Brother & Brother v. Peters & Brother

MANNING, J. Munter & Brother, being largely in debt, and insolvent, by an order requesting shipment to them, bought of plaintiffs, J. M. Peters & Brother, of Yirginia, twenty-five boxes of tobacco; which they accordingly sent [248] as directed, to Munter & Brother, at Montgomery, Alabama, by railroad, forwarding to them by mail a bill of lading therefor. On receipt of this, several days before the boxes arrived, Munter & Brother indorsed it, and transferred their right to the goods to J. Loeb & Brother, who gave them credit for the same, on a debt past due, which Munter & Brother owed them. There was no other consideration for this transfer. Soon afterwards, Peters & Brother, being informed of the insolvency of Munter & Brother, and claiming the right to stop the tobacco in transitu, demanded it of the carrier, the South & North Alabama Railroad Company, and sued the same in detinue for it, having first offered to pay the freight money. Loeb & Brother intervened as claimants, and thereby obtained possession of the goods. Whereupon, the suit was prosecuted against them, to a verdict and judgment in favor of Peters & Brother, from which Loeb & Brother have appealed to this court. We do not concur in the opinion expressed in Rogers v. Thomas (20 Conn. 54), that a vendor of goods, in transit to an insolvent vendee, can not stop them on the way, before delivery, unless the insolvency of the vendee occurred after the sale to him of the goods. We think, with the Supreme Court of Ohio, that the vendor may stop the goods upon a subsequent discovery of insolvency existing at the time of the sale, as. well as upon a subsequent insolvency. If there be a want of ability to pay, it can make no difference, in justice or good sense, whether it was produced by causes, or shown by acts, at a period before or after the sale. — Benedict v. Schuettic, 12 Ohio St. 515; Reynolds v. Boston & M. R. R. Co., 43 N. H. 589; O’Brien v. Norris, 16 Md. 122; Blum v. Marks, 21 La. Ann. 268. The best definition of the right which we have seen, is that in Parsons’s Mercantile Law, as follows : “A seller, who has sent goods to a buyer at a distance, and, after sending them, finds that the buyer is insolvent, may stop the goods at any time before they reach the buyer. His right to do this is called the right of stoppage in transitu.”— Chap X, p. 60._ If, before this right is exercised, the buyer sells the goods, and indorses the bill of lading for them to a purchaser in good faith, and for value, the right of the first vendor to retake them is extinguished. — Lickbarron v. Mason, 1 Smith’s Lead. Cases, 888. Evidence, therefore, that Loeb & Brother knew, when they took a transfer of the bill of lading, that Munter & Brother were insolvent, was relevant and proper to show, in connection with other testimony, that Loeb & Brother were not hona fide purchasers. And there was no error in permitting a witness to testify what one of that firm had [249] previously said, tending to show such knowledge, when he was giving evidence in another cause. Statements and declarations, relevant to the matter in hand, which have been made by a party to a cause, may be proved against him, without his adversary being compelled to use such party as a witness in a suit in which he is interested. The two judgments against Munter & Brother, in favor of creditors, confessed by the former before the tobacco had reached its destination, and the seizure upon execution the next day of property of Munter & Brother, by the sheriff, tended to prove their insolvency; and the evidence of those facts was, therefore, properly admitted. The transfer of a bill of lading, as a collateral to previous obligations, without anything advanced, given up, or lost on the part of the transferree, does not constitute such an assignment as will preclude the vendor from exercising the right of stoppage in transitu. Said Bradley, Circuit Justice, in Lesassier v. The Southwestern, 2 Woods, 35: “Nothing short of a bona fide sale of the goods for value, or the possession of them by the vendee, can defeat the vendor’s right of stoppage in transitu ; and hence it has been held, that an assignee in trust for creditors of the insolvent vendee is not a purchaser for value, and, consequently, takes subject to the exercise of any right of-stoppage in transitu, which may exist against the assignor. — Harris v. Pratt, 17 N. Y. 249.” Wherefore, it was held in the latter case, that an attachment in the suit of the vendee’s creditor, of goods landed by the carrier upon a wharf-boat at the place of delivery, did not prevent the vendor from stopping them in transitu. — See, also, O'Brien v. Norris, 16 Md. 122; Naylor v. Dennie, 8 Pick. 199; Nicholas v. Lefeuvre, 2 Bingh. (N C.) 83. The doctrine is based upon the plain reason of justice and equity, enunciated in D'Aguila v. Lambert (2 Eden’s Ch. 77), that “ one man’s property should not be applied to the payment of another man’s debt.” The right itself is regarded as an; extension merely of the lien for the price, which the seller of goods has on them while remaining in his possession; which lien the courts will not permit to be superseded, before the vendee, who has become insolvent, obtains possession, unless, in the meantime, the goods have been sold to a person who, in good faith, has paid value for them, and so would be a loser by Ms purchase,' if that were held invalid. Appellants having only credited Munter & Brother on a debt previously due from them, with the price of the tobacco, have nothing more to do, in order to get even, than to debit them with the same sum, for the non-delivery of the goods in consequence of the defect in Munter & Brother’s title. [250] Tbe case of Crawford v. Kirksey (55 Ala. 282), so much relied on by appellants, is wholly unlike this. The question of stoppage in transitu was in no way involved in it. The controversy there was, whether a conveyance by a debtor in a failing condition, of property which was indisputably and entirely his, in payment of a debt to one of his creditors, was not void as to the others; and this court decided, that the law permitted such a preference, and that the transaction was not fraudulent in fact. It results from what we have said, that there was no error in the charges to the jury. Let the judgment of the Circuit Court be affirmed.