Macky v. Dillinger

73 Pa. 85, 1873 Pa. LEXIS 44

Opinion

The opinion of the court was delivered, January 27th 1873, by

Agnew, J.

This was an action of replevin for forty barrels of whiskey. Dillinger & Son were distillers in the western part of the state, and consigned the whiskey to Moorhead & Co., of Philadelphia, for sale. Moorhead & Co. pledged the whiskey to Macky for the repayment of a loan .of $3700. The instrument of hypothecation embraced other whiskey pledged for the same loan, including ten barrels testified to belong to Moorehead & Co. themselves. On the trial, James R. Moorhead, who transacted the business, testified that he had told Macky that the forty barrels of whis key were consigned to them by Dillinger & Son, for sale at a limit of one dollar and sixty cents a gallon. The question of Macky’s knowledge of the ownership of the whiskey by Dillinger & Son, was submitted to the jury, with the instruction that if he did not know of the consignment by Dillinger & Son to Moore-head for sale, when he took the hypothecation, that the plaintiffs could not recover. The verdict establishes the feet of Macky’s knowledge. This, therefore, raised the principal question in the cause, the defendant claiming the right of a consignee for sale, to pledge the goods for a loan to himself, made even with a knowledge that the consignee was not the owner, and had no authority from the owner to hypothecate. In Lausatt v. Lippincott, 6 S. & R. 386, it was said by Chief Justice Tilghman, “ that a factor cannot pledge the goods of his principal for his own debt, seems to be too well settled to admit of dispute.” He regretted that this will put it in the power of the factor to deceive innocent persons who deal with him bonfi fide, and on valuable consideration, for he says, “it bears extremely hard upon persons who deal with a factor, ■without a possibility of knowing that the goods do not belong to him.” The Revisers, who reported the Factors’ Act, passed on the 14th of April 1834 (1 Br. Purdon 664),referred to this case in their report, and to the alteration of the common-law rule by the statute of 6 Geo. IV., c. 94, passed in the year 1825, which they took as the foundation of the Factors’ Act reported by them. They say, also, that “ the evil complained of by the Board of Trade of Philadelphia, and by the mercantile community in general, is, tha,t consignees and factors authorized to sell the goods of their principal, and who are held out to the world as the owners thereof, have not power to pledge the goods in their possession, for advances made by persons who have every reason to believe that they are the actual owners.” They then add, “ now we would apply a remedy for this particular evil, but we think that it would not be prudent at present to go further, lest evils should be produced on the other side.” In remarking upon the third section, they say “ it is intended to protect all persons, who, in the ordinary course of business may have lent or advanced money to consignees or factors, authorized to sell goods of their principal, without knowledge that they were not the actual owners of the goods.” “ The phraseology of this section (the report adds) is designedly guarded, and we have thought it best to limit the power of factors more than we find it expressed in the statutes of England and New York, which we have alluded to.”

We have been referred by the plaintiff in error to the case of Navulshaw v. Brownrigg, 13 Law and Equity Reports 262, in support of the right’ of Mr. Macky to take the goods in pledge for a loan, even with the knowledge of Moorehead & Co. being consignees for sale only. That case, however, is decidedly against him, it being decided on the force and effect of the statute of 5th and 6th Victoria, ch. 39, which has not been adopted in this state. The Lord Chancellor states there the common-law rule, and the statute of 4 Geo. IV., ch. 83, and 6 Geo. IV., ch. 94, and commenting on the statute of 6 Geo. IV., said: “ So that the statute enabled the agent as regarded third persons, to sell or pledge provided the persons with whom he pledged did not know that he (the person that pledged) was not the actual and bond, fide owner of the property.”

With these guides to the interpretation of the Factors’ Act of 1834, it would not be difficult to arrive at its meaning, if the language were more doubtful than it is. But the language is clear. The pith of the act is contained in the first and third sections. But the second section and the proviso to the third section, expressly except the case of one having notice by the bill of lading document or otherwise, that the person in whose name the merchandise was shipped, or transmitted, or who is the holder, is not the actual owner thereof. The fourth section is equally explicit; for one who accepts a pledge for a pre-existing debt, without notice, or one who takes the pledge with notice, shall acquire the same interest only in the merchandise, as the factor himself had at the time of making the pledge. The purpose of the 4th section, say the revisers, was to reserve to the person taking on deposit, goods for a precedent debt, without notice, or for any debt with notice, of the person being only a factor, all the rights of the factor over the property as against his principals, which might be supposed to be impaired by the preceding section. The 5th section is also intended (they say) to prevent the preceding sections from operating injuriously to existing interests. An examination of the several clauses in the 5th section, bears out the intent as obvious in the clauses themselves, and furnishes at’ once the answer to the argument of the plaintiffs in error, which sought to give an extension to the pledgee’s rights by these clauses, instead of the protection they are designed to give to existing rights of the owner as well as the factor. On the trial of the cause, the defendant, Macky, rested his case wholly upon his right to hold the whiskey for his entire claim of $3700. Neither at the time of the demand of the goods by Dillinger, nor on the trial, did he set up any claim for the advances made by Moorehead & Co., but'the jury were instructed by the judge, that if they found Macky had notice of the ownership of the whiskey, they would still allow the defendant for the advances made by Moorehead & Co. .to Dillinger & Co. on the whiskey, or whatever balance was unpaid by way of recoupment from the damages. It was insisted in the argument, that, although no claim was made for freight or storage, and no attention called to them, the judge erred, because the language of his charge would, in effect, restrict Macky’s claim to the advances of Moorehead & Co., and the sum of $117.86, contained in Macky’s account of sales, as charges for freight, ought to have been allowed. But evidently, the language was not intended to lay restrictions on the extent of the recoupment. The whole subject of the charge was upon the right of Macky to hold the whiskey in pledge for the repayment of the loan of $3700, and when it was said, the defendant in that case, having no right to demand these conditions, can now be permitted only to recoup the advance of Moorehead & Go. from the damages, it is clear this was by way of contrast of these two aspects of the case, and not to limit the rights of Macky to any claim he could legally set up by way of recoupment. It was his own fault, therefore, if he did not claim the freight.. But in fact, as the evidence stood, he had no such claim on this whiskey. The hypothecation shows, that Macky had taken three lots of whiskey in pledge, of which, the testimony proved, that ten barrels were the property of Moorehead & Co. The account of sales shows that the. gross proceeds of the three lots amounted to $5333.26; and gross off, $538.65; of this gross, the $117.36 was the freight on the whole. Thus, by his own showing, the freight was paid by the charge in the account; while the ten barrels of Moorebead’s whiskey were ample to pay all expenses. No attempt was made to prove how much, if any, of this charge for freight applied to the forty barrels of. Dillinger & Son’s whiskey, and besides this, Macky’s knowledge of Dillinger & Son’s ownership of the whiskey being found by the verdict, how can a charge for expenses incurred by Macky in the transfer and storage of the whiskey, as a pledge in violation of Moorehead & Co.’s authority, stand on a higher ground than the loan itself; viewed in any aspect, therefore, the charge, in this respect, did the plaintiff no harm.

The only question remaining which we need notice, relates to the tender said to be necessary. Macky refused to deliver the whiskey unless Dillinger & Son paid him the loan of $3700, and' put the Craycraft & Co. order out of the way._ In charging that this refusal, and insisting on terms not binding on the plaintiffs, would be a waiver of a tender of the advance made by Moorehead & Co., clearly the judge did not mean to say that it was a waiver of Macky’s right to these advances, but only of a tender as an act precedent to a suit; the instruction following immediately, to allow Macky the advances by way of recoupment, proves this. The instruction was according to the general doctrine of tender, that when a party declines to accept payment or performance, except in a particular way, to which he is not entitled, he cannot insist that the action is prematurely brought. Macky would deliver the whiskey only on his own terms, and these terms the verdict shows he was not entitled to demand. This necessarily left his rights to be determined by this suit. Set-off does not exist in replevin, but when the goods are the subject of a lien or charge, the charge upon them can be enforced by way of recoupment, for the charge is inseparable from the thing itself, and therefore, when the value of the thing is to be allowed in damages, the charge necessarily reduces the damages by way of a recoupment, in order to do justice to both parties. As to the order to Craycraft & Co., there was no evidence given to show that it had fastened upon the whiskey, by such a boná fide sale or pledge as would attach to the property, and enable Mackey to use the title of Craycraft & Co. to defend his possession.

We discover no error, and the judgment is therefore affirmed.