Bank of Beloit v. . Beale

34 N.Y. 473

• Court: New York Court of Appeals
• Decided: January 5, 1866
• Status: Published

Opinions

The plaintiff consigned to the defendants for sale a quantity of wool, which they sold at different times and for different prices. The last sale was made on the 11th of September, 1858. That the gross amount received was $7,375.36. This appeared from account of sales rendered by the defendants to the plaintiff.

The defendants set up as a defense that one B.A. Sweet was the owner of said wool, and that the same was in the possession of one Marcel B. Sherwood, in the State of Wisconsin, as the agent of said Sweet, and that said Sherwood held said wool in his possession as such agent, for the purpose of preparing the same for transportation, and causing it to be transported to said Sweet in the city of Albany. That said Sherwood wrongfully and fraudulently, and for the purpose of deceiving and defrauding the said Sweet, and of converting the said wool to his own use, delivered the said wool to the said plaintiff; and that thereupon the plaintiff consigned the said wool to the defendants in the city of New York. That the defendants not being aware of the facts, and not knowing who the true owner of said wool was, and supposing that the said plaintiff was the owner of the same, received the said wool from the said plaintiff in pursuance of the consignment aforesaid. That afterward, and before the said defendants had sold the whole of the said wool, and before the making of the demand mentioned in the complaint, the said Sweet informed the defendants that the said wool was his property, and that he was entitled to the possession thereof, and directed the said defendants not to deliver the same or the proceeds thereof to the said plaintiff, but to deliver the said proceeds to him, the said Sweet, as he had good right to do.

The defendants, therefore, the consignees of the plaintiff, set up title to the proceeds of the sale of the goods consigned, in a third person, and claimed this to be a good defense for not paying over to the plaintiff the balance in their hands of the proceeds of said consignment. The plaintiff, to rebut this defense, produced in evidence the record of a judgment in the Supreme Court of this State, wherein the said Sweet was plaintiff, and said Sherwood was defendant, wherein said Sweet claimed to recover the moneys advanced by him to said Sherwood, for the purpose of purchasing said wool, and said Sweet alleged the said Sherwood had received said moneys for the purpose of purchasing wool therewith; that he had purchased the same, and refused to deliver to him either the said wool or the said moneys so advanced, whereupon the plaintiff demanded judgment for the balance of said moneys so due to him. He had judgment accordingly and an execution against the person of said Sherwood, by virtue whereof he was arrested and imprisoned, and at the time of the trial of this action, was in the custody of the sheriff of the county of Saratoga, upon the ca. sa. issued on said judgment. The learned chief-justice of the New York Superior Court, before whom this action was tried, decided that the facts then proven were a bar to the defense set up in the answer, and precluded the defendants from proving such defense, and that no evidence could be offered under it. To which decision and opinion the counsel for the defendants duly excepted. Under the direction of the court, the jury rendered a verdict for the balance to the plaintiff, and judgment thereon was affirmed at General Term, and the defendants now appeal to this court.

Sweet, with a full knowledge of the fraud perpetrated by Sherwood in the disposition of the wool purchased with his funds, elected to prosecute Sherwood for the moneys so misappropriated, instead of following the property, claimed by reason of the fraudulent acts of Sherwood to belong to Sweet. He affirmed the acts of Sherwood, and sought to recover from him the moneys thus improperly used by Sherwood. In other words, he affirmed the contract of sale made by his agent, and sought to recover from him the moneys received on the sale. It is too late now to change his ground and to pursue the property, which he elected to regard and consider that of Sherwood. This principle is emphatically announced in Lloyd v. Brewster (4 Paige, 537), where it was held that if a vendor who has been defrauded in the sale of his goods proceeds to judgment against the vendee, upon the contract of sale, after he is apprised of the fraud, his election is determined; and he cannot afterward follow the goods, or the proceeds thereof, into the hands of a third person on the ground of fraud.

The doctrine of this case seems to me quite decisive of the present one, and I am for affirming the judgment, with costs.