Newhall v. Vargas

| Me. | Apr 15, 1836

Tho action was continued nisi, and the opinion afterwards drawn up by

Weston C. J.

Joseph Vargas, having due authority therefor, furnished for the intestate’s barque a return cargo of molasses, in part payment of which the net proceeds of the outward cargo were applied. It is insisted, that in this business ho acted as factor; and as such could not exercise the right, upon which the defendants’ title depends. The circumstance of his having purchased the molasses specially for this purpose, can make no difference. It was paid for out of his own funds; and he stood in relation to the intestate in the character of a vendor, as much as if it had been supplied from his owm warehouse. And it has been directly adjudged that a factor or agent, who purchases goods for his principal, and makes himself liable to the original vendor, is so far considered in the light of a vendor, as to be entitled to stop the goods. Feise et al. v. Wray, 3 East, 93. Every reason, upon which this right is founded, applies with equal force to a purchaser so circumstanced.

The b'lls drawn by the master, payable to Vargas, for the amount due on the purchase of the return cargo, were not equivalent to payment. They were the evidence of the debt due to Vargas; and did not deprive him of any other remedy, authorized by law, where the vendor becomes insolvent. This further remedy, arising from the right of stoppage in transitu, is analogous to the lien, which the vendor of real estate has in equity upon the estate sold for the purchase money. It is not affected or impaired, by taking the bond, bill or note of the purchaser. 4 Kent, 153. The master, in drawing the bills on the owner, was acting on account of the latter; and although sufficiently authorized thereto before, his doings have been since ratified, by the representatives of tho owner, in claiming the molasses thus purchased. It was the usual mode of doing business of this sort. And although by the form of the bills, the master may have made himself personally liable, there is no reason to suppose that his security was relied upon by Vargas, or that, by accepting it, he waived other remedies. Descadillas et al. v. Harris, 8 Greenl. 298. The master was not acting for himself. He was the mere agent of the owner. In the case before cited from East, where the right of stoppage was recognized, bills had been drawn for the merchandise sold, which had been accepted and negotiated.

Nor do we perceive, that the commissions charged by Vargas, for doing the business and negotiating the bills, can deprive him of the right he claims. As indorser of the bills, he became conditionally liable to the holder, if protested for non acceptance, or for non payment. And this business done for the owner, together with the purchase of the molasses, well entitled him to a commission. He became liable upon the bills, not for the benefit of the drawer, but of the holder. It is not easy to conceive how this liability could have the effect to impair any of his remedies against the owner, who was bound to accept and pay the bills. There is very little analogy between this case and that of a factor, who receives a del credere commission. The factor there guaranties to his principal the solvency of others, who are the purchasers of his goods. Here Vargas became responsible to others, if the principal, for whom he bad purchased and who had purchased from him, did not duly honor his bills. In either case, every legal remedy remains in full force against the purchaser. In the case cited from East, which in many of its points has a near resemblance to the one under consideration, the party who purchased and supplied the cargo, and who negotiated the bills, charged and was allowed a commission.

The right of stoppage in transitu, upon the insolvency of the purchaser, has been well settled in the commercial world. It had its origin in the civil law ; was first recognised in England in equity, and was subsequently adopted by the courts of common law. It is analogous to the common law right of lien, being an equitable lien, which enables the vendor, after he has parted with his possession, to resume it at any time before the vendee has acquired it, and to retain the goods, until the price has been paid or tendered. The leading principles in relation to the doctrine, have been established by judicial decisions. There is very little conflict of authority, as to who may exercise the right. The principal difficulty has been in some of the cases, as to when the transit ends, upon which the right ceases. In regard to this point, there is not entire harmony in the decisions; and there has been much refinement in some of the distinctions, upon which they have turned. The right of stoppage is a favored claim ; and in general it continues until the goods have come to the possession, or under the direction of the vendee.

It is contended, that the right ceased in this case upon the delivery of the goods on shipboard, because the vessel belonged to the vendee, and because the master was his agent. On the other hand it is urged, that as the goods were destined to be delivered to the vendee at Portland, the transit continued, until they were received by him or his representatives at that port. It is conceded that such would have been the fact, had the vessel been a general ship. The decision of the cause will mainly depend upon the question, whether the vessel in this case belonging to the vendee, and in his employment, a different rule is to be applied.

In Fowler et al. v. McTaggard et al. cited in Inglis v. Usherwood, 1 East, 515, it was ruled by Grose J., that upon the delivery of a quantity of tobacco on board a ship, chartered for three years by the vendee, the transit was at an end, and the right of stoppage ceased. And it appears in Hodgson v. Loy, 7 T. R. 436, where the case was again cited, that a motion for a new trial was overruled. In the case last cited from East, Grose J., recognizes it as a general rule, that the delivery of goods by the vendors, on board a chartered ship of the vendee, is a delivery to the vendee himself. Lawrence J., expressed himself to the same effect, but the right of stoppage was there allowed, upon the construction put upon the law of Russia, where the goods were delivered. In the case before Grose J., the tobacco was not shipped to be delivered to the vendee, but for a foreign destination.

Where goods are shipped on board a vessel, appointed by the vendee, to be transported not to his residence or to he received by him, but to other markets, there is a termination of the transit, and the right of stoppage by the vendor ceases. Noble v. Adams, 7 Taunton, 59; Stubbs v. Lund, 7 Mass. 453; Rowley v. Bigelow, 12 Pick. 307. And this is the true principle, upon which Fowler v. Taggard turned, as stated in the opinion of the court, delivered by Lawrence J. in Bohtlingk v. Inglis, 3 East, 381, in which Grose J. who tried the former ease, concurred» Lawrence J. disclaims, for himself and for Grose, any intention in Inglis v. TJsherwood, to state, that a delivery on board the vendee’s ship was a delivery to him, so as to take away the right of stoppage, except as in the case of Fowler v. McTaggard, where the goods were sent abroad, stating truly, that Inglis v. Usherwood was decided upon the law of Russia. And he further insisted, that neither case was inconsistent with the judgment then pronounced in Bohtlingk v. Inglis, that the delivery of goods on board of the chartered ship of the vendee, to be transported to him, did not preclude the right of the vendor or consignor to stop the goods in transitu, any more than if they had been delivered on board a general ship. The court there expressly repudiate any distinction, between a general and a chartered ship ; saying that they were misunderstood, if any such inference can be drawn from the former cases. And certainly they were competent to explain their own meaning.

It is a little remarkable, that in Bolin et al. v. Hoffnagle, 1 Rawle, 9, the Supreme Court of Pennsylvania, although their attention was called to the case last cited, decided otherwise ; and principally upon the authority of the cases there commented upon, giving them an effect and bearing, disclaimed by the court, by whom they were decided. The learned Judge, by whom the opinion of a majority of the court was delivered, goes into an elaborate consideration of a delivery actual and constructive; and deduces that it is only where the delivery is constructive, that the right of stoppage exists. A delivery on board the consignee’s or vendee’s own ship, he calls actual. But a delivery to the servant or agent of the party, is as much actual, as if delivered to the party himself. And whether that servant or agent is specially deputed for the purpose, or some one is deputed, having similar commissions to discharge for others ; whether the vendee employs his own vessel or carriage, or causes the goods to be transported for an adequate compensation in that of another, does not appear to us to make any difference. The delivery is actual in the one case, as well as in the other. The sale is complete. The property is transferred. The right of stoppage is not founded upon any imperfection in the sale, nor does it rescind the contract ; it only authorizes the vendor to take the goods, until the price is paid. Two, out of the five members of the court, did not concur in the judgment cited from Jiawle. The opinion of the dissenting Judges seems to us to be best supported by authority.

Stubbs v. Lund, before cited, is a case precisely in point. Chief Justice Parsons goes into a consideration of the question directly, whether the vendee of the goods, being the owner of the ship and appointing the master, places the case, in reference to the right of stoppage in transitu, upon any different ground, than if the goods were delivered on board a general ship, and he expressly decides, speaking for the court, that it does not. That if goods are put on board the consignee’s ship to be transported to him, the transit continues for the purpose of stoppage, until they come to his actual possession ; but that the rule is otherwise if shipped to bo conveyed to a foreign market. That case has never been overruled ; and was decided, while Maine, was a part of Massachusetts. It is true, that in Illsley et al. v. Stubbs, 9 Mass. 65, where the same property was in controversy, under the same facts, the court assign additional reasons for coming to the same result. But Seivall J. by whom the opinion of the court was delivered, says, “ with the aid however of the doctrine of stoppage in transitu, the question in this case may be more conclusively, and with some, more satisfactorily decided.” He then, after examining the authorities, and stating his reasons at large, confirms the doctrine, previously laid down in Stubbs v. Lund. And be shows that the cases, apparently conflicting in England, may be reconciled by the distinction, that in the one case, goods were shipped for a foreign destination, and in the other, were to be transported to the consignee.

If this doctrine is not reaffirmed in Rowley et al. v. Bigelow et al. 12 Pick. 307, that case did not require it; turning as it did upon the destination of the goods. There is nothing in it however impeaching the former cases. And we hold it to be well settled law in Massachusetts and in this state, and we think also in England, that if goods, as in the case before us, are delivered on board the ship of the consignee or vendee to be transported to him, if he becomes insolvent, the vendor has a right to stop them in transitu, until received by the vendee. It results, as a part of the doctrine, equally sustained by the authorities, that the receipt of goods by the master of the vendee’s ship, does not put an end to the transit-. He stands in this respect like all other agents, who are employed to transport the goods. In certain cases, where goods have been received by an agent to be forwarded, on the further order of the vendee, to an ulterior destination ; or where the vendee, having no warehouse of his own, availed himself of that of a packer; or where the vendee obtained the use of the vendor’s warehouse for the storage of the goods, the right of stoppage has been held to cease. In these, and in other cases of the same class, cited for the plaintiffs, depending on their peculiar circumstances, we find nothing necessarily, if at all, conflicting with the doctrine, which we have recog-nised.

Another point taken is, that Vargas should have paid or tendered to the plaintiffs, the amount of the outward cargo and the freight, before he could be allowed to exercise the right he claims. But the right, when enforced, does not rescind the contract. Hodgson v. Loy, 7 T. R. 440. The vendee, or his assigns, may, notwithstanding recover the goods, on payment of the price. And it has been held, that the vendor may sue for and recover the price, notwithstanding he had actually stopped the goods in transitu, provided he be ready to deliver them upon payment. Kymer v. Sowercropp, 1 Camp. 109. The goods are stopped, to enforce an equitable lien for what remains unpaid. Hence payment in part, has the effect only to diminish the lien pro tanto on the goods detained. Hodgson v. Loy, and Feise v. Wray, before cited. The net proceeds of the outward cargo were applied in part payment for the molasses. Of the same character is the increased value, arising from the transportation. The freight is equivalent to a partial payment. If the goods stopped are of greater value, from the former payment, and their appreciation here, than is wanted to pay Vargas his balance, the plaintiffs have nothing to do but to pay or tender to him the amount due, and they will have a right to reclaim the molasses. But the vendor, to entitle him to exercise his right of stoppage, is under no obligation to refund, what he may have received as part payment.

The goods, not having been paid for, and the vendee having become insolvent, the vendor had a right to stop them in transitu. Does it appear to have been seasonably exercised in the case before us ? We are of opinion that it does. Fessenden, Thompson fy Co. were the correspondents of Vargas, in this country. They were aware that he was in danger of sustaining loss. They interpose to do an act for his benefit, which tending greatly to promote his interest, it could not but be presumed he would approve. Upon being advised of it, he requests them to take care of his interest. Id is special agent and attorney, Nicholas Vargas, also adopts and approves the course pursued by his correspondents hero. Merrill was sent on board for them, and upon the arrival of the vessel in the outer harbor of Portland, he notified first the mate, and then the master, of the claim of Vargas. This claim, thus interposed and thus ratified, we regard as a competent exercise of the right of stoppage.

Notice to the carrier, or to any one having charge of the goods, before the transit ends, is sufficient for this purpose. Mills v. Ball, 2 Bos. & Pul. 457; Litt v. Cowley, 7 Taunton, 169. Nicholas Vargas, the undoubted agent and attorney of Joseph, renewed the claim of the latter, immediately upon his arrival in Portland, of which he notified the collector, while the goods were in his possession, and then lying in the government stores. This of itself was sufficient, according to the case of Northey et al. v. Field, 2 Esp. Rep. 613, where a quantity of wines had been lodged in the King’s stores, the duties not being paid, and while there, they were claimed by the agent of the consignor, this was held by Lord Kenyon a legal stoppage in transitu, although they had been previously demanded by the assignees of the consignee. And this last case, where the assignees had only made a demand, differs from the case of Holst v. Pownal, 1 Esp. Rep. 240, where they had taken actual possession. The latter has been repudiated ; but Chancellor Kent cites the former with approbation. 2 Kent, 430. The right of stoppage, being a favored claim, may be exercised by notice, but no case has been adduced to show that it ceases upon notice, and the interposition of a claim merely, on the part of the consignee.

Judgment for the defendants.