26 Colo. App. 260 | Colo. Ct. App. | 1914
delivered the opinion of the court.
The controversy here under consideration concerns only the counter-claim made by the Fuel Company against the Sparling Company, which was resolved in favor of the latter upon trial before the court without a jury. There is no dispute as to the facts, which, so far as necessary to state', are substantially as follows: Both companies were dealers in coal, handling the same in carload lots, and both having offices in the city of Denver. George E. Sparling was president and manager of the Sparling Company, and acted for it in all transactions involved herein. H. E. Stewart was, and for some years prior to said transactions had been, the general sales agent of the Fuel Company. Sparling had been acquainted with Stewart for about nine years, knew his agency for and business relations with the Fuel Company, and had purchased a considerable quantity of coal in carload lots from said company, through the said Stewart as its agent. He had never, prior to this transaction, purchased coal from Stewart as owner, or known of his selling any as such. At different times prior to the 16th day of December, 1910, the Sparling Company had loaned money tp Stewart, in sums at that time aggregating $75 unpaid. About ten o’clock of that day, Stewart went to the office of the Sparling Company, and stated to Sparling that he had taken the output of a new mine in the Walsenburg field, which he was going to handle for himself until the next spring, at which' time he intended to quit the employment of the Fuel Company, solicited the Sparling- Company tO' become 'his customer, and offered to sell it coal from said' mine at the regular price to jobbers. Sparling agreed .to take three cars, for which Stewart stated that he would bring over the bills of lading. About twelve o’clock of the same day, he brought one bill of lading for a car of coal, upon receipt of which bill of lading the Sparling Company gave him a check for $75, which, together with
“Q. What induced you to- make' the payments to- Stewart? A. The very fact that he came to- me with the proposition of having this coal; that he brought the bill of lading to me was absolute evidence to- me of possession of the goods.
Q. Did you rely upon that? A. Yes, I would do it every time.”
1. Upon the undisputed facts and the finding of the court, the only substantial question for determination is one of law, viz., whether the Fuel Company is estopped from collecting the value of its coal from the Sparling Company which .received and appropriated it. It is manifest that the Sparling Company cannot resist the claim of the Fuel Company to payment for the merchandise, except by establishing an equit
“In this case, The Rocky Mountain Fuel Company is, under the law above cited by us, estopped from collecting for this coal, because by its act in giving Stewart power to change the name of the consignee in the bill of lading, it has enabled Stewart to' perpetrate the fraud.”
The Fuel Company does not question the actual good faith or integrity.of the Sparling Company, but contends that the bills of lading were received by it in such condition as, taken together with the other circumstances, were sufficient to put it upon inquiry as to the true owner, and therefore whatever loss befell was occasioned by the failure of the Spar-ling Company to make such inquiry as a prudent man should have made. The rule invoked as an estoppel, though general in its terms, only operates ter protect those who, in dealing with others, exercise ordinary caution and prudence, and as against those who' have voluntarily conferred upon others the usual evidences or indicia of ownership of property, so that they have apparent authority to dispose of it; but it.is not every parting with the possession of chattels or the documentary evidence of title that will enable the possessor to make good title to .one who may purchase from him. So far as such a parting with the possession is necessary in the business.of life, or authorized by the custom of trade, the owner of the goods will not be affected by a sale by the one having the custody and manual possession of the goods or the indicia and muniments of title. — Clark & Skyles, Agency, p. 1189. The owner must go farther, and do, or omit to' do, some act of a nature such as to mislead persons as to- the true possession of the title. The general rule of law is that a pur
“Bills of lading differ essentially from bills of exchange and other commercial and negotiable instruments. Bills of lading áre regarded as so' much merchandise.” — Shaw v. R. R. Co., 101 U. S. 557, 565, 25 L. Ed. 892. Wherefore, the rule that applies to bills of exchange, viz., that “suspicion of defect of title, or the knowledge of circumstances which would excite such suspicion, in the mind of a prudent man, or gross negligence on the part of the taker at the time of the transfer, will not defeat his title,” is not the rule with regard to bills of lading. — Shaw v. R. R. Co., supra.
“The law has most carefully protected the ownership of personal property, other than money, against misappropriation by others than the owner, even when it is out of his possession. This protection would be largely withdrawn if the misappropriation of its symbol or representative could avail to defeat the ownership, even when the person who. claims under a misappropriation had reason to believe that the person from whom he took the property had no right to it. * * * At least the purchaser of such a bill, with reason to believe that his vendor was not the owner of the bill * * * is not a bona Me purchaser, and he is not entitled to hold the merchandise covered by the bill against its true owner.”
And the law is that the endorsee of a bill of lading who had notice of such facts as to- put him on inquiry as to' the right of the vendor to dispose of the merchandise, which- inquiry, if pursued, would have led to notice of the true state of the title, must abide the consequences if he choose to run the risk. — Decan v. Shipper, 35 Pa. St. 239, 78 Am. Dec. 334; Dows v. Perrin, 16 N. Y. 325;; Bertoli v. Smith, 6g Vt. 425, 38 Atl. 76; Squires v. Barber, 37 Vt. 558; Barnard v. Campbell, 55 N. Y. 456, 14 Am. Rep. 289; Id., 58 N. Y. 73, 17 Am. Rep. 208.
In Barnard v. Campbell, supra, is found a discussion of the law of estoppel (as applied, to facts so nearly parallel to those at bar as to- malee it a precedent), so sound and satisfactory in reasoning that we are disposed to adopt the same, so far as applicable, for the disposition of this case. Jeffries, a broker, sold to Campbell and others certain linseed, in payment of which they made and forwarded to- Jeffries their notes. At the time of the sale and the delivery of the notes, Jeffries was not in possession of the seed, nor of the bills of lading. Shortly thereafter, he purchased the seed of the plaintiffs, and by fraudulent representations induced them to deliver it to him, whereupon he shipped it to Campbell &
In applying the principles stated, the instant case is naturally divided into two- parts — (a) the liability of the Spar-ling Company for that portion of the purchase price which it attempted to- -pay by offsetting its loan of $75 to Stewart, and $32.44 of the said purchase price which it admits it had not paid to Stewart. Those two- items, come clearly within the principle that, in order that a purchaser of goods obtained from the owner by the fraud of a third person can hold them or their value as against the owner, he must have advanced money or incurred- liabilities upon faith in the apparent title of the wrongdoer and his right to dispose of the property, and then only to the extent of the advances so made or liabilities, incurred. There is no pretense that the loan (a part of which was made eleven months, and a part one month, before the sale of the coal) was made, or the money advanced, upon the credit of the bills of lading or the possession thereof; and as to that amount, as well as to the amount of the purchase price still retained by the Sparling Company, there is no element of estoppel, and judgment therefor should have
“Public policy requires that purchasers of property should be vigilant and cautious, at least to the extent of see*271 ing that their vendors have some, and the usual, evidences of title, and if they are content to rest upon their declarations, they may not impose the loss, which is the result of their own incautiousness or credulity, on another.”
We have already called attention to a principle, that is applied with some strictness in a case of this kind, viz., that the purchaser must have parted with his money, relying upon the bill of lading. That it did so rely in the instant case is not shown by the evidence. In fact, we think it is clearly shown that the manager relied on the representations of Stewart, and that his unwarranted credulity, and not any act or failure of the Fuel Company, enabled Stewart to perpetrate the fraud. That the manager did not rely on the bills of lading as evidence of Stewart’s ownership of them or of the coal, is shown by the facts — (a) that there was nothing in or on the bill that indicated that Stewart had any interest in it or right to dispose of it; (b) there was that on the bill which would, if noticed, have excited his suspicion; (c) that he did not read or otherwise examine the bill, except to> notice that his company was consignee. It is a waste of energy to insist that Sparling, as a prudent business man, expended substantial sums of money in reliance on a bill of lading in which he was not sufficiently interested to ascertain therefrom the name of the consignor, the place from which shipped, by whom the request for substitution was signed, or by whom the bill was endorsed, when he knew that he was not the original consignee, and when it also is shown that if he had examined it, the entire absence of any showing of right in Stewart to' dispose of the coal would have appeared. Bare possession of the bills of lading by Stewart, not in his name, did not clothe him with power to dispose of them as though he were owner, and to the preclusion of the right of the real owner. 'He was not thereby clothed with the apparent ownership'. — Clark & Skyles, Agency, section 236. There is no reason or equity in placing the burden of a fraudulent sale upon a bona Me owner rather than upon a bona Me pur
Counsel for plaintiff in error argues certain exceptions which are based on objections to the reasons given by the trial court for its judgment. These objections and the argument thereon have been considered, but will not be discussed. It is often held that a court of review is not concerned in the process of reasoning by which a trial court arrived at a correct conclusion'or judgment, but we have not heard it said, and think it not true, that a court of review is not concerned in the reasoning by which the trial court reached a conclusion upon which a judgment is based which apparently ought not to be sustained. The path into' a jungle may serve to point the way out. From the remarks of the trial court in announcing its conclusion, it is fair to assume that it overlooked, or failed to give effect to, the familiar principle that an agent of a corporation while known to be acting for himself cannot be regarded as such agent, nor his principal made responsible for his acts or representations.
2. It is contended that the Fuel Company cannot recover on its counter claim, because it declares in assumpsit, whereas, the proof is of 3. conversion. Technically, this objection may be well taken, but it is a mere technicality. The Sparling Company, by one answer to the counter-claim — a plea in confession and avoidance — stated) the conditions under which it took the coal, which showed a conversion, and which it sought to avoid by pleading estoppel. The case was tried upon that theory. There was no surprise. We think it may well be held that if the Fuel Company ought to have added a count in conversion, to its counter-claim, that defect in pleading is cured, or should be disregarded. — Section 78, Mills’ Code. It is manifest that no good would be accomplished by returning the case to the trial court, with leave to amend so as to plead conversion.
Reversed and Remanded.