117 N.Y.S. 989 | N.Y. Sup. Ct. | 1909
In August, 1906, the Rochester Railway Company contracted to purchase of the" Eccleston Lumber Company 40,000
“In accordance with agreement with our bankers, the Manufacturers’ Commercial Company, we have given them an assigned bill on 30,000 ties on account of our order from you. No. 13.027. and we request that, as these ties are delivered to you at destination and found acceptable, you pay your checks for same to the order of our hankers. We will load .and ship out these 30,000 ties to you as rapidly as is possible by rail, now that the canal has closed, and expect to accomplish the entire shipment within the next three or four months. We ask that you please hold this bill for the 30.000 ties, and we will advise you specifically at once of each shipment we make on account of said hill for the 30.000 ties.”
Tht bill reads as follows:
“The Eccleston Lumber Company,
“Nov. 15th, 1906.
“Sold Rochester Railway Company Rochester, New York,
“Your No. 13.927. Net cash within 30 days after delivery each lot.
To 30.000 6-in. x 8-in. ft. sound square edge yellow pine ties at 59c per tie.............................................$17,700 00
Estimated freight........................................... 4,650 00
$13,050 00
“To be delivered to you at Rochester, N. Y.”
November 19th. after receipt of both letters before mentioned, the secretary of the Rochester Railway Company wrote the president of the plaintiff as follows:
“Your letter of the 15th to Mr. Danforth has been received. In reply would say that we placed an order with the Eccleston Lumber Company, No. 13,927, for 40.000 yellow pine ties. Vp to the present time no delivery has been made on this order, and there are no claims against it. As soon as this order has been filled, we shall lie glad to remit, within 30 days, the amount due to any company designated by the Eccleston Lumber Company.”
At the date of .this correspondence and for three months thereafter, the Rochester Railway Company continued to receive-shipments of ties on orders given previous to order No. 13,927; but in January, 1907,
It turns out, however, that while these ties were being shinned under order No. 13,927, the Eccleston Lumber Company was also dealing with the defendant Place, a banker of New York City, doing business under the name of J. W. Place & Co., who was advancing money to the Eccleston Lumber Company from time to time, taking as security therefor assignments of the bills for invoices of ties in transit to Rochester ; and pursuant to the directions of the Eccleston Lumber Company written upon these bills the Rochester Railway Company, before the commencement of the action, paid to the defendant Place, for ties shipped ostensibly under order No. 13,927 the net proceeds of 44,607 ties, amounting to $17,228.06. Ostensibly under the same order, the Rochester. Railway Company has also received 24,020 ties, which are not paid for, which ties are covered, however, by invoice bills made while the ties were in transit and assigned to the defendant Place. Upon the faith of these assignments and of bills of lading also assigned at the same time' by the Eccleston Lumber Company to him, Place advanced moneys to the Eccleston Lumber Company and the Rochester Railway Company holds upwards of $11,000 due for these ties, subject to the direction of the court in this action.
In August, 1906, when the contract, order No. 13,927, was made, the railway ties were at various points in North Carolina, but had not been counted, separated, nor placed aboard cars or vessels for shipment pursuant to that order, and such was the condition November 15, 1906, when the assignment was made by the Eccleston Lumber Company to the plaintiff. The contract was wholly executory, and the title to the ties had not passed to the railway company. When the various assignments of invoices for the separate lots of ties in transit were made by the Eccleston Lumber Company to the defendant Place, the contract as to such ties was still executory. It is true the ties were on board cars or vessels consigned to the Rochester Railway Company
Under these cases, the fact that plaintiff’s assignment was to secure debts already due, and the assignments to Place were to secure the repayment of money advanced on the faith of the assignments, does not give the defendant Place any advantage. But when we consider the effect of the assignment to the defendant Place of bills of lading covering ties in transit, on the faith of which assigned bills of lading advances were made by Place, another principle is operative which gives him the advantage over the plaintiff. In the bills of lading the Eccleston Lumber Company was named as the consignor and the Rochester Railway Company the consignee. While the ties were on board cars or boats the Eccleston Lumber Company, by transferring to him the bills of lading therefor, gave to Place an immediate property interest in the ties themselves, and no indorsement was necessary to make the transfer effectual. Bank of Rochester v. Jones, 4 N. Y. 497, 55 Am. Dec. 290; City Bank v. R., W. & O. R. R., 44 N. Y. 136.
By allowing the ties subsequently to be delivered to the Rochester Railway Company, Place did not thereby lose the advantage acquired by him through the bills of lading; and the Rochester Railway Company, receiving the ties with knowledge that bills of lading thereof had been assigned to the defendant, Place, for cash advanced on the faith thereof, is bound to account to Place directly for the purchase. price of the ties covered by said bills of lading; and Place’s rights under the assigned bills of lading are superior to the rights of the plaintiff under its prior assigned invoice bill of November 15, 1906, Place being in legal effect a purchaser in good faith of the chattels themselves while in the possession and under the control of the owner, and without notice of plaintiff’s claim. First Nat. Bank v. Ege, 109 N. Y. 120, 125, 16 N. E. 317, 4 Am. St. Rep. 431; Commercial Bank of Keokuk v. Pfeiffer, 108 N. Y. 242, 15 N. E. 311.
But as to the ties already paid for to Place & Co., aggregating 44,-
In this respect,’ however, it is insisted on behalf of the Rochester Railway Company that it was justified in making these payments because of the directions so to pay indorsed upon the various invoices assigned to Place; and reliance is placed upon the clause in the letter of the president of the Eccleston Lumber Company to the Rochester Railway Company of November 17, 1906, quoted above, viz., “We ask that you please hold this bill for the 30,000 ties, and we will advise you specifically at once of each shipment we make on account of said bill for the 30,000 ties,” and also upon the letter of the secretary of Rochester Railway Company to the plaintiff, written November 19th, stating, “As soon as this order [No. 13,927 for 40,000 yellow pine ties] has been filled we shall be glad to remit, within 30 days, the amount due to any company designated by the Eccleston Lumber Company”; and the words quoted are pointed out as adding a condition to the, assignment of November 15th, and as justifying the payments to Place, because all of such payments were pursuant to specific designation by the Eccleston Lumber Company.
But the validity of the assignment to the plaintiff of November 15th did not depend upon .the acquiescence of the Rochester Railway Company. Brill v. Tuttle, 81 N. Y. 454. The railway company had immediate- notice of the assignment to plaintiff, and no subsequent arrangement' made between the lumber company and the railway company, to which the plaintiff was not a party, could cut down the rights thus vested in the plaintiff. There is no evidence that the plaintiff knew of the letter written November 17th by the lumber company to the. railway company. The letter of the railway company to the plaintiff,. written November 19th, did not warn the plaintiff that the -lumber company was contemplating anything .inconsistent with plaintiff’s as
There must also be stricken out of the case the testimony as to bills of lading, not produced, covering 7,209 ties not paid for. Letters introduced in , evidence show that certain bills of lading relating thereto were delivered to the Lehigh Valley Railway Company; but as tits bills of lading are the foundation for the right of Place to receive the money therefor, the bills of lading themselves" should have been offered in evidence, and it is not shown that they could not have been produced under proper subpoena at the trial. •
In order that the equities of the defendants between themselves may be adjusted as far as may be, findings may be submitted and the decree settled upon five days’ notice, at which time' provision will be matte for the allowance of costs.