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Reflection and study have changed our first impressions of this case, and led us to the conclusion that the non-suit was improperly granted, and the plaintiffs should have recovered. The facts which seem complicated are not really so, and create no difficulty when accurately understood.
The defendants, Gossler Co., doing business in New York, entered into an agreement with one Finlay to sell him a quantity of sugar, to be sent from St. Vincent, and to be "May-June shipment." The purchase-money was to be paid at the port of departure, and to accomplish this, Finlay applied to the plaintiffs for a letter of credit to their correspondents in London, through whom the funds could be transferred to St Vincent, and used to pay for the sugar. The plaintiffs gave Finlay the desired letter of credit, who in turn delivered it to Gossler Co. as a means of payment for the purchase. By its terms this credit expired, unless used, on June 30. It also required a May or June shipment, and bills of lading to the order of the plaintiffs. The letter of credit harmonized with the contract, and by its express terms would have been unavailable for any shipment later than June 30. But at the request of Gossler Co. a credit by telegraph was substituted in its place, the form and language of which was dictated and
prepared by them. That credit was sent forward. The necessary brevity of the dispatch excluded details, and it contained no prohibition of a use later than June. It is not pretended that the terms of the contract between Gossler Co. and Finlay were at all changed. It was still a May-June shipment which the latter was to receive, and for which alone the credit was to be used to pay. What had happened was only this: that the form of the telegraphic credit enabled Gossler Co., or their representatives in St. Vincent, who were to ship the sugar on their behalf, to use the credit after June 30, and for a later shipment. They gained no right to do so, but found in the form of the order an opportunity and a possibility of getting the money upon an unauthorized delivery. That is exactly what they did. June went by without any shipment. The right to utilize the credit upon the contract was gone. The money it represented was no longer Finlay's, unless by his further choice. He ceased to be liable for it under the contract. He had not used the credit so as to become liable, and no one was authorized to use it for him upon a new and different contract. The money, therefore, on the morning of July 1 was not Finlay's, and could not be applied on a succeeding shipment on his account. It was solely and only the money of the plaintiffs, to be returned to them by the cancellation of an unused credit, and for which no lawful use remained, since the contract for which it was issued had expired, and was dead. For it is not to be doubted that Finlay was not bound to accept or pay for sugars shipped in July. (Russell v.Nicoll, 3 Wend. 112" court="N.Y. Sup. Ct." date_filed="1829-08-15" href="https://app.midpage.ai/document/russell-v-nicoll-5513184?utm_source=webapp" opinion_id="5513184">3 Wend. 112; Catlin v. Tobias, 26 N.Y. 217" court="NY" date_filed="1863-03-05" href="https://app.midpage.ai/document/catlin-v--tobias-3624986?utm_source=webapp" opinion_id="3624986">26 N.Y. 217; Rouse
v. Lewis, 2 Keyes, 352" court="NY" date_filed="1866-01-15" href="https://app.midpage.ai/document/rouse-v-lewis-5649002?utm_source=webapp" opinion_id="5649002">2 Keyes, 352.) Now Gossler Co. were the vendors of the sugars, and the letter of credit when made was delivered upon their direction, and when paid was a payment to them. They dealt as principals, disclosing no agency, and indicating the existence of none. The written contract shows them to have been the vendors, and no pretense of any agency appears in the transaction until one of the defendants was sworn on the trial. While he testifies that they were not the owners in fact of the sugars, they must be treated as such as between themselves and
Finlay on the one hand, and the plaintiffs on the other, since to neither did they assume any other position than that of owners and principals. The letter of credit was delivered to them; the telegraphic credit was sent upon their order and to their appointees; and the latter, in dealing with it, must be deemed the agents of the defendants, acting on their behalf and responsibility. What then did these agents or appointees do with the funds placed within their reach? They appropriated them to a July shipment. Through them Gossler Co. took the funds in payment for July sugars. In substance they took the money of plaintiffs upon a forced loan or advance, without right or lawful authority, and shipped to the plaintiffs the sugars with bills of lading to their order. The transaction at this point was one of two things. Finlay might accept the sugars notwithstanding the delay. He might waive the provision of the contract which required a June shipment. If he did, the appointees of Gossler
Co. were rightfully in possession of the money as paid upon the latter's contract of sale. But if he did not, if he refused to accept, and stood upon the terms of the contract, then Gossler
Co. were in the position of appropriating plaintiffs' money as a loan or advance upon the faith of the sugars shipped to the plaintiffs to sell on commission. Putting one side Finlay's contract as no longer existing, the agents and appointees of Gossler Co. could not take the money as Finlay's, or under his contract. They could only take it as plaintiffs' money, and as an advance upon a consignment of the sugars to them to be sold on commission. With the end of Finlay's contract the facts raised a new contract, and created a new relation between Gossler Co. and the plaintiffs, upon which the rights of the latter can rest. Two cases to which our attention is specially directed by the learned counsel of the respondents tend to sustain the view we have thus taken of the relation of the parties. In Cornwal v.Wilson (1 Vesey, Sr., 509), the defendant, a merchant in London, sent orders to the plaintiffs in Riga to buy for him as his factors, a quantity of hemp at a fixed and limited price. The plaintiffs exceeded their authority and bought at a larger price. On the
arrival of the hemp the defendant refused to receive it under his contract, but did take it and dispose of it. Lord HARDWICKE said: "That a merchant here refusing goods sent over by his factor in a foreign country, who exceeded the authority, having advanced and paid his money on these goods, may be considered as having an interest as a pledge, and may act thereon as a factor for that person, who broke his orders." The chancellor then held that defendants did not act as factors, although they might have done so, because instead of selling the hemp as factors and in the customary way, they took the risk of transporting the hemp to Portsmouth, and selling it there. Upon the doctrine of this case, if the sugars had been shipped to Finlay who had made advances, the latter might have refused them under the contract, but received them, and sold them on commission as factor of the shippers. Much stronger is the case as applied to the present plaintiffs. They had made no contract of purchase. Finlay had refused to receive the property, and forbidden them to accept it for him. They could not, and they did not, receive the sugars on his behalf. They expressly so declared. They could receive them, however, as factors for Gossler Co., and to sell on commission. Just that they did. They explained their attitude carefully. They gave Gossler Co. in their character of shippers and owners opportunity to take the whole cargo, and sell it themselves upon repaying the advances. Upon their refusal the plaintiffs sold the goods in the usual and ordinary way, as commission merchants, applied the proceeds upon the advances, and now call upon the shippers for the unpaid balance. The other case referred to is that of Chapman v. Morton (11 M. W. Exch. 534). The sale by the purchaser who repudiated the contract in words was held on all the facts to have nullified his refusal. Lord ABINGER admitted that the act of sale was in itself equivocal. PARKE, B., stated its equivocal character more strongly, saying: "There might be circumstances under which he might have disposed of the goods as agent of the vendor; but it might be also that he meant to take the property, having recourse to his cross remedy." In the present case the sale by
the plaintiffs was in no respect an equivocal act. Finlay had refused to accept; and they had refused to accept for him. No contract of sale and purchase remained. The omission to ship in June authorized Finlay to treat it as rescinded. (Seipel v.Int. Life Ins. Tel. Co., 84 Penn. St. 47; Graves v.White, 87 N.Y. 463" court="NY" date_filed="1882-01-17" href="https://app.midpage.ai/document/graves-v--white-3598428?utm_source=webapp" opinion_id="3598428">87 N.Y. 463.) Nothing remained except the facts of the advances made by plaintiffs in invitum and against their wish, the shipment of sugars to them as commission merchants having a lien upon the proceeds for their reimbursement, and their sale accordingly.
The error of the courts below thus becomes apparent. Their conclusion went upon the ground that plaintiffs received and sold the goods as agents of Finlay, and, therefore, they could not rescind the contract without an unconditional offer to restore the sugars. We think the contract was already rescinded by the act of the defendants; that the plaintiffs did not receive the goods as agents of Finlay, since that had become impossible, and was expressly refused; and that they did receive them upon commission, and upon a new contract of that character between themselves and the defendants, springing up from and growing out of the facts and circumstances of the shipment and advances.
It follows from these views that the judgment should be reversed and a new trial granted, costs to abide the event.
All concur.
Judgment reversed.