Davis v. Winona Wagon Co.

120 Cal. 244 | Cal. | 1898

GAROUTTE, J.

The plaintiff, as' assignee in insolvency of the Bull & Grant Farm Implement Company, a corporation, has brought this action against defendant, a corporation, to recover fourteen thousand dollars damages, alleged to be the value of certain wagons and other vehicles wrongfully converted by defendant to its own use. Plaintiff appeals from the judgment and order denying Ms motion for a new trial.

The merits of this litigation are to be disposed of upon a consideration of the second cause of action. The material facts, as found by the trial court, may be substantially stated as follows: The Bull & Grant Farm Implement Company, upon ¡¡November 11, 1889, was the owner and in the possession of a large number of vehicles which it had purchased from the defendant, but was still indebted for the same. Thereupon the defendant canceled this indebtedness, and the Bull & Grant Farm. Implement Company transferred the title to these vehicles to it. At the same time it was agreed that the Bull & Grant Farm Implement Company should retain possession of the property, sell the same on commission, and account for the net proceeds to defendant. Upon December 5, 1890, the Bull & Grant Farm'Implement Company was declared an insolvent debtor, and this plaintiff was thereafter appointed assignee of the insolvent’s estate. Prior to such insolvency the Bull & Grant Farm Implement Company bad sold about seven thousand dollars’ worth of this property, and had accounted to the defendant for the proceeds thereof. Plaintiff, before his appointment as assignee, for a short time acted as receiver of the insolvent’s estate, and as such receiver sold a small portion of this property and accounted to defendant for the net proceeds. Subsequent to plaintiff’s appointment as assignee, defendant, claiming title to all of said property which remained on hand and in the possession of the assignee, demanded its surrender, and plaintiff delivered said property to defendant in accordance with such demand. Subsequently the plaintiff, claiming to act in the interest of the creditors, brought this action, as stated aforesaid, to recover from defendant in conversion the sum of fourteen thousand dollars alleged to be the value of the property converted.

As to the creditors of the Bull & Grant Farm Implement Company, the sale by it to defendant was void, for there was no immediate delivery and change of possession of the vehicles. (Murphy v. Mulgrew, 102 Cal. 547; 41 Am. St. Rep. 200; Byxbee v. Dewey (Cal. 1897), 47 Pac. Rep. 52.) Neither can there be any question as to the right of the assignee of the insolvent debtor, representing the creditors, to bring an action of the character here disclosed. (Brown v. Bank of Napa, 77 Cal. 544.) No demand for a return of the property was necessary before the action was brought. For defendant sets out by" its answer that the property belonged to it, and bases its right to defeat plaintiff’s cause of action upon those grounds alone. Under such circumstances no demand is required. (Parrott v. Byers, 40 Cal. 622.)

As already suggested, there being no immediate delivery and change of possession, the wagons and vehicles, as against creditors, were at all times the property of Bull & Grant Farm Implement Company. In order to maintain this action plaintiff is bound to prove that the property was converted by the defendant, the Winona Wagon Company. It is now claimed that such conversion is proven, as to the vehicles sold by the Bull & Grant Farm Implement Company prior to the insolvency proceedings, by the fact' of such sales. It is insisted that the Bull & Grant Farm Implement Company was the agent of the Winona Wagon Company; that therefore the sales of the agent were the sales of the principal, and that the conversion of the agent by such sales was the conversion of the principal. While, under certain circumstances, the wrongful conversion of property by an agent is the wrongful conversion of the principal, the rule does not apply to a case similar to the one at bar. As to the creditors, this property was the property of the Bull & Grant Farm Implement Company. Hence, as to creditors, any dealings with the property by that company conlcl not have been as agent of the Winona Wagon Compan)r, but as principal. And as to the creditors, sales by that company must be held to be the exercise of acts of ownership upon its part, and not as agent of the Winona Wagon Company. It is absolutely necessary to the success of plaintiff’s cause of action that this property should be held to be the property of the Bull & Grant Farm Implement Company, and when that is held, then clearly such company had the right to dispose of the property, and, in the absence of some character of fraud, the sales were valid, and no fraud is here disclosed. Plaintiff cannot be allowed to change his legal position as the wind changes. His case stands alone upon his claim of title to this property in the Bull & Grant Farm Implement Company, and when he has made such claim he cannot be allowed to insist that when dealing with this property the Bull & Grant Farm Implement Company dealt with it and made sales of it as the agent of another. There is no materiality in the fact that the proceeds of these sales went to the Winona Wagon Company. The Implement company may as well have paid them to Jones or Smith, or dissipated them away. This is an action to recover the value of the property, and is in no sense an attempt to follow the proceeds of a fraudulent sale. In the absence of any showing that such sales were violative of some provision of the insolvent act, we are fully convinced that any attempt to follow such proceeds would not meet with success.

There was a large amount in value of these wagons and other vehicles which came into the hands of the assignee. Upon demand he delivered this property to the defendant. The title to it, as against the creditors, was in the insolvent when the assignee was appointed, and thereafter such title passed in trust to the assignee. By mistake of either law or fact, or both, as to the location of title in himself, the assignee gave over the possession of the property to defendant. If he had refused to deliver the property when it was demanded, unquestionably defendant would have failed to recover it upon action brought, for, as already suggested, the title as against it was in the assignee. It is now insisted that plaintiff, having delivered the property to defendant, is estopped from recovering it back or suing for its value. Plaintiff insists that he knew nothing of the original transaction between the two companies, and supposed and believed that the property had been consigned by defendant to his insolvent to sell simply on commission. In answer to this contention defendant insists that plaintiff was in the possession of all the facts when he delivered the property, or, if not in such possession, he had the means of knowledge at hand, which fact was, as against him, of equal potency with actual knowledge. There is nothing in the foregoing facts to justify a holding of the existence of an estoppel against plaintiff. Conceding a knowledge upon his part of all the facts claimed, at the time he delivered the property to defendant, still those facts do not create an estoppel against him. It is difficult to see how the mere delivery of property by a party in possession of it to a party claiming title to it bars the first party from ever attempting to regain its possession or its value. Vital elements of an estoppel are lacking in such a case. But, above and beyond all this, plaintiff was a trustee of the creditors. He held this property in trust for them. He stood in an entirely different relation to it as compared to property wherein the absolute ownership vested in him. As such trustee he had not the power to give it away, even if such were his intention. As trustee of the creditors he could not be held to this transaction, even if he was a party to it in fraud. How much less may he be held to it where he acted under mistake.

Owing to the foregoing views it becomes unnecessary to pass u}Don other questions raised by counsel.

Judgment and order reversed, and cause remanded for a new trial.

Harrison, J., Van Fleet, J., McFarland, J., Temple, J., and Henshaw, J., concurred.