Williams Mower & Reaper Co. v. Raynor

Lyon, J. Although the affidavits upon which the motion to vacate the order of arrest was made and resisted, contain averments of many facts collateral to the contract of the parties set out in the affidavit of Matteson, upon which the order of arrest was made, yet the determination of the question whether that order was properly made depends entirely upon the construction of such contract.' If the defendant was merely the agent, bailee or factor of the plaintiff to sell the machines named in the contract, the title thereto remaining in the plaintiff until a sale thereof by the defendant, then it satisfactorily appears by the motion papers that there has been a conversion by the defendant of some of the machines delivered to him under the contract, or a fraudulent misapplication by him of [128] the proceeds thereof, or both, and the order of arrest was properly made. R. S., chap. 127, sec. 2 (Tay. Stats., 1452, § 2). But if the contract is one of sale —that is to say, if the defendant was the owner of the machines delivered to him under the contract,— there could not have been a conversion of them, or any fraudulent misapplication of such proceeds, by the defendant. If he failed to pay for the machines, the price in such case became a debt, to be recovered by the plaintiff in an action ex contractu, in which action no order of arrest can lawfully be made. We are required, therefore, to determine whether the defendant was merely the agent or bailee of the plaintiff to sell the machines delivered to him under the contract, the title thereto remaining in the plaintiff, or whether the defendant was the purchaser ancLowner of such machines. The question of the true construction of the contract is not free from difficulty; for there are provisions in the instrument which seem to support either of the above hypotheses. Many cases were cited in the argument, in which the courts have given construction to contracts containing provisions similar to some of the provisions of the contract before us. In some of those cases the instruments ■were held to be contracts of sale; in others they were held to be mere contracts of agency, or bailments to sell. But in all of them the controlling question was, as it is in this case, What was the intention of the parties ? Such intention is to be ascertained, if possible,, from the terms of the instrument. After very careful consideration of all the provisions of the contract under consideration, we have reached the conclusion that the defendant was the agent or factor of the plaintiff to sell the machines, and that the title thereto did not vest in the defendant. In other words, we conclude that the defendant held the machines, and the proceeds of the sales thereof, in a fiduciary capacity; and, the motion papers showing that he had converted or ■ fraudulently misapplied the same, the order of arrest' was properly made. [129] The defendant expressly agreed to act as the agent of the plaintiff for the sale of the machines ; to keep all machines delivered to him, under the contract, properly stored and covered ; to give special assistance to each purchaser to set up and start his machine; not to deliver a machine until it was fully settled for; to pay the stipulated price in creditable farmers’ notes, in a prescribed form, taken for the machines, and, pro rata, in cash taken therefor; to sell extra parts for cash only; to keep true, accurate and separate accounts of all transactions pertaining to the business of the plaintiff, and to exhibit the same to the plaintiff whenever required; and to render to the plaintiff, by a certain day, a statement of all sales of machines and extra parts, with full payment of any balance that might remain due to the plaintiff, “in the proportion of cash and notes therein agreed.” The contract also restricted the defendant as to the time of credit he might give on. sales, and required him to take notes for machines sold on credit, payable to the order of the plaintiff, with an agreement, to be signed by the maker of each note, that the title to and ownership of the machine for which the note was given should remain in the plaintiff until the note should be paid. We are unable to construe a contract containing the above provisions, to be a contract of sale. It does not profess to be a contract of sale; on the contrary, by its express terms, the defendant agrees to act as agent of the plaintiff for the sale of the machines within certain specified territory. The restriction of the defendant as to the length of credit he might give, and, what is perhaps more significant, the provisions that the proceeds of sales, to the extent of the stipulated prices, whether cash or notes, should be paid and delivered over to the plaintiff, and that each purchaser on credit should be required to give his note payable to the order of the plaintiff, and to covenant that the title to the machine so purchased should remain in the plaintiff until paid for, all strongly, almost unmistakably, indicate that an agency or bailment to sell, and not a sale, was [130] intended by the parties. To the same effect is the provision by which the defendant guarantied the sale of all machines ordered, by him. If he was the absolute purchaser gnd owner of all machines delivered to him under the contract, the reason for inserting this provision is not apparent. The construction we give to this contract is strengthened by the provisions in the second paragraph relating to machines not sold during the season of 1874. At its option the plaintiff could have required the defendant to give his note for the stipulated price of the unsold machines, or could have allowed them to lie over in his hands until the next season, subject to the same contract. This, we think, was an option to compel the defendant to purchase such machines absolutely, or to retain them as an agent or bailee to sell. The provision seems inconsistent with the theory that the title thereto passed to the defendant in the first instance.. On the other hand, it is assumed by the learned counsel for the defendant that from the time the machines were delivered to the defendant they were absolutely at his risk, and hence the title thereto must have been in him. This is unsatisfactory reasoning. If they were at his risk, it was because he was the owner. If not the owner, then, unless he made himself liable as an insurer, the risk was. with the plaintiff,, and, had the machines been destroyed or injured while in the hands of the defendant, without his fault, the loss would have fallen upon the plaintiff. , It is also claimed that the provision which requires the defendant to guaranty the collection of all notes taken for machines, is an indication that a sale and not a bailment was intended by the parties. But this is merely what is known as a del credere agreement, quite usual between principals and factors, and which in no manner affects the title of the property to which it relates, or the fiduciary relation of the factor to his principal. .It is further claimed that the absence from the contract of [131] any provisions limiting the prices at which the machines might be sold, or fixing the defendant’s commissions, and the fact that they were billed or invoiced to the defendant as “ bought ” of the plaintiff, show that a sale, and not a mere agency to sell, was contemplated by the parties. Conceding, for the sake of the argument, that these omissions from the contract, and the form of the invoices, tend to support the defendant’s theory, and conceding also that there are provisions in the contract which tend in the same direction, we think that the effect of the provisions which tend to sustain the opposite view is not overcome thereby, but that it is a contract by which the defendant agreed to act as agent in certain counties, and under certain restrictions, to sell machines for the plain tifie, and to'pay over to the plaintiff the money and notes received by him on such sales, to the stipulated amount, the plaintiff remaining the owner of the property until sold by the defendant. The numerous cases cited by counsel for the defendant to sustain his positions have beén carefully examined. It will serve no useful purpose to comment upon them at length. Each of them depends upon its own facts, and each differs from this case in material particulars. It is believed that none of them are in conflict with the views above expressed. Those cases which are cited to the proposition that “ commission merchants who sell goods for their consignors and guaranty the payment of the price, do not receive the proceeds of the sales made by them in a fiduciary capacity, and are not liable to arrest in an action for such proceeds,” fail to sustain it, with the single exception of Duguid v. Edwards, 32 How., 254. That was a special term decision, and, on appeal to the general term, was reversed. Same Case, 50 Barb., 288. The doctrine established by the cases is, that the above proposition is only correct when applied to a case where the consignee or factor is authorized by the consignor to use the proceeds of the sales in his own business. This is not such a case. By the Court. — The order of the county court, refusing to vacate the order of arrest, is affirmed..