Dows v. Greene, 32 Barb. 490

Dows v. Greene

32 Barb. 490 | N.Y. Sup. Ct. | 1860

By the Court,

Hogeboom, J.

The action in this caséis replevin, to recover 2565 bushels of corn alleged to -have been unlawfully -detained by the defendants from the plaintiffs. Both parties claim title to the corn, and through the samé persons, Hiles & Wheeler, who were at 'one. time confessedly the owners thereof. The plaintiff’s title, if otherwise valid, is prior in point of time to that of the defendants, and in such, case must prevail. The question is upon the validity of thó plaintiff’s title; which is always the question in an action of replevin, and especially so in this case, as the. defendants’.title is in no- way' impeached, if the plaintiffs’ title fails. The plaintiffs make title as alleged bona fide holders of the bill of lading, relying upon- which as the evidence of title to the property, they made advances to the shipper of the goods, and they claim a lien , to the extent of these advances as against the defendants, (who are subsequent purchasers of the Corn from Hiles- Wheeler,) both at common law- and under the statute “ relative to principals and factors-and agents.” (3 R. S. 76, §§ 1, 2.) The important inquiries;, *502therefore, to which we should direct our attention, are 1. Is the instrument, under which the plaintiffs claim, a hill- of lading ? 2. Was it executed and delivered to them by the owners of the goods or their agent; or did the plaintiffs come into posséssion of it in some other way, in a manner to bind the owners, Hiles & Wheeler? 3. Did the plaintiffs make advances thereon in good faith before notice that the person in whose name the shipment of the goods was made was not the actual and bona "fide owner thereof? Let us examine each of these- propositions.

■ 1. The instrument under which the plaintiffs claim was a bill of lading. If not exactly formal, it was substantially such. It did not detract from its force or validity that it purported to be the act of the- owners of the goods and also of the carrying vessel, instead of their agent, the master or captain. Hot only from its similarity to other bills of lading has this been-argued to possess the character of such a paper, but this very instrument has in several instances been adjudged to be a bill of lading. That question, therefore, is no longer open to discussion. (Dows v. Perrin, 16 N. Y. R. 328, 9. Dows v. Greene, 16 Barb. 72. Dows v. Rush, 28 id. 183. Bank of Rochester v. Jones, 4 Comst. 497.)

2. The paper does not purport to have been executed by Hiles & Wheeler personally, but by them “ per E. H. Walker.” We must therefore inquire into the authority of Walker to execute and deliver the instrument. He had no express authority. He was not instructed by his principals to execute thé paper. But there is much evidence of implied authority. He was a clerk in the employ of Hiles &-Wheeler, the only indoor clerk at that time. He was a clerk in the shipping or carrying business; a clerk to make out bills of lading; a clerk to sign those of a particular character, to wit, where Hiles & Wheeler were mere freighters and not owners of the goods. He does not recollect before to have signed any, where Hiles & Wheeler were the owners; but this nice distinction, it seems to me, cannot affect his real authority, or prejudice the *503public or dealers with the concern, ignorant of any such limitation. It is somewhat remarkable that Hiles, who was examined as a witness in the cause by the defendants, (Wheeler not being at home at the time of the transaction,) does not deny the authority of Walker to sign bills of lading, and is not examined upon that- subject. On the first trial of the cause Bloss testified that he did not recollect that Hiles was present when the bills of lading were obtained, or then knew of the fact; and Hiles swore he did not. But on the second trial, now under review, Bloss testified that when he first inquired at the office for the bill of lading, some person within the bar or enclosure, and some person with whom he had conversed as to the purchase of the corn, referred him to Walker; and among the persons thus within the bar, was, he thinks, Mr Hiles; that it was in pursuance of this reference that he got the bills of lading of Walker; and that when, after the bills were procured, he in a subsequent part of the week, spoke to Hiles about having sent the bills of lading to Rochester, the latter did not, to his recollection, object to or deny Walker’s authority to sign the bills. Upon this evidence the judge who tried this cause at the circuit without a jury, found “ that Bloss obtained said bill of lading in good faith, and Walker had authority to execute it for Hiles & Wheeler, and it was in fact executed by Walker with the knowledge and sanction of one of the firm of Hiles & Wheeler.” On this evidence I think we cannot, in a court of review, subvert this finding, or undertake to say it was a finding against the weight of evidence. There may be some little further evidence on this point, which has escaped my attention, but none, I think, of much moment, and I cannot therefore regard it as an appropriate case for granting a new trial on account of an erroneous finding on this question of fact.

Assuming the bill of lading to have been well executed by Walker in behalf of Hiles & Wheeler, and to have gone into the possession of Bloss lawfully, did the plaintiffs make advances upon it to Mack in good faith, relying upon the bill of *504lading as evidence of Ms ownership and without notice of any facts justifying the conclusion that he was not the real owner, or that any fraud was meditated, or had heen committed, in the purchase of the corn ? This question has been answered in the affirmative by the judge who tried the cause, and I think upon sufficient evidence. There is some testimony tending to show- that Bloss saw Cary on the 9th of August, at Buffalo, but, none that he disclosed to him there the particulars of the contract; and some testimony tending to show that Dpws went down the Hudson river with Mack after he made the assignment, but I can discover none seriously affecting or. at-any rate overthrowing the other facts in the case fending .to show that the advances were made by the plaintiffs. in ignorance of any circumstances tending to,cast suspicion, upon, the title of Mack. A new trial upon that grqund ought not .therefore to be granted. . ...

,. It remains to consider another question of some importance, made so. by the decision of .the court of appeals in the case of Dows v. Perrin, (16 N. Y. Rep. 325,) to wit, whether, assuming the bill of lading to have been executed under proper authority and to, have-been lawfully and intentionally delivered to. BMss, and to his principal Mack, and the plaintiffs as the indorsees of the bill of lading and the consignees of the goods, to have ma.de advances thereon to Mack in good faith without notice that he was not the owner of the goods, the plaintiffs’ title to. the corn is.good, notwithstanding Mack may have intended a fraud in acquiring possession of the goods and purchased with a preconceived intention not to pay. For the purpose' of"considering this question, I assume that the intentions of Mack, though not of Bloss, were fraudulent, there being sufficient evidence in the case, perhaps, to justify such an inference, although the judge has not found the fact, and there is room for debate whether the fraudulent intent on the part of Mack was conceived until after Bloss had sent on to him the bills of lading from Buffalo. The court of appeals, in the case last cited, are reported to have decided that a bill *505of lading is only so far negotiable as to protect a bona fide indorsee thereof for value from the exercise by the consignor of the right of stoppage in transitu; but when such bill of lading is obtained by fraud, from the owners of the goods, and there has been in fact no sale of them, an indorsee, though taking in good faith and for value, can obtain no better title to the goods than the indorsee had. The bill is of no effect, except when the assignor has at the time some right or authority operative as against the owner until rescinded by him. (Dows v. Perrin, 16 N. Y. Rep. 325.)

Now the first remark to be made in reference to that decision is, that the case called for no such adjudication. The court, before announcing the principle just quoted, had decided that the judge at the trial should have nonsuited the plaintiff for want of evidence of authority on the part of Walker to execute the bill of lading, and then proceeded to declare this principle in anticipation of the state of facts which might be presented upon a new trial. While the principle thus announced is, therefore, entitled to the greatest respect as the opinion of the highest judicial tribunal in the state, it does not possess the force of authority, as a rule of action in other cases.

Nor is it necessary to dispute the position maintained by the learned chief justice who delivered the opinion of the court, that Mack, as the fraudulent purchaser of the goods, was not in a situation to dispute the title of Niles & Wheeler or that of their bona fide assignees. He acquired no title by the purchase, on account of the fraud, and was liable to an action of replevin for the goods.

But the important question is, what right did the bona fide purchaser from him acquire; for such is the situation of the plaintiffs. I take it to be very well settled that a bona fide purchaser for value from a fraudulent vendee obtains a superior title to a subsequent bona fide purchaser from the vendor, where possession accompanies the sale from the fraudulent vendee. And in this case I think Mack must be deemed *506to have had the possession. In the first place, Bloss, and through him, his principal, Mack, obtained lawful possession of the corn. The bill of lading was made out in the name of Mack; the goods mentioned in the bill of lading were deposited in the canal boat, and by virtue of the bill, and with the consent of Hiles & Wheeler, the master of the boat held the goods as the goods of Mack; at least as the goods of Mack or of his consignees, the plaintiffs. He held them in no sense as the goods of Hiles & Wheeler. In fact he held them as the property and for the benefit of the consignees, the plaintiffs. Prima facie the right of property, as between the consignor and consignee, is in the latter; though the transaction is subject to explanation, and the consignee may be shown to be the mere agent or depositary of the consignor. This being so, the goods on board of the canal boat were, with the knowledge and consent of Hiles & Wheeler expressed on the face of the bill of lading, in fact held by the master of the boat for the plaintiffs as the owners thereof. Is it possible, under such circumstances and in the absence of fraud, that Hiles & Wheeler could subsequently convey a valid title to the defendants ?

Properly speaking, therefore, the question discussed in the case of Dows v. Perrin did not arise. The plaintiffs were not the indorsees of the bill of lading, but the original parties thereto, the very persons in whose favor the bill was made; and it seems unnecessary to discuss the question whether a subsequent indorsee receiving the transfer of the bill simply by indorsement or assignment from a fraudulent shipper or consignee of the goods, as a security for cash advances made in good faith, acquires a title untainted with the original fraud. In one sense, indeed, the plaintiffs may be said to be subsequent parties; that is, they are not the original purchasers from Hiles & Wheeler, but purchasers from their fraudulent vendee. And although this assimilates them, somewhat, to mere indorsees in good faith of the bill of lading, yet I think the fact that the plaintiffs are the actual consignees of the corn— *507named as such in the hill of lading—creates a material distinction in their favor.

But let it be conceded that the plaintiffs occupy the position simply of bona fide indorsees of the bill of lading, making advances in good faith upon the strength of Mack’s supposed ownership of the goods, is it true that the law is, and “ that the courts have gone no farther upon this subject than to hold, that the bona fide indorsee of a bill of lading for value is not liable to have the property which it represents stopped in transitu by his consignor on account of the non-payment of the purchase price,” and “ that the holder of such a bill void [voidable P] on account of fraud, cannot confer a better title than he had himself” ? (16 N. Y. Rep. 332.) By the use of the term void, I presume is here meant voidable; for in the connection here used, a bill of lading is never absolutely void, but only voidable at the instance of the aggrieved party, and in that sense it is every day’s experience that a fraudulent vendee can confer upon a bona fide purchaser a better title than he himself had. And for the purpose of this argument, a bona fide indorsee of the bill of lading for value stands in all substantial respects in the attitude of a purchaser of the goods. The bill of lading is the symbol of title, and the evidence of possession. It is the hey of the canal boat warehouse. The master of the boat holds the goods'for, and as being in the possession of, the party named as owner in the bill of lading. The party then has all the possession of which the nature of the thing is capable, while in the act of transportation by another party for his benefit. And the advance upon the credit of the goods, whether to the full or only the partial value, makes him pro tanto the purchaser of the goods—the conditional purchaser—the purchaser until the amount of the advances is reimbursed, or what is the same thing, the lien-holder or mortgagee. The indorsement of the bill of lading is the bill of sale of the goods. By commercial usage it has this effect, in the same manner and to the same extent as if the bill of sale or transfer of title was written out *508at length, upon the hack of the bill of lading. " To this extent the negotiability of these instruments bas' never, so far as I know, been questioned.. The plaintiffs, therefore,¡as bona fide indorsees for value of the bill óf lading," stand in precisely the same light as any other bona fide purchasers of property from a fraudulent vendee. The vendors in this- as in- other cases of a bonafide change-of ownership, lost their right of stoppage in transitu, and not the less so, though the purchase from them was fraudulent. Strictly and technically speaking, perhaps the right of stoppage in transitu'in most" cases-op-plies to a "case where the purchase may have beén fair,, but the purchaser is, or becomes, -insolvent; -but was it ¿ver doubted that it could also, and more emphatically, be exercised where the purchase was fraudulent, and the: lawfulness of the exercise of this right in each case depends, when exerted against another party than the-original purchaser, upon the question has such party obtained the transfer of title in good faith, for value and upon the presumed ownership of the goods in his vendor ? If so, the right of stoppage in transitu is at an end. Under the facts proved and found, therefore, the plaintiffs are bona fide holders for value of the bill of lading and of the corn, under a-bill of lading lawfully executed and delivered to their vendor by the original owners of the goods and of the shipping boat, with nothing to impeach their title except the fraud of their vendor, of which they were ignorant. I think this gives them a good-title as against a subsequent purchaser from the original owpers.

3. Assuming the facts of the case to be such as have been before mentioned and such as have been found by the trial court, I am of opinion that the right of the plaintiffs to .recover stands firm upon the 1st and 2d sections of the factor’s act. (3 R. S. 76, 5th ed.) That act in substance provides that every consignee of merchandise shall be entitled to a lien thereon for any money advanced or negotiable security given by such consignee to or for the use of the person in whose name the shipment thereof shall be made, and that such last *509named person shall be deemed the true owner of such merchandise, unless the consignee shall have notice to the contrary by the bill of lading or otherwise. The case of the plaintiffs, as established.by the evidence and found by the court below, seems to stand precisely in the predicament contemplated by. this act. The plaintiffs being therefore protected by. this act, having the constructive and the actual possession of- the goods under the bill of lading—being deprived of that possession by Niles .& Wheeler—finding their property subsequently in possession of the defendants, who upon demand refused to. deliver the same to them, were entitled, I think, to maintain the action of replevin and to recover the corn or its value. .:The view of the case taken by the court below was correct, and the judgment of the circuit court should be affirmed.

[Albany General Term, September 3, 1860.

Gould, Hogeboom and Bockes, Justices.]