188 A.D. 798 | N.Y. App. Div. | 1919
Lead Opinion
The action was brought to recover damages for the alleged conversion by the defendants of five automobiles alleged to belong to the plaintiff.
The answers admit the incorporation of the defendant corporation and the demand for and refusal to deliver the automobiles and deny the other allegations of the complaint.
This is a review of the second trial of the action. Upon the review of the first trial we reversed a judgment in favor of the plaintiff and granted a new trial for an error of the trial court in excluding evidence offered by the defendants to show that the automobiles were bought on contracts of conditional sale. (185 App. Div. 904.)
The following facts are undisputed:
One Theodore J. Parley, for three or four years prior to June 13, 1917, had been in the automobile business and had a public garage in the city of Lockport in the county of Niagara. He was subagent for and sold Studebaker motor cars or automobiles, had a large building, stored cais, had his place full of cars in winter, sold gasoline, oil and tires, and had a repair shop with two men working and sometimes more. The defendant A. W. Haile Motor Company, a domestic corporation, doing business in the city of Buffalo, was general agent for the Studebaker motor cars or automobiles for Western New York which includes Niagara county. Parley purchased all the Studebaker cars which he handled. from A. W. Haile Motor Company in Buffalo. On the 13th day of June, 1917, Farley absconded. Since that time and up 1o the time of the trial he had not been found although efforts were made by the defendants to find him. At the time of his departure there were in his garage five Studebaker cars which
This action was begun June 21, 1917. •
There is no serious conflict in the testimony of the witnesses except as to the condition of the cars and their value. Except as to the condition of the cars and their value the plaintiff was the only witness in his own behalf, and the defendant Arthur W. Haile, being also the president of the defendant corporation, was the principal witness in his own behalf and for the defendant corporation. One Hugh H. Price, who at the time of the trial was in the military service of the United States and out of the jurisdiction of the court, would have been a material witness for the defendants. Under an arrangement of counsel, however, the defendants read in evidence part of the testimony given by him on the first trial. .He was at that time in the employ of the defendant corporation and had to do with the transactions between the defendant corporation and Farley, involved in the lawsuit. The testimony of these witnesses was the subject of criticism, because of their interest in the litigation.
I shall take up a consideration of the plaintiff’s testimony first. It was in substance to the effect that in the middle or latter part of October, 1916, Farley applied to the plaintiff for a loan on the garage in order that he might buy three cars which were in the defendant corporation’s salesroom in Buffalo which could be bought for the old prices, so that he might have cars on hand to sell, because he had learned that prices were going to advance and, on account of war times, the company would not guarantee deliveries. Theretofore Farley had been accustomed to buy and pay for one car at a time. The plaintiff told Farley that he had no money to loan
Thereupon Farley took from his pocket an invoice for the car for $741.15 showing the receipt of payment November 25, 1916. Farley stated that he would like to get another car that day and the third one the next' day if the weather held good. The plaintiff then said that if Farley was “going to get these cars as fast as this I don’t see any use in making out a note on each car,” but they might as well put the whole thing into one note. The plaintiff said: “You can figure this thing up here and see what it is and you can go and get this car insured and I will go over to the bank and take care of the money end of
“ I have bought for sale by Theo. J. Farley, as my agent two Studebaker fours and one Studebaker six automobiles and to finance the deal have endorsed the note of said Farley dated this day for $2545.65 and interest. Said Farley is to store said cars at his garage and keep same insured at Ms expense and to sell same as soon as possible on my account. As fast as the cars are sold the moneys derived from the sales are to be applied to pay said note and interest until same is fully paid. In case of any renewals of said note said Farley is to pay the interest and discount. All moneys realized by Farley by the sales after paying the said note in full are to belong to him for Ms services in the matter.
“ Dated November 27th, 1916.
“ MONTFORD C. HOLLEY.
“ T. J. FARLEY.”
They both signed the original, wMch the plaintiff retained, and the plaintiff signed the carbon copy and delivered it to Farley.
The next day Farley came to the plaintiff’s office with a receipted invoice for the other four-cylinder car, delivered the invoice to the plaintiff, got the insurance slip to cover it and handed it to the plaintiff and thereupon the plaintiff gave him a check upon the same account dated November 28, 1916, for $741.15 payable to the order of Farley.
On the 29th day of November, 1916, Farley again came to the plaintiff’s office, said he had gotten the six-cylinder car and delivered to the plaintiff the receipted invoice for the same. Then Farley got the insurance slip for that car and delivered it to the plaintiff. Thereupon the plaintiff handed Farley another check dated that day and payable to the order of Farley for $913.35, being fifteen cents less than the price of the car.
The three invoices and the three checks were produced by the plaintiff and put in evidence. The checks showed that they had been paid at the bank.
The six-cylinder car, serial number 204582, is one of the cars involved in this controversy.
About the middle of December, 1916, it was arranged between Farley and the plaintiff that the plaintiff would buy another six-cylinder car under the same arrangement. On the 19th day of December, 1916, Farley came to the plaintiff’s office, gave the plaintiff the insurance slip to cover the six-cylinder car, said he had an invoice for the car, but must have left it at his home. The plaintiff made out a note for $963.35, being the sum of the price of the car, $913.35, and the $50 going to him, payable three months from date to the order of Farley. Farley signed the note as maker, the plaintiff indorsed it, got it discounted at the bank and the proceeds passed to the credit of his auto account. The plaintiff took the memorandum of November twenty-seventh from his safe and wrote on the bottom of it the following and he and Farley signed their names thereto:
“ Dec. 19, 1916.
“ One additional Studebaker Six bo’t today under same conditions. Note given by Farley today $963.35, due 3 months with interest.”
In January, 1917, Farley told the plaintiff that he wanted to get some new model cars and after the matter was talked over the plaintiff agreed under the same arrangement to buy three more cars, one six-cylinder car and two four-cylinder cars. ' On the 31st day of January, 1917, Farley came to the plaintiff’s office, said he had the three cars down from Buffalo and handed the plaintiff the receipted invoices for them and the insurance slips covering the cars. The plaintiff made out a three months’ note payable to the plaintiff’s order for $2,728.20, being the sum of $2,578,20, the price of the cars, and $150, being $50 for him for each car. Farley signed the note as maker, the plaintiff indorsed it and got it discounted at the bank and the proceeds passed to his credit in the auto account. The plaintiff wrote in the corner of the invoice the following which both the plaintiff and Farley signed:
“ Above cars hereby included in and covered by written agreement of November 27,1916, on same terms and conditions. January 31, 1917.”
Then the plaintiff gave Farley a check payable to his order dated January 31, 1917, for $2,578.20, the price of the cars. The invoice, the writing on it and the check were received in evidence. The check showed that it was paid by the bank. The insurance slips, one for each car, were also received in evidence. They were alike in form and one of them is as follows:
“ Certificate of Insurance.
“ $750. ' No. 5889.
“ Boston Insurance Company
Boston, Massachusetts.
“ Capital One Million Dollars.
“ This certifies that T. J. Farley insured under and subject to the conditions of Open Automobile Policy No. 32583 of this company, Seven Hundred Fifty Dollars upon Automobile Manufacturers Number 14092, Built by Studebaker in the year*807 1917, Model 4 Cyl. Type Touring, Horse Power 24, from January 31, 1917, noon, to January 31, 1918, noon.
“ Loss if any payable as provided in the policy upon surrender of this certificate.
“ This certificate is not valid until countersigned by .................................... at Lockport, N. Y.
“ January 31, 1917.
“ H. D. ALLEN, Prest.
“ Loss, if any, payable to M. C. Holley as his interest may appear.
“THE SHAPLEIGH WRIGHT CO. Agent.
“ Wm. C. Shapleigh.”
The serial numbers of the four-cylinder cars are 114227 and 115397 and the serial number of the six-cylinder car is 211318.
Only the two four-cylinder cars, serial numbers 114227 ahd 115397, are involved in this controversy.-
In March, 1917, the plaintiff and Farley made an arrangement for the purchase by plaintiff of two more cars, one four-cylinder car and one six-cylinder car. On the 5th day of March, 1917, Farley delivered to the plaintiff two receipted invoices, one for a six-cylinder car at $990.60, and the other for a four-cylinder car at $793.80. They were receipted February 28, 1917. Farley also delivered to him insurance slips for the two cars. The plaintiff drew a note for $1,884.40, being the sum of the prices of the two cars and $100, $50 for each car. Farley signed the note as maker and the plaintiff indorsed it and got it discounted and the proceeds passed to his auto account. Thereupon he wrote on each invoice the following which was signed by Farley:
“ Above car hereby included in and covered by written agreement of Nov. 27, 1916.
“ March 5, 1917.”
Thereupon the plaintiff gave to Farley a check on the auto account payable to his order for $1,784.40, the price of the cars.
The invoices with the written agreements thereon, the check and insurance slips were received in evidence. The check showed that it was paid by the bank. The serial
Only the four-cylinder car is involved in this controversy.
The defendant Arthur W. Haile maintains that the nonsuit as to him was right because he did not act in his individual capacity in taking away the automobiles.
The defendants assert that the plaintiff had no title to the automobiles and, therefore, cannot, in any event, recover.
The defendant corporation, making no claim to have had a lien on the four-cylinder car, serial number 114227, insists that it had a right to take and hold the other cars because it retained title to them under conditional contracts of sale accompanied by notes given to it by Farley for the purchase price thereof and renewals of the same from time to time. It is conceded that these contracts were never filed.
The testimony of Arthur W. Haile, called as a witness on behalf of the defendants, and the part of the cross-examination of Hugh H. Price from the record of the first trial,, read on behalf of the defendants, together with the defendants’ books and the renewal notes and contracts of conditional sale, tend to show that, at the time the defendant corporation took into its possession the six-cylinder car, serial number 204176, there was outstanding Farley’s note for $800, dated May 31, 1917, payable to the defendant corporation June 15, 1917, with interest, accompanied by a conditional contract for the retention of the title to such car in such defendant till the note was paid; tend to show that at the time the defendant corporation took into its possession the six-cylinder car, serial number 204582, there was outstanding Farley’s note for $500, dated June 5, 1917, payable one month from date to the order of the defendant corporation, with interest, accompanied by a conditional contract for the retention of the title to such car in such defendant till the note was paid; tend to show that at the time the defendant corporation took into its possession the four-cylinder car, serial number 113233, there was outstanding Farley’s note for $400, dated May 31, 1917, payable to the order of the defendant corporation June 10, 1917, with interest, accompanied by a conditional contract for the retention of the title to such car in such defendant till the note was paid; tend to show that at the time the defendant
Upon the first trial it seems that the battle was waged principally over the question whether or not the plaintiff was simply a general creditor of Farley. The learned justice presiding at the trial now under review appears to have been specially impressed with the evidence upon which the defendants argued that the plaintiff bought the automobiles when he knew or ought to have known of the conditional sales contracts of the defendant corporation.
The claim of the defendants that the plaintiff erased from the invoice of November 28, 1916, the words “ by note $600; by cash $313.50,” has no substantial basis in the evidence.
The defendants seem to regard the way in which the notes were given by which the plaintiff raised the money to pay for the automobiles and the manner of the insurance as strongly indicating that the plaintiff was not the purchaser of the automobiles in good faith. I do not so regard them. The use of the notes was to get the money from the bank and the money was to be obtained by the plaintiff. It was a much better banking proposition to present to the bank the note signed by Farley as maker than for the plaintiff to appear as maker and Farley as accommodation indorser. The property in the garage was covered by blanket policies of insurance and it was entirely proper and usual to deliver slips just as the slips in question were delivered.
Assuming, without deciding, that the conditional contracts covered the four automobiles as claimed by the defendants, they were void as against the plaintiff because they were not filed if he was a subsequent purchaser of the automobiles in good faith. (Pers. Prop. Law [Consol. Laws, chap. 41; Laws of 1909, chap. 45], § 62.) I am of the opinion that all the evidence indicates that the plaintiff bought these automobiles of Farley in entire good faith; that so far from having any thought of wronging the defendant corporation, he believed that he was furnishing the money and that it
Farley having remained in possession of the automobiles after they were sold to the plaintiff, although such retention of possession was not fraudulent in fact as I have already indicated, it might be deemed fraudulent under some rule of law within section 107 of the present Personal Property Law. I do not think that the defendant corporation was in a position to treat the sales as void in any event. However that may be, the legislation, beginning with Revised Statutes, part 2, chapter 7, title 2, sections 5 to 7 (2 R. S. 136, §§ 5-7), appearing revised in the former Personal Property Law (Gen. Laws, chap. 47; Laws of 1897, chap. 417), section 25, and in the Personal Property Law (Consol. Laws, chap. 41; Laws of 1909, chap. 45), section 36, was repealed by the Sales of Goods Act which went into effect September 1, 1911 (Laws of 1911, chap. 571, adding to Pers. Prop. Law, §§ 82-158), and, so far as the same is applicable to the case at bar, section 107 of chapter 41 of the Consolidated Laws was substituted in place thereof. Section 107 is as follows:
“ Creditors’ rights against sold goods in seller’s possession. Where a person having sold goods continues in possession of the goods, or of negotiable documents of title to the goods and'such retention of possession is fraudulent in fact or is deemed fraudulent under any rule of law, a creditor or creditors of the seller may treat the sale as void.”
I think it is reasonable to presume that the rule of the common law which obtained in this State prior to the legislation contained in the Revised Statutes above referred to was designed to be restored in the enactment of the section just quoted. Under that rule retention of the possession of the goods was only presumptive evidence of fraud and the presumption was rebuttable by evidence showing the good faith of the transaction. Such evidence might be of such cogency as practically to annihilate the presumption and make the question of good faith one of law. Such has been declared to be the law. .(Prentiss Tool & Supply Company v. Schirmer, 136 N. Y. 305, 311.) The evidence in the case
As the taking of the automobiles was wrongful, the nonsuit in favor of the defendant Arthur W. Haile was error.
I think that the plaintiff should have been permitted to show as part of res gestae that Farley turned over to him the proceeds of the sales of the automobiles which the plaintiff had purchased and that it was error to exclude evidence to that effect.
It was also error to submit to the jury the question whether or not Farley was plaintiff’s agent in buying the cars from the defendant corporation, as there was no evidence upon which it could have been claimed that Farley was an agent for that purpose.
At the request of the counsel for the defendants the learned trial court charged the jury that where personal property is sold and the physical possession thereof remains in the seller and no instrument is filed in any place where required, the sale is presumed to be fraudulent as against a bona fide purchaser and creditors under the law. An exception was taken to this ruling by the counsel for the plaintiff and I am of opinion that the learned trial court fell into error in complying with the request. The question was not in the case and quite likely had an effect upon the jury harmful to the plaintiff.
It follows from the foregoing that the judgment and order appealed from must be reversed and a new trial granted, with costs to the appellant to abide the event.
All concurred, except Kruse, P. J., who dissented in a memorandum; Lambert, J., not sitting.
Dissenting Opinion
I think the jury could find from the actual transaction, as disclosed by the written evidence and surrounding circumstances, that although the title was taken in the name of Farley, he held the title as agent for the plaintiff. The paper signed by Holley and Farley states that “ I [referring to Holley] have bought for sale by Theo. J. Farley, as my agent,” but does not state from whom he bought them. I
I think the jury were warranted in finding that Farley was acting as Holley’s agent in buying the cars from the motor company, or that he and Farley were partners, or at least jointly interested in .the joint venture of buying and selling these cars, dividing the profits between them as detailed by Holley. The mere fact that this agency was not disclosed to the defendant motor company does not take the case out of the rule which binds a principal with knowledge of the facts involved in a given transaction within the scope of the agency.
But even if there was no such agency, the condition that the title to the automobiles should remain in the motor company until paid for was good as between Farley and the motor company, and also as to Holley, unless he was a purchaser in good faith. The burden of proof was upon him to show that he was such pin-chaser (Cutler Mail Chute Co. v. Crawford, 167 App. Div. 246, 253) and was, as I think, a question of fact and properly submitted to the jury.
Holley contends that he did not know of this condition, but he is an interested party and the jury could disregard the credibility of his testimony upon that point. I think they could find otherwise from the circumstances. As has already been stated, Holley knew these cars; he knew that Farley was such agent. It is not unreasonable to assume that he knew the manner of dealing between Holley and the motor company; he knew that Farley needed funds to pay for the cars, and it was known to everybody connected with these transactions that these cars were made to sell to customers by the selling agent. It is obvious that if the conditional bill of sale was
While Farley produced a receipt acknowledging payment, the circumstances are such as to show that Holley knew they had not been paid for, because, as he himself testifies, he said to Farley: “ If you are going to get these cars as fast as this I don’t see any use in making out a note on each car. * * *
We might as well put the whole thing into one note.” The jury need not find that Holley had notice. A finding that he had failed to establish that fact was enough to defeat him. He must establish that he was a purchaser in good faith.
If I am right so far it does not seem to me that the exceptions to the charge complained of require a reversal, nor does it seem to me that the court erred in excluding plaintiff’s offer to show that Farley turned over to him the proceeds of the sale of the automobiles.
I, therefore, vote to affirm.
Judgment and order reversed and new trial granted, with costs to appellant to abide event.
