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Anderson v. Reed

51 N.Y. Super. Ct. 326 19 Jones & S. 326 Court N.Y. Super. Ct. Decision date 1885-03-02 English

Delivered by Sedgwick, Ch. J.

Contents

Majority

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JOHN W. ANDERSON, as Assignee, &c., Respondent, v. CLEMENT REED, et al., Appellants.
Decided March 2, 1885.

Headnote

Vendor and vendee.—Order of vendee holding a sold note, in fa/oor of a named party, on and accepted by, vendor—insolvency of vendee after ac ceptance.-—■ Word “sold,” definition of.—Equity.
Where a vendee holding a sold note makes a delivery order on the vendor in favor of a party named therein, which is accepted by the vendor, the holder of the order and sold note, bona fide for value paid to the vendee, is entitled to recover of the vendor,—if the conditions of the contract of sale have been complied with,—the value of the property designated in the accepted order at the time fixed for its delivery by the contract, with interest.
Therefore, if by the contract of sale the vendee was to give notes for the purchase money, and they were given and accepted as payment, the insolvency of the vendee after the acceptance of the order by the vendor, and non-payment of the notes, will aSord no defense.
The above ruling applied to a contract for the sale and delivery of goods to be manufactured.
The word “ sold,” does not necessarily, when used in a contract, comprehend the assertion that title has passed; but may mean that it will pass upon the occurrence of certain subsequent events. Thus, under the facts of the case at bar as stated above, the promise of the vendor to the holder of an order by the vendee for delivery to him, to deliver to him, will operate under equitable principles upon the thing to be delivered and pass the title to it. • •
The principles of equity are applied to law actions in this state.
Before Sedgwick, Ch. J., and Tritax, J.
Appeal by defendants, from judgment entered upon a verdict of jury, in favor of plaintiff.
The plaintiff brought, as assignee of Perry M. De Leon, this action to enforce De Leon’s rights under an order for
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the delivery of goods which has been, accepted by the defendants. . The action was for damages for non-delivery, in the amount of the value of the goods. The jury gave a verdict for this amount.
The facts are given in the opinion.
Sullivan & Cromwell, attorneys, and Algernon S. Sullivan and W. J. Curtis, of counsel for appellants,
argued.—I. The contract entered into between Raisin & Co. and the defendants, on December 7, 1881, was an ex-ecutory contract of sale. It was a contract for the future delivery of goods not in existence. The goods were not identified ; the contract merely refers to their quality, not to a specific quantity, but to a certain quantity in general. The contract was executory and no title to the goods passed (2 Kent 641 [10th ed] ; Story on Sales, § 233 ; § 310 Benj. on Sales, note 4 [Corbin’s ed.] ; 1 Chitty Contr. [11 Am. Ed.] 524-5 ; Blackburn Sales, 120; 1 Benj. Sales [Corbin’s ed.] § 462 ; Kimberly v. Patchin, 19 N. Y. 332 ; Foote v. Marsh, 51 Ib. 288 ; Higgins v. D., L. & W. R. R. Co., 60 Ib. 558 ; Cook v. Millard, 65 Ib. 356 ; Merchants’ Nat. Bk. v. Bangs, 102 Mass. 295 ; See also McConiche v. N. Y. & Erie R. R. Co., 20 N. Y. 497 ; Andrews v. Durant, 11 Ib. 35). . If the contract be executory, and such it evidently is, the same interpretation must be given to the word sold that was given to it in the case of Boyd v. Siffkin (2 Campb. 326). It means contracted to sell (See also Kelley v. Upton, 5 Duer, 336 ). In Decker v. Furniss ( 3 Duer, 292 ), the instrument, which related to the sale of a steamboat, began with the words, “ W. H. Brown sells to M. P. Furniss the one-half of the steamboat Rhode Island,” yet in reversing the judgment of this court the court of appeals held, that the contract had not the effect of vesting an immediate title in Furniss, but was an agreement to sell and not a sale, and that, although the words used denoted a present transfer, a future only was intended.
Where the right of an unpaid vendor to retain the
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goods is involved, courts have laid hold of slight circumstances to retain in him the property until the purchase money be paid (Hanson v. Meyer, 6 East, 614; Wallace v. Breeds, 13 Ib. 522; Shepley v. Davis, 5 Taunt. 616 ; Bust v. Davis, 2 M. & S. 397; Swanwick v. Southern, 9 A. & E. 895 ; Godts v. Rose, 17 C. B. 229 ). Another class of cases are those in which the contract is to supply goods of a particular description, which would be fulfilled by furnishing any goods of the quality and kind agreed to bo furnished (Austin v. Craven, 4 Taunt. 644; Wait v. Baker, 2 Exch. 1). “The question whether the property had passed under a contract of sale has generally arisen where the right of an unpaid vendor is in the issue. Payment of the price is so essential an ingredient of a sale that neither in law nor in morals is the buyer entitled to have the goods until he pays for them .... hence the inclination of the courts to hold on slight circumstances that the contract is so incomplete that a transfer of title was not intended where the delivery is constructive only and the insolvency of the buyer has intervened with the contract price unpaid ” (See also Foot v. Marsh, 51 N. Y. 288 ; Ormsby v. Machlin, 20 Ohio St. 295 ; May v. Hooglan, 9 Bush [Ky.] 171).
II. For a refusal on the part of Bead & Co. to deliver under this executory contract, Baisin & Co.’s only remedy would be an action at law to recover damages for breach of contract; but in such an action Baisin & Co. cannot recover without actual payment, they having become insolvent before time of delivery (§ 1305 Benj. on Sales [Corbin’s ed.]; § 897, note 23; Story on Sales, § 452). “It will be a good defense to an action for non-delivery that the vendee is unable to pay for the goods and has compounded with his creditors ” (Story on Sales, § 452).
HI. Even if it were established that the plaintiff was the assignee of Baisin’s contract, he must have taken the same, subject to all equities that might be invoked against Raisin & Co. (Willard’s Eq. 462 ; Bush v. Lathrop, 22 N. Y, 535 ; Chitty on Contr. 1366, 11 Am. ed.).
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IV. There was no direct privity of contract between defendants and De Leon. By the acceptance merely of the order in question the defendant entered into no contract with De Leon, as he was no party to the contract, and if the defendants made any binding contract by accepting the order it was with Raisin & Co. (Rogers v. Union Stone Co., 130 Mass. 583 ; Sherman v. Brown, 68 N. Y. 355 ). It is claimed by the plaintiff that the contract between Reed & Go. and Raisin & Co., was made for the benefit of De Leon, and that De Leon has a cause of action against the defendants under the broad doctrine laid down in Lawrence v. Fox ( 20 N. Y. 268 ). It is respectfully submitted that the case at bar does not fall under the ruling in Lawrence v. Fox and the later decisions that follow the ruling in that case. The application of the doctrine of Lawrence v. Fox has been confined in New York, almost exclusively to cases where the purchaser of land subject to a mortgage, agrees with his vendor to assume the .payment of the mortgage; and in those cases it is held that the mortgagee has a right of action against the purchaser on his covenant. And it is justly so held, because there is always a sufficient consideration for this covenant on the part of the purchaser ; the amount of the mortgage assumed is deducted from the price that would otherwise have to be paid. Yet even in that class of cases the rule of Lawrence v. Fox has not been extended but, on the contrary, very rigorously limited by Garnsey v. Rogers ( 47 N. Y. 233 ). The doctrine of that case will not be extended (Real Estate Trust Co. v. Balch, 45 Super. Ct. 532; Pardee v. Treat, 82 N. Y. 392 ; Ætna National Bank v. Fourth National Bank, 46 Ib. 82 ; Turk v. Ridge, 41 Ib. 201; Hutchings v. Minor, 46 Ib. 456 ; Merrill v. Green, 55 Ib. 270 ; Simson v. Brown, 68 Ib. 356).
V. Even if the sale were an executed one, Reed & Co., as unpaid vendors, would have a hen upon the goods for the price (Story on Sales, § 281). Reed & Co. did not lose their hen by taking Raisin’s notes ; for upon Raisin’s insolvency, the hen revived (Griffiths v. Perry, 1 E. & E.
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680; Milliken v. Warren, 57 Me. 46 ; Opinion of Chancellor, 5 Den. 630 ). “ Unless actual possession of goods sold has been delivered to the purchaser, the vendor is not deprived of his right of lien as against the assignee of the purchaser in the event of his insolvency ” (Grice v. Richardson, L. R. 3 App. Cas. 319 ; Dixon v. Yates, 5 Barn. & Cress. 313 ; Arnold v. Delano, 4 Cush. 33 ).
VI. By the delivery of the “order” and “memorandum ” mentioned in the complaint, the property in the goods did not pass to De Leon ; and Reed & Co.’s lien, as unpaid vendors, was not divested thereby. These papers are not indicia or documents of title ; they are not quasi-negotiable. (1) A “ delivery order” is not a document of title. “The giving of a shipping note or of a delivery order does not make a change in the property ” (Ackerman v. Humphrey, 7 Mann. & Granger, 678; McEwan v. Smith, 2 H. L. C. 309 ; Farmeloe v. Bain, 1 C. P. Div. 445 ; Farina v. Home, 16 M. & W. 119 ; Story on Sales, § 289 ; Imperial Bank v. London & St. Kitts Dock Co., 5 Chanc. Div. 200; Blackburn on Sales, 297; Benj. on Sales [Corbin’s ed.] § 1213, 1225 ; 2 Daniels Neg. Instr. § 1713). (2) A delivery order is not quasi-negotiable (Lickbarrow v. Mason, 2 Term Rep. ; Story on Sales, % 344 ; Rogers v. Union Stone Co., 130 Mass. 583 ; Gushee v. Eddy, 11 Gray, 502 ; Sears v. Lawrence, 15 Ib. 267; McEwan v. Smith, 2 H. L. Cases, 309 ; Farmeloe v. Bain, 1 C. P. Div. 445; Benjamin on Sales [Corbin’s ed.] §§ 1212, 1214).
VII. The doctrine of estoppel cannot be invoked against the defendants. The elements of estoppel are wanting in this case. In order to create an estoppel, there must be a representation of some existing fact; Bigelow on Estoppel [2d ed. ] 438 ; White v. Ashton, 51 N. Y. 280 ; Musgrave v. Sherwood, 54 How. Pr. 339 ; 6 Wait's Actions and Defenses, 584 ; Bigelow on Estoppel, 437, 467).
The authorities are positive in holding that, without an attornment, express and unequivocal, to the subvendee, unpaid vendors will not be estopped from assert
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ing and maintaining their Hen for the unpaid purchase money (Farmeloe v. Bain, 1 C. P. Div. 445 ; McEwan v. Smith, 2 House of Lords Cas. 309 ; Rogers v. Union Stone Co., 130 Mass. 581 ;. Gunn v. Bolckow, &c., 10 Chanc. 491).
The vendor’s remedy will not be impaired by his giving a delivery order for the goods if countermanded before his bailee attorns to the buyer (Benj. Sales [ Corbin’s eat.], §§ 1153, 1212).
The cases reHed on by the plaintiff are very easily distinguished. In Woodley v. Coventry, (2 H. & C. 164), the goods were identified and were appropriated. A delivery order on the defendants (warehousemen) was given to the plaintiffs, the sub-vendees, by the original vendees. This defivery order was presented to the defendants (the original vendors) by the plaintiffs and left with them ; and there was a direct representation of fact made by the defendants to the plaintiffs. In Knights v. Wiffen (L. R. 5 Q. B. 660), the goods were in esse and were stored in the warehouse of the defendant (a warehouseman), who was also the original vendor. The plaintiffs presented the delivery order to the defendant and the latter immediately attorned tó the plaintiffs, the sub-vendees. There being a representation of fact made by defendant direct to the plaintiffs, it was correctly held that the elements of estoppel were present in the case. Both the above cases were cited in Farmeloe v. Bain (supra), and distinguished. In Pearson v. Dawson (El. B. & E. 447), the defendant, who was the original vendor, was a warehouseman. The plaintiffs, the sub-vendees, presented to him a delivery order drawn' by the first vendees, and the same was acknowledged by the defendant, who entered upon his books the change of ownership in the specified barrels of sugar. There was a complete attornment by the defendant to the plaintiff. This fact was clearly recognized by the counsel for the plaintiffs in that case, who, in his argument (p. 453), was very careful to distinguish his case from McEwan v. Smith, and to show that “the first vendor had, before the insolvency of the first vendee, done
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every act by which he could sanction the sale by such first vendee to a third party.” In all the above cases it will be found on examination that there was an express attornment by the first vendor to the sub-vendee. In the case at bar there was no such attornment by Reed & Co. to De Leon. In Briggs v. Sizer ( 30 N. Y. 650 ) the gist of the decision is in the last paragraph and is in defendant’s favor. Judgment was given for the defendant. The language of the rest of the decision is mere obiter dictum— not one authority or precedent is cited—and that decision has not since been cited as authority. The one question in that case was, whether the defendant attorned to the plaintiff, and the court decided, upon the evidence, that he had not.
E. Louis Lowe, attorney and of counsel for respondent,
argued :—I. Before the passage of the factor’s act, in 1811, in England, it had been settled by the decisions of the courts that the indorsement of dock warrants, warehouse receipts and certificates, and delivery orders given to vendees by vendors upon their warehousemen, was not such a delivery of possession as divests the vendor’s hen, even when transferred to a bona fide holder for value ; but that, when such delivery order was accepted by the warehouseman, he thereby attorned to the holder, whether the original vendee or a sub-vendee ; and thenceforth he was to be regarded as the bailee of such holder (Benj. Sales [4th Am. ed., Bennett], § 814, et seq. § 823; and cases cited). This conclusion had not been reached without a number of contrary decisions. Parliament based its enactments upon the assumption that such documents are “ instruments used in the ordinary course of business as proof of the possession or control of goods and as “authorizing the possessor of such document to transfer goods thereby represented.” In a word, the legislature dealt with those documents as symbols of the goods (Ib. % 811). Whereupon the learned author remarks, in the same section, that “it is no matter of surprise, when the
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ratio'decidendi of the courts, on the one hand, and the ratio legis ferendoe of the legislature, on the other, are so much at variance in regard to the meaning of those instruments, that the law should be in an anomalous and unsatisfactory state. It is perhaps to be regretted that the courts did not give to those papers originally the same meaning as the lawgiver attached to them ; a meaning which might have been given without doing violence to their language.
It is manifest from this well-considered opinion of one of the greatest lights of the English bar, as he had previously been of the American bar and senate, that American courts should be in no haste to bind themselves by these decisions of the English courts.
To unfetter great commercial interests from the embarrassments caused by those decisions, parliament was obliged to pass the Factor’s Act of 1877. For, in Lucas v. Dorrien (7 Taunt. 278), Dallas, 0. J., had said, in relation to a West India Dock warrant, “ I have been several times stopped by a special jury, they being satisfied that the goods pass from hand to hand by the indorsement of these instruments. All special juries cry out, with one voice, that the practice is, that the produce lodged in the docks is transferred by indorsing over the certificates and dock warrants. ’ ’ It was such clamor of English merchants in the jury box that made necessary the passage of the Factor’s Act. Millions of pounds in England were then, as millions of dollars here are now, paid out as purchase-money or advances, upon the faith and credit of just such documents as those which the English courts had held not to be “ documents of title.” But such injurious results had not been arrived at without the dissent of some of the ablest judges. Park, J., in Zwinger v. Samuda (7 Taunt. 265), and Dallas, C. J., in Keyser v. Suze (Gow. 58), had both held, at nisi prius, that precisely such construction of those mercantile “ documents of title ” as the juries had given was the correct one. So, likewise, it had been decided in other cases. The experience of more recent times
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and the broader views of the judges of younger commercial states have indorsed the wisdom of those decisions of the dissenting English judges. And it is now held in this country that a delivery of a warehouse receipt, or of an order on the warehouseman, has the same effect in transferring title to property as the delivery of the property. Such is precisely the effect of the transfer of a bill of lading (Howe v. Baker, 8 Cal. 613 ; National Bank v. Wallbridge, 19 Ohio, 419 ; Allen, Bethune & Co. v. Maury & Co., 66 Ala. 18 ; Chirardelli v. McDermott, 22 Cal. 539 ; Davis v. Russell, 52 Ib. 611; Merchants’ Bank v. Hibbard, 48 Mich. 118 ). If the doctrine so clearly announced by the American courts in the foregoing cases be sound, then the very foundation of the English decisions is destroyed. In the same spirit, and even of a wider scope, is the decision of the court of appeals, in Briggs v. Sizer ( 30 N. Y. 647 ), to which more particular attention will be directed later. See also Wilkes v. Ferris ( 5 Johns. 335 ).
It is therefore submitted that the delivery by vendor to vendee of an order on a warehouseman for goods, even before acceptance by the warehouseman, should be held to operate as a constructive or symbolical delivery of the property.
It may well be that, before actual delivery, the vendor’s hen would revive, as against his vendee, upon the insolvency of the latter or his failure to pay the price, as agreed ; but it is respectfully insisted that such Hen would be lost as against a bona fide purchaser for value to whom the vendee had sold the goods before the revival of his vendor’s Hen.
“But if the goods have been resold and the second purchaser has received from his immediate vendor, the first purchaser, a dehvery order addressed to the original vendor, which has been accepted by him, the original vendor cannot, after he has thus attorned to such second purchaser, refuse to deliver the goods to such second purchaser, pursuant to his acceptance, although the first purchaser to whom he sold becomes bankrupt before dehvery
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and before payment of the price, and the goods were not weighed or measured over prior to the bankruptcy of the first purchaser (2 Addison on Contr., 8th ed.5 486—b. p.). Briggs v. Sizer ( 30 N. Y. 647 ), was an order by the vendee upon the vendor in favor of the sub-vendee. As a matter of fact, the order had not been accepted by the vendor, and it was upon that ground alone that the plaintiff failed to maintain his action. The court held that, as in the case of a bill of exchange, the consideration moving between the drawer of the order and the drawee sustained the obligation which the drawee or acceptor incurred to the holder of the order by virtue of the acceptance. In other words, that the same privity existed between the vendor and the sub-vendee upon such an accepted order, as exists between the payee and acceptor in a bill of exchange.
Speaking of the assent or acceptance of the warehouseman which is necessary to constitute him the bailee of the holder of the order given by the vendor, Mr. Benjamin (page 934, § 817), asks, “What is there in the law to prevent this assent from being given in advance”?
Many of the English cases are to the eff ect that, where the vendor has not formally accepted in writing his vendee’s order for delivery to a sub-vendee, acceptance has been shown by some acts done by the vendor, such as entering the name of the sub-vendee in his books opposite the goods sold, or allowing the goods to be marked, or other similar recognition by the vendor of the fact of the sale by the vendee to the sub-vendee (Pearson v. Dawson, 27 L. J. Q. B. 248 ; Knights v. Wiffen, L. R. 5 Q. B. 660 ; Cited in Voorhis v. Olmstead, 66 N. Y. 113 ; Woodley v. Coventry, Law Journal, 1863, cases at Common Law, R S. vol. xxxii., part 2, page 185 ; S. C., 2 Hurls. & Colt. 164 ; Hunn v. Bowne, 2 Caines Rep. 38 ).
II. Where the seller undertakes to sell and deliver goods, he cannot defend by showing, outside of his contract, that the goods were not actually segregated or set aside, and the title passes to the vendee without such
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segregation (Kimberly v. Patchen, 19 N. Y. 330 ; Russell v. Carrington, 42 Ib. 118 ; Merchants’ Bank v. Hibbard, 48 Mich. 118 ; Woodley v. Coventry, 2 Hurls. & Colt. 164 ; Knights v. Wiffen, L. R. 5 Q. B. 660 ; Whitehouse v. Frost, 12 East, 613).
HI. The judge charged that the agreement between Raisin & Co. and Reed & Co. was executed. Nothing remained to be done but to deliver goods of the quality warranted, at the time named in the contract. Notes had been received for the price at 4 months, to be renewed at maturity, to run until December, 1882. The goods were to be delivered in December, 1881. The analysis to be made was not a condition precedent to the delivery of the goods ; “not essential to the contract of delivery.” In such case title passes at once (Bank of Rochester v. Jones, 4 N. Y. 503 ; Alexander v. Comber, 1 H. B. 9 ; 2 Starkie Ev., part 2, 1221 ; Dox v. Dey, 3 Wend. 357 ; Edwards on Bailm., 2d ed., 298).
IV. Whether the Raisin and Reed contract was or was not executed cannot affect De Leon’s rights, because the defendants by their conduct led him to believe that they had actually sold 1000 tons to Raisin & Co., which by their acceptance of the delivery order and the memorandum they engaged to deliver to him. Being in the same trade, they knew very well that he would act upon that order and pay Raisin & Co. the price of the goods (Victor v. International Nav. Co., 45 Super. Ct.; Blair v. Wait, 69 N. Y. 116 ; Mer. & Traders’ Bank v. Hazzard, 30 Ib. 226 ; Knights v. Wiffen [supra] ; also Woodley v. Coventry [supra]; Cont. Nat. Bank v. Nat. Bank of Comm., 50 N. Y. 515 ; Voorhis v. Olmstead, 66 Ib. 116). The foregoing decisions of the superior court (Victor v. Int. Nav. Co.) is a complete reply to defendant’s argument based upon his principal English authority, cited by him at the trial below, viz : Farmloe v. Bain (1 L. R. C. P. Div. 445).
V. Upon the facts and the law as hereinbefore stated, we submit that it is wholly immaterial as between the defendants and De Leon, whether or not the defendants ac
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tually intended to waive their vendor’s lien when they accepted Eaisin & Co.’s delivery order. We claim that the defendants are estopped by the fact of the acceptance, coupled with the knowledge of the intention of Eaisin to make it the foundation of a money transaction with De Leon, and that De Leon acted upon the faith of it, whereby his condition has been altered greatly to his prejudice.

By the Court.

The learned counsel for defendants, argues, that the contract between the vendor and vendee was executory, and that the title to the phosphates, agreed to be delivered, had not passed to the vendee. The ground of this argument is, that the preponderance of the testimony showed that the phosphates had never been manufactured. The further argument is, that the sub-vendee can have, as assignee of a part of an executory contract, only the action that the vendeewould have, and that the vendee could not recover the-value of the goods if the action were for a breach of the-obligation to deliver, without paying the price or tendering it. In this case, the contract provided, that the price-was to be paid in the notes of the vendee, who became-insolvent, before the time for delivery had come. The-case may be examined on the assumptions of this argument.

These are the material facts : The defendants signed an agreement which was: “We have to-day sold to. Messrs. Eaisin 1000 tons of super-phosphates at $21 a ton on a cash basis, goods to be delivered free on board buyers vessels and in bulk. Settlements are to be made on delivery to buyers of bills of lading by their notes.” This was also signed by the vendees. Before this contract was made, the vendees, the Messrs. Eaisin, had contracted to sell and deliver to De Leon 2000 tons of phosphates, of their own manufacture. At the time for delivery, De Leon was demanding that it should be made, but they had no phosphates of that kind that they could deliver. At a date which the defendants maintain was earlier than.

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December 9, Messrs. Eaisin proposed to De Leon, that in the place of the 1000 tons of the kind to be delivered under their contract, he should accept the 1000 tons which were to be delivered under the defendants’ contract. This offer was accepted. Before this, as defendants’ maintain, the Messrs. Eaisin, the vendees, had had an interview with their vendors, the defendants. They substantially told the defendants that they had over-sold to De Leon, that is, they had sold to De Leon phosphates that they had not on hand to deliver, and they would have to take the goods under the defendants’ contract, and deliver them to De Leon, under his contract. The defendants assented to this. Afterwards the following was presented to them, for acceptance:
“ December 7, 1881.
“Messrs. Eeed & Co. Gentlemen, please deliver to P. M. De Leon 1000 tons of ammoniated super-phosphates sold to us. E. W. L. Eaisin & Co.” Upon this order the defendants wrote, on December 10, “Accepted Eeed & Co.” The defendants wrote a note to Messrs. Eaisin, “We will deliver to Mr. P. M. DeLeon, on your order, dated December 7, accepted by us to day, one cargo say 500 tons to vessel, to begin loading about the 19th of December, and the remainder of the 1000 tons to a vessel to load the latter part of December, or early in January, 1882 ; vessels to be furnished by De Leon.” The Messrs. Eaisin took the accepted order and the note, delivered them to De Leon, who thereupon on December 10, paid the price agreed to be paid by him, under his contract with the Messrs. Eaisin. On the same day, the Messrs. Eaisin delivered to the defendants their notes, the agreed price of the goods, under their contract, and the defendants accepted them in payment. On December 16, the Messrs. Eaisin & Co. became insolvent. The defendants gave notice to all parties that the order and acceptance were void bn several grounds. The only ground that under the verdict of the jury it is necessary to notice here was, that Messrs. Eaisin & Co. were insolvent.
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If the acceptance of the order did not operate upon any title to goods, because no goods existed, or for any other reason, then what was the nature of the arrangement ? It cannot be successfully maintained that it was but a contract between Messrs. Raisin and the defendants. It is not necessary to determine what equitably are the rights of a party holding an unaccepted order by a promisee upon the promisor for the payment of the money, or the delivery of the thing agreed for by the latter. Upon such an order being accepted, its holder and the acceptor enter into an arrangement to which they are parties, and the holder has an action according to the nature of the arrangement as it exists. In the present case, it is manifest, both from the face of the order and from the extrinsic facts, that the intention of both vendor and vendee was that it should be delivered to De Leon. Upon its delivery to De Leon, he became possessed of a promise, that the vendors would deliver to him, instead of to the vendees, the property that was to be delivered to the latter. Upon equitable principles, which in this state are applied in law actions, this promise to deliver operates upon the thing to be delivered, and passes the title to it, in proper cases. But if there be any condition expressed or implied, to be performed before the obligation to deliver is complete, the title cannot equitably pass before the conditions are performed. How, I think that there is a great deal of force in the proposition that the word “ sold ” did not comprehend an assertion that title had passed to the vendees, and that there remained only the matter of delivery. That might be the meaning of the word upon a technical construction. The case substantially shows that all parties knew that the super-phosphates were the subject of a contract, definitely designated, while all its terms were not known to De Leon. They all meant the word ‘ ‘ sold ” to signify what such a word would signify, when applied to a delivery under a contract such as the contract was, according to the facts. But these considerations do not result in the conclusion that the defendants entered into no obliga
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tion. Equitably, De Leon became possessed of the right to enforce the contract with the defendants according to the terms of the contract. Those terms were that Eaisin & Company should pay the purchase price before the vendees were bound to deliver possession. In other words, the defendants were bound to deliver, upon Eaisin, or any one entitled to act for them, paying what the contract contemplated should be paid. But, in fact, Eaisin & Co. did pay, and the defendants accepted in payment, their notes, made and given by them in the maimer the contract described. If this payment had been money, or the makers had not become insolvent, no question could have been raised as to De Leon’s right to demand delivery under the accepted order.

The makers, however, did become insolvent. This insolvency did not annul the contract or its obligation. Under certain circumstances, it gives the vendor a lien. There can be no lien, without there also being something in existence on which it may rest. It extends only to a right to keep possession of goods, withholding delivery. It may be that it should be the law, that the vendor, upon the vendee’s insolvency, may retain the notes and annul the effect upon the rest of the contract, of the fact of the giving of the notes. Mo such thing was done in this case nor would it have benefited the vendors under these circumstances. De Leon had obtained rights in the meantime which the defendants could not annul.

While De Leon was holder of the accepted order, the condition upon which the defendants were to deliver, namely, payment in the manner provided by the contract, had been performed, so far as contract obligations were concerned. All that was left to the vendors was what may be called a contingent right to keep possession. The vendor may waive this right, or the facts may show that the special contract excludes it. In this case, they have no right to assert it against De Leon.

It has been already said that, through the effect of the; order and acceptance, the defendants had promised to de-'

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liver, that is, transfer the possession of the goods to De Leon, upon the performance, by Eaisin & Co., of the condition of the original contract. If it be necessary to sustain this by proof of a consideration, it would be found in the defendants being relieved from the obligation to deliver to Eaisin & Co., or what is more in point, after it had been made in anticipation of its delivery to De Leon, and De Leon accepting it, De Leon had released Eaisin & Co. from the obligation to deliver their phosphate, and had paid them the price under his contract, taking as the consideration for that, the accepted order in question. This consideration to the defendants in other words, was a conditional one, or one to be executed in the future. There was a promise to De Leon, that if he would pay to Eaisin & Co. they would deliver possession to De Leon. This was the legal substance of the arrangement. The acceptance was something more than a promise to Eaisin & Co., who drew it, for the benefit of Eaisin & Co. It was made for the benefit also of De Leon. It was intended to become operative when delivered to him. Its form, coupled with the other facts, establishes between the defendants and De Leon an immediate relation.

The result is, that the condition of the original contract having been changed, there was no longer an implication that the vendors could withhold possession from Eaisin & Co., or from De Leon. In the former case, because delivery was not to be made to Eaisin & Co.; in the latter, because for a sufficient consideration, they had promised to deliver to De Leon, upon the condition of the original contract being performed. They had been performed. The basis of the right of vendor’s hen is not a condition of performance of the contract. It is dehors the contract and acts simply upon the facts of possession and unpaid price. It is not an equity, subject to which the assignee takes a contract. If it were an equity, it arose after the assignment was made. The controlling consideration in my mind, is that when for sufficient consideration, the vendor promised to deliver possession to the sub-vendee,

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if De Leon may be deemed one, the vendor abandoned the right to withhold delivery, that would rest, upon the vendee becoming insolvent.

If these views are correct, it would appear upon the uncontradicted facts of the case, and upon such facts as were established by a preponderance of evidence, that the plaintiffs were entitled to recover the amount of the verdict. No proceeding upon the trial would affect this conclusion.

Judgment and order affirmed, with costs.

Truax, J., concurred.

Cases cited