Gray v. Agnew

Mr. Chief Justice Walker delivered the opinion of the Court: The certificate of ¡the Appellate Court finds no facts in this case. It only certifies that certain specific evidence was heard in the court trying the issues, and that certain other evidence, tending to prove the issues on each side, was introduced. This being true, even if this was such a finding as the statute requires to be certified by that court to this, we could not be bound by it further than to show the evidence tended to prove the issues. But, inasmuch as the Appellate Court affirmed the judgment of the circuit court, we must regard the judgment of the Appellate Court as having found the facts as they were found by the jury. We can not, therefore, examine the evidence to see whether it sustains the verdict. We can, therefore, only look to the evidence to see whether it tended to prove the issues, and whether, on that evidence, the court properly instructed the jury, or erred in admitting or rejecting evidence, or in other rulings in the progress of the trial. The Appellate Court held there was no error in the giving or refusing of instructions. The contest grows out of appellee having loaned money to E. A. Bigelow & Co. and renewal notes for prior indebtedness from them to him, and to secure which they pledged to him a quantity of rope, cordage, etc., which was delivered to and received by him. After-wards, Henry Lawrence & Sons, claiming to be the owners of the goods thus pledged and that they were held by Bigelow & Co. as factors, replevied them, but having obtained possession, they afterwards dismissed the suit, and this action was brought on the replevin bond given when the replevin suit was brought. A recovery was had. We shall first consider whether the court erred in giving this instruction: “The court instructs the jury that if they believe, from the evidence, that the firm of Henry Lawrence & Sons billed or invoiced the property in question and other property of the same nature to the said firm of E. A. Bigelow & Co. in such a manner as would indicate that the same had been actually sold to said Bigelow & Co. by said Lawrence & Sons, and that said defendants Lawrence, or either of them, directed said Bigelow & Co. to deal with said property so billed or invoiced as their own, and that there was nothing in or about the place of Bigelow & Co. to notify parties dealing with them of their relation to said Lawrence & Sons in regard to said property, which was known to the Lawrences, then as to parties dealing with said Bigelow & Co. in good faith, either by receiving said property, or any part thereof, as security or otherwise, the said defendants Lawrence would be estopped from claiming the title thereto, even though the jury may further believe, from the evidence, that the property so received was consigned to said Bigelow & Co. under the contract read in evidence in this case, if said Horton had no notice of said contract. And the court instructs the jury, as a matter of law, that where one of two innocent parties must suffer, it must be the one who, by his own act, has enabled his agent or broker to commit a wrong.” This instruction is faulty in several particulars. It states an incorrect rule of law governing factors or commission men. The law governing the rights of consignors and factors long and well established, both in Great Britain and this country, is thus stated by Paley on Agency (Dunlap’s ed.), p. 213: “A power to sell, such as is possessed by a factor or broker appointed for the purpose, can only be executed by way of sale, and does not justify a disposition in any other manner. A factor, therefore, can not dispose of the goods in the way of barter, and it is clearly settled that he has no authority to pledge the property entrusted to him. Nor is it of any consequence that the pledgee is ignorant of the factor not being the owner.” In support of the propositions numerous cases are referred to in the notes. In Story on Bailments, sec. 326, it is said that “ In America' the general doctrine, that a factor can not pledge the goods of his principal, has been frequently recognized.” And Kent, in his Com., vol. 2, p. 625-28, says, “Decisions in this country have fully settled the doctrine that a pledge by a factor of his principal’s goods is wholly tortious and the owner may recover their whole value of the pledgee without any reduction or recoupment for his claim against the factor.” Numerous cases are referred to which support the rule. Story, in his work on Agency, sec. 113, states the rule thus: “ On the other hand, factors have no incidental authority to barter the goods of their principals, or to pledge such goods for advances made to them on their own account or for debts due by themselves.” See Wharton on Agency, sec. 748, to the same effect as Paley has stated the rule. The English reports abound in adj udged cases announcing the same rule, and American cases are abundant. The rule is clearly stated by Chancellor Kent in the case of Rodriguez v. Hefferman, 5 J. Ch. R. 429, where it is said : “A factor may sell out and out in the way of business, and the sale will be binding, but he can not pledge even under the formality of a bill of parcels; and this was clearly such an act. It was an assignment to secure a debt, with a trust to account for the surplus. It was, therefore, a mortgage and not an absolute sale. It is a well settled and understood rule, that the factor can not pledge even though the creditor has no notice of his character as factor. In such a case every creditor trusts and deals at his peril.” ^Kent lays down the same rule in his Commentaries, vol. 2, p. 625. On p. 627 he says: “To guard against abuse and fraud, it is admitted that if the factor be exhibited to the world as owner, with the assent of the principal, and by that means obtains credit, the principal will be liable.” It does not appear that Bigelow thus obtained credit, but did so on his own representations and false statements, and appellee so testified. He made no further inquiry, nor did he call for bills or instructions. See Graham v. Dyster, 2 Stark. 21. In fact there can be no question of the rule. It is true that in England and some of the States of the Union the rule has been changed by legislation, but that only shows that the rule was too firmly fixed to be abrogated by decisions of the courts. Under these authorities, then, it was wrong to refer in the instruction to the fact that if nothing appeared in or about the house of E. A. Bigelow & Co. to indicate the relations of Lawrence & Sons and Bigelow & Co., as an important fact, as the authorities hold in case of a pledge, the want of notice is immaterial for the protection of the rights of the owners. ¡Notice has nothing to do with the protection of appellee’s rights. Hor does the case of Michigan Central Railroad Co. v. Phillips, 60 Ill. 190, modify the rule. In that case the question of consignor and factor was not involved, but the controversy was, whether there had been a sufficient delivery by a vendor to a vendee to waive a precedent condition of payment on delivery, and the question, whether an innocent purchaser from the vendee was protected. It was held in that case, as it had been held in a number of previous cases, that the vendor having clothed his vendee with the indicia of ownership by delivery of possession, he could not claim the property as against an innocent purchaser from his vendee. The question involved in the case at bar was not presented or discussed in that case, and it can not control this. Again, the concluding sentence of the instruction, although it may be correct law, was well calculated to mislead the jury. From it they would understand that by simply placing the property in the hands of Bigelow & Co., Lawrence & Sons had enabled the former to perpetrate the fraud, and they should, therefore, sustain the loss; but we have seen that, of itself, clearly does not estop Lawrence & Sons, and cast the. loss on them. It should have been qualified by informing them that their consigning the goods to them for sale on commission would not have such an effect. But the question is presented by this instruction, whether the facts that the goods were invoiced to E. A. Bigelow & Co. as purchasers, and not as factors, and that Lawrence & Sons directed them, for the purpose of concealing the fact that the goods were to be sold on commission from 'the manufacturing association, and of which facts appellee had no notice, render the consignors liable to suffer the loss. If Lawrence & Sons had told appellee that Bigelow & Co. were the owners, or had they so informed others from whom appellee had learned the fact, or that fact had come to his knowledge from other sources, then there could have been no doubt that Lawrence & Sons would have been estopped to claim the property. Such conduct would have induced appellee to act differently from what he ivould had he known the truth. But it is not shown that appellee, when he received the goods in pledge, knew of the facts. Appellee testified that he did not know from whence the cordage came to Bigelow & Co.; nor did he claim, when on the stand, that he had seen the bills from Lawrence & Sons to Bigelow & Co., before he received the pledge, but had seen similar bills. Hence, he can not claim that Lawrence & Sons did any act by which he was misled. In the case of Patterson v. Tash, 2 Strange, 1178, the Court of King’s Bench held, “that though the factor has power to sell, and thereby bind the principal, yet he can not bind or affect the property of the goods by pledging them as a security for his own debt, though there is the formality of a bill of parcels and a receipt.” We have found no case that modifies the rule there announced. The instruction was, therefore, erroneous in thus limiting the rule by referring the question of the bills being made in the name of Bigelow & Co. as purchasers, and the want of anything about the house to indicate that the firm was selling goods on commission. From what has been said, it follows that the circuit court erred in refusing defendant’s first instruction; and the question, whether appellee relied on what Bigelow told him as to his ownership, and induced him to purchase, was improper, and the court erred in permitting it to be answered. Under the authorities referred to, it did not matter what Bigelow said, as he could pledge no greater title than he held in his own right. For the errors indicated the judgment of the Appellate Court must be reversed. Judgment reversed.