Flynn v. Ledger — 55 N.Y. Sup. Ct. 465

Majority

p. 465

JOHN FLYNN and Others, Appellants, v. EDWIN C. LEDGER, as Assignee, etc., of SIMON BELL, Respondent.

Headnote

Sale of goods — rescission of the contract by letters — an assignee foi'the benefit of creditors acquires only the title which the assignor' possessed at the time of the assignment — effect of charging goods to a party.

This action was brought by the plaintiffs, merchants doing business in Pittsburg, Penn., to recover the value of a quantity of glass chimneys which were shipped by railroad on April 12, 1886, to the defendant’s assignor, Simon Bell, a merchant then doing business in the city of Albany, pursuant to an order made by him on April eighth. The chimneys arrived in Albany on April sixteenth. Bell, who had not received the goods or paid the charges, having discovered, on April nineteenth, that he had become insolvent, wrote to the plaintiffs that he was not in condition to receive them, and offered to tell the plaintiffs how to dispose of them in Albany, the letter being mailed on that day. On April twenty-second an answer to the letter was mailed by the plaintiffs at Pittsburg, directing Bell to sell the goods and give them the name of the party to whom the sale was made, and suggesting that he, himself, might be able to take them “after you get matters fixed up,” the answer being received on April twenty-fourth. On April twentieth, Bell made a voluntary assignment, for the benefit of his creditors, to the defendant, who, on April twenty-sixth, took the goods from the railroad company and paid the charges thereon.

Held, as the goods were in the custody of the railroad company, and the charges remained unpaid at the time at which the letter of the plaintiffs accepting the offer made by Bell to rescind the contract was mailed, and the assignment had not been made when such offer was made by Bell, that the sale was rescinded.

That the assignee acquired no title superior to that which Bell possessed at the time the assignment was executed.

It seems, that if Bell had made a sale of the chimneys to a bona fide purchaser for value, a very different question would have been presented.

That the fact that the plaintiffs charged the price of the chimneys to the defendant, as assignee, after they were informed that he had taken possession thereof, could not be regarded as amounting to a consent, on their part, that the chimneys should be considered a part of the assets under the assignment.

Appeal by tbe plaintiff from a judgment entered in fay or of tbe defendant, after a trial at tbe Albany Circuit by tbe court without a jury.

A. Vcmdersee, for tbe appellants.

Eugene Burlingame, for tbe respondent.

This action was brought by tíre plaintiffs against the defendant, as assignee of Simon Bell, tinder a voluntary assignment 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 Pittsburg, 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 a/nd Ea/rthenware, No. 96 and 98 South PeaYl Street, ATbcmy, N. Y.

“Albany, N. Y., April, 19, 1886.

“Excelsior Glass Compcmy:

“Deab Siks. — 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 tñe plaintiffs the day of its date. On the 22d day of April, 1886, an answer to the above letter was mailed by plaintiffs at Pittsburg addressed to Simon Bell, which was as follows: “ In reply to yours of the nineteenth instant, 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 party 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,

p. 467

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

“Office of SimoN Bell,

“ Importer cmd Dealer i/n Ghi/na, Glass cmd Ea/rthenwa/re, Ho. 96 a/nd 98 South Pea/rl Street.

“AlbaNY, N. Y., April 27, 1886.*

■“ Excelsior Fl/mt Glass Gompamy:

“Dear Sirs. — Yours of tbe twenty-second is received, and would have been answered sooner if I bad good news to send, but tbe news is bad, tbe lawyer for tbe assignee compelled him to put your goods in with tbe assets, and told him be might get into trouble if be did not, as they were, beyond any doubt, part óf my assets, being in Albany nearly a week before tbe assignment. Tbe whole thing is out of my bands, 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 bis trickery.

“ Respectfully yours,

“ SIMON BELL.”

Tbe letters of tbe nineteenth and twenty-second April were received in tbe due course of mails between Albany and Pittsburg. On tbe 19th day of April, 1886, tbe plaintiffs and Simon Bell were authorized to rescind tbe contract of sale. Bell had paid no part of tbe price of tbe chimneys, nor bad be paid tbe charges thereon, nor bad be assumed to control tbe same. He bad ascertained that be was insolvent, a fact not known to tbe plaintiffs when they shipped tbe goods, as them first information in regard to bis embarrassed circumstances was probably derived from bis letter of tbe nineteenth April. Tbe chimneys were in tbe custody of tbe railroad company and tbe charges remained unpaid, and tbe assignment bad not been executed when tbe last mentioned letter was mailed to tbe plaintiffs, and tbe title to tbe chimneys bad not, at that time, certainly, vested

p. 468

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 appeal’s by their letter of the twenty-second of April, which was received by Mr. Bell on the twenty-fourth 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 right to do so, or by the defendant if he had the right. • "Whichever party has the right to rescind must do it withm a specified tí/me, if there be such a time, or otherwise within a reasonable 1m%e.” We think the plaintiff’s contention finds support from the following cases. (Harris v. Pratt, 17 N. Y., 250 ; Babcock v. Bonnell, 80 N. Y., 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 recision 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 course 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, asassignee 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

p. 469

in favor of tbe plaintiffs under tbe facts of tbis case entitle them to all tbe protection which tbe court can properly extend to them. They are chargeable with no improper conduct, and were not guilty of laches, they acted promptly upon tbe suggestion of Mr. Bell, and .did all that they could to preserve their rights.

Tbe judgment should be reversed and a new trial ordered, with ■costs to abide tbe event of. tbe action..

LeaeNed, P. J. and LaNdoN, J., concurred.

Judgment reversed, new trial granted, costs to abide event.