Rolfe v. Huntsville Lumber Co.

62 So. 537, 8 Ala. App. 487, 1913 Ala. App. LEXIS 214

• Court: Alabama Court of Appeals
• Decided: May 13, 1913
• Status: Published

Opinion

THOMAS, J.

— The appellee, the Huntsville Lumber Company, brought this suit against Olifton O. Rolfe and Percy M. Rolfe, partners composing the firm of Rolfe Bros., for damages for the conversion of certain logs and certain money, Avhich the complaint alleges Avas at the time of the conversion the property of appellee. The complaint contains nine counts. The first four counts allege the Avrongful conversion by the appellants of certain logs, the property of the appellee, and the last five the Avrongful conversion by the appellants of certain money, the proceeds of certain logs or lumber, the property of the appellee. The case was tried upon the plea of - the general issue, and there was a jury and a verdict for the defendants. Thereupon the plaintiff (appellee here) moved the court to set aside the verdict of the jury, upon the ground, among others, that the verdict of the jury was against the great weight of the evidence. The court granted the motion and set aside the verdict and the judgment pronounced thereon, and the defendants (appellants here) appeal.

1. It appears from the evidence that the appellee is engaged in the sawmill business at Decatur, Ala., and that in the year 1906 it made two contracts with appellants, whereby appellants bound themselves to deliver logs to appellee, and upon the faith of Avhich contracts the appellee made certain advances in money and other things of value to appellants. In one of the contracts the appellants contracted to deliver from Morgan county logs to appellee at its mill. Some logs were delivered under that contract, and their value was credited upon the account which appellants had contracted with appellee to which we have already referred. In the other contract, which bears date August 7, 1906, the ap-pellee contracted to pay appellants “for poplar, white oak and red oak logs delivered on bank of West Flint creek, in good shape, not over two miles above Wallace’s bridge, ten dollars ($10.00) per thousand feet Doyle-Scribner log measure,” provided that 50 per cent, of all logs delivered were number one logs, and provided that not over 25 per cent, of all logs delivered were red oak logs, and provided, also, that there were sufficient floats put in to float the oak logs down to Decatur in rafts, logs to be scaled and settled for whenever appellants had as much as 50,000 feet unsealed on bank, logs to be delivered on bank as above specified during the year 1906. The appellants agreed to deliver as much as 150,000 feet of logs at the above price in accordance with the above terms and specifications. It was this latter contract and the dealings of appellants and appellee under that contract, which resulted in this litigation. We direct attention to the fact that under the terms of the above contract no logs were to be scaled or settled for until appellants had as much as 50,000 feet of logs on the bank of the above-named creek at the above-named place. Until 50,000 feet of logs were placed on said creek certainly, under the terms of the above contract, appellants had no right to demand payment of appellee for any logs placed on the bank of the creek, and under the terms of that contract the title to no logs placed there by appellants vested in appellee. Until 50,000 feet were placed there by appellants, all logs placed there were, under the terms of the contract placed there at appellants’ risk. If, for instance, a fire had destroyed them, the loss would have been- appellants.’ If, by reason of freshets, they had been washed away, the loss would also have been appellants’.

At the time the above contract was made the logs above contracted to be delivered were probably standing as trees in Lawrence county, and it is evident that no title by virtue of the above contract alone passed to. the appellee. After the above contract was made, appellants appear to have begun to place, in accordance with the terms of the contract, logs at the above-mentioned place on West Flint creek. About December 15, 1906, they had placed there 4 red oak logs, 23 white oak logs, and 42 poplar logs, aggregating 23,965 feet, and 4 ash logs, aggregating 539 feet. These logs were on said December 15th measured or scaled by one Ward, an agent of appellee, and he placed on each log an encircled “W,” which was the mark by which appellee distinguished its logs from other logs. Appellants seem to have continued after December 15th to place logs at said place, for on January 29, 1907, appellee’s agent, Ward, again went to said place and again scaled or measured other logs as follows: 6 white oak logs, 1,890 feet; 11 red oak logs, 4,011 feet; 17 ash logs, 3,813 feet; and 24 poplar logs 7,346 feet. He at that time branded each log so measured or scaled with appellee’s encircled “W,” and according to the testimony of Ward the total value of the two lots of logs, including the ash logs, so measured or scaled was $415. This witness testified that “there was no agreement made between me and the defendants, or either of them, either in December, 1906, or in January, 1907, at the time I scaled the logs, with reference to the purchase or sale of them. Nothing was said with reference to the purchase or sale of them.” The two lots of logs aggregated not 50,000 feet, but only a fraction over 40,000 feet, and we are not of the opinion that the mere scaling of the logs, their marking with the encircled “W,” or the estimate which the witness Ward made of their value in any way, under all the evidence in this case, operated as a transfer of the title to the logs from the- appellants to appellee. When the first scaling was made, it was anticipated by appellee’s agent (Ward) that the appellants would, of course, comply with their contract, and place at least 50,000 feet of logs at the point at which the appellee was bound, under its contract, to accept them when they amounted to that many feet. When he made that scaling of the logs, and took down their numbers, naturally he placed the appellee’s mark upon them, so that, when as many' as 50,000 feet had been placed there and the time for delivery came, he would know that all the logs previously scaled were there. The witness Ward testified, it is true, that the appellee advanced $200 on these logs, but that fact, as shown by a letter which was written by appellee shortly thereafter, did not in any way divest the general title of the logs out of appellants, and vest it in appellee. After appellee had received notice of the scaling which was made by Ward on December 15, 1906, appellee wrote a letter to appellants which is dated December 17, 1906, in which a check for $150 — a part of the alleged advance of $200 — is mailed to appellants, and in which letter we find the following: “It hardly looks to us as though you are going to get 100 M feet on Flint where you agreed to put out 100 M feet and sell us on the banh. We hope you will get out the 100 M feet there as we cannot afford to go there for less than that. And- you will have to deliver them unless you do get out 100 M feet. We hope by the time you have another scaling, your showing will be different.” When the scaling was made in January, 1907, that scaling was made after the time fixed by the contract made in August, which required the delivery of at least 50,000 feet on Flint creek during the year 1906, had expired, and after the lants had been notified, on December 17th, by the appel-lee that the appellants would themselves be required to deliver the logs at Decatur unless they placed as much as 100,000 feet on Flint creek. When under its contract with appellants for the purchase of timber from Morgan county the appellants delivered logs at the mill to appellee, and those logs were scaled, the appellee and the appellants knew that the title to those logs vested in it, and it promptly credited appellants’ account with the value of those logs. Appellants did not place as much as 50,000 feet of logs on Flint creek during the year 1906, and never did place 100,000 feet there at any time, and for that reason they breached their contract with appellee. As appellants failed to place as much as 50,000 feet on Flint creek during the year 1906, and never did, after that time, place as much as 100,000 feet there, the appellee was not, under the term of its original contract, or, if modified by the letter of December 17, 1906, under the terms of the modified, contract bound to accept the logs actually placed there; it did not credit appellee with anything for the logs so placed there, and we think it evident that at no time under the evidence in this cáse did the title to the logs which were placed there by appellants ever vest in the appellee. Suppose the logs referred to were still on Flint creek, worm-eaten and valueless. Whose, logs, under all the evidence and all the reasonable tendencies of the evidence, would they he? Upon tohom would the loss thereby sustained have fallen — upon appellee or upon appellants? The questions formulate their own answer.

In Joyce v. Adams, 8 N. Y. 291, it is said that “it is a general rule of law that when a contract is made for the purchase of goods, and nothing is said about payment or delivery, the property passes immediately, so as to cast upon the purchaser all future risk, if nothing further remains to be done to the goods, although he cannot take them away without paying the price. But if anything remains to be done on the part of the seller as between him and the buyer, such as weighing, measuring, or counting out of a common parcel, before the goods purchased are to be- delivered, until that is done, the right of property has not attached in the buyer.” See, also, John Martin v. Henry Hurlbut, 9 Minn. 142 (Gil. 132).

“The question of transfer to and vesting of title in the purchaser always involves a question of the intention of the contracting parties; and it is to be ascertained whether their negotiations and acts are evincive of an intention on the part of the seller to relinquish all further claim or control as owner, and on the part of the buyer to assume such control with its consequent liabil-itiesA — Bethel Steam Mill Co. v. Brown, 57 Me. 9, 99 Am. Dec. 752.

It is possible that the facts in this case show that appellants were willing to relinquish all claim or control over the logs as their owners when the scalings by Ward took place, hut all the evidence discloses that the ap-pellee was not only unwilling to, but that it did not, assume control at any time of said logs as owner thereof with the liabilities of such owner. On the contrary, all the evidence shows that appellee looked to the appellants to deliver the logs as provided in the contract, and that at no time did it regard itself as liable to appellants for their value. All the acts of the parties conclusively show that at no time did the appellee regard the appellants’ contract as fulfilled or that it was under any obligation to appellants to assume dominion over the logs or to accept the risks which possession of the logs would entail upon it.

“Every agreement for a subsequent delivery is essentially executory. * * * The distinction between a sale which transfers the ownership and an agreement to sell and deliver at a day certain, which gives but an action for the breach of it, is a broad one.” — Strong, Deemer & Co., Limited, v. Dinning, 175 Pa. 586, 34 Atl. 919.

It has ever been the rule in this state that to sustain an action of trover the plaintiff must have at the time of the alleged conversion a general or special property in the chattel and either the actual possession of the chattel or the right of immediate possession. — Tallassee Falls Mfg. Co. v. Alexander City First Nat. Bank, 159 Ala. 315, 49 South. 246.

[The foregoing portion of this opinion was prepared by Judge de Graffenried, and was adopted by this court after he became a member of the Supreme Court.]

The appellee had, as pointed out and shown therein, no general property or title to the logs. The only remaining question then, is: Did it have such a special interest or title in or to them as would support this action? We are of opinion that it did. We think the facts, without conflict, are such as to show that the ap-pellee had a lien upon the logs, to the extent of the money it had advanced the appellants upon them, secured by an implied pledge of the logs.

A pledge may be defined to be “a transfer of personal property as a security for a debt or other obligation” (31 Cyc. 785), or “a bailment of personal property by a debtor to his creditor, to be kept by him until his debt is discharged” (22 Am. & Eng. Ency. Law, 842). “The three elements necessary to constitute a contract one of pledge are: (1) the possession of the pledged property must pass from the pledgor to the pledgee or to some one for him; (2) the legal title to the pledged property must remain in the pledgor; (3) the pledgee must have a lien on the property for the payment of a debt or performance of an obligation due him by the pledgor or some other person.” — 31 Cyc. 797. “The delivery of the possession of the property to the pledgee may be actual, constructive, or symbolical; but it must be clear, unequivocal, complete, and effective at all times so as to give, notice to third parties of pledgee’s rights.” —31 Cyc. 801. As fulfilling this latter requirement, it has been held in this state that where an iron furnace company borrowed money and pledged as security a certain number of tons of pig iron, and under agreement between it and the creditor a particular spot of ground belonging to the company and located apart from its other iron yards was tendered to the creditor and accepted by him as a place for setting aside and keeping the pledged property, and the company, in pursuance of the promise made at the time of procuring the loan, placed the pig iron, so agreed to be pledged, on such spot of ground, marking on it with paint the initials of the creditor pledgee, this was such a delivery of possession as to give validity to the pledge and to act as notice to the public of the pledgee’s interest in the property. — Am. Pig Iron Co. v. German, 126 Ala. 195, 28 South. 603, 85 Am. St. Rep. 21.

The present case in this particular is even stronger than that. Here the logs were placed by defendants on the banks of West Flint creek — the place of delivery fixed by the original contract — and they were there scaled by plaintiff’s inspector and each given plaintiff’s mark of an encircled “W.” While it is true, as hereinbefore pointed out, that this possession was not so accepted by the appellee as to make it a delivery of the property in compliance with or waiver of the terms of the original contract, or to constitute it a purchaser thereof under that contract, so as thereby to make its holding of the possession of the property a holding as a purchaser invested with the general title thereto, yet we are of opinion that the relationship between and the situation of the parties is such that each understood, what must be implied from their conduct, that the ap-pellee was to hold that possession as security for the money it had advanced before and did subsequently advance to the appellants on this property. Before this possession was on December 15, 1906, delivered on the bank of Flint creek, where the logs were scaled and marked by appellee’s inspector, Ward, appellee on August 25, 1906, advanced appellants $50 and two days after possession was so delivered, it, on December 17, 1906, also advanced them $150, writing to appellants the letter from which we have hereinbefore quoted, in which it said: “We have received the.scaling that our Mr. Ward made of your logs on Saturday [December 15, 1906], and your request for us to make you check for $150.00. We inclose you check for $150.00. It hardly looks to us as though you are going to get 100 M feet on Flint [the place at which the logs were], where you agreed to put out 100 M feet and sell us on the bank. We hope you will get out the 100 M feet there as we cannot afford to go there for less than that. And you will have to deliver them [here)] unless you do get out 100 M feet. We hope by the time you have another scaling, your showing will be different.” Clearly, the first $50 was advanced appellants in contemplation of a delivery of the logs, and this $150 was advanced after the delivery and on the faith thereof, and of appellee’s resulting possession; and it is to be implied that it as pledgee was to bold these logs, as security for the money then and previously advanced upon them, either until it was repaid that money, or until appellants complied with the contract and delivered either 100 M feet on Flint creek, or failing therein, delivered, or bore the expense of delivering, these particular logs, or any quantity measuring less than 100,000 feet, at appellee’s mills —in either of which two latter named events appellee was to become the purchaser of-the logs, and was to owe the appellants the balance of the purchase money at the rate of $10 per thousand feet, as fixed by the contract, from which, of course, it was then to deduct the money advanced. In other words, appellee held possession of these logs as bailee for appellants, pledged as security for the money it then and previously advanced, or might subsequently advance, and was to become the purchaser of them or any others subsequently delivered, only in the event appellants delivered there on Flint creek enough logs to amount in measurement to 100,000 feet, or bore the expense of delivering these particular logs, or any less quantity than 100,000 feet, at its mills. The scaling value of this lot of logs delivered on December 15, 1906, was $245, and the scaling value of the lot subsequently delivered on January 29, 1907, was $175. These, being the only two deliveries under this contract, amounted to less than 100,000 feet; hence appellee never became the purchaser of the property, nor invested with the general title thereto under the original contract of purchase, as modified, but it did become and was the bailee or pledgee of all these logs by virtue of an implied pledge arising out of the fact of the delivery by appellants and the advancement of money to them by appellee under the circumstances of this case. This contract of pledge is independent of, but incidental and subsequent to, the contract- of purchase — tbe delivery being sufficient in execution of tbe former, but not of tbe latter. One of tbe appellants, they being partners, swore: “I signed tbe agreement offered in evidence, of date August, 1906, to sell plaintiff [appellee] some timber, and I bad a subsequent agreement with tbe plaintiff with reference to furnishing money on that timber.” Subsequent to this delivery of tbe logs to plaintiff (ap-pellee), tbe whole course of conduct of defendants (appellants) shows that they understood that tbe appellee bad a lien upon or interest in these logs, and that ap-pellee also so understood. One of the defendants says: “He [Mr. Ward, plaintiff’s agent] told me to sell tbe logs to tbe best advantage to any one that desired to buy them. This * * * was about tbe last of April, 1907. * * * He told me unless we sold tbe logs tbe loss would be very heavy on us. * * * I also bad a conversation with Mr. Webster, vice president of tbe plaintiff. He asked me why I didn’t go and sell tbe logs, etc. He told me to do the best I could with them, otherwise tbe loss would be too great for us. * * * He told me I could have them sawed, and made me some prices on tbe lumber in tbe event I got them sawed. * * * Plaintiff never claimed until this suit was brought that it owned these logs, nor did it ever claim that tbe title was in it, but insisted that any loss to tbe logs would be ours and that tbe title to tbe logs was in us.”'

Assuming all of this to be true, while it is inconsistent with a general title in plaintiff as purchaser, it is not inconsistent, but, on tbe contrary, entirely consistent, with a special title in plaintiff as pledgee, held as security for tbe money it bad advanced.

Its interest was to this extent and this extent only, and it itself, as pledgee, bad tbe right upon tbe maturity of its demand — a reasonable time from tbe making of the loan, in the absence of any time 'fixed by agreement between the parties — to sell, upon demand and notice, the property, Code, §§ 3303, 3304. It might also authorize defendant to do so, or to saw the logs into lumber and sell it, hut this in itself would not amount to a waiver of its right in the proceeds to the extent of the debt owed it. One of the defendants further says: “I disposed of none of the logs, nor of the lumber sawed from the logs, in question, until after I had obtained the consent of plaintiff.” If defendants did not recognize that the plaintiff had an interest in the logs, why the necessity of gaining its consent to sell them?

The witness Bixby, a sawmill man, and the purchaser from defendants of some of the logs, testified: “Prior to my purchase of the logs, I had gone to Lawrence county and examined them. Mr. Rolfe (one of the defendants) told me that it was plaintiff that had had the logs branded, and I requested him to get a written release from plaintiff. He told me that the plaintiff wouldn’t give a written release, but that plaintiff had told him to go ahead and sell them. I telephoned plaintiff, and it told me it would be all right to buy the logs, so I bought them.” The plaintiff denies that it authorized a sale of the logs; but, even if it did authorize it, it would not defeat its right to recover under those counts of the complaint which are predicated upon a conversion by defendant of the proceeds of the sale, unless it was also its intention thereby to waive its right to the proceeds, though it would defeat its right to recover under those counts which are based upon a conversion by defendants of the logs themselves.

The pledgee, by virtue of his possession and special title in the property, can support trover or detinue against any one who wrongfully disturbs that possession, or converts the property, be he the pledgor or some third party (Noles v. Marable, 50 Ala. 366) ; but when he sues the pledgor of the property for its conversion, or for a conversion of the proceeds of the sale, when the property has been sold by the pledgor with permission of the pledgee, the measure of damages is the amount of the debt Avith interest, where the value of the property exceeds the debt, and is the value of the property, with interest, where it is less than the amount of the debt.— 31 Cyc. 840.

We discover no error in the action of the trial court in setting aside the judgment in favor of the defendants and in awarding the plaintiff a new trial, and this judgment is affirmed.

Affirmed.