Guilford v. Smith

The opinion of the court was delivered by Bennett, J. This case, having been before the court for some length of time, and having also had the full and matured consideration of counsel, it is proper that it should be disposed of without further delay. It need hardly be observed that the plaintiffs stand upon the rights, as derived by them from J. & J. H. Peck & Co., and the defendants upon the rights of Gooderham, Howland & Co. Upon the ground which we are about to put the case upon, we shall assume that Gooderham, Howland & Co. were substantially the vendors of the flour, and J. & J. H. Peck & Co. the vendees, although we think it is attended with considerable difficulty to establish that point; and we do not intend, in making this decision, to express any opinion upon it. We shall confine our inquiry to the question, whether the right of stoppage was exercised in due time, provided it once existed. This right must be exercised after the property has left the possession of the vendors, and before it has come to the actual or constructive possession of the vendees, or those standing in their place. This period covers the whole transit. The rule is explicit, and the difficulties -arise — 65 — in its application, in determining the capacity in which a third person holds the goods before they have come to the actual possession of the vendee. If he holds them for the mere purpose of transport in the course of their transit to the vendee, or to their ultimate place of destination, the goods in such third person’s hands, are still in transitu and may be stopped, not because the delivery to such third person was not a constructive delivery to the vendee, but because it was a delivery to transport, as a connected link in the transmission of the property to the vendee. As a general rule, a constructive possession in the vendee is as available to put an end to the transit, as an actual one can be, and it is only when the constructive possession is for the purpose of transport, that an exception to the general rule is found. A middleman simply to forward, is no more the agent of the vendor than of the vendee. The title of the property passes from the vendor to the vendee upon the sale, and when it is once delivered to the carrier, the vendor has only the right of stoppage in cases of insolvency while it is in transitu. The property while in transit, is ordinarily at the risk of the vendee, and mere middle-men are more peculiarly the agents of the vendee than of the vendor. The rule is well settled by authority, that when the goods are delivered at a place where they will remain until a fresh impulse is communicated to them by the vendee, the transitus is at an end. Such is the doctrine of Dixon v. Baldwin, 5 East 175, and in subsequent adjudged cases. In such a case, the delivery is not to transport but to keep, and a constructive possession will determine the transit. The inquiry then is, in what capacity did Stark, Hill & Co. hold the flour on the 13th day of October, when Gooderham, Howland & Co. claimed the right to stop it ? Did they hold it to transport ? or was it a custody to heep, subject to the orders of the Pecks or their assignees ? Though Stark, Hill & Co. were the carriers of this flour to Ogdensburg, yet when it was in the warehouse they held it as warehousemen, and ceased to be liable as carriers. The case finds that the warehouse was in their possession and under their management, and that they received and took charge of all goods which were on transportation to and from Canada by railroad and steamers ; and while the goods were thus in the hands of Stark, Hill & Co. between the steamers and the — 66 — cars, they were responsible for the same, having the key and control of the warehouse for such purpose. Although Stark, Hill & Co. may have had the possession of (he flour as warehousemen, still the question remains, did they hold it to transport, or for the purpose of custody ? To determine this we have only to look at the facts in the case. The direction given by the Pecks to the vendors, is to forward the flour to Flagg & Hyde, their agents at Ogdensburg, where, it is found, the agents had a fixed place of business, and the vendors were to advise the Pecks of the shipment by telegraph. There is no allusion in the instructions of the Pecks to the vendors, to any ulterior destination of the flour beyond Ogdensburg, and if there had been, it would not have been a matter of much moment. It is found by the referee “ that the Pecks had been accustomed to deal in flour at the west, and that Flagg & Hyde were their agents for the purpose of receiving it at Ogdensburg and forwarding it as directed by them!’ This does not import a direction to forward the flour to Burlington, or any particular point, but rather to hold it, subject to the order of the Pecks as to the time and place to which it was to be forwarded, and the referee expressly finds that none of the flour would have been forwarded from Ogdensburg to Burlington unless directed to be done by Flagg & Hyde. As to that part of the flour purchased by Gooderham, Howland & Co. for the Pecks which actually reached them at Burlington, the case finds that it was sent on from the warehouse at Ogdensburg, in which it had been deposited, to Burlington by the direction of Flagg Hyde. All the bills of lading, as they were called, make Flagg & Hyde the consignees of the flour at Ogdensburg, with the exception of one, where the name is left blank, probably by mistake. It is added in the bills of lading, it is true, “ to be forwarded to J. & J. H. Peck & Co., Burlington.” But this can not supersede the Pecks or their assignees in their rights to control the flour, even while it is in transit; and besides, this ulterior destination of the flour in the bills of lading, was not according to the letter of instructions given to Messrs. Gooderham, Howland & Co., on the 4th of September. When the referee speaks of the flour as being consigned by Gooderham, Howland & Co. to Flagg & Hyde, to be forwarded to J. & J. II. Peck & Co., Burlington, as per bills of — 67 — lading, I should apprehend that all that he meant by this finding was, that the bills of lading indicated the ulterior destination of the flour to be Burlington, and it wonld seem from the whole report, that this must have been his meaning. But, as it has already been observed, it is not a matter of decisive moment whether Burlington was the ulterior destination of the flour or not. Admitting it to be so, still, if the flour while on its transit reached a point where it would await a fresh direction to be given to it by the Pecks or their agents, the transitas, nevertheless, would be at an end. While it was in that situation it would not be held to transport, but to keep. The finding of the referee is express that none of the flour would have been forwarded by Stark, Hill & Co. from their warehouse unless directed by Flagg & Hyde. Stark, Hill & Co. treated this flour in their warehouse as subject to the special direction of Flagg & Hyde. While they were putt'ng it into their warehouse, Flagg, happening to be on the ground, was inquired of for directions in regard to it, and Stark, Hill & Co. were ready to comply with his directions in regard to forwarding it. This was on the 9th of October. On the 10th of October, after Flagg had received notice from the assignees directing him to hold the flour subject to their order, he repaired to the warehouse and countermanded his previous order, and gave directions to have the flour remain in the warehouse for further orders. The flour did remain in the warehouse, and in consequence of such directions, it was not forwarded under the previous order, and in this situation it remained in the custody of Stark, Hill & Co., in their warehouse, until the 13th of October. On that day and prior to any attempt to stop the flour by Gooderham, Howland & Co., Herrick appeared at Ogdensburg, clothed with full powers from the plaintiffs as the assignees of the Pecks, to take possession of the flour in question. Herrick and Flagg went to the warehouse, saw the flour, counted the barrels and bored into some of them to examine its quality, although they did not see Stark or give any directions, at that time, in regard to the flour. It does appear, however, that Herrick, before anything was done by Gooderham, Howland & Co. showed his letter of instructions from the assignees to Parker, who was the agent of the Northern Railroad Company at Ogdensburg, — 68 — and had the general charge of the freight, freighting and freight buildings of said company, except so far as his powers were restricted by the contract between the railroad company and Stark, Hill & Co., and requested him to hold the flour for the assignees ; to which Parker, it is found, made at the time no objection. I should apprehend for one, that at that time the flour was subject to the control of Stark, Hill & Co. as warehousemen, and that the direction to Parker to hold it for the assignees, could be of no particular importance to the plaintiffs, excepting as it may go to show an intention on the part of the assignees to take the possession of the flour. It may also, if necessary, go to give character to the acts of Herrick and Flagg at the warehouse, in counting the barrels of flour and taking specimens of its quality by boring into some of the barrels. All this took place before either Parker or Stark, Hill & Co. were requested to hold the flour for the vendors. It is hardly necessary to vindicate the rule as laid down by Baron Park, in James v. Griffin, 2 M. & W. 631, “ that when goods are delivered at a point where the vendee intends they shall remain until a fresh destination is communicated to them by orders from the vendee himself, the transitus is at an end.” In Dixon v. Baldwin, 5 East 175, the goods were ordered “ to be forwarded to one Metcalfe at Hull, to he shipped for Hamburg as usual.” It appeared that it was usual for Metcalfe to keep such goods until he received orders from the vendees, and then comply with such orders; and it was held the transitus ended at Hull, though there was an ulterior destination of the goods beyond that place. Lord Ellenborough said the goods waited for new orders from the purchaser, to put them in motion, and that without such orders they would remain stationary. In Leeds v. Wright, 3 B. & P. 320, the agent of the bankrupt purchased the goods for exportation, having authority from the bankrupt to export them to any port he pleased; and the court held he did not possess the goods as an agent to forward, and that while in his hands, they were not in transitu. In Scott v. Pettit, 3 B. & P. 469, the bankrupt had given general orders to a carrier to send on his goods to a packer to be packed, and the goods were accordingly sent to the house of the packer, and the packer was not treated by the court as an agent to forward, but it was held that, like a warehouseman, he — 69 — held the goods subject to the order of the vendee, and that in his hands the transitas of the goods was ended. The case of Stokes v. La Riviere and Lawley, cited in Ellis v. Hunt, 3 Term 464, and more fully by Lawrence, J., in Bothling v. Ingless, 3 East. 398, is put upon the ground that the goods were in the hands of the defendants to be conveyed. In Jackson v. Nichols, 5 Bingham, N. C., 508, Justice Tindall reiterates the doctrine of the case of Dixon v. Baldwin. The case of Coats v. Railton et als., 6 B. & C. 422 (13 Com. Law 196), in principle is much like the case of Smith v. Goss, 1 Camp. 232, and neither are opposed to Dixon v. Baldwin. In Smith v. Goss, the goods were ordered to be sent addressed to the care of Goss, Bull’s wharf, London, with directions to send them by the first vessel to New Castle. It might well be held in that case, that the goods in the hands of Goss were in transitu. He held them to transport, by the first vessel, to their ultimate destination. In Coats v. Railton, the goods were purchased of the plaintiff by the defendants, as agents for a house at Lisbon, and were to be forwarded to that house at Lisbon by the defendants, who were packers and warehousemen as well as the general agents for the vendees, and it was held that, as the defendants had received the possession of the goods to send them to the vendees at Lisbon, they might be stopped in their hands, and before they reached Lisbon, notwithstanding the defendants made the purchase as the agents of the vendees. All that this case decides is, that after the purchase was made the defendants held the goods for the purpose of transport, and that in this case the constructive possession of the goods in the vendees, would not defeat the right of stoppage before they arrived at Lisbon. In short, it simply holds that the purchase of the goods by the defendants, as the agents of the vendees, was an element in the cause and could not control the right of stoppage, arising from the fact that the defendants held the goods subsequent to the purchase for the purpose of transport. In Valpy v. Gibson et al., 56 Common Law 865, in the letter of advice from the consignors to the consignees, the latter were requested to ship the goods with the letter of advice, “as the bankrupt might direct the same to be shippedand though the defendants, who were commission merchants and knew the goods were to be sent by the bankrupt to Valparaiso, so informed the — 70 — house to whom they forwarded the goods at Liverpool when they sent them, yet it was held, the house at Liverpool could not act on that information, and that they held them subject to the order of the bankrupt; and that, when the goods had reached the house of the consignees at Liverpool, the transit was ended. Here it should be remarked that the direction was, “to ship the goods as the bankrupt might direct the same to be shipped.” With such instructions the consignees received the goods to keep and not to transport. In principle this case is the same as Dixon v. Baldwin. Foster et als., Assignees of Fowler, v. Frampton, 13 Common Law 60 (6 B. & C. 107), is strongly in point for the plaintiffs. There the vendee of several hogsheads of sugar, having had notice from the carrier of their arrival, took samples from them, and directed the carrier to let them remain in his warehouse until he should receive further instructions; and before they were removed the vendee became bankrupt, and it was held the transitas was at an end. Justice Bayley remarks that the bankrupt, on that particular occasion, used the warehouse of the carrier as his' own, and made it the repository of his own goods; and Holroyd, J., says, “the carrier ceased to be such, and became a mere bailee.” The carrier in that case, at least by implication, entered into a new relation, distinct from the contract for the carriage, and held the goods for the vendee as his agent, not to transport but for the custody of them, subject to his order. In Allan v. Gripper, 2 Cromp. & Jervis 218, the goods had been deposited in the carriers’ warehouse for the convenience of the vendee, to be delivered out as he should want them, and it was held the transitas was at an end. Here, too, the warehouse in which the goods were deposited might well be considered for this special purpose, as the warehouse of the purchasers. Stark, Hill & Co. from the time the flour was deposited in their warehouse, held it subject to the future order of the Pecks, or those standing in their place, ai.d a fresh direction to them was necessary again to put the flour in motion, and in this view they received the flour to keep and not to transport, unless directed. The possession of Stark, Hill & Co. was the constructive possession of the Pecks or their assignees, and it may well be said, they made the warehouse of Stark, Hill & Co., for this parties ular purpose, their own, — 71 — Besides, on the 10th of October, the assignees directed Flagg & Hyde to hold the flour for them, and they immediately directed Stark, Hill & Co. to have the flour remain in the warehouse for further orders, and in obedience to such order it did remain in their warehouse, and was not sent on in pursuance of the previous order of Flagg & Hyde. Baron Park, in Whitehead v. Anderson, 9 M. & W. 518, has well said, “a case of constructive possession is where the carrier enters, expressly or by implication, into a new agreement distinct from the original contract for carriage, to hold the goods for the consignee, as his agent, not for the purpose of expediting them to the place of original destination pursuant to that contract, but in a new character for the purpose of custody on his account and subject to some new or further order to be given him.” There can be no doubt this is a case where Stark, Hill & Co., by the strongest kind of implication, assumed to hold this flour subject to the future directions of Flagg & Hyde, who, on the 10th of October, were acting as the agents of the assignees, and this would give the assignees a constructive possession of the flour if there had been nothing else in the case. The assignees might well treat, on this occasion, the warehouse of Stark, Hill & Co. as their own. The case of Buckley v. Furniss, 15 Wend. 137, is deemed by the defendants’ counsel to be strongly in point, but we think is is quite distinguishable from the case at bar. In that case the iron was marked and directed to Titus, the vendee at Malone, to the care of Thomas Green, Plattsburg, who was a warehouseman at that place, and the court put the case upon the ground that the goods only rested at that place for the purpose of changing the mode of transportation from a water to a land transportation, and that they were not to remain at Plattsburg to await a fresh order from the vendee. This is clear-ly a case where the warehouseman received the iron to transport and not to keep until further orders. It is said in argument that, before the Pecks or their assignees could assert any right to the possession of the flour, it was indispensable that they should have paid the charges and duties on it. But it should be remembered that this is a question between vendors and vendees, and the only inquiry now is, whether the vendors’ right of stoppage was at an end, and not whether Stark, Hill & — 72 — Co. had a lien on the goods for their charges, or the government one for the duties. The vendees might well have a constructive possession of the flour, subject to such liens, and it is not for Gooderham, Howland & Co., who are strangers to such liens, to set them up to defeat any rights of the vendees. In Allan v. Gripper, 2 Crompton & Jervis 218, it was held that the transitus was at an end, and the vendor’s right to stop in transitu gone, although it appeared that the carrier claimed to have a lien on the goods. The payment or the non-payment of the charges and duties, may have some bearing upon the character of the possession which a third person may have, but when it is found that such third person has the custody of the goods to keep for the vendee, and await a further order from him, the non-payment of freight or duties becomes of no importance. The vendee has then a constructive possession, subject to all liens. The title passes to the vendee upon the sale. In Mottram v. Heyer, 1 Denio 483, the goods were shipped from England to the vendees at New York, and the circuit judge charged the jury, that by the receipt of the bill of lading, the payment of the freight by the vendees and their entry of the goods at the custom house, the transitus was ended, even though in that case the agent of the vendors had demanded the goods before the duties were paid, and while the goods were in the custom house. This ruling was affirmed upon error by the superior court of the city of New York. The case stands upon the ground that the vendees had a constructive possession, though the goods were in the custom house and the duties unpaid. This case went up to the court of errors, and though there was some discrepancy of opinion as to the ending of the transit, yet the judgment was affirmed by a vote of thirteen to four. See 5 Denio 629. Though it is true the chancellor maintains that the entry of the goods at the custom house in that case did not terminate the transit without a payment of the duties also, yet he admits that if the goods had been placed in a public store under the warehousing system, the transit would have ended. His opinion goes upon the ground that, from the facts in that case, enough was not shown to give the vendees a constructive possession without t^e payment of the duties; but he was for affirming the judgment of the superior court upon the ground that the demand — 73 — upon the vendees for a return of the goods, made while they were in the custom house, was not sufficient to stop the goods in their transit. Porter and Putnam both agreed that the transit was not ended. Van Schoonhovem, Senator, held that the transit was ended, and Senator Lott gave a written opinion, and Johnson, Barlow and Talcott oral opinions in favor of an affirmance, but upon what ground does not appear from the case. All that can be learned from the report of the case on this point is, that the chancellor and two senators held that the transit was not ended at the time the vendors made the demand for the goods then in the custom house. The authority of the case upon this question, as reported in 1 Denio, can not be considered as impeached by the court of errors. The case of Northey v. Field, 2 Espinasse 613, is relied upon to show that Gooderham, Howland & Co. exercised the right of stoppage in time, it being before the duties were paid; but we apprehend the case will not warrant the position as applied to the facts in the case at bar. The consignees in that case neither had an actual or constructive possession of the wines. The wines remained on board the ship until after the vendees became bankrupt, and the duties not having been paid within the twenty days allowed by the excise law, during which time they are to remain on board, they were taken from the ship to the King’s warehouse, in consequence of the non-payment of the duties within the time fixed by the excise laws. The goods remaining in the vessel of the carrier until taken to the government warehouse, and the vendees having no right to an actual possession until the duties were paid, it is clear they could have no constructive possession. I apprehend in that case the possession of the carrier was still continued, subject to the lien of the government for the duties. The vendees not only failed to pay the duties, but did not, as was said by Lord Tenterden, enter the goods at the custom house. No act of ownership whatever was exercised by the vendees over the property. See this case in Abbott on Ship. 664, 7th Am. Ed. Donath v. Brownshead, 7 Barr 301, is like Northey v. Field. In that case the goods were removed to the custom house directly from, the vessel by the officers, and were not entered at the custom house by the consignee, on account of the loss of the invoice. Clearly, in this case, the vendee, though he had paid the freight, had not entitled himself to actual possession, and could have no — 74 — constructive possession. It could not be implied in that case, that either the master of the vessel or the agent of the vendee held the custody of the goods to deliver. But in the case before us, the flour had been deposited in the warehouse of Stark, Hill & Co., under the warehousing system, and it was the practice of that firm to give bonds for the inland transportation of goods arriving by steamers, and transported on the Northern Railroad. As I understand the warehousing system as established by act of Congress, it provides that if duties are not paid, or if the importer or consignee shall make an entry in wilting for warehousing the goods, they shall be deposited in the public stores, or other stores agreed on, at the charge and risk of the importer or consignee, subject to their order on paying the duties and expenses, to be secured by bonds with sureties. If, however, satisfactory security shall be given that the goods shall be landed out of the jurisdiction of the United States, or on entry for reexportation and the payment of expenses, etc., the goods may be shipped without the payment of the duties. If the goods shall remain in the warehouse beyond one year without the payment of the duties on them and expenses, they are to be appraised and sold at auction, and the surplus after paying the duties, expenses, etc., is to be paid over to the owner or consignee. Clearly then, under the warehousing system, whatever possession the government may have of the goods, it is under the owner, and it is at most but a qualified or special possession, and for the purpose of securing a lien by -way of pledge. The goods were at all times subject to the order of the owner upon payment of duties and expenses. He had the right of actual possession upon the payment of the duties, etc., and his general ownership of the property would, at all events, give him a constructive possession, as against third persons. So far as they are concerned, it is a possession for the owner, and the owner could sell or dispose of the goods as he should see fit, subject to the duties and expenses. Granting then, that the right of stoppage existed in this case, we think the transitas was ended before there was an attempt to exercise it, and that Gooderham, Howland & Co. must be regarded as trespassers in taking this property from the warehouse on the 23d of October. Though we should be glad to have Gooderham, How-land & Co. indemnified against the bond given to secure the pay — 75 — ment of the duties, and also for the charges paid Stark, Hill & Co., yet, being wrong-doers in taking the property, they could acquire no lien upon it, and the assignees of the vendees were entitled to replevy the property without tendering or paying to Gooderham, Howland & Co. the charges paid by them and the duties which their bond obligated them to pay. The general principle is, that a right to a thing carries with it a right to all it produces, and to all that becomes united, attached or interwoven with it, so long as its identity is not destroyed. If a man wrongfully converts my saw-mill logs into boards, the boards are mine, and he can claim no compensation for his labor in the commission of the trespass ; he can have no lien upon the boards for sawing the logs. So in this case Gooderham, Howland & Co. were mere volunteers in the payment of the freight and charges to Stark, Hill & Co., and in securing the duties; and, as we find they had no right to repossess themselves of the flour, they clearly could not set up a lien to defeat this action. Whether there are any principles in equity law which can be invoked to make them good for the disbursement made by them, which the plaintiffs would otherwise have been compelled to have made before they could have availed themselves of the property, it is not necessary to inquire. The defendants in their avowries, put themselves upon the rights of Gooderham, Howland & Co. as owners of the flour, and justify as carriers under them; and by the rule of reference this case comes up upon the report of the referee, as upon a special verdict, and there is nothing in the pleadings which will warrant the defendants in attempting to stand upon any rights of the government, and as they stand to the plaintiffs in the light of trespassers, and have no lien upon the flour, and had no right to give the bond, it is difficult to see how the defendants could, under Gooderham, Howland & Co., stand upon any supposed rights of the government. If the goods had been stopped while in transit, and the duties paid or secured either before or after the stoppage, the case would have been quite another one. The court, after a full examination of this case, are all agreed that upon a correct application of the authorities to the facts of the case, judgment should be for the plaintiffs. Judgment of the county court is reversed, and judgment for the plaintiffs for nominal damages and costs.