasmuch as the referee finds as matter of fact that the mortgagor was at no time dispossessed of the said boat or horses, by the plaintiffs, but during all the time she was laid up at Little Falls, the said mortgagor remained on board of her with his crew, and has continued in possession of the boat and horses since that time. The evidence, I think, fully warrants this finding of the referee, and in this view of the facts, the defendant could not be guilty of a conversion of the boat and horses by simply directing the mortgagor to go on and complete his trip, and furnishing him money to defray his expenses for that purpose. The possession of the mortgagor was not unlawful, and he being entitled to go on and complete his trip, it was not unlawful for the defendant to advise and aid him to do so. As the corn with which said boat was loaded belonged to the defendant and his partner, any direction which the defendant may have given to Cook, the mortgagor and master of "the boat, must have respect rather to the cargo than to the boat, horses and furniture which Cook, in his own right, had the lawful authority to control and use for the purpose of completing the said trip.
[Fourth Department, General Term, at Rochester,
September 10, 1872.
Mullin, Talcott and M. D. Smith, Justices.]
The judgment should therefore be affirmed.
Cases cited
- Connah v. Hale 23 Wend. 462 p. 360
- Fox v. Burns 12 Barb. 677 p. 360
- Langdon v. Buel 9 Wend. 80 p. 360
- Butler & Vosburgh v. Miller 1 N. Y. 496 p. 360
- Bush v. Lyon 9 Cow. 52 p. 362
- Wood v. Orser 25 N. Y. 348 p. 362
- Newsam v. Finch 25 Barb. 175 p. 363