Fleeman v. McKean

By the Court. S. B. Strong, P. J. The equity of this case is strongly in favor of the plaintiff. He sold the goods in question to the defendant McKean, for cash, to be paid on delivery, but which has not been paid, and McKean for that reason, was willing to return the goods, and makes no defense. The defendant Innes, who alone resists the plaintiff’s claim, agreed to purchase a bill of exchange drawn by McKean to raise the money to pay for the goods, which purpose appears to have been known to Innes, for cash. Innes did not pay, or offer to pay, the money, but refused to do so, and tendered a check drawn by Ritchie, Baine & Co. for a part of it, and a receipted account of that firm against McKean for the residue. That transaction, surely, did not confer upon Innes any right to the goods. They were not sold or delivered to him, and he could only have acquired a lien upon them by and through a transfer of a bill of exchange, (which it seems the goods were designed to meet in a foreign market.) The proposed transfer to him was for money to be — 480 — paid down, and as that condition Avas neither performed nor waived, but continuously insisted upon, he acquired no title to the bill. He could not, therefore, defend himself except under the claim of McKean, and that, if it Avas ever valid, was voluntarily surrendered. But it seems to me that McKean never acquired a valid title to the goods. The sale to him was upon condition that the price was to be paid upon delivery. In such a case, the title does not vest upon actual delivery, without payment, unless the condition is Avaived. That ay as admitted by the counsel for the defendant, upon the argument, but he insisted that an unexplained delivery would be conclusive evidence of a waiver of the condition. So, indeed, it would be, but was there not an explanation in this case, which, if not entirely satisfactory and conclusive, should have been submitted to the jury V It was proved by the plaintiff that it was the custom of the trade to deliver goods sold for cash to be paid on delivery, and to call for a check in tAvo or three days. The custom seems to be admitted by the learned counsel for the defendant in his second point, although he considers the delay as a credit, which I do not. It is simply an extension of the time for the performance of the condition. It appears to have been so considered by Chancellor Kent in Haggerty and others v. Palmer, (6 John. Ch. R. 437.) In that case it was proved that the goods were sold for approved indorsed notes, at four and six months, and that it was usual where goods Avere sold at auction (as those were) to deliver the goods to the buyer, and to send for the notes aftenvards. The goods were delivered to the purchaser probably on the days of sale, (the 23d and 27th of May,) and subsequently, (on the 1st of June,) the vendors sent for the notes but they were not delivered, as the purchaser had in the mean time failed, and had made an assignment of his property, including the goods in question. There Avas nothing to show, or indeed to raise the inference, that the condition was insisted upon or even mentioned when the goods were delivered; nor was there .any allegation that there Avas any actual fraud in making the original purchases. The chan — 481 — cellor said that the delivery of the goods was conditional, and they were taken by the purchaser as a trustee for the sellers? until the delivery of the notes. In the case of Furniss v. Hone, (8 Wend. 247,) the reporter, in his head notes, considers it as an undecided question, “ whether the delivery of goods under a usage or custom, where goods are sold at auction, to be paid for in approved indorsed notes, to deliver the goods to the buyer when called for, and afterwards to send for the notes, be an absolute delivery so as to pass the title, or only a conditional delivery.” Chief Justice Nelson, in that case, remarked that it was contended that the delivery in such cases is in conformity to the known usage, subject to the expectation and condition that the indorsed notes will be ready when called for, and not with the intent or understanding of either party that the title to the property, or the lien upon it for the purchase money, shall be parted with until the security is given. This is the construction which has repeatedly been given to those auction sales by the court of chancery in this state, previous to the decision of the chancellor in the present case. (Haggerty v. Palmer, 6 John. Ch. 437. Addis v. Hafield, MSS. per Ch. Jones. Haggerty v. Duane and Ferris, 1 Paige, 321.) And it seems to me this general usage of business, known to all parties, and of course presumed to enter into their consideration in dealing with one another, with the attending circumstances, may fairly warrant the construction given to those rules. The transaction is not considered complete until the indorsed notes are received, by the very terms of the sale; but for the convenience of all parties concerned the property is delivered to the purchasers subject to those terms. That the vendor does not intend to trust to the personal responsibility of the purchaser appears from the conditions of the rule.” In the same case. Senator Maynard, in speaking of the case of Haggerty v. Palmer, says that there “ the sale and delivery were admitted in the answer, to have been upon the conditions, under the circumstances and according to the usage, alleged in the bill. Such is not this case.” And he declined expressing any opinion as to what would have been the effect if the alleged usage had been — 482 — admitted. , Senator Tallmadge expresses some doubts whether the usage, if proved, would have qualified the delivery, but he says, that in- that case, the usage wras not established, and he thought that if it had been made out, the condition was waived by the lapse of time (nine days) between the delivery of the goods and demand of the notes.” Although it was held in that case that the delivery was absolute, yet the decision, (explained as it was by the two senators in the majority,) by no means overruled the judgments in the court of chancery to which Chief Justice Nelson alluded. Neither does the decision in Smith v. Lynes, (1 Selden, 41.) In that case there was no proof of any usage to qualify the delivery. The only opinion given was by Judge Paige, who said, “ the delivery will be conditional if the intent of the parties that it should be so, can be inferred from their acts, and the circumstances of the case. The learned judge who tried this ease, was evidently mistaken in the proposition advanced by him, that to make a delivery conditional it must be declared to be so in express terms.” The learned judge mentions Haggerty v. Palmer, and says that in that case the delivery was held to be conditional in accordance with a usage of the city of New York, known to the purchaser, and the validity of which was not called in question by the parties to the suit. He expresses no disapprobation of that decision, and it is to be inferred, from what he said, that he approved of it. He also quotes with approbation the opinions of Senators Edmonds and Wager, in Russell v. Minor, (22 Wend. 662,) who put the question of wraiver of the condition of the sale on the intention of the parties at the time of the delivery. Now in the case under consideration the hops were sold for cash, to be paid on the delivery. The payment was a condition precedent to the acquisition of the title by the purchaser. What is, by the usage of trade, a payment of cash on delivery ? It is a payment within three days after the actual change of possession. The condition is, then, that the money shall be paid within the three days. Surely, the non exaction of the payment before it can be claimed consistently with the usage, cannot be considered as a waiver of the condition. The opin — 483 — ions of Senators Edmonds and Wager in Russell v. Minor, and of Judge Paige in Smith v. Lynes, indicate very strongly, indeed Judge Paige says expressly, that it is not necessary in order to make a delivery conditional that it should be declared to be so in express terms. In this case there was a delay of but two of the three days allowed by the usage in demanding payment; surely, that is not enough to raise an irresistible presumption of an intent to dispense with the condition. In Furniss v. Hone, there had been a delay of nine days without any proof of a correspondent usage, and that undoubtedly raised a strong inference that the condition precedent had been waived. As to the actual intent of the vendor in this case, there can be no reasonable doubt. There is no evidence that there had been any change in the circumstances of the purchaser when a restoration of the goods was demanded. Payment was required, and when that was refused, the vendor claimed the return of .the goods. This was far from showing any reliance upon the credit of the purchaser. There was no such reliance. Both parties acted upon the presumption that there would be a compliance with the usage. Putting the goods on board of the vessel would not indicate an intent to make an unconditional delivery, unless there was an expectation that she would sail before the expiration of the three days, and there was no proof of that, but the contrary is to be inferred, as she did not leave the port within that time. There was no evidence to show that McKean had parted with the bill of lading when he consented to restore the goods, and the redelivery of the goods with his assent would, under those circumstances, have relieved the shipmaster and the owners from any responsibility. It was insisted on the argument that the rule contended for by the plaintiff would, if it should prevail, defeat the title of subsequent purchasers, and be highly prejudicial to the interests of commerce. I asked the counsel for the defendants whether, even supposing that a delivery under the circumstances of this case should be deemed incomplete as between the parties, a sale by the purchaser to an innocent dealer would not be valid ? My impression at the time was, and still is, that as the original — 484 — owner voluntarily places the goods in the hands of the purchaser and thus makes him the ostensible proprietor, a sale by the possessor to a bona fide dealer without notice, would be valid and pass the title. It was so decided in Haggerty v. Palmer, and the decision was sustained by the court of appeals in Smith v. Lynes. [Kings General Term, October 13, 1857. I am satisfied that the learned judge who tried this action erred in withdrawing the question whether there had been a waiver of the condition, from the jury, and in his instructions to them that the delivery of the goods was unconditional, and vested the title absolutely- in the purchaser. The judgment must therefore be reversed, and there must he a new trial, costs to abide the event of the suit. S. B. Strong, Birdseye and Emott, Justices.]