Flynn v. Ledger — 16 N.Y. St. Rep. 453

Majority

p. 453

John Flynn et al., App’lts, v. Edwin C. Ledger, as Assignee, etc., Resp’t.

(Supreme Court, General Term, Third Department,

Filed May, 1888.)

Headnote

1. Contracts—Rescission of—Title to goods.

This action was brought to recover from the defendant as assignee the value of merchandise The assignor, on the 8th day of April, 1886, ordered merchandise of the plaintiff. In compliance with the order the merchandise was shipped to the assignor on the 12th of that month, arriving at its destination on the 16th. The assignor was notified that the goods were at the depot, but did not receive them or pay the charges on them. On the 19th, having discovered that he was insolvent, he wrote the plaintiff, saying that he was in trouble and could not receive the goods, and offering to assist in disposing of them at the place to which they had been sent. This letter was mailed on the day of its date, and on the 22d the plaintiffs wrote and mailed a letter in reply, accepting his offer to dispose of the goods. The assignor received this letter on the 24th. On the 20th he had made a voluntary assignment for the benefit of creditors, and on that day his assignee took actual possession of the assigned property, not, however, taking possession of the goods in question until the 26th, when he did so, and paid the charges on them. Held, that by the letter of the 19th of April, the assignor rescinded the contract, and that the assignment not being made until the following day, title to the goods did not vest in the assignee.

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2. Same—What could not be regarded as reviving rescinded con- ' TRACTS.

Held, that the mere fact that the plaintiffs charged the price of the goods to the defendant as assignee, after being informed that he had taken possession of them, could not be regarded as amounting to a consent on their part that the goods should be considered a part of the assets under the assignment.

Appeal by plaintiff from a judgment entered in favor of defendant, after a trial at the circuit, by the court without a jury.

A. Vanderzee, for appl’ts; Eugene Burlingame, for resp’t.

This action was brought by the plaintiffs, against the defendant, as assignee of Simon Bell, under a voluntary asssignment for the benefit of creditors, to recover the value of a quantity of glass chimneys which came to the possession of the defendant under the following circumstances: On the 8th day of April, 1886, Simon Bell, who was a merchant doing business in the city of Albany, ordered from the plaintiffs, who were doing business at Pittsburgh, Pa., a quantity of glass chimneys. The chimneys were shipped by railroad, on the 12th day of April, 1886, and arrived in Albany April 16, 1886. Bell was notified that the goods were at the depot at Albany, but allowed them to remain there, and did not receive the same, or pay the charges thereon. On the 19th of April, 1886, having discovered that he had become insolvent, he addressed to the plaintiff’s the following letter:

“ Simon Bell, importer and dealer in china, glass and earthen ware, 96 and 98 South Pearl street, Albany, N. Y., April 19, 1886, Excelsior Glass Co.:

“Dear Sirs—Your chimneys have just arrived, but I am not in condition to receive them, as I am in trouble. If you are not too angry with me, I can no doubt tell you how to dispose of them in Albany. I am awfully sorry to cause you any trouble, but I could not help it.

“ Truly yours, .

“S. BELL.”

This letter was mailed to the plaintiffs the day of its date. On the 22d day of April, 1886, an answer to the above letter was mailed by plaintiffs, at Pittsburgh, addressed to Simon Bell, which was as follows: “ In reply to yours of the nineteenth inst., would say that we are not angry with you, in fact we are under many obligations for protecting our interest in this matter. You sell the goods, give us the name of the p'arty to whom you make sale, and we will make invoice to them; or, perhaps, after you get matters fixed up you can take the goods yourself.”

“This letter was received by Mr. Bell on the 24th of April 1886. On the 20th day of April, 1886, Bell made a

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voluntary assignment to the defendant for the benefit of creditors. On that day the assignee took actual possession of the assigned property, but did not take actual possession of the chimneys on that day, but they remained in the custody of the railroad company until the 26th day of April, when the defendant went and took the chimneys, and paid the charges thereon. On the 27th of April, 1886, Mr. Bell addressed to the plaintiffs the following letter :

“ Office of Simon Bell, importer and dealer in china, glasstvare and earthenware,- -96 and 98 South Pearl street, Albany, N. Y., April 87, 1886, Excelsior Glass Co.

Dear Sir—Tours of the 22d is received and would have been answered sooner if I had good news to send, but the the news is bad, the lawyer for the assignee compelled him to put your goods in with the assets, and told him he might get into trouble if he did not, as they were beyond any doubt part of my assets, being in Albany nearly a week before the assignment. The whole thing is out of my hands, and I am unable to do as I would like. This trouble came on by a sharp trick of a well-known glass man. I will lose heavily by his trickery.

Respectfully yours,

SIMON BELL.”

The letters of the 19th and 22d of April were received in the due cause of mails between Albany and Pittsburgh. On the 19th day of April, 1886, the plaintiffs and Simon Bell were authorized to rescind the contract of sale. Bell had paid no part of the price of the chimneys, nor had he paid the charges thereon. Nor had he assumed to control the same. He had ascertained that he was insolvent, a fact not known to the plaintiffs when they shipped the goods, as their first information in regard to his embarrassed circumstances was probably derived from his letter of the 19th of April. The chimneys were in the custody of the railroad company, and the charges remained unpaid, and the assignment had not been executed when the last mentioned letter was mailed to the plaintiffs, and the title to the chimneys had not at that time certainly vested in the defendant under the assignment which was not executed until the day following. The plaintiffs promptly accepted the offer of the purchaser, Bell, as appears by this letter of 22d of April, which was received by Mr. Bell on. the 24th of April.

In Parsons on Contracts, vol. 2, p. 190 (4th ed.), the author remarks: “The defendant may rely on the fact that the contract has been rescinded. And this may have been done by mutual consent, or by the plaintiff, who had the

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right to do so, or by the defendant if he had the right. Whichever party has the right to rescind must do it within a specified time, if there be such a time, or otherwise within a reasonable time.” We think the plaintiffs’ contention finds support from the following cases: Harris v. Pratt, 17 N. Y., 250 ; Babcock v. Bonnell, 80 id., 244. Manifestly the facts herein present a case somewhat exceptional. Ordinarily one party to the contract, insists upon performance thereof, but in this case Mr. Bell, prompted by an honest motive, mailed a letter which contained a proposed rescission of the contract, which was intended for the benefit of the plaintiffs and they promptly accepted the same, and informed Bell thereof by letter, which was received by him, in the. due cause of the mail, and which was previous to the time the assignee took the chimneys from the railroad company. If Bell had made a sale of the chimneys to a bona fide purchaser for value, a very different question would be presented. The defendant as assignee under the voluntary assignment for the benefit of creditors, acquired no title superior to that which Bell possessed at the time the assignment was executed. The mere fact that the plaintiffs charged the price of the chimneys to the defendant as assignee after they were informed that the defendant had taken possession thereof, cannot reasonably be regarded as amounting to a consent on their part, that the chimneys should be considered a part of the assets under the assignment. The circumstances rather favor the view that the-plaintiffs intended to hold the defendant liable for the value of the chimneys, upon the assumption that he had taken the same without authority, and therefore became liable for their value. We can hardly infer from the facts that the plaintiffs intended to contribute to the assets for the benefit of the creditors generally, to the value of the chimneys, and then accept a pro rata share under the assignment. The strong equity which exists in favor of the plaintiffs,, under the facts of this case, entitles them to all the protection which the court can properly extend to them. They are chargeable with no improper conduct, and were not guilty of laches, they acted promply upon the suggestion of Mr. Bell, and did all that they could to preserve their rights.

The judgment should be reversed, and a new trial ordered with costs to abide the event of the action.