Buck v. Grimshaw

The Vice-Chancellor.

No fraud is imputed in this .case either to John Grimshaw Or the firm of Sands," Spooner & Co» The circumstances which led to -the failure of the former and his consequent inability to fulfil his contract, appear to havd been entirely unexpected by all the parties; it becomes a question, therefore, between the complainant and the house of Sands, Spooner & Co. (both equally innocent) which is to bear-the loss occasioned by the failure ?

This depends, very much, if not entirely, upon the question %■ whether the delivery of the cotton by the complainant to Grimshaw was an absolute or a conditional delivery 1'

Jt is insisted by the complainant’s counsel, that the sale is to be regarded as a conditional one; and the decision in Palmer v. Hand, 13 J. R. 434, is relied upon as establishing the principle, that where goods are sold to be paid for on delivery and the vendee neglects or refuses to "pay for them upon the delivery being made, the vendor has a lien for the price and may resume the possession or recover the goods- in trover. The case thus cited does not warrant so broad and general a conclusion. The court did not proceed upon the ground of a conditional delivery, but upon the circumstance of no delivery haying, in fact, been made. There, the lumber in disputé was in a course of delivery and before any part of it reached the purchaser' his fraud was discovered and the actual delivery withheld: and, therefore, the court very properly-decided that the title had not passed out of the vendor. Indeed, the decision seems to be founded in principle upon the right of thé vendor to stop the goods in transitu: a doctrine with which we are very familiar; and I apprehend it was intended by that case to carry the law no further. A more recent decision of the same court evidently restricts its operation to this principle. I allude to Chapman v. Lathrop, 6 Cow. 110.., There, goods were sold to be paid for in cash and were suffered to pass into the possession of the vendee by actual delivery. He, afterwards, refused to pay the cash according to his contract: and the vendor undertook to disaffirm the sale and brought an action of trover against him. It was held, he could not recover: the court treating it as settled law that, where no time is agreed upon for payment at the time of a sale for cash, the delivery and payment are to be simultaneous acts ; that the vendor may refuse to deliver without actual payment, on account of its being a condition of the sale, but if he chooses to deliver the goods to the vendee without payment, he waives the condition and the property passes, for the title becomes thereby changed. These are rules by which courts of law are governed in deciding upon the rights of property in chattels between a vendor and vendee where no fraud intervenes; 'and they admit- of a qualification only in special cases: when the vendor is permitted to exercise the right of stoppage in transitu.

The courts of equity go no further than the courts of law in extending protection to vendors. In Conyers v. Ennis, 2 Mason, 236, on the equity side of the circuit court, Judge Story was strongly pressed, on account of the peculiar hardship of the case and its imposing equitable circumstances, to extend the doctrine and permit the vendor to reclaim in equity where insolvency had occurred and the goods still remained unpaid for in the hands of the purchaser. He was urged not to confine the right of a vendor to stop or reclaim goods while they were in transit merely. But the learned Judge considered he had no authority to break in upon the rules of law; that they were inflexible on the subject; and that he could not give the vendors any relief, even in equity, upon the idea of a lien for the payment of the purchase money or on the ground of a condition attaching to the delivery and creating a trust in the purchaser until the money was paid for the goods. The question of enforcing a supposed equitable lien for the purchase money in favor of an unpaid vendor of goods against the vendee and volunteers under him has recently been before Chancellor Walworth in Lupin v. Marie, 2 Paige’s C. R. 169; and from him to the court of errors in the same case, 6 Wend. 77.1 This casé settles the point definitively, that there is no such lien where there has been an absolute and unconditional delivery and no fraud. In such a state of things the vendor must look to the personal responsibility of the vendee. Still, these decisions, instead of impairing, acknowledge the right of the vendor to reclaim his goods or the proceeds where the sale or delivery is conditional or where it is evident it was not intended by the parties to be absolute until the purchase money is paid if sold for cash or upon a credit for endorsed notes and then until such notes are given: for then the vendor is considered as not parting with his title until the condition is fully complied with by the purchaser—and he may follow the goods or the proceeds in the hands of any one, except a subsequent bona fide purchaser without notice. These principles were first acted upon in Haggerty v. Palmer, 6 J. C. R. 434; and have since been applied in Keeler v. Field, 1 Paige’s C. R. 312. They were also fully recognized by Judge Washington in Copland v. Bogart 4 Wash. C. C. R. 588; and were laid down by Judge Story, in his charge to the jury, in D’Wolf v. Babbet, 4 Mason, 289.

Whether a sale and delivery be conditional or not depends upon the particular facts and circumstances of each - case. It may be the subject of express stipulation in the contract of sale or a matter ,of subsequent agreement when the delivery is made or it may be inferred from the course of the transaction and the usage of a particular trade that the vendor did not intend to make or the vendee to receive an absolute and unconditional delivery. But the condition must be made to appear as matter of evidence: otherwise, the legal-presumption would follow, from the fact of a purchaser’s being in the actual possession of the goods, that the delivery to him was an absolute one.

By the terms of sale in question, the price of ten cents per pound was to be paid on delivery of the cotton; and such delivery was to' be completed on or before a particular day. There was no stipulation that the taking of a part of the cotton at a time by the purchaser was not to be a delivery pro tanto „ On the contrary, I think it is* the fair and reasonable interpreiatiou of the contract, that the delivery was to be made in * parcels on different days, since it was the object of the parchaser to ship it by different vessels, and, therefore, when the twenty-nine bales were called for, the complainant had a right to ask for the money for that parcel, and might have refused io part with it until so much, at least, of the purchase money was paid. But he did not insist upon any payment; and must be considered as waiving the condition precedent so far as the twenty-nine hales are concerned. He, moreover, permitted the cotton to be laden on board the ship and a bill of lading to be taken by Grimshaw, without objection on his part or any reservation of a right to consider the delivery conditional, nor arc there any circumstances attending the transaction from which it can be inferred the delivery was so intended. In the absence of proof or‘fair inference, I must presume it was intended as an absolute delivery which, of course, changed the right of property. What better evidence can we. have of Grimshaw’s being vested with the absolute right of property than the fact of his exercising ownership by shipping it in his own name and taking the bill of lading under his own control ? No fraud or unfairness appears to have been practised for the purpose of putting the complainant off his guard. He was willing to trust to the personal responsibility of the purchaser for a few-days. If he sustains a loss, it mus^ be attributed to his misplaced confidence or to that kind of misfortune in commercial affairs from which the most prudent and careful are not always exempt.

The complainant has alleged in Ms bill a custom among merchants of delivering goods sold for credit where the purchaser is in fair credit and afterwards sending for the money. I do not perceive how tMs can vary the case. It is not alleged to be a mercantile usage (so well known and established as to form a part of the law merchant) that when goods are thus delivered it is understood and intended to he conditional and not to pass an absolute title to the purchaser: any thing short.of a usage to that extent is not sufficient.

In whatever light tMs case is viewed, I tMnk there is not enough to warrant the conclusion that it was such a conditional sale or delivery of the cotton in question as to entitle the complainant to reclaim it. Even if it were otherwise, and I could feel myself at liberty to declare in favor of an equity existing in the complainant which could be enforced as between him and the purchaser, I apprehend there would still bo great if not insuperable difficulty in enforcing the claim against the other parties to this suit, who made large advances upon the credit of this cotton and thereby acquired rights which the court, under the circumstances, would probably be bound to regard. It is unnecessary to pass definitively upon the point.

Upon the other ground I am constrained to dismiss the bill with costs.

Case Details

Case Name: Buck v. Grimshaw

Court Name: New York Court of Chancery

Date Published: Oct 13, 1831

Citation: 1 Edw. Ch. 140