Lees v. Richardson

By the Court, Daly, First Judge. The plaintiffs in this case, Lees & Waller, sold to one Fisher 312 tierces of lard at 10 cents per pound, amounting to the sum of $9,378.91, for cash. The lard, at the time of the sale, which was on the 17th of March, 1856, was in a ship lying at one of the wharves in this city. The lard was landed from the ship, weighed by the plaintiffs upon the wharf, and then delivered to Fisher, who, having sold 262 tierces of it, delivered the amount sold by him from the wharf to the various parties to whom he had sold it. The delivery to Fisher was completed on the 4th of March, that is, within three days after the sale; and of the fifty tierces remaining, after the "sale by him of the 262 as above stated, six were sent to his store, and the remaining forty-four tierces were delivered by Fisher, together with another lot of lard, all being included in one invoice, to the defendants on the 5th of March, 1856, in pursuance of an agreement previously made by him with them, by which they advanced to him $10,000 in cash, and $10,000 in their paper, in consideration of his depositing with them lard as security, to be sold by them on Ms account unless they were reimbursed—in pursuance of which agreement Fisher, at the time this arrangement was entered into, and afterwards, placed in their hands lard to the amount of nearly $24,000 at the invoice price, of which lard, so deposited, these forty-four tierces formed a part. This deposit of the forty-four tierces was made, as suggested, on the 5th of March, 1856, on which day the plaintiffs presented their bill to Fisher, containing the weight, tare, &c., of the 312 tierces, and left it for examination, it being usual for the purchaser to examine the return, calculations, &c., and compare them with Ms own figures. Two days after, the plaintiffs’ clerk called, that is, on the 7th, v-xl asked Fisher for the cash, but did not get it. He — 170 — called the following day with the same result, and again a day or two after, when Fisher gave him a check for $2,000 on account, Fisher saying that that was all that he could give that day, and which check was paid. A day or two after, Mr. Lees, one of the plaintiffs, called, when Fisher gave the plaintiffs a cheek for $5,000, which was not paid at presentment. On the 11th of March, 1856, the day of the date of this $5,000 check, Fisher failed; and, at-2 o’clock P. M. of that day, executed a general assignment to the plaintiff Lees for the benefit of creditors, in which assignment the sum remaining due to the plaintiffs Lees & Waller, for the lard sold, was included in a class of preferred debts, upon which the plaintiffs have received 24 per cent, from the assigned estate. The present action is brought by the plaintiffs Lees & Waller to recover from the defendants the value of these forty-four tierces, upon the ground that no title to them ever vested in Fisher, and that he could therefore transfer none to the defendants, the plaintiffs having demanded the forty-four tierces, and the defendants having refused to give them up. Upon this state of facts, the referee has found that the plaintiffs parted with the title and ownership of the forty-four tierces, and I think he was justified, by the evidence, in so finding. This was a sale of a large quantity of merchandise for cash. The general rule deduced by the elementary writers, from the cases that have been determined, is, that where no time is fixed for payment, payment and delivery are to be simultaneous acts, and the ■ seller is not bound to deliver until payment is tendered. Story, on Oont. § 803; 2 Kent’s Com. 496. This rule will apply very well upon the sale of a single chattel, as in the case put to illustrate it in Shephard’s Touchstone, 224—the sale of a horse ; but it is scarcely applicable in the sale of a large quantity of merchandise, the delivery of which may occupy considerable time, and in which some time must also intervene to enable the buyer to ascertain the correctness of the weights, to adjust the tare upon the different packages, and generally to ascertain the quality and condition of the merchandise received. As a matter of necessity, therefore, a custom has grown up in this city, in the sales of — 171 — merchandise in quantity, and which was proved hefore the referee, of allowing from a week to ten days for this purpose, during which period no interest is charged upon the sale by the seller. It was further proved, that when the buyer has received the goods, he has, by the custom, full control of them; and that it is the universal custom for the buyer to sell them freely during this time, as well before payment as after, though it would seem that, if the goods were sold to a stranger, it is not the custom to deliver until the price is paid, unless the buyer is well satisfied about him. The parties in this case must be regarded as having contracted with reference to this usage. There is nothing in the case to show that they did not. Fisher was not a stranger. He was a merchant .doing business in this city at 84 Broad street. According to the witness, his business was buying to sell again, •and he had dealt with the plaintiffs’ house, and their predecessors, since the house was formed, more or less for four or five years, the plaintiffs having frequently sold lard to him before. There was no fraud—no pretence that he had wrongfully obtained the possession of the merchandise by any device or fraudulent representation. It was a fair sale in the ordinary course of business. •He had a large amount of property at the time, in this city and in Europe, amounting to from $150,000 to $175,000. He had not, at the time, as he testified, any reason to suppose that he would not be able to pay for this lard, and his failure within a week after the delivery of it, that is, on the 11th of March, 1856, up to which period he continued all his payments, was occasioned by advices from Europe, on the 10th, of a large loss upon a sale of lard there—lard having depreciated in consequence of the confirmation of the news of peace between Russia and the allied powers, which created a panic in the public mind in relation to lard and tallow, of the first of which he appears to have been a heavy holder. There was, then, in this case, a surrender of the merchandise into the possession of the buyer, induced by no fraud, and unaccompanied by any condition that he should not have the right to sell and dispose of it until he paid the price. The law in respect — 172 — to a conditional delivery upon the sale of goods is very well stated by Vice-chancellor McCoun in Buck v. Grimshaw, (1 Edw. Ch. R. 146): “ Whether a sale and delivery be conditional or not, depends upon the particular facts and circumstances of each case. It may be the subject of express stipulation in the contract of sale, or a matter of subsequent agreement when the delivery is made; or it may be inferred, from the course of the transaction and the usage of a particular trade, that the vendor did not intend to make, or the vendee to receive, an absolute and unconditional delivery. But the condition must be made to appear as matter of evidence, otherwise the legal presumption would follow, from the fact of the purchasers being in the actual possession of the goods, that the delivery was an absolute one.” In Smith v. Lynes, (1 Seld. 41), Paige, J., referring to a sale of goods on condition of being paid for on delivery in cash or commercial paper, declares that “ the vendor, to avoid a waiver of the condition of sale, must either refuse to deliver the goods without performance of the condition, or he must make the delivery, at the time, qualified, and conditional,”—citing Lupin v. Marie, 6 Wend. 81, and other adjudged cases determining this to be the law; and all the cases relating to conditional delivery are to the effect that it must appear, from the circumstances, that it was the intent of the parties that the delivery, should be conditional—that is, that the property should not vest in the buyer; that he should not have the right to use or dispose of it until he had complied with the condition upon which it was sold. Hussey v. Thornton, 4 Mass. 405; Whitwell v. Vincent, 4 Pick. 449; Keeler v. Field, 1 Paige, 312; Furniss v. Holt, 8 Wend. 256; Haggerty v. Palmer, 6 Johns. Ch. R. 437; Russell v. Minor, 22 Wend. 664; Mills v. Hallock, 2 Edw. Ch. R. 652; Copeland v. Bosquet, 4 Wash. C. R. 588; D'Wolf v. Babbet, 4 Mason, 294; Barret v. Pritchard, 2 Pick. 512; Buck v. Grimshaw, supra; Bishop v. Shilito, 2 B. & Ald. 329, note. Where there is nothing in the circumstances to show that the delivery was thus qualified, the mere fact that the sale was for cash will not, of itself, be sufficient to warrant the legal inference that the delivery is conditional, and that no title, is intended to pass to the — 173 — buyer until the cash is paid. This was expressly determined in Chapman & Schoolcraft v. Lathrop, (6 Cow. 110), in which it was held that, where goods are sold upon the condition that they are to be paid for in cash, and they are delivered without payment, the property passes, and the condition is waived. In that case, a quantity of merchandise was sold for cash, and delivered. The next day payment was demanded, and the buyer offered a note endorsed by the seller, and the residue in cash, which the seller refused to receive. A fortnight after the property was demanded, but the buyer refused to give it up. The seller brought trover, and it was held, upon the grounds above stated, that he could not recover; that the property passed to the buyer, and that the plaintiff’s remedy was an action for the price. To the same effect was Haswell v. Hunt, cited in Tooke v. Hollingworth, 5 Term R. 231. A parcel of tobacco was sold, to be paid for in ready money. The plaintiff’s servant delivered it without any order from his master to demand the money, and it was held that the title was vested in the buyer, who had become a bankrupt on the day when the tobacco was delivered. My conclusion, from the authorities, is, that in a cash sale to a solvent buyer, where there is no fraud, no art or device used to obtain possession, but the goods are voluntarily delivered in the usual and ordinary course of business, that the title passes to the buyer by the act of delivery, and that he has, with the possession, the right of immediate disposition, unless there are circumstances indicating, and clearly showing, that the intent was that the delivery should be merely conditional—that no title should pass until the cash was paid; and that it rests with the party, who claims such to have been the fact, to establish and make it out. The cases cited by the appellant do not conflict with this doctrine. In Leven v. Smith (1 Denio, 571,) the plaintiffs instructed their clerk not to deliver the goods, unless upon payment of the money. He took the goods, consisting of several packages of shoes, to the defendant’s store, with the bill. The packages were compared with the bill, were found to be correct; and the defendant offered the clerk a note of the plaintiffs’, and eight dollars in cash, in payment. The — 174 — clerk declined to receive the note, but said he would see the plaintiff, and take his directions. He accordingly left, was absent but four or five minutes, when he returned with the plaintiff’s answer that he would not receive payment in that way, and with instructions to take back the goods. The clerk demanded the return of the goods or the payment of the bill in money, which the defendant refused. It was held that the plaintiff might maintain replevin; and it was very clear, in that case, that there was an intention, on the part of the plaintiff, not to deliver unless the money was paid. The decision was in conformity with Bishop v. Shilito, (2 Barn. & Aid. 331, note), in which it was held that if a tradesman sell goods to be paid for on delivery, and his servant, by mistake, delivers them without receiving the money, the tradesman, after a demand and refusal, may maintain trover against the purchaser. In Van Neste v. Conover (5 How. Pr. 148,) the sale was for cash, pajmble on delivery.—Edmonds, J., says: “ The agreement was very precise that the com was to be paid for on delivery; and, unless so paid for, was not to hecome the property of the defendant. Of course, if such was the agreement, the delivery was conditional, and there was no waiver, the bill having been presented with, the delivery of the last parcel, and payment demanded the following day.” In Draper v. Jones (11 Barb. 263,) the sale was not complete. The terms were not finally adjusted. The goods were delivered with the understanding that they would be sold at a credit of four months, upon security satisfactory to the sellers, and, until it was ascertained what security would be satisfactory to them, there was no sale, though the goods had been delivered. The minds of the parties had not met. The contract was not concluded. It was open for the buyer to propose, and for the sellers to determine whether they would receive what should be proposed by him as the security; and, before that could be ascertained, and while the contract was in this unsettled state, the defendant failed. It was very clear, in such a case, that he acquired no title. In Aguirre v. Allen, (10 Barb. 76), which was in affirmance of a judgment rendered in this court, the question here considered did not arise—the goods, in that case, — 175 — were paid for; and Acker v. Campbell (23 Wend. 372,) was decided upon the ground of fraud: while, in Herring v. Hoppock, (15 N. Y. R. 409), there was an express stipulation, in writing, that Herring was not to part with, nor were the buyers to acquire, any title to the safe until the note, given for the purchase money, was fully paid. If the agreement had been drawn in vie w of all the authorities, it could not have been more precise. . In all these cases, therefore, the intention to make the delivery-conditional is plainly inferable from the circumstances, while in this case there is nothing from which any such intention could be inferred. Fisher and the plaintiff were both doing business in the city of New York, and, in making this sale, they must be regarded as contracting with reference to a usage prevailing here, when nothing appears denoting a different or contrary intention. By that usage it is customary for the buyer to sell and dispose of what he buys immediately upon receiving it, without waiting until it is paid for, which is illustrated in this case by Fisher disposing of five-sixths of this lard, in the course of its delivery, to various purchasers, delivering their respective parcels to them on the wharf where he received it. That such a usage should prevail in a great commercial mart, where merchandise is constantly changing hands, is manifest. Goods must be constantly bought, predicated upon orders received for them, or where the buyer, contemporaneous with their purchase, has arranged for their resale, in which he becomes a mere conduit in their transfer to other purchasers. It would be a serious clog upon the facility of commercial transactions, if solvent buyers for cash were precluded from making any disposition of the goods delivered to them, until they had arranged and paid for them. It must frequently be the case, that the agreement of the buyer to pay 'cash is founded upon his ability to dispose of them to another for cash at a profit, and in which the cash received on the resale is relied upon as the fund for the payment of the original purchase. The law goes far enough when it holds that no title is acquired by delivery where the possession is obtained by fraud, and recognizes the right of the seller to impose, as a con — 176 — dition, that no title shall be acquired by the buyer by delivery, until the price is paid, as well as the vendor’s right, in case of insolvency, to stop the goods in transitu, before the delivery is complete. Beyond this, full effect should be given to any commercial usage which recognizes the right of property as in the buyer, where it is voluntarily delivered to him, untainted by fraud and untrammeled by conditions, whether it be what is termed a cash sale, or a sale upon time. It is much better to rely upon and give effect to those usages which have sprung up as the fruit of the experience of those engaged in the conduct and management of business, the utility, propriety, and necessity of which is manifest from their general recognition, than to devise rules for the disposition of commercial cases which have not, like the former, the test of experience. If, then, the plaintiff delivered the lard to Fisher with the mutual understanding, inferable from the usage, that he was at liberty to sell and dispose of it, which, as respects the greater part of it, it appears that he did as socn as it was delivered to him, they transferred, and meant to transfer, the title. The right to dispose of it before payment necessarily implies that the property was in him, and that they looked to and relied upon his personal responsibility for payment. If any doubt could exist, it is removed by the ground upon ■which the referee placed his decision, that they afterwards accepted part of the purchase money. If a sale is conditional, the seller is bound to exact the performance of the condition, either at the time of the delivery, or within a very short time afterwards, or he will be deemed to have waived it. Lupin v. Marie, 6 Wend. 77; Mills v. Hallock, 3 Edw. Ch. R. 652; Furniss v. Holt, 8 Wend. 247; Hennequin v. Sands, 25 Wend. 641; Cangus v. Ennis, 2 Mason, 236. That this was not such a sale, is apparent from the plaintiffs’ accepting $2,000 of the purchase money five days after the delivery, and after two demands had been made for payment. That very materially changed the position of the parties as respects the right of reclamation, even if the delivery had been conditional. If the condition is not performed, the — 177 — seller may reclaim the property, and, upon demand and refusal, may maintain an action for the wrongful detention. Levin v. Smith, 1 Denio, 571; Hennequin v. Sands, 25 Wend. 640; Herring v. Hoppock, 15 N. Y. R. 409. To place themselves in a position to maintain such an action, the plaintiffs would have to return, or offer to return, the $2,000 they had received. This they did not do, or offer to do. On the contrary, they not only kept the money, but, within two days after it was paid, Fisher made an assignment of all his property for the benefit of creditors to one of the plaintiffs, in which assignment the residue of the purchase money, $7,878.91, was included in a list of preferred debts, as a debt due and owing by Fisher to them, and upon which they have received a dividend of 24 per cent. All these acts are wholly inconsistent with the existence of a right on the part of the plaintiffs to reclaim from Fisher the 812 tierces of lard, upon the ground that the delivery was conditional, and the condition has not been performed, but are reconcilable only upon the assumption that the transfer of the property to him was absolute. It is suggested to us that the plaintiff Waller cannot be affected by the assignment to his partner Lees, which was made to Lees individually; but the acts of' either party, so far as they relate to or affect this transaction,, may be looked to when the object is to ascertain the intent with which the property was delivered by the firm to Fisher. It is said by Wager, Senator, in Russell v. Minor, (22 Wend. 670), as the result of his examination of the authorities, “that the' property will be considered as passing whenever, from the cir cumstances proved, the party might be considered as trusting to the ability and readiness of the vendee to perform the agreement on his part, and had, therefore, waived his right to insist upon strict payment or performance, on the part of the vendee, as a condition to passing the title.” The evidence before the referee, in my judgment, established such a case, and his report should be confirmed. Judgment affirmed.