Fawcett, Isham & Co. v. Osborn, Adams & Co.

Mr. Justice Breese delivered the opinion of the Court: This is an action of trover and conversion to recover the value of two thousand sides of "hemlock-tanned soleleather. There was a trial in the Superior Court of Chicago, and a verdict and judgment for the defendants. The case is brought here by the plaintiffs by writ of error, and on bill of exceptions. The title to this leather, as between the plaintiffs and the Stevens, was settled by this court in an action of trover brought for the conversion by the Stevens’ of nine thousand sides of hemlock-tanned soleleather, and established in the plaintiffs. Stevens v. Fawcett et al., 24 Ill. 483. The leather is identified as the leather tanned for the plaintiffs by the firm of W. H. & F. Stevens, and a demand of it was made by the agent of the plaintiffs, of the defendants in whose possession it was found. How did the defendants acquire a title to this leather? It seems, from the proof, that a large quantity of hides had been intrusted to W. H. & F. Stevens, the owners of a tannery, by the plaintiffs, to be tanned at a certain price per pound, and on a sale of the leather by the plaintiffs after deducting all charges against it, the net profits were to be divided between the parties. The contract was made in August, 1855, and was to continue three years, Stevens agreeing not to tan hides for others, except for a few customers in the neighborhood during that time. The hides, when tanned, were to be delivered to the plaintiffs at a dock in Hew Tork city. In the month of September, 1856, Fletcher Stevens, one of the firm, shipped, in a clandestine manner, a large quantity of the leather manufactured from the plaintiff's’ hides, to places other than the city of Hew Tork. During this movement of the leather, Stevens assumed the name of F. Stafford, and had in his employment, a man by the name of William H. Stanton, who, at the suggestion of Stevens, assumed' the name of- L. L. Stratton. Two thousand sides of this leather were shipped in 1851, by Stevens to Chicago, consigned to “ F. Stafford,” and on their arrival, were taken possession of by Stanton, under the assumed name of Stratton, who had been sent there by Stevens for that purpose and to dispose of the leather. Stanton—Stratton, soon made the acquaintance, at Chicago, of one Bose, before then an entire stranger, who introduced Stanton, by his assumed name, to the defendants, who, thereupon, purchased of him two thousand sides of the-leather, and made payment therefor. The plaintiffs having traced their leather into the hands of the defendants, demanded a return of it, and on refusal to surrender it, they brought this suit. The defendants set up no other title to the leather, than this purchase, under the circumstances, thus briefly detailed, and the question arises whether such a purchase divests the true owners of their title to the property. The defendants contend that they bought the property in good faith, in the regular course of business, paying a full price in open market, and with no knowledge' of a want of title in their vendor, in whose possession the property was, when purchased by them. They insist that this' is one of a large class of cases, where, though the title - of the vendors may have- been obtained by fraudulent means, yet he can make a valid sale of the goods to a bona fide purchaser for a valuable consideration, so as to deprive the original owner of his power to reclaim them. Humerous cases are referred to in support of this view, into which we have looked, and find, for the most part, they are cases where an actual sale of the goods had been made, and consummated by a delivery, and in some cases accompanied by a bill of the goods. The case of Root v. French, 13 Wend. 572, is singled ont by the defendants, as announcing the principle on which this case stands, and it is, that an innocent third person finding a vendor, who sells to him, in possession of the property sold, without notice of any fraud affecting such possession, showing that it is otherwise than a rightful and lawful possession, may obtain a superior title to that of the lawful owners who enabled the person in possession to deal with it as his own, by clothing him with the evidence of that ownership, without which the innocent purchaser would not have become a purchaser. That was a case of an absolute sale and delivery of the goods to the fraudulent purchaser, and his note taken at ninety days for the price. In three days thereafter the purchaser transferred these goods to the defendant, to indemnify him for responsibilities he had assumed as indorser and as a creditor to a large amount. The purchase was made on the eve of a bankruptcy. A demand was made on the transferee for the goods, and on refusal to deliver them up, replevin was brought. The case showed that the purchaser of the goods was hopelessly insolvent. The court say, as between the plaintiff and Jenkins, the purchaser, Jenkins, had no title to the property in question. It is a general rule that a person who has no title to property can convey none; but to this rule there are some exceptions. To create such exception, and to give a third person a better title and a superior equity to the true owner, such third person must have given value for the property, &c., and without notice of the fraud. Such innocent third person is a bona fide purchaser for a valuable consideration. In such a case, the vendor, who has been defrauded of his property, and the bona fide purchaser from the fraudulent vendee, are both innocent parties; and when one of two innocent parties must suffer from the fraud of a third, the loss should fall on him who enabled such third person to commit the fraud. Possession of personal property is prima facie evidence of property. And to the same effect is the case of Jennings v. Gage et al., 13 Ill. 614, as to the equities between the parties. Between parties who are both innocent, the loss should fall upon the party who sold and delivered the goods to the fraudulent purchaser, thus enabling him to commit a fraud, by means of his possession of the goods voluntarily given to him by the owners with the intention of a sale. But this court, in that case said, the principle does not apply to sales on condition, and when the original owner has never consented to the transfer of the property, referring to Bradsen v. Brooks, 22 Maine, 463; Brefier Manuf. Co. v. Waterston, 3 Met. 9; 2 Kent’s Gom. 497. Juud the court further said, that' it is a universal and fundamental.principle of the law of personal property, that no man can be divested of it without his own consent. Saltus v. Everett, 20 Wend. 275; Arb v. Putnam, 1 Hill, 303. In all these cases, cited by the defendants’ counsel, the property was transferred to the purchaser, by the consent of the owner, under the form of a regular sale and delivery, and therein differ in a most important particular from the case we are considering. Here has been no transfer of the property by the consent of the true owners, nor have they, voluntarily, under the form of a sale, delivered the property to the defendants’ vendor, or clothed him with any of the vndñaia of ownership, in the sense and meaning of any of the cases cited. We apprehend no well considered case can be found in the books, where a party has been deprived of his property without his consent, or where a party selling has been adjudged competent to convey to a purchaser a better title than he himself possessed. The general rule of law, sanctioned by common sense, is, that no man can, by his sale, transfer to another the right of ownership in a thing wherein he himself had not the right of property, except, and this for the sake of sustaining the currency, in the instances of cash, bank bills, checks and notes payable to bearer or transferable by delivery in the ordinary course of business, to a person taking it, bona fide, and paying value for it. The other exception, of title acquired by sale in market overt, of stolen property, though recognized in England, has been uniformly held to have no force in this country. Ho one can sell a right when he himself has none to sell This is a proposition so self-evident, that argument cannot elucidate or strengthen it. It is true, that possession of personal property is one indicium of ownership, and is prima facie evidence of title to the thing. The bare possession of goods is a strong inducement to believe that the possessor is the true owner, and when to that is added proof of an actual sale and delivery to him, by the real owner, though by fraudulent pretenses, a subsequent sale by such purchaser to a bona fide purchaser, without notice of any fraud in the alleged sale and delivery to his vendor has been held, as is seen by the cases cited, and may be seen in a multitude of other cases, to confer title upon such subsequent bona fide purchaser. The maxim of “ he who trusts most shall lose most,” is held to obtain in such cases, as will be seen by Root v. French, and Jennings v. Gage. This maxim, so generally accepted, may be open to some just criticism. Does a party who parts with the possession of property, or the use of a thing, capable of easy identification, trust more than he who pays his money to a vendor upon his affirmance or assurance that the thing sold is his own, and he a stranger. There being, upon the sale of personal property, an implied warranty of title, the vendee has his action against the vendor, if his title proves deficient. The buyer must then take care that he is not deceived by dealing for a pretended title, or that his vendor is able to respond in damages for any loss which may happen to the vendee. The general rule is, beyond all controversy or dispute, that no man can acquire a title to chattels from a person who has himself no title to them. Wheelright v. Depeyster, 1 Johns. 478, and authorities cited. The exceptions we have stated, being those of cash and certain commercial paper, and of sales in market overt. Then, even if the property sold was obtained by a felony, unless the buyers knew that the property was not in the seller, or there was any other fraud in the transaction, the purchaser would get a good title against the real .owner, except he should he the king. But the defendants here seem to consider, that a purchase of goods in the ordinary way in a commercial city, in open market, is equivalent to a purchase in market overt under the English common law. In the case cited, which was a sale of coffee in open market, Ch. J. Kent said, he knew of no usage or regulation within the State of Hew York, no Saxon institution of markets overt, which controls or interferes with the application of the common law. In Mowrey v. Walsh, 8 Cowen, 241, the court said, referring to the case cited in 1 Johns., 471, as we have no such market, sales here can have no other effect than mere private sales in England. It follows that any sale of stolen goods does not divest the title of the owners. In Ventress et al. v. Smith, 10 Peters, 175, it was said this doctrine of markets overt, which controls and interferes with the application of the common law, has never been recognized in any of the United States, or received any judicial sanction. Market overt is defined to he a fair or market held at stated intervals, in particular places, by virtue of a charter or permission, 2 Black. Com. 449, to which our ordinary markets or stores for the sale of merchandise, hear no resemblance. The reason why a sale of stolen property, made in market overt, conveyed a title to the purchaser, is understood to he that, as the market was held at stated intervals, in particular places, and known to the whole community, those who had lost property by theft or otherwise, could he present and make known their loss; failing to do so, and as, by the publicity of the transaction, every assurance was given to purchasers that the sale was honest and fair, it was hut just the purchasers should be protected in the title thus acquired. The defendants obtained the possession of this leather through a breach of trust, amounting almost, if not quite, to larceny, on the strength of a naked possession in the vendor, without any other indicium of title whatever, and without even knowing the name of the vendor, who was a perfect stranger, and wholly unknown to the business men of Chicago, and without any inquiry into the source of title of the vendor. Possession of the property was but prima facie evidence of its ownership, and is but one of the indicia. The doctrine is, as in Jennings v. Gage et al., if the real owner of goods suffer another to have possession of his property, and thus enable him to hold himself out to the world as having not the possession only, but the property, then a sale by such a person might bind the true owner. The real owner thus suffering the vendor to have the possession, and delivering to him documentary evidence of title, does, by this possession, and the documents with which the real owner has endowed him, enable him to hold himself out to the world as the true owner; and, if any loss happens, he who has thus clothed the vendor with the power to deceive, ought to bear the loss. Here the possession of the leather was not delivered by the plaintiffs to the defendants’ vendor; it was furtively obtained •by him under circumstances which would convict him of embezzlement, at least, under section 71 of our Criminal Code. Ho invoice or other bill of the leather was produced, no inquiry made about ownership, and the vendor’s name not even known. Under such circumstances, to say that this felonious bailee could confer a title on a purchaser by any sale he could make, is saying what common sense, justice or correct legal principles will not sanction. Defendants’ vendor had not the shadow of title, and, therefore, could convey none by a sale. But it is said, the vendor was a partner of the plaintiff in this leather, and as such had a disposing power over it to sell it. If the contract between the parties is examined, it will be seen that the Stevens’ had no other possession of the property than such as was necessary to place it in a condition to be transported to a dock in the city of Hew York, for the plaintiffs. From the time the leather left the tannery it continued to be the property of the plaintiffs, and in contemplation of law was in their possession and control all the time, the Stevens’ having no right or authority to meddle with it, nor any ownership in it, their right extending only to a share of the proceeds after the plaintiffs should have made sale of it and nothing more. Assuming a name which did not belong to him, and inducing his agent, Stanton, to do the same, the defendants’ vendor took this leather to Chicago, and there, unknown to the business men of that city, or to his vendees, the defendants here, with no evidence of title, documentary or mercantile, relying on his bare possession, fraudulently, if not feloniously obtained, the defendants become the purchaser of two thousand hides, of the estimated value of near eight thousand dollars. The ordinary inquiries and caution, usually exhibited in a large sale like this, seem not to have been made or observed in this transaction, and the question is plainly and distinctly raised, has the real owner lost his title to the property by the force of the facts proved ? From the most careful examination of adjudged cases on this subject, and the most mature reflection and consideration we have been enabled to give it, we are satisfied that the plaintiffs had never parted with the property in this leather, or bestowed the possession of it upon any one, with a view to a sale and disposal of it; nor have they given by their own voluntary act or consent to any one, such evidence of a right to sell it, as according to the custom of trade, and the understanding of community usually accompanies the authority for disposal. The defendants’ vendor had but a naked possession. This cannot prevail against the right of the real owner, who is entitled to follow his property, and reclaim it wherever found. The buyer should have “ taken care ” that the title was in his vendor—he having no title, the defendants acquired none. The rule we have sanctioned may seem a rigid one, and may involve purchasers in some perils, but it is a safeguard to the protection of the owner’s rights in goods and other property necessarily placed under the temporary control of others, and in their legal, though qualified possession. The views here presented dispose of the instructions. They maintain the correctness of the second, sixth and seventh instructions in the language and terms as prayed, and dissent from the modifications of the second and sixth, as made by the court. They also are at variance with the instructions given by the court on its own suggestion. For these errors of the court, in refusing the seventh instruction, and modifying the second and sixth, and refusing to give them as asked, and in giving the instructions by the court on its own motion, the judgment must be reversed, and the cause remanded for further proceedings not inconsistent with this opinion. Judgment reversed.