O'brien v. Norris, Caldwell & Co.

Bartol, J,, delivered the opinion of this court: The fund in controversy is the proceeds arising from the sale of certain goods, taken under an attachment, at the suit of the appellants against Isaac N. Turner, their non-resident debtor. To this fund, the appellees filed their claim, upon the ground that, as vendors of the goods to Turner, they had the right to stop them in transitu. If the right of stoppage in transitu existed in the appellees, at the time the attachment was laid, and when their claim was filed; then, in the judgment of this court, their right could not be defeated or impaired by the attachment. Smith vs. Goss, 1 Camp., 282. Naylor, et al., vs. Dennie, 8 Pick., 199. Buckley vs. Furniss, 15 Wend., 137, 144, [130] Butler vs. Woolcot, 2 N. R., 64. Nicholls vs. Lefeuvre, 2 Bing., N. C., 83. Hays & Black vs. Mouille & Co., 14 Penn. State Rep., 48. Nor could the rights of the parties be altered by the sale of the goods, under the court’s order. That order was a mere interlocutory proceeding, passed under the Act of 1839, ch. 39, the effect of "which was to convert the goods into money, which remained in the hands of the sheriff, to await the determination of the attachment, subject to any claims that might have been asserted against the goods themselves. There is no force in the objection made by the appellants, that the right of stoppage, even if itexisted in this case, hasneverbeen exercised. “It is not requisite,” (says Kent, vol. 2, page 543 marg.,) “that he (the vendor) should obtain actual possession of the goods before they come to the hands of the vendee, nor is there any specific form requisite for the stoppage of goods in transitu; thought it is well settled that the bankruptcy of the buyer is not, of itself, tantamount to a stoppage in transitu. But a demand of the goods of the carrier, or notice to him to stop the goods, or an assertion of the vendor’s right by an entry of the goods at the custom house, ór a claim and endeavor to get possession, is equivalent to an actual stoppage of the goods.” See Northey & Lewis vs. Field, 2 Esp. Rep., 613, and the other authorities referred to in Note (a.) 2 Kent, 543 marg. Being of the opinion that the filing of the claim to the fund in court, by the appellees in this case, was a sufficient exercise of the right of stoppage in transitu, if such a right existed, it remains only to examine whether, under the facts and circumstances enumerated in the appellees’ prayer, they were entitled to- exercise such right. The right of stoppage in transitu is thus defined by Chancellor Kent, vol. 2, page 540 marg. ‘-‘It is the right which the vendor, when he sells goods on \ a: credit to another, has, of resuming the possession of the goods while they are in the hands of a carrier or middleman, in their .transit to the consignee or vendee, and before they arrive into his actual possession, or at the destination which [131] he has appointed for them, on his becoming bankrupt or insolvent.” The same author says, (page 542, marg.): “The right came from courts of equity, and was first established in Wiseman vs. Vendeputt, 2 Vern. Rep., 203, and its apparent equity recommended the adoption of it in the courts of law, as a legal right. It would be very unreasonable to allow the goods of the vendor to be appropriated to the payment of the creditors of the vendee, who fails before payment, and before the goods have actually reached him.” This right is now firmly established in the law, and is greatly favored by the courts, as “tending to the furtherance of justice.” 1 Term Rep., 445. 1 East., 515. There are, however, certain prescribed limits to the right, and the question here is, whether the facts and circumstances of this case, as they are enumerated in the court’s instruction, and found by the jury, were sufficient to authorize the appellees to exercise the right ? On this question, the particular objection of the appellants is directed against that part of the court’s instruction which relates to the insolvency of Turner, the vendee. The jury were directed, if they should find u that at the time said Norris, Caldwell & Co. sold said goods to said Isaac N. Turner, he, the said Turner, was insolvent, and that said insolvency continued to the time of the attachment,” then, if they found the other facts stated in the prayer, the claimants were entitled to recover. It has been contended that this instruction was erroneous; because it is said, “the right of stoppage in transitu exists only when the insolvency has arisen or occurred after the sale, and does not exist where the vendee was insolvent at the time of the sale.” In support of this view, the appellants’ counsel has referred to the case of Rogers, et al., vs. Thomas, 20 Conn., 53. With the greatest respect for the learning and ability of the court which pronounced the judgment in Rogers vs. Thomas, we are compelled to dissent from the reasoning upon which it was founded; and are of opinion that the weight of reason [132] and authority is with Mr. Justice Waite, who delivered the' dissenting opinion in that case. A careful examination of the authorities has brought us to the conclusion, that the right of the vendor to stop goods in transitu, cannot be defeated by showing that the vendee was actually insolvent at the time of the purchase; unless it be shown that such insolvency was known to the vendor, and he contracted with such knowledge. See the opinion of Waite, Justice, on this point, 20 Conn., 68, et seq., and the authorities cited by him. “The validity of the right depends entirely on the bankruptcy or insolvency of the vendee.” 2 Kent, 543. 6 Rob. Adm. Rep., 321, the case of The Constantia. In the case before us, there was sufficient evidence to authorize the jury to find the insolvency of Turner (the vendee) at the time of the attachment, and of the claim made by the appellees. It is not necessary that it should be a technical insolvency; if a stoppage of payment by the vendee be proved, it is sufficient. Smith’s Mer. Law, 678,3rd Am. Ed., note (a.) If the insolvency of Turner, at the time of the purchase, was known to the appellees, and they contracted with that knowledge, such insolvency would not entitle them to rescind or vary their contract, or reclaim the possession of the goods. Buckley vs. Furniss, 15 Wend., 142, 143. This court is all of opinion that, to entitle the aj>pellees to recover, the insolvency of Turner must have come to their knowledge after the sale. This point was not distinctly put to the jury in the instructions granted. But, in the opinion of a majority of this court, there was no evidence legally tending to prove any such knowledge on the part of Norris, Caldwell & Co. at the time of the sale, and therefore it was unnecessary to call upon the jury to pass on that question. The presumption, both of reason and of law, in the absence of proof to the contrary, is, that when they sold the goods, on a credit, they believed the purchaser to be solvent, and able to pay for them. Inglis, et al., vs. Usherwood, 1 East., 524. In the record before us, there is no evidence sufficient in law to rebut that pre-" sumption. Believing there was no error in the instruction given to the jury, the judgment will be affirmed. [133] (Decided June 14th, 1860.) Tiie bill of exceptions presents no questions, except upon the instruction granted by the comí; no exception was taken to the refusal of the court to grant the appellants’ prayer; the point involved in it has, however, been necessarily decided in passing upon the instruction granted. Judgment affirmed.