Matthews v. Hobby

By the Court, Clerke, J. The contract was for a sale by the plaintiff to Drowne of one hundred bales of cotton, quality even middling, at 59 cents, to arrive; cash on delivery. Twenty-one bales of the cotton had arrived; of which notice was immediately sent to Skinner, Drowne’s agent, who selected nine of them, as even middling, in accordance with the contract, and obtained possession of them. . According to the testimony of the plaintiff, immediate payment was demanded of the agent, on behalf of the plaintiff; which was refused. Skinner sent the cotton to the warehouse of the ' defendant, and told him to store it, as the property of the — 169 — Atlantic Delaine Company, of Providence, E. I. This deposit of the goods with the defendant for the benefit of this company was alleged to have been made in part fulfillment of a contract which Drowne had entered into with them, some time previously, to deliver to them two hundred bales of cotton, at 64 cents, cash on arrival. I. If the Atlantic Delaine Company can be .regarded under that contract as bona fide purchasers of the nine bales in question, whether the plaintiff did or did not waive his right to payment on delivery to Drowne, he cannot maintain this action. It is not pretended that the company paid or parted with any consideration for them. The defendant’s counsel, indeed, offered to show that Chapin, the treasurer of the company, had received the returns (in an account) of the nine bales, in the hand writing of Skinner; that he had given Drowne credit for the same in the books of the company, under the contract; and that in consequence of the non-performance by Drowne of his contract, the company had charged Drowne with the profit to them on'that contract, against the amount due for the nine bales. This offer the judge overruled at the trial, on the ground that the proposed proof would not be sufficient to show that the company was a bona fide purchaser. In Palmer v. Hand, (13 John. 433,) the rule which was then, and had been for a long time previously, most prevalent, was distinctly stated, and that is, “ when goods are sold to be paid for on delivery, and during the delivery and before it is completed, the purchaser sells or pledges them to a third person for a valuable consideration, but without notice to the original vendor, the lien of the latter will not be affected, and he may recover them from such subsequent purchaser.” In that case actual advances in cash were made to the vendee, by the defendant, to nearly the amount of the value of the goods, and while they were in course of delivery. The defendant was regarded as an innocent party who had in good faith advanced his money ; yet the court did not pro — 170 — tect his claim against that of the original vendor. See also Sargent v. Gill, (8 N. H1. Rep. 325 ;) Copland v. Bosanquet, (4 Wash. C. C. Rep. 594;) Coggill v. Harlem and New Haven R. R. Co., (3 Gray, 545;) among the number. In Smith v. Lynes, (1 Seld. 41,) the Court of Appeals seems to negative this rule. It declares, in that case, that even where the delivery of goods to the vendee was conditional, yet if he sold them to third parties ignorant of the condition, the latter were entitled to the protection of bona fide purchasers, so far as they had paid for them. Lynes, the defendant in that case, had made an agreement with Thompson & Company before his agreement with the plaintiff, by which they agreed to take from him the goods which he after-wards purchased from the plaintiff. Some parcels of the goods delivered by Lynes to Thompson & Co., had been paid for by them to Lynes ; other parcels received by them had not been paid for. But as these latter parcels had been delivered by Smith, the plaintiff unconditionally to Lynes, it is stated in the opinion of the court that the title of Thompson & Co. to them was perfect; although they had not paid for them ; leaving us, necessarily, to infer that if the delivery to Lynes had been conditional, their title would not have been perfect against the plaintiff, in consequence of the fact that nothing had passed from them to Lynes. There was an agreement, as in the case before us, between Thompson & Co. and Lynes to take from him the goods which he afterwards purchased from the plaintiff, and the goods were received by them and credited to Lynes. Nevertheless, the court held that if any portion of those not paid for had been delivered by the plaintiff to Lynes, conditionally, they could not be protected against the original vendor’s lien. This decides the question under consideration in the case before us. The Atlantic Delaine Company paid nothing for the nine bales of cotton; and although they received them under their contract with Drowne, and credited him with the receipt of them, they" cannot be protected against the plaintiff's lien — 171 — unless the plaintiff was not originally entitled to, or waived payment on delivery of the nine bales to Drowne’s agent. II. Either Mathews or Drowne could have regarded the contract between them as an entire contract. The cotton was “to arrive,-” and until the whole of it should arrive, the one was not obliged to deliver, or the other to receive, any portion of it. Russell v. Nicoll, (3 Wend. 112,) is in many respects similar to the case before us. The contract was for the sale of 500 bales of cotton, to be delivered on its arrival in New York from New Orleans, to be paid for in cash on delivery, and to be delivered at any time between February and 1st of June, 1825. Eleven bales arrived before the 1st of June, which were demanded by the vendees, (the plaintiffs in the action,) and an offer of payment was made to the defendants, who refused to deliver any portion until the whole should arrive. Marcy, J., in delivering the opinion of the court, says: “ The contract was for 500 bales; it was entire; there was no obligation upon the part of the plaintiffs to receive a less quantity than the whole; and, consequently, none on the part of the defendants to deliver less than the whole.” So, in the case before us, the plaintiff was under no obligation, according to the contract, to deliver; nor was Drowne under any obligation to receive the nine bales, until the whole should, arrive, But, as he did receive them, he was bound to pay for them on delivery, unless the plaintiff waived this condition of the contract. This, no doubt, the latter could have done, either by express assent, or by acts, such'as an unreasonable delay in demanding payment, or in not demanding it at all. III. Was payment on delivery of the nine bales waived by the plaintiff? The plaintiff’s agent testifies that so far from waiving payment, he insisted upon it, as soon as he discovered that the defendant’s agent got possession of the cotton. Comstock swears that “it was agreed between him and Skinner, Drowne’s agent, that the cotton was to be paid for immediately upon the delivery of the weigher’s bill and — 172 — the receipt, and that the plaintiff was to hold the title and custody of the cotton until the money was paid.” And he repeats this, in, substance. If there was no testimony to contradict these clear and positive statements of Comstock and of the other' witnesses of the plaintiff, the1 judge Would have been correct in taking the consideration of the: question from the jury. But Wenman, one of the defendant’s ■ witnesses, denies these statements. Skinner, Drowne’s agent in the transaction, expressly contradicts Comstock, and testifies that nothing was said between them to the effect that the cotton should be paid for day by day as it was delivered. He states enough to show that Comstock waived immediate payment for the nine bales; provided- that he (Skinner) would pay Sawyer, Wallace & Co. for cotton previously purchased by Drowne from them-through Matthews. • And seé the "agreement proved by Skinner, foL 127. All this conflicting testimony should have been left to the jury. The defendant’s counsel, besides, offered, several times, to show what was the condition or stipulation, with reference to the delivery of the nine bales, which -was• objected to; and the objection was sustained. -1 think' this was error. The defendant’s counsel,' in making this offer, proposed, to furnish express testimony in relation to the precise question before the' jury—whether the plaintiff waived the condition of payment on delivery. ' ' With respect to the question of the right of payment on the delivery of less than the whole contracted for, Champlin v. Rowley, (18 Wend. 187,) and Paige v. Ott, (5 Denio, 406,) referred to by the counsel of the defendant, do not contra-' diet the principle which I have deduced from Russell v. Nicoll, (3 Wend. 112.) In the contracts stated in those cases, it was expressly provided that payment should not be required, until the whole of the thing, contracted for should be delivered ; except that in Champlin v. Rowley $100 should be'paid in advance; which had been done; and about which there was no dispute. Where there is no such provision, as in the contract before us, I repeat, therefore, that — 173 — the vendor is not obligated to deliver, nor the vendee to receive, the goods, until the whole shall arrive; but if less than the whole be received by the vendee, and the contract stipulates for payment on delivery, the vendor is entitled to immediate payment for the portion delivered. Of course this right can be waived ; and, as there was conflicting evidence on the question, in this case, the judge erred in taking it from the jury, and in refusing to admit evidence bearing upon that question. New York General Term, November 5, 1866. The judgment should be reversed, and a new trial ordered ; costs to abide the event. Clerke, Mullin and Ingraham, Justices.]