129 Minn. 198 | Minn. | 1915
In January, 1913, tbe Segerstrom Piano Manufacturing Co. entered into tbe following agreement with tbe Wisconsin Music Co. of Superior, Wisconsin:
“CONSIGNMENT CONTRACT.
“Tbe undersigned Wisconsin Music Co., Superior, Wis., hereinafter referred to as second party, hereby enters into mutual agreement with Segerstrom Piano Mfg. Co., hereinafter designated as first party, to sell pianos furnished by first party on consignment— upon the following terms and conditions.
“Purchaser’s notes, contracts, or leases shall be made upon blanks furnished by first party, and shall draw interest at not less than 6 per cent, and all such papers, when approved by first party, shall be endorsed by second party, and the payment of the same including the instalments guaranteed at maturity; and the second party does hereby waive protest and notice of protest on the same.
“Second party agrees to sell all instruments consigned, within four months from date of shipment; or if any of said instruments remain unsold after four months, second party agrees to pay interest after that time on the same, at the rate of 6 per cent per annum on the invoice price; but it is expressly understood that the charge of said interest and the payment thereof shall not be construed as indicating a sale of said instrument to second party.
“The compensation for selling these instruments shall be such amount as second party shall obtain in excess over the price the said instrument is billed to him. On cash sales the commission shall be payable when the first party receives pay for the instrument. On time sales the first payment may be retained by second party if the same does not exceed the commission on the sale; the balance of said commission, if any, to be paid to second party as first party receives money from the purchaser after the invoice price has been paid.
“All instruments taken back from customers on account of default of payments, or for other causes, and all new or second-hand instruments taken in exchange, or in part payment, for instruments consigned by first party, are to be regarded the same as goods consigned, and to be accounted for in the same manner. Second party agrees to send first party a statement the first day of each and every month of all instruments received and sold, and remaining on hand, unsold, and make prompt returns as sales are made.
“Upon the demand of first'party or of its agent, second party
“This agreement may be terminated at any time by either party, and any stock then on hand will be subject to the order of the first party.”
Plaintiffs were appointed' receivers of the manufacturing company and as such shipped a carload of pianos to the music company. While the above agreement was made before the appointment of the receivers, it sufficiently appears that this shipment was made thereunder. When the car reached Superior and before it had been unloaded, the music company gave a bill of sale of the pianos to one of their creditors, as security for his claim, under a verbal agreement that the pianos should remain in the car for 10 days, and be returned to the music company if they paid the debt within the time. The bill of sale purported to transfer the property absolutely and was accompanied by an order directing the railway company to deliver it to the vendee. Contrary to his promise, the creditor on the same day that he received his bill of sale, sold the pianos to defendant, and defendant took them from the car and placed them in its store at Duluth. As soon as knowledge of these transactions reached plaintiffs, they demanded the pianos from defendant, and, the demand being refused, brought this action to recover possession of them. The trial court found that defendant was a good faith purchaser for value, and held that the above agreement was a contract of conditional sale, and was void as against defendant because not filed in the office of the city clerk as required by the
When we examine the contract in controversy to determine its purpose and effect, we find that the music company never becomes the owner of the pianos, and is not even given an option to buy them; that it nowhere obligates itself to pay for them, hut only to account for the proceeds received upon sales to others; that it must return to plaintiffs all pianos not sold to actual purchasers whenever directed so to do; and that it may terminate the arrangement whenever it chooses and return all pianos then on hand. We further find that plaintiffs remain owners of the pianos until sold to private purchasers, with the right' to recall them at any time before sale; that they can compel the music company to account for and turn over the proceeds of all sales, hut cannot compel the music company, itself, to take any of the pianos or pay for any of them; and that they may terminate the arrangement at any time and thereupon must take hack all pianos then on hand. The contract imposed onerous burdens upon the music company, including the obligation to pay interest upon pianos not sold within four months, and 10 per cent as depreciation upon those returned, but plainly does not intend that the company shall ever own the pianos or pay the purchase price for them. It plainly does intend that they shall remain the property of the consignor until sold to an actual pur
It has always been the law that a bailor may pursue his property and reclaim it, even in the hands of a good faith purchaser from
“A factor or agent who has power to sell the produce of his principal has no power to affect the property by tortiously pledging it as a security or satisfaction for a debt of his own, and it is of no consequence that the pledgee is ignorant of the factor’s not being the owner. * * * By the common law, the transfer of the plaintiffs’ tobacco to Warner cannot be maintained. He is responsible to them for the value of so much of it as was not transferred by him to Heald, Woodward & Co. Heald, Woodward & Co. are responsible for so much of it as Warner transferred to them, because Warner, having no property in it, could not convey any to them.”
The rule is stated in 19 Cyc. 174 as follows:
“In the absence of statutes which furnish protection to persons dealing with factors, the principal can recover his property wherever he can trace it as distinct from that of the factor into whomsoever’s hands it may have come. He is entitled to recover the specific goods themselves if they can be had, and if the goods themselves cannot be recovered he may recover their proceeds if they can be traced. Thus if a factor barters his principal’s goods in a manner not authorized by the principal and not within the ordinary modes of transacting business, the principal may follow and reclaim the property whether the person dealing with the factor knew him to be such or not. But if the principal has by any act of his own induced a third person to believe he has given the factor authority*205 to dispose of the goods the principal cannot reclaim them. The principal may recover goods or the proceeds of a consignment of a person to whom they were turned over in the payment of an antecedent debt due from the factor.”
In Eilers Music House v. Fairbanks, 80 Wash. 379, 141 Pac. 885, plaintiff consigned a quantity of player pianos to a factor for sale. The factor sold one of them to apply on his own debt to a creditor having notice of the bailment. The creditor sold it to a good faith purchaser. Plaintiff brought replevin against the purchaser. The Washington court quote the above excerpt from Cyc. and then say:
“This rule applies to a purchaser without notice from one who has acquired possession of property from a factor through barter or exchange, or in consideration of a pre-existing debt. Warner v. Martin, supra. This is true because one who purchases from a factor in consideration of a pre-existing debt, or in part consideration of a pre-existing debt and barter or exchange, acquires, no title, and, having no title, can pass none. This rule, of course, is subject to the equitable principles of estoppel, where the facts are such as to bring the ease within them; but there are no such facts present in the case at bar.”
A large number of cases bearing upon the same question are cited in a note found in 28 Ann. Cas. at page 1290.
Order reversed.