Hyde & Everit v. Cookson

By the Court, Brown, P. J. The answer admits that the hides in controversy were furnished by the plaintiffs and received by John H. Osborn, the defendants’ assignor, to be tanned and manufactured into hemlock sole leather, under the contract of the 6th of October, 1853. There is one feature which distinguishes this contract from some of those of a 'similar kind which have been the subjects of litigation in the courts, and which goes, far to repel the idea of a sale. It is this: that the identical hides, after being tanned, and mamifactured into leather, were to be returned to the plaintiffs. It is marked by another feature having a like effect. Osborn did not undertake to pay for them. His responsibility was not that of a purchaser upon credit, but that of a bailee to manufacture. Had the property been lost or destroyed by any casualty whatever, not attributable to his negligence or want of care, he incurred no loss or responsibility beyond the loss of his labor in tanning and manufacturing, and the expenses of transportation. All other loss would have fallen upon the plaintiffs. He was not, therefore, a purchaser upon credit; for there is no express or implied promise to pay for the goods. The contract was not to purchase, but “to tan from 2000 to 3000 hides, to be worked the present fall, and to be furnished by Hyde & Everit.” Osborn undertook to “take the hides in Hew York, transport them to his tannery in Tioga county, to tan and manufacture them into sole leather, in a reasonable time and in a good workmanlike manner, and return the same to Hyde & Everit, in Hew York.” There is nothing in this language which indicates a design by the plaintiffs to sell, or by Osborn to purchase, but it indicates a clear intention to suffer the right of property to remain unchanged. These provisions contain the substance of the agreement in regard to furnishing the goods, and performing the work, and the duties and obligation of the parties in — 102 — relation thereto. Let us now examine whether in providing for the adjustment of compensation and profits, the parties have used expressions which manifest an intention to change the title to the property.. The hides were to be furnished by Hyde & Everit, on a commission of 5 per cent on cost and charges for buying, and 6 per cent commissions and guaranty for selling the leather. These provisions, and especially the commercial and ordinary signification of the word commissions, are relied upon as evidence of an intention that the hides- were to be purchased, and after they were converted into leather, sold for Osborn. In commercial parlance the word commissions certainly means the compensation which the merchant or factor takes for buying or selling goods for another. In ascertaining the intention of the parties, and determining the effect of the written instrument however, every part of it is to be considered, and if possible, to have effect, and not detached and isolated sentences. The plaintiffs were merchants, dealing in the article which is the subject in controversy. They either had purchased in the market or must of necessity purchase the property in order to furnish it to Osborn. They were also to insure it and receive it again and sell it, in its manufactured state. In adjusting the reward which Osborn was to receive for converting the raw material into leather,'it is but slight—if it is any—-evidence of an intention to change the title, that the purchase money and interest, money paid for insurance and commissions for buying and selling, should first be taken from the proceeds of the sales, a,nd the residue paid over to Osborn, as his compensation. So the provision guarantying the sales is simply a manifestation of the same general purpose, and is designed to assure to the manufacturer his reward, should the property be eventually sold to an irresponsible purchaser. The hides were to .be insured and charged to Osborn, and this also is thought to manifest an intent to sell. I do not see this provision in that light. Even the literal sense of the expression does not favor the defendants’ interpretation, for it is the hides that are to be charged, and not the price at which they were sold to Osborn, — 103 — or purchased for him. They were to be charged to him as evidence of their delivery for the purposes of the contract, and to insure their return, which is consistent with the idea that he received them as bailee and manufacturer, and not as purchaser and owner. The concluding sentence of the agreement is also significant to show the nature of Osborn’s interest. “When the leather is sold, the account is to be made up, and the net proceeds, after deducting the cost of hides, and expenses, commissions on hides and leather, interest, insurance and all other expenses, shall be the profit and loss to accrue to Mr. Osborn in full for tanning as above.” Thus the clear residuum was to be Osborn’s reward—not for the mercantile risk he had incurred by the investment of his money or his credit in the purchase of Orinoco and Augustura hides, but as a compensation for the labor ' and expense of converting them into hemlock sole leather. In the absence of words which express, or from which it may be implied, that the parties intended the right of property should pass to Osborn, the rule which determines the right will be found in the dissenting opinion of Oh. J. Bronson, delivered in Mallory v. Willis, (4 Comst. 76,) and recognized and approved in Foster v. Pettibone, (3 Selden, 433,) which is in these words: “When the identical thing delivered, .although in an altered form, is to be restored, the contract is .one of bailment, and the title to the property is not changed. But when there is no obligation to restore the specific article^ .and the receiver is at liberty to' return another thing of -equal value, he becomes a debtor to make the return, and the title to the property is changed. It is a. sale.” We have-seen that the contract provided for the return of the identical hides delivered, in the form of sole leather, and therefore I think the plaintiffs were entitled to recover,, It appears that the labor and expenditure of Osborn upon the hides ,addéd $2000 to their value, after they came to his hands ; which sum, with $64.37 interest thereon, in addition to the value of the hides in their unmanufactured state, the plaintiffs were suffered to recover, under the charge .of the court. In applying the rule of damages, it must be remembered that — 104 — the defendants are not trespassers or wrongdoers. Although the action is in form ex delicto, it arises out of a contract, and involves the right to property which came lawfully into the possession of the defendants, and of Osborn, their assignor. Whatever has been done to change the property from its natural condition and to add to its value, has been done in good faith, with tie approbation of the owners, and in execution of Osborn’s contract with them. This has been broken, and it is in consequence of that breach that the plaintiffs are entitled to recover. When they have judgment for the full value of their interest in the subject of the contract, is not that a full satisfaction, without depriving the defendants of the entire value of the labor and expenditures put upon it in good faith ? It is true that in a different form of action the plaintiffs might have taken judgment for the specific property in dispute; but it is also true that, even in that case, had the contract been fully performed by Osborn, they would have been bound to account to him for the proceeds of the property in the manner specified in the contract. Having chosen a mode of proceeding where the recovery is to assume the form of damages, should not the measure be limited to the value of their interest in the property ? Had they elected to prosecute Osborn for a breach of the contract, the measure of their damages would have 'been the extent to which they were injured, and not the entire value of the property when manufactured into leather. ^In acquiring title to property by accession, the law makes a distinction between a willful and an involuntary wrongdoer. The former never can acquire the title, however great the change wrought in the original article may be, while the latter may. This is the precise question decided in the celebrated case of Silsbury v. McCoon, (3 Comst. 378 ;) the judge at the circuit having rejected the evidence offered, that tho taking of Wood’s corn (from which the whisky in dispute was made) by the plaintiffs, was not only wrongful, but willful. J udge Buggies, who delivered the opinion, after saying that if during the continuance of the possession of the wrongdoer, he enhances the value of the chattel willfully taken, by the labor and skill bestowed — 105 — upon it, the true owner may retake it, or recover its improved value in an action for damages, proceeds to say that the common and the civil law “ agree in another respect, to wit, that if the chattel wrongfully taken afterwards comes into the hands of an innocent holder who, believing himself to be the true owner, converts the chattel into a thing of different species, so that its identity is destroyed, the original owner cannot reclaim it.” This distinction between a willful and an involuntary wrongdoer, runs through the authorities, and stands upon the principle that a party can obtain no right by his own wrong. (Brown v. Sax, 7 Cowen, 95. Baker v. Wheeler, 8 Wend. 505. Rightmyer v. Raymond, 12 id. 51. Martin v. Porter 5 Mees. & Welsh. 352. Wild v. Hold, 9 id. 672.) In Pierce v. Schenck, (3 Hill, 28,) Mr. Justice Cowen expresses the opinion “ that when a manufacturer receives goods for the purpose of being wrought in the course of his trade, the contract is entire, and without a stipulation to the contrary he has no right to demand payment until the work is complete. A fortiori he has no right to carve out payment for himself without consulting the bailor. A miller is entitled to take toll from your grist, on grinding, but if he chooses to grind only a part and then sell the whole, he is not entitled to toll for what he actually grinds. It is like the common case of undertaking to labor during a certain time,, hr on finishing a certain amount of work for so much. Till the labor is performed he can claim nothing.” These observations are not entitled to the force of authority, because the other judges who heard the argument refused to express any opinion upon the measure of damages beyond the value of the original article. They may all, however, be taken to be true—which they undoubtedly are, when made in their appropriate place—without aiding the plaintiff upon this appeal. This is not an action where the manufacturer is asserting his right to recover compensation for the work done, or to retain a part of the property as a compensation for his labor, having failed to complete the contract. But the plaintiffs bring their action for the conversion; and the question is whether they shall recover more than the value of their interest in the prop — 106 — erty when the residue of the interest, if any, really belongs to the defendants, being the proceeds of their labor and expenditures. It is a very important feature in the transaction, that the enhanced value not only proceeded from the labor and expenditures of Osborn, applied to the property in good faith and in pursuance of the contract with the plaintiffs, but so applied before the conversion upon which the right of action is founded took place. In no sense of the term can he be regarded as a wrongdoer, in so much as the enhanced value is concerned, but his only breach of duty is his inability to complete his engagement, or his mistake in supposing the property in the hides vested in him. I have seen no case, in an action sounding in damages, in which the manufacturer who had expended his money and labor in good faith, has been deprived of the enhanced value; and I have not been referred to any principle which will justify such a measure. The most complete justice will be done to both parties by limiting the plaintiffs’ damages to the full value of his interest in the property, giving them the same ample indemnity as they would have had in an action for a breach of the contract. The measure should be the money paid by the plaintiff and 5 per cent commissions for buying, expenses, interest and 6 per cent commissions upon the value of the leather when ready .for the market. This will put the plaintiffs in the same position as they would have been in if the contract had been performed by Osborn, and the leather returned to them to be sold. [Kings General Term, October 2, 1855. Unless the plaintiffs consent to a reference to estimate the damages, upon the principle stated, and the plaintiffs elect to make the proper deduction from the amount of the judgment, there must be a new trial, with costs to abide the event, Brown, S. B. Strong and Rockwell, Justices.]