Soltau v. Gerdau

The trial judge held that the facts of the case showed that the broker Smith obtained the rubber from the plaintiff by larceny, and upon that ground directed the verdict. There were no disputed facts and we think the evidence so clearly established the larceny that there was nothing in reference thereto to submit to the jury. It is entirely clear that Smith intended from the beginning of his negotiations with the plaintiff in reference to the rubber, to steal it. 27o other conclusion or inference from the evidence is justifiable. The plaintiff did not intend to part with the title of the rubber to Smith, and at most intended that he should have possession of it for a special purpose. He meant only to part

At the time the first delivery order was delivered to Smith, the property was legally in the possession of the plaintiff, and the moment Smith took it he became a trespasser, the theft was complete, and he could at once, without any demand, have been sued for the trespass. The title of the property and the right of possession remained in the plaintiff, and he was deprived of the actual possession thereof wholly by the trespass and theft. In the law he never consented to part with the possession of the property, and Smith never had possession thereof, rightfully or legally, for one moment. Hothing which subsequently occurred changed the character of Smith’s possession. The subsequent delivery order which the plaintiff was induced to give to him, directed to Driggs in whose warehouse he falsely represented the rubber to be, had no effect whatever. It gave Smith no dominion or control of the rubber, and in no way divested the plaintiff of any control or possession thereof which he then had. It was absolutely nugatory for every purpose. The property had then for nearly two months been stored in the warehouse of Bell in Smith’s own name, and the warehouse receipt had for nearly two months been pledged to the defendant. From the time Smith first took possession of the rubber, his possession, so far as he had any, was solely that of a thief, and the actual possession and control of the property was never thereafter restored to the plaintiff. The plaintiff must, therefore, be treated as having been deprived of Ms property by the common-law crime of larceny, and it follows that the thief could not, independently of the Factors Act, confer any title or right of any kind, as against the plaintiff, upon any other person. The defendant, therefore, got no right to this rubber

It is provided in section 3 of the act, chapter 1Y9 of the Laws of 1830, commonly called the Factors Act, as follows: “ Every factor or other agent entrusted with the possession of any bill of lading, custom-house permit or warehouse keeper’s receipt, for the delivery of any such merchandise, and every such factor or agent, not having the documentary evidence of title, who shall be entrusted with the possession of any merchandise for the purpose of sale, or as a security for any advances to be made or obtained thereon, shall be deemed to be the true owner thereof, so far as to give validity to any contract made by such agent with any other person, for the sale or disposition of the whole or any part of such merchandise, for any money advanced, or negotiable instrument or other obligation in writing given by such other person upon the faith thereof.” Statutes similar to this have for many years existed in England, and in most, if not all, the states of the union, and it has never yet been held, nor, so far as we can discover, claimed in any reported case that the Factors Act can have any operation whatever in the case of goods taken by a common-law larceny from the true owner. If the documents mentioned in the section quoted have been stolen from the owner, then it cannot be said that the thief was entrusted with their possession; and when a factor or agent Í obtains goods from the true owner by a common-law larceny, (it cannot be said that he is entrusted with their possession for ¡the purpose of sale. To bring the case within the section quoted, the factor or other agent must he consciously and voluntarily entrusted with the possession of the documents or I merchandise, and the section can have no application whatever | to a case where the documents or goods are taken by trespass '! or theft, and thus the possession of the factor or agent is, from the beginning, tortious, wrongful and unlawful. .

The first section of the Factors Act provides as follows: “After this act shall take effect, every person in whose name any

In Howlmd v. Woodruff ( 60 N. Y. 73 ), it was held that the Factors Act was intended for the protection of third parties who, in good faith and in ignorance of any defects of title, advance money or incur obligations upon the faith of merchandise and the apparent ownership thereof by factors or agents who have been entrusted by the owners with the possession of, or with the documentary evidence of title to property; that it is the ant of the owner in thus conferring upon his factor the apparent ownership and right of disposal, together with the fact that an innocent third person has dealt with the latter in reliance thereon, that estops the former from following his property ; but that in order to estop the owner, where the factor has not the documentary evidence of title, actual possession is required. In that case Allen, J., said: “ It is the act of the owner in entrusting the factor -with the possession of the goods, or the documentary evidence of ownership and right of disposal, in connection with the fact that innocent third persons deal with him on the faith of such apparent ownership, that estops the owner from following his property into the hands of Toonafide vendees or pledgees, and gives the latter a better title than their vendor or pledgor had.” The’, doctrine of estoppel has never been applied against an owner j who has been deprived of his property by larceny. Judge' Allen further said, that it was not the interest or the general scope of the act to deprive owners of their property without

The case of Collins v. Ralli ( 20 Hun, 246 ), affirmed in this court ( 85 N. Y. 637 ) upon the opinion delivered in the Supreme Court, is entirely analagous to this, and is a very precise authority for the conclusion we have reached. There H. M. Cutler, a cotton broker, called upon the plaintiff and, by falsely and fraudulently representing that he was authorized to purchase cotton for certain mills in Massachusetts, induced the plaintiff to sell certain cotton to the mills and deliver to him a bill of sale thereof to the mills. Upon the representation that he desired to ship the cotton immediately, Cutler procured from the plaintiff a delivery order upon the warehouseman, at whose warehouse Cutler had the cotton weighed and marked and loaded upon a truck. Subsequently Cutler stored the cotton in another warehouse and took out receipts- therefor from the keeper of. such warehouse in his own name first, and afterwards in the name of his brokers. Thereafter the defendants purchased the cotton in good faith, and for value, through their brokers, receiving the warehouse receipts therefor, and subsequently shipped it to Liverpool. Cutler having absconded without paying for the cotton, the plaintiff brought the action against the defendants to recover the value of the cotton received and converted by them; and it was held that Cutler was guilty of larceny- in fraudulently obtaining the temporary custody of the cotton, and thereafter converting it to his own use, and that the defendants acquired no title to it by reason of his transfer of it to them; that, as the plaintiff had merely entrusted Cutler with the temporary possession of the cotton, to enable, him to weigh and cart it for shipment to the pre

The decision of this case could, we think, be put upon a narrower ground than the one upon which we have thus far placed it. The delivery order given by the plaintiff to Smith, that he might make delivery of the rubber to the Goodrich company, ivas not, within the meaning of the Factors Act, documentary evidence of title. It ivas not a bill of lading, custom-house permit or warehouse keeper’s receipt. It was no evidence whatever of title, and whatever it ivas it was not seen by the defendants and they did not act on the faith thereof. FTor was Smith entrusted with the possession of the rubber “ for the purpose of sale.” So far as the plaintiff entrusted him with the possession, it was simply that he might make delivery of the rubber in pursuance of the contract of sale which he pretended he had nearly three months previously obtained.

The learned counsel for the appellant, in his argument, places great reliance upon the case of Borníes v. Swain-son (4 B. & S. 270). There the plaintiffs, cloth manufacturers, were applied to by one Ernsley, who wás a factor and commission agent, for a sample of their cloths, on the representation that he could get them a purchaser. The samples having been sent, Ernsley afterward told the plaintiffs that he had got them an order for a certain .number of ends at a stated price. The plaintiffs required to know the purchasers, and, Sykes & Son being mentioned, they sent the goods to the warehouse of Ernsley, who was to pass them on to Sykes & Son after seeing the process of perching performed upon them, for which he was to receive a commission from plaintiffs of one shilling per end. Ernsley had no authority from Sykes & Son, and he sold the goods to the defendants, who were cloth merchants, and bought them bona fide ; and it was held per Wightmau and Obomptou, JJ., that Ernsley was an agent “ entrusted ” with the cloths within the meaning of the Factors Act (6 G., 4 C., 94 , § 4, and 5 & 6 Yict. chap. 39, § 4), and that consequently the purchase of them from Ernsley by the defendants was protected; and per Blackbubit, J., that . Ernsley being in possession of the goods was, according to the statutes (5 & 6 Yict. chap. 39, § 4), to be taken to be “ entrusted ” with them by the owner, unless the contrary was shown, and that was a question for the jury. Under those statutes, to bring a transaction within their provisions, it was not necessary that the goods should be entrusted to an agent 'for sale, but it was sufficient if there was any mercantile agency; and if the goods were entrusted to a person whose business it was to deal in goods and make sales of them, he was such an agent as was contemplated by the statutes, although they were not entrusted to him for sale. Our Factors Act is different. In order to bring a case within it,

He agreed, and sent them an order in the following terms: “ To the Carrón company. Please deliver to Messrs. Campbell Bros.” Campbell Bros., instead of employing the document for the purpose of giving delivery to the supposed purchaser, represented the iron as their own, and asked Hertz to make them an advance upon it. Hertz declined until the document should be stamped and a place of delivery inserted by Vickers. These requirements having been satisfied by Vickers, the Carrón company wrote to Hertz saying: “We have placed the pig iron indorsed by Thomas Vickers, Esq., to your credit.” Hertz thereupon advanced to Campbell Bros. £2,400. The act of Campbell Bros, was a gross fraud upon Vickers, who knew nothing of the transfer to Hertz, although he had unsuspectingly facilitated its accomplishment. Campbell Bros., having become bankrupt, disappeared, and an action was brought by Vickers against Hertz for a delivery of the iron. The defense was that the iron had been acquired bv Hertz legitimately under an order indorsed by

It is not very profitable to enquire what would have been the position and rights of these parties if the sales pretended to have been made by Smith had been real, or, if the rubber had been, by the delivery orders, placed in his hands for sale on behali of the plaintiff, an undisclosed principal. The pretended sales, and all the other pretences of Smith, were mere shams — devices used by him to accomplish the larceny, and the fact of larceny must dominate this case. The rubber was ' never in his possession for sale. Six weeks before it arrived in this country he had, as a broker, made the pretended sale to the Goodrich company, and, after its arrival, he obtained the delivery order, not to make a sale, but to make a delivery of the rubber upon a contract, which, if real, was previously binding upon the parties thereto.

But, if the pretended contract of sale to the Goodrich company had been real, and the plaintiff had given to Smith the delivery order to enable him to obtain possession of the rubber

A little more may be said to show that Smith obtained, no title to the rubber. There is no real evidence that it was intended by him or the plaintiff that he should have the title. He solicited of the plaintiff the right to act as his broker. He delivered to the plaintiff a bought note showing that the rubber was sold in his name and as his property; and if the transaction had been real he would, according to the previous custom and his understanding with the plaintiff, have given the purchaser a sold note indicating a sale on account of. his principal without writing therein the principal’s name. Thus he would have brought the seller and buyer together, and Would have made a contract of sale binding upon them, incurring no responsibility himself but that of broker. (Southwell v. Bowditch, L. R. [10. P. Div.] 314). He obtained the delivery order, not to deliver rubber upon his contract, but upon plaintiff’s contract. He consulted the plaintiff about taking the rubber back from the Goodrich company, and obtained his consent therefor. He subsequently professed to store it in plaintiff’s name, and at all times subsequently professed to the plaintiff to deal with and treat it as his. Clearly, beyond any question, the plaintiff and Smith understood that the title to the rubber was in the plaintiff and never in Smith; and without the intention of one or both of them it could not pass from the plaintiff to Smith. The entries upon the plaintiff’s books in reference to the rubber were mere matters of bookkeeping, having no reference to the title to the rubber, hut merely to the proceeds which were expected to reach plaintiff’s hands through Smith as his broker.

"We have given careful attention to the exhaustive and learned brief of the counsel for the defendant, and while this case is not free from some difficulty, we are constrained to hold

All concur, on the ground that there was a common-law larceny, except Huger, Oh. J., Pecki-iam and Gray, JJ., dissenting.

Judgment affirmed.