Wooster v. Sherwood — 25 N.Y. 278

Majority

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Wooster et al. v. Sherwood.

Headnote

A brewer sold “ sufficient barley now in my brewery to make malt enough, to be made in the brewery, to pay ” a sum then advanced by the plaintiff, to whom a delivery was made of a specific mass of barley more than enough for the payment. The plaintiff did not remove it, but it remained until the brewer sold his brewery and the contents, with notice of the facts and subject to the plaintiff’s claim. The purchaser sold the barley to the defendant; and by his direction put it upon a railroad for transportation to the latter. Eeld:

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1. The legal title and general ownership of the barley passed to the plaintiff. The transaction was an executed sale, in the nature of a mortgage.

2. The purchaser with notice had no title as against the plaintiff and could convey none t6 the defendant, although the latter bought without notice.

3. The apparent authority of the defendant’s vendor, not having been conferred by the plaintiff, nor with his knowledge or assent, the defendant is not within the rule protecting, as a bond fide purchaser, him who deals with one to whom the real owner has given the indicia of power to sell.

4. As against the defendant, the transfer was valid, without filing as a chattel mortgage.

Whether a demand is necessary to sustain an action for the conversion of the barley, qucere; if it were, one made of the carriers engaged in transporting it is suEcient.

Parol evidence,, it seems, is admissible, in addition to the written contract of sale or mortgage, that, by the agreement of the parties, the brewer was not to sell the barley delivered under the contract, or malt made from it, without the plaintiff’s permission.

Appeal from the Supreme Court. Action for the wrongful detention of 450 bags of barley malt, alleged to be the property of the plaintiffs. The trial was before a referee, who reported in favor of the plaintiffs, and assessed their damages at $1,413.33, the value of the property. The referee found the following facts:

On the 22d of September, 1856, and from that time to the 15th January, 1857, one William S. Haight was the owner and in possession of a brewery in the county of Monroe, and a manufacturer of malt and beer at said brewery. On the day first mentioned, Haight borrowed of the plaintiffs, for his own accommodation, their promissory note, dated upon that day, and payable upon the 1st December following, to the order of Haight, for the sum of $3,000, which was subsequently used by Haight in his business; and on the 13th Deqember, 1856, was owned and held by thevHollister Bank of Buffalo.

On pr before the 3d December, 1856, Haight was indebted to Edgar C. Dibble for money lent and advances made to him in his business; and on that day, with the consent and" con

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currence of Dibble, made and executed an instrument in writing as follows:

“ Whereas, W. B. & A. M. Wooster did, on the 22d September, 1856, advance their promissory note for $3,000, payable at the Metropolitan Bank, in the city of New Tork, on the 1st day of December then next, which I was to return to them or give them the cash therefor by the 1st October then next; and whereas the Hollister Bank has used the same, and the same is under protest for non-payment; in consideration that the said Wooster agrees to pay the same, I, William S. Haight, do hereby sell and transfer to them sufficient barley now in my brewery, to make malt enough, which is to be made in the brewery, to pay said note and interest to them, or to said Hollister Bank. This instrument is made subject to the right of Edgar C. Dibble to the barley in said brewery, and the malt made therefrom, which said Dibble says is th$ right to take 1,500 bushels which he is now getting, and sufficient over and above said 1,500 bushels to make the further sum of $3,951, and such further advances as he may make to pay for barley already bought to amount of $500.

“WM. S. HAIGHT.

“Mumford, December 13, 1856.”

At the time of making said contract there was in the south part of said brewery between eight and nine thousand bushels of barley, about 2,500 of which were in the process of malting, and the residue in grain. There was, in addition to the above, in the north part of the brewery, a separate heap of barley, containing about 2,000 bushels, upon which Nathan H. Camp held a claim or lien, for advances theretofore made and'responsibilities incurred by him for said Haight.

On the same day of the making of said contract, and immediately after the execution thereof, the. said Dibble, at the request of the said Haight, went with the said plaintiffs, or one of them, to said brewery, and made delivery of that portion of said barley being in the south part of the brewery as aforesaid, by pointing out and taking a part of the parcel of said

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barley in his hand and saying to the plaintiffs, “ I deliver to you this barley subject to my claim, and in pursuance of the contract” above mentioned. There was a verbal understanding, at the time of the above agreement, that the plaintiffs should control said barley: that Haight should manufacture the same into malt: that of the malt so made Dibble should in the first place receive sufficient to satisfy his demands above mentioned, and that Dibble should inform the plaintiffs by letter when he should receive the amount requisite for that purpose. There was no other delivery of said barley than that above mentioned. Haight subsequently proceeded to manufacture the barley from the parcel in the south part of brewery into malt, which was afterwards from time to time received by said Dibble. The quantity so received, on or before the 2d January, 1857, was sufficient to satisfy his said claim and demand, which on that day was discharged accordingly, and notice thereof was subsequently, and on the 15th January, given by Dibble to the plaintiffs.

The lien or claim of Camp upon the parcel of barley in the north part of said brewery as above mentioned, was under and in pursuance of a writing executed by Haight and dated December 1, 1856, given to secure certain liabilities; the, provisions of which writing were, on the 14th January, 1857, altered and modified.

On the 15th January, 1857, Haight sold and conveyed by deed to Camp, the said brewery and lot upon which it stood, and a house and lot in the same town; also, under date of 14th January, 1857, executed to him a bill of sale of all the barley and malt in the brewery and malt house; and on the 15th January, 1857, executed another bill of sale of personal property attached to the brewery and belonging to Haight. The different writings constituted parts of one entire agreement, which in substance was, that Camp, out of said property, should pay the demands in his favor against the said Haight, and all responsibilities incurred by him on behalf of the vendor, and that the surplus should be restored or paid to Haight or to such creditors as he might direct. Camp, before

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said writings were executed by Haight, was informed of and knew the claim of the plaintiffs to the barley in the south part of said brewery under and by virtue of the written contract of December 13, 1856, and the facts above mentioned. He was informed by Haight that no part of the barley last mentioned should be removed or disposed of until the claim of the plaintiffs was paid or satisfied, to which suggestion of Haight, Camp made no objection.

The plaintiffs, in the month of January, 1857, and before the commencement of this suit, paid the note mentioned in the writing of December 13,1856, in pursuance of that agreement. The itote, with interest and fees for protest, amounted, on the 20th July, 1857, the date of the referee’s report, to $3,133.30.

On or about the 16th January, 1857, Camp took possession of the brewery and the property mentioned in his several bills of sale. There was at that time, in the south part of said brewery, and of the parcel of barley delivered to the plaintiffs as above mentioned, about 4,175 bushels, in grain and in process of malting, exclusive of the 2,000 bushels subject to Camp’s claim in the north part of the brewery as aforesaid. Camp proceeded by his workmen to convert the parcel so delivered to the plaintiffs into malt, part of which he disposed of to the defendant, claiming the right as owner to dispose of the whole of said parcel. Prior to the commencement of this suit, the plaintiffs demanded the possession of the barley and malt which was then in the brewery, of Camp, which was refused by the latter. The barley and malt thus demanded was a part of the parcel so delivered to the plaintiffs as aforesaid. The barley in said parcel at the time of the execution of the writing of December 13, 1856, was worth ten shillings per bushel, and malt the same; and at the time of the trial of the cause, twelve shillings per bushel.

Camp and the defendant reside at the city of Buffalo. Subsequent to the 16th January, 1857, and after Camp had taken possession of the brewery, and before the commencement of this suit, Camp sold to the defendant the malt mentioned in the complaint in this cause, and received from him upon said

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sale $500, part of the purchase money; the malt was manufactured from the barley in the south part of said brewery, and theretofore delivered to the plaintiffs. Such malt was delivered by Camp to the defendant, by putting the same, in pursuance of the directions of the defendant, upon the cars of the railroad at Caledonia, in charge of the proper officer of said road, and consigned to the defendant at Buffalo. And it was admitted, upon the trial, that said malt was, at and before the commencement of this suit, in the possession of the defendant.

Before the commencement of this suit the said malt was demanded of the officer having the same in charge, who refused to render possession thereof to the plaintiffs. One demand on the said officer was at the railroad in the town of Caledonia, and the second at the town of Batavia, in the county of Genesee, while the malt was in transitu-, both of which were refused. The malt was worth ten shillings' per bushel when sold to the defendant, and when converted by him as aforesaid, and twelve shillings per bushel at the time of the trial of the cause.

The referee’s conclusions of law were: 1st. That by the written instrument of the 13th December, 1856, designated as exhibit “A” in the cause, a sale was made of the parcel of barley in the south part of said brewery, and which was delivered to the plaintiffs, in the nature of a mortgage, to secure and indemnify the plaintiffs for their agreement and undertaking to pay the note lent by them to said Haight. 2d. That prior to and, at the commencement of this suit, the plaintiffs had the right and were entitled to the possession of the personal property mentioned in the complaint, and the same was wrongfully detained by the said defendant. 3d. That the plaintiffs were entitled to the usual judgment in this action, and that their damages should be assessed at the value of the property, being 1,131 bushels of malt at $1.25 per bushel, equal to $1,413.35.

The defendant excepted to each and every conclusion of law by the referee. He also excepted to every decision of the referee upon the questions of fact arising in the cause, as-

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against and unsupported by the evidence; and furthermore to the report of the referee, for the reason that he had not found certain facts.

On the trial of the cause, Haight testified that “the agreement was, that Wooster was to have the control of the barley and malt, and that I was not to sell without consulting him. What I have just said was at my house at the time of the written contract.” The defendant moved to strike out this statement of the witness as inadmissible, as tending to vary or change the written contract. The referee overruled the motion, and the defendant excepted.

The defendant appealed from the judgment entered on the report of the referee to the court at general term, when such judgment was affirmed, and he appealed to this court.

William H. Greene, for the appellant.

Angus McDonald, for the respondents.

The rights of the parties depend primarily on the construction of the contract of December 13, 1856. If, by that contract, Haight’s title to the specific parcel of barley in the south part of the brewery passed to the plaintiffs, Camp, the subsequent vendee of Haight, took no interest in it, and could pass none to the defendant. Camp, by the transfer of the 14th January, 1857, took only such title as Haight then had. If he had none, Camp took nothing, and if Haight in selling the barley would have been guilty of a conversion, Camp would be equally a wrongdoer. Camp has not the shadow of equity peculiar to himself, for he was informed by Haight, when he took possession of the brewery, of the plaintiffs’ claim to the parcel of barley in the south part thereof, and in substance assented to the suggestion of Haight that no part of it.should be removed or disposed of until such claim was paid or satisfied.

I think that the legal title to the barley in the south part of the brewery vested in the plaintiffs by the contract of December 13, 1856, and that by such contract they obtained more

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than a mere right of action against Haight. It amounted to a sale in presentí of the property mentioned. The language too of the instrument is, “ I, William S. Haight, do sell and transfer,” &c., and the consideration was a present one. The instrument did not specify the parcel or the quantity of barley sold. It, however, represented the subject of the sale as in the brewery, and the quantity was to be sufficient to pay the plaintiffs’ note and interest, lent to Haight, and which he had used in his business. The precisé subject of the sale was ascertained and fixed by the delivery made as a part of the transaction. Cotemporaneously with the execution of the agreement, the precise parcel of barley sold, viz., that in the south part of the brewery, was pointed out by Haight’s agent to make delivery, and formally delivered to and accepted by the plaintiffs. There was no removal of the barley by the plaintiffs, but this, did not affect or change their rights. By the terms of the contract the grain was to be malted in the brewery, and had they removed it after delivery and then brought it back to be manufactured, their rights would be the same as they now are. There can be no objection, therefore, against regarding the transaction as an executed sale, on the ground of an imperfect or insufficient delivery.

The intention of the parties in the execution of the agreement, and the formal delivery of the specific parcel of barley in the south part of the brewery, is obvious. It was to invest the plaintiffs with the legal title to the parcel for the security of themselves and Dibble. The legal title to, and control of, the barley was passed to the plaintiffs to secure Dibble’s claim and the payment of the $3,000 note. In this view, it was a sale in the nature of a mortgage. The plaintiffs were to have enough of the proceeds of the property to pay the note, after satisfying Dibble’s claim; and the surplus belonged to Haight.

By the sale and delivery, therefore, on the 13th December, 1856, the legal title and general ownership of the parcel of barley in the south part of the brewery passed to the plaintiffs. By leaving it with Haight to be malted, he acquired a qualified possession for that purpose only, in subordination to

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the legal title, and the right of possession incident to it. When Camp, after taking possession of the brewery, undertook to convert the property to his own use, and dispose of a portion of it to the defendant, the legal title, with the right of possession was in the plaintiffs. Camp, in assuming to sell the barley, was a trespasser, and his act without any legal justification.

It is urged, however, that the defendant is a bona fide subsequent purchaser of the malt of Cámp, and that, as between the plaintiffs and the defendant, the referee erred in deciding that the latter wrongfully detained it. If Camp had no title to the malt in question,' but was a wrongdoer in controlling and disposing of it, it is not easy to perceive how his vendee could acquire a valid title or, in respect to the property, occupy .the relation of a subsequent purchaser in good faith. It may be conceded that when the owner of property, by his own voluntary act or consent, has given to another such evidence of the right of selling his goods as, according to the custom of trade in the common understanding of the world, usually accompanies the authority of disposal, the owner furnishing such indicia, or apparent authority, is bound by it, and the bona fide purchaser obtains title. But that is not this case. It does not appear that the plaintiffs had any knowledge of the transfer by Haight to Camp, or that they voluntarily gave the latter any indicia whatever, not even possession. On the contrary, as soon as they learned that Camp had possession of their property, claiming to sell it, they brought their action against Camp, and his vendee, the defendant. Whatever apparent authority Camp had, came through the effect of the transfer by Haight to Camp, which was involuntary as to and unauthorized by the plaintiffs. If Haight could not give good title, under the same circumstances, to a bona fide purchaser, without notice, Camp, the defendant’s vendor, could not. That Haight, as against the plaintiffs (even conceding that the defendant was without notice of the plaintiffs’ rights), could not have conveyed title to the defendant, I think is clear. Haight only had possession to manufacture the barley into malt, and

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had no right to sell. There is nothing to show that either Haight or Camp ever manufactured malt on their own account and sold it in the usual course of trade, except the sale to the defendant; or, if they did, that the defendant knew it. But if it had been shown that Haight or Camp sold malt on their own account, the fact of "the plaintiffs leaving barley at the brewery to be manufactured into malt would not furnish sufficient indicia of the right of the manufacturer to sell. In both cases, the manufacturer makes his goods, or adds labor to them, for others as well as on his own account, and hence the presumption of authority to sell does not arise. This case falls within the rule, that whoever deals with an agent constituted for a special purpose, deals at his peril, when the agent passes the precise limits of his power. If the owner loses his property, or if it is sold or pledged without his consent, by one who has a qualified possession of it for a specific purpose, as for' work to be performed on it, the owner can follow and claim it in the hands of any person.however innocent. (2 Kent’s Com., 621; Saltus v. Everett, 20 Wend., 267 ; Brown v. Peabody, 3 Kern., 121.) The case of Thompson v. Blanchard (4 Comst., 303), is no authority against this view.

Nor, regarding the title of the plaintiffs as that of vendee or mortgagee, was it necessary, as against the defendant, to file the instrument of December 13, 1862, in the clerk’s office of the town in which Haight resided. The defendant was not a subsequent bona fide purchaser, nor a purchaser at all from Haight. The statute only applies to purchasers from the mortgagor. But. if it were otherwise, the defendant pur chased from Camp, who was a mala fide purchaser, and hence must be considered'as occupying the same relation.

A remaining question upon the whole case is, whether the action could be maintained against the defendant without a demand; and if not, whether the demand proved was sufficient. I am inclined to the opinion that no demand was necessary. The defendant, under a claim of ownership, assumed to transport the property to or towards Buffalo, after having unlawfully acquired the possession of it. That act, and

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the detention for that purpose, was wrongful, and a conversion. But a demand, if necessary, upon the carrier was sufficient. The carrier’s possession was not only that of the defendant, but he had himself an interest in the possession by virtue of his responsibility for, and to enable him to discharge his duty to his principal. In Jones v. Hart (2 Salk., 441), it was held that the refusal of a pawnbroker’s servant to redeliver goods pawned, is evidence of a conversion by his master.

But a single exception relating to the admissibility of evidence, was taken on the trial. Haight having testified “ that Wooster was to have control of the barley and malt; and that he (the witness) was not to sell without consulting him,” the defendant moved to strike out the statement as tending to vary or change the written contract. The defendant’s counsel seems not to have made this a point on the argument. But there was no error in refusing to strike out the testimony for the reason assigned. It did not tend to vary or change the written contract. The legal effect of the contract, and the delivery of the specific parcel of barley accompanying it, was to be determined by the writing itself. The testimony had only reference to the rights of the parties as to the parcel of barley delivered for the purpose of carrying out the contract; and for this purpose, it was not improper. Had there been, however, a technical error in refusing to strike out, it is evident that the evidence could not in any way have influenced the decision of the referee.

The judgment of the Supreme Court should be affirmed.

■Judgment affirmed.