Chapman v. Lathrop

6 Cow. 110

• Court: New York Supreme Court
• Decided: August 15, 1826
• Status: Published

Opinion

Curia, per

Savage, Ch. J.

The principal question is, whether trover will lie upon the facts proved.

If there was a fair contract for the goods, and they were delivered to the purchaser, without any fraudulent contrivance on his part to obtain possession, the property passed, and the plaintiffs’ remedy is by a different action.

It is conceded that the plaintiffs were entitled to pay for the goods upon delivery. They might have refused to part with the goods until payment. Where no time is agreed on for payment, the delivery and payment are to be simultaneous acts. But if the vendor delivers the goods to the vendee, and the latter omits to pay, the property of the goods is changed, if the vendee becomes bankrupt, while the goods are on their passage, but before actual delivery, the vendor may stop them in transitu. (2 Com. on Contr. 221. Cook. Bankr. L. ch. 8, s. 17, 18.)

In case of an agreement to pay down for goods, if the vendor deliver the goods without actual payment, the ven-dee may avail himself of any legal set off, notwithstanding the agreement to pay ready money, (ibid. 1 East, 375.)

In Hussey v. Thornton, (4 Mass. Rep. 405,) the plaintiffs had agreed to sell a quantity of candles'to T. ⅜ W. on credit, and on their giving security. The agent of T. ⅜ W. received the candles on board a vessel through the hands of cartmen sent by him. While part of the candles were on the wharf, and part on board the vessel, one of the plaintiffs appeared, and said he should consider the candles the property of the plaintiffs, until security was given ; to which the agent assented. These candles were attached by the defendants as the property of T. ⅜ W.; and the qustion was, whether they were so. Parsons, Ch. Justice, states the inquiry to be, whether this was an absolute delivery, not revocable ; or, if revocable, yet not revoked. “ We think,” said he, “ they (the plaintiffs) were bound to recollect the condition they had themselves made ; and not to have delivered the candles until it had been complied with.” The court, however, decided the cause, on the ground that the agent had accepted of a conditional delivery ; and therefore the property remained in the vendors. But the decision wmuld have been different. if the goods had been sold or attached while in possession ^ -*iccori^r)S f° Ibe doctrine of this case, the absolute delivery of the property is a waiver of any condition antecedently made.

In M'Carty v. Vickery, (12 John. 348,) this court decided that trespass would not lie, where the vendor had parted with the possession, even though by fraud. They add, the property was changed by the delivery.

in 5 T. R. 231, Mr. Justice Butter cites the case ©f Haswell v. Hunt, where Lacey, in the morning, purchased some tobacco of the plaintiffs, to be paid for in cash: and then went off to France to absent himself from his creditors. The tobacco was delivered by the plaintiffs’ servants, at Lacey's house, without demanding the money, or having any orders to do it. Eyre, Ch. J. held that the sale was made complete by the act of the plaintiffs; that by delivering the goods, without demanding the money, the property was vested in Lacey as upon a complete sale ah initio, without ready money. That was a much stronger case than the present.

Suppose the plaintiffs’ note had never been presented ; but that after a fortnight had elapsed, they had sent a bill of the goods, and the defendant had omitted to pay ; could it be pretended that trover would lie ? If so, the vendor has only to make his contract for cash; and may then pursue the property, whose hands soever it may reach, at any length of time, not barring an action upon the statute of limitations. The proposition is monstrous.

As to fraud, it seems to me, if there be any in the case, it is on the side of the plaintiffs. The judge admitted that the defendant acted under an erroneous opinion of his rights; and yet charged the jury that his conduct might be fraudulent. The fraud, I presume, was that of paying the plaintiffs with their own paper. If that be fraudulent, it must be admitted, that the defendant is guilty. But there is no evidence in the case, shewing that he contemplated making such a payment, when he purchased the goods, or when he received them.

The case of Palmer v. Hand is not in point. The purchaser in that case never received the delivery of the lumber ; but while the hands were piling it, he defrauded the defendant of nearly the value of it, and absconded.

I find no case which will warrant a recovery in this action ; nor is it sustainable upon any principle of law.

1 think the judge erred; and there must be a new trial, With costs to abide the event.

New trial granted,

(a)

There is no doubt that the strong general proposition laid down by Platt, J. in Palmer v. Hand, (13 John. 434,) joined with the subsequent case of Haggerty v. Palmer, (6 John. Ch. Rep. 437,) decided by Kent, late chancellor, have led the profession generally, to an adoption of the doctrine as stated in Mr. Johnson's marginal note to the former case; that 44 where goods arc sold, lo be paid for on delivery, if on the delivery being completed, the vendee refuses to pay for them, the vendor has a lien for the price, and may resume the possession of the goods.” This case was at law. Haggerty v. Palmer, in equity, goes about the same length, as between vendor and vendee, and where no bona fide purchaser intervenes. No case is cited in support of either the dictum of Platt, J. or the decision of Kent, chancellor. But they were very learned and able judges. And as the dictum cited is certainly at war with the decision in the principal case, whatever may be said of Haggerty v. Palmer; and as it is important that a principle of such extensive practical application be as firmly settled as possible, I give below the decision of Story, J. in Conyers v. Ennis, (2 Mason, 236.) This case declares the law, as I believe it was held by the \ profession, till the two decisions cited from Johnson, viz^Ahat a fair sale^ \ for cash, or a bill, or other mode of payment at the time ; and a delivery, f though without payment, passes the property of the goods absolutely, both ¡‘ at law and in equity, eren as between vendor and vendee ; and that no lieq^ remains for the price, j This, i am sure, was the conceded and well established doctrine, at least, in a court of law ; and Í am not aware that, even in equity, after transilus determined, the doctrine of lien for the price was ever applied, till the case of Haggerty v. Palmer. The question was much discussed in Warren v. Sproule, (2 Marsh. Kentucky Rep. 528, A. D. 1820,) and at p. 536, judge Owsley, who delivered the opinion of the court, asserts in terms, and as the clear and settled doctrine, that it is only while the goods are in transitu, that the consignor can retake them, even though the consignee be insolvent; and he denies that the consignor can, after the delivery, have any lien in such a case fur the price .j The question there was in equity. The case, however, does not determine the point as between vendor and vendee ; for the latter had sold to another, who purchased bo* nafide ; and would be protected even within the doctrine of Haggerty v. Palmer.

Costees and mother vs. William Ejvnis asd others, admisis-TRATOES OF I.E' IS R.GÜSMANIEKE.

A bill in equity which was set down by consent for a hearing upon the bill and answer. It was argued by Hunter for the plaintiff, and by Randolph for the respondents, upon the point stated in the opinion of the court.

Story, J. This is a case of extreme hardship, amd such as might well induce a court to strain after some mode of redress. The cause has come on upon the bill and answer, and the material facts are these : The intestate, Lewis Rousmaniere, a merchant of Newport, being deeply and fraudulently insolvent, on the 4th of Map, (820, wrote a letter to the plaintiffs, who are merchants in Charleston, S. C. and with whom he had previously done business, containing an order for the purchase and shipment of 30 casks of rice on his own account, from Charleston to Newport. On the 6th of Map, the intestate, in consequence of the discovery of his frauds, committed suicide. The letter of the 4th of May, duly reached the plaintiffs, who, on the 16th of May, shipped the 30 casks of rice consigned to the intestate on his own account and risk, and drew' a bill on the intestate for the amount, in $500 73, payable at 30 days sight. The rice duly arrived at Newport, on the 24th of May, and was received and freight and charges paid by the defendants, who had previously taken administration on the estate of Rousmaniere, and represented it insolvent, according to the laws of Rhode Island. On the evening of the day in which the rice was received by the defendants, a letter arrived by the mail, from the plaintiffs, containing an invoice o¡ the rice, and advising of the draft drawn for pay ment. Upon the presentment of the draft, the defendants refused payment, and it was duly protested. The rice was sold by the defendants, and the present bill is brought to obtain payment of the cost of the rice, out of the proceeds in the hands of the defendants. The defendants’ answer admits, that at the time of the order, the intestate must have been insolvent, hut that whether that fact was then known to him, they are unable to say ; and it stater, that the defendants are ignorant of any representations made by the intestate to the plaintiffs of his ability to comply with his engagements, and if he made any, whether he made them being himself deceived as to his pecuniary circumstances, or with a view to deceive the plaintiffs. It farther states, that the intestate to the day of his death, was actually engaged in business, and was in the daily receipt and payment of considerable sums of money.

The principal point, which under these circumstances, has been pressed at the bar, is, that the right of a consignor to slop property in cases of insolvency, ought not to be confined to stoppage in transitu, but in equity should extend to all cases where the property is not paid for, and remains in the hands of the consignee. It is admitted, that the decisions in England have confined the right of stoppage to cases where the property is in its transit. But it is suggested, that the point has not been solemnly adjudged in the United States, and that it is open for the court to adopt the more enlarged rule, hinted at by Lord Harduriecke, in Slice v. Prescoll. (1 Alk, 245.) His Lordship ther§ says, Though goods are even delivered to the principal, I could never see any substantial reason, why the original proprietor, who never received a farthing, should be obliged to quit all claim to them, and come in as a creditor only, for a shilling perhaps in the pound, Unless the law goes upon the general credit the bankrupt has gained, by having them in his custody.” The reasoning, too, of Lord Loughborovgh, in Lickbarrow v. Mason, (1 H. Bl. 357,) is brought in aid of the same doctrine.

All argument of this sort is addressed in vain to this court. I do not sit here to revise the general judgments of the common law, or to establish new doctrines, merely because they seem to me more convenient or equitable. My duty is to administer the law as I find it; and I have not the rashness to attempt more than this humble discharge of duty. Nothing is-better settled, if an uninterrupted series of authorities can settle the law, than the doctrine, that the vendor in cases of insolvency, can stop the property only while it is in its transit. If it has once reached the consignee* there is an end of all right to reclaim it as a pledge for the payment of the purchase money. If the doctrine were to go the length now contended for, it is far from certain that it would promote public convenience or policy. Where could we stop ? Could it be applied with safety to purchases made at any distance of time, if it should turn out in the event, that the buyer ■was then insolvent? It is very true, as has been stated at the bar, that our* law respecting the distribution of the estates of persons dying insolvent, differs from that of England, where the assets are marshalled, and payment goes according to the dignity of the debt. Here, all debts are paid pari passu. This, however, affords no ground to change the general rights and duties of vendor or vendee, or to create relations between debtor and creditor hitherto unknown to the law. The cases arising under the bankrupt laws, are not in principle unlike those which arise here under insolvencies. And the bankrupt laws furnish no instance of an attempt to establish any doctrine like that now sought from the court. It is sufficient for me to stand upon the law, as it is now universally received. If there are public mischiefs growing out of its principles, let them be remedied by the legislature.

The only point of view, in which it seemed possible to sustain the plaintiffs’ bill, struck me at the argument io be, that there was a meditated fraud and concealment practiced on them by Rousmaniere. If the latter had by false affirmations and contrivances, imposed upon the-plaintiffs, and induced them to send him the property, there might be reason to say, that the contract was ab origine void for fraud. And the question then would be. whether the suppressio veri, under the strong circumstances of the present case* was not equivalent to the allegatio falsi, since the imposition as to tho intestate’s insolvency was complete. If a man, knowing his own insolvency and utter incapacity to make payment, purchases goods of another, who is ignorant of any change of his circumstances, and sells them under the most implicit belief of the good faith and solvency of the buyer, in what respect does the transaction differ from a direct affirmation by the buyer of his owtf good faith and solvency ? If the buyer conceals a fact, that is vital to the contract, knowing that the other party acts upon the presumption that n'áf such fact exists, is it not as much a fraud, as if the existence of such fact were expressly denied, or the reverse of it expressly stated ?

Upon looking more attentively to the facts of (his case, strong as at first blush they seem to be, I do not think they establish a case of meditated fraud. The intestate was in full business as a merchant, and there is no reason to suppose, that he did not expect still to keep on in business. It is admitted at the bar, that the accidental discovery of his fraudulent conduct led to the unhappy catastrophe which terminated his life, and he might have been able and have intended fairly to pay for the rice in question at the time when payment should become due. The sum was not so large as not to be completely within the ordinary means of a merchant. At all events, the bill does not pointedly put the case as one of meditated fraud .and imposition ; and so far as any conclusion to this effect might be drawn -from the facts, it is repelled by the answer.

I- do not say, that the supjiressio veri, if made out in this case, would have .sustained the plaintiffs’ bill, even if it were a concealment of positive and deep insolvency, no device or contrivance having been made use of to deceive the plaintiffs. That is a question with which we need not at present intermeddle ; and sufficient unto the day is the evil thereof. In the case now before the court, there is no pointed averment of such fraudulent concealment to cheat the plaintiffs; and if it had been averred, no attempt has been made to sustain it by proof; and without proof no court of justice ought to presume it, unless the presumption from the other facts, be direct and irresistible.

Let the bill be dismissed with costs.