F. L. Shaw Co. v. Coleman

WILDSON, C. J. (after stating the facts as above). In what is to follow the word “appellant” means the Shaw Company; the word “dealer,” appellee Coleman; and the word “purchaser,” appellees Goode, McGlos-son, and Tinnin, respectively. [1] The shipment being an interstate one as between the Studebaker Corporation and appellant, it may be conceded at once that *181 -the bill of lading was an “order bill” and negotiable within the meaning of the federal net (sections 8604a to 8604n, TJ. S. Compiled Statutes), and that appellant, to whom it was negotiated, acquired such title to the automobiles as the Studebaker Corporation, who negotiated it and who was both the consignor and consignee named therein, “had or had ability to convey to a purchaser in good faith for value” (section 8604p). [2] It may as readily be conceded that the carrier was without authority to deliver the automobiles except on the order of appellant, tlie owner thereof, and that it violated duty it owed to appellant when it delivered them to the dealer as it did, in the absence of such order by appellant and without its knowledge or consent. [3] And it might also be conceded, if testimony in the record should be given the effect warranted by many authorities, that by such delivery neither the right of possession nor ownership of the cars passed to the dealer as between him and appellant. Such effect cannot be given that testimony, however, in view of the holding of the Supreme Court of this state in Robinson & Martin v. H. & T. C. R. R. Co., 105 Tex. 185, 146 S. W. 537.. In that case Robinson & Martin by telephone from Dallas ordered a' boiler of the Erie City Iron Works in Houston, to be shipped to Gainsville. The iron works company delivered the boiler to the carrier, prepaying the freight and taking a bill of lading in which it was stipulated that .the carrier should' deliver the boiler at Gainsville to the iron works company’s order. The names of the purchasers did not appear in the bill of lading, but it was sent, with a draft on them for the purchase price attached, to a bank, with instructions to deliver same to the .purchasers when they paid the draft. The Supreme Court held that the title to the boiler vested in the purchasers when it was delivered to the carrier in Houston. “The right of property,” that court said, “passed to the purchaser when the particular boiler was designated, but the right of possession remained with the seller until the draft was paid.” If the Supreme Court meant, as we think we must assume it did, what the language it used indicates it did, then its ruling applied here requires us to hold that the title to the automobiles vested in the dealer when they were delivered to the carrier in Detroit, that thereafter only the right of possession as security for the payment of the purchase money was in the Studebaker Corporation, and that that right of possession for that purpose was all that passed to appellant as the transferee of the bill of lading. It follows, in that view, that the judgment should be affirmed so far as it is in favor of the purchaser; for a bona fide purchaser from one who has the legal title to the property and possession thereof, though his possession is wrongful, takes the title as against the person entitled to possession only, or whose right is that of a mere lienholder. McDonald v. Humphries, 146 S. W. 712; Rohrbough v. Leopold, 68 Tex. 254, 4 S. W. 460; 35 Cyc. 356. If the Supreme Court in the ease referred to (Robinson & Martin v. Ry. Co.) meant only to hold, instead, as the Galveston Court of Civil Appeals seems to have concluded it did (Lippman v. Produce Co., 184 S. W. 534), and as the United States Supreme Court held in Dows v. Bank, 91 U. S. 618, 23 L. Ed. 214, that shipping goods under an order bill of lading sent to a bank with a draft for the purchase price attached, the bill of ladihg to be held until the draft was paid, “did not of itself constitute and conclusively show an intention to withhold the passing of the title until the draft is paid,” the ruling, in the facts of this case, the purchaser insists, would still require an affirmance of the judgment; for, he says, and we agree, the judgment involves a finding by the trial court that the parties intended,the title to pass to the purchaser when the property was delivered to the carrier in Detroit; and, he says further, there was testimony to support such a finding. The testimony he refers to showed, he says, that “the automobiles,” quoting from his brief, “were sold f. o. b. Detroit. Coleman paid the freight from Detroit to Paris. Under the terms of the contract denominated ‘dealer’s contract,’ clause 7, Coleman was obliged to pay taxes on the automobiles while on the railroad track if taxes were leviable. Under the contract the distributor, Shaw Company, could or could not draw a draft for the purchase price at his option.” We agree that the testimony established the facts stated, except the fact that the cars “were sold f. o. b. Detroit.” With reference to that the testimony was that the prices the dealer was to pay for the cars were their price f. o. b. the cars at Detroit, and not that they were sold f. o. b. the cars there. Keeping in mind the fact that the question presented is not one as to the dealer’s right as against appellant to the possession of the cars at the time he sold them, nor one as to how strongly testimony before the trial court may have tended to show the intention of the seller 'and buyer to be that the title should remain in the former until the cars were paid for, but is one as to the sufficiency of testimony before the court to support the finding in question, we think it must be answered that there was testimony sufficient for that purpose. The contract covering the. dealer’s purchase of the cars did not specify the place where they were to be delivered, unless the provision therein that the prices to be *182 charged were for the automobiles f. o. b. the cars at Detroit should be construed as meaning the delivery was to be at ;that point. If the provision meant that, and the delivery to the carrier in Detroit was a delivery to the dealer, the title passed to him then. If the provision did not mean that, then a place for their delivery was not specified in the contract, and a like result would follow; for, "where the contract is silent as to the place of delivery,” said the court in Alexander v. Heidenheimer (Com. App.) 221 S. W. 942, ‘‘delivery to the carrier operates as delivery to the vendee and passes title to him.” The shipment in the case just cited was not on an order bill of lading, as here, but, if it had been, it is not thought the ruling, would liave been different. In Glanzer v. Armsby Co., 100 Misc. Rep. 476, 165 N. Y. Supp. 1006, the shipment was on an order bill, notify the purchaser, as here, and it was held that on facts like ■ those in this case it will be presumed, unless a different intention appears, that “the property in the goods passes to the buyer at the time of the delivery to the carrier.” The court in so holding quoted from the opinion of the New York Court of Appeals in Sawyer v. Dean, 114 N. Y. 469, 21 N. E. 1012, as follows: “The plaintiff by shipping in his own name was simply keeping the possession of the property, as he had a right to do, until it had been accepted and paid for by the defendant. By shipping in that manner he retained and kept the lien of possession as his security for the payment of the property. The effect of the contract was to transfer the title of the property from plaintiff’s assignor to the defendant, subject only to the right of the assignor to retain possession until payment should be made, as long as no credit was to be given or had been provided by the terms of the agreement.” The fact that the dealer was to pay the freight on the automobiles also was of proba--tive force on the question as to whether the intention was that the title to the cars should pass to the dealer when they were delivered to the carrier. 1 Mechem on Sales, § 741. So, we think, was the fact that the dealer was to pay taxes assessable on automobiles purchased by him while, in the possession of the carrier. And to our minds the provision in the contract between the dealer and appellant that the latter should not be liable to the former “for any loss or damage,” quoting, “to' automobiles or parts or other goods while in transit, as distributor’s [appellant’s] responsibility shall cease upon delivery of goods to a carrier,” tended to show that the intention was that the title should pass to the dealer when the property was delivered to the carrier; for, unless he then became the owner, he could not hold the carrier for such loss or damage (Asheboro Wheelbarrow Mfg. Co. v. Railway Co., 149 N. C. 261, 62 S. E. 1091), and, if he could not look to the dealer for compensation therefor, he would be without a remedy for same. We think the trial court had a right to conclude'it was not the intention to place the dealer in that position. 24 R. C. L. 16. Another view of the record which the purchaser insists warranted the judgment in his favor is that appellant was estopped as against him from asserting, if it was a fact, that title to the property was not in the dealer. The principle of law invoked is that— “Where the true owner holds out another, or allows him to appear, as the owner of, or as having full power of disposition over, the property, and innocent third parties are thus lead into dealing with such apparent owner, they will be protected.” 1 Mechem on Sales, § 157; 24 R. C. B. 378. As indicating that this ease was within the rule, the purchaser points to provisions in the contract between appellant and the dealer, referred to in the statement above, showing the dealer was to provide and maintain a salesroom and a properly equipped repair and service station for Studebaker cars, keep a stock of two such cars on hand and at least one other for demonstration and show purposes, order in advance cars to supply his trade for the current and succeeding months, do local advertising of such cars and solicit orders for them, use the name “Studebaker” conspiciously in his business, furnish the names and addresses of persons to whom he sold cars, and information as to prospective purchasers, and carry a stock of parts for such cars as should be recommended by the Studebaker Corporation, of the value of not less than $950. If, in addition to the facts stated, it appeared that the possession the dealer held of the automobiles in question was with appellant’s consent, or was attributable to any fault or neglect on its part, we would agree it was estopped from claiming them as against the purchaser. But it appeared that appellant not only did not consent to the delivery of the automobiles to the dealer, but that same were delivered to him in violation of its instructions to the carrier. Therefore the case, with respect to the contention made, is within an exception or qualification of the rule the purchaser relies upon, which makes it inapplicable, where the title remains in the seller, when it was not du,e to his act or omission that the buyer was in possession of the property. 1 Mechem on Sales, § 158 et seq.; 24 R. C. L. 378. It is clear from the testimony that it was not due to any conduct of the appellant that the dealer was in possession of the automobiles. Appellant did everything it reasonably could have done to prevent the passing of the possession of the cars to the dealer before he paid for them, and the latter’s possession of same clearly was wrongful and in defiance of appellant’s rights. *183 No reason appears in tlie record for denying appellant the recovery it sought against the dealer, and we think the judgment is erroneous in that respect. It will be affirmed so far as it is in the purchaser’s favor and reversed so far as it is in the dealer’s! favor, and judgment will be here rendered against him in appellant’s favor for the amount of his indebtedness to appellant on account of the automobiles.