Case ID: scl_44/html/0287-01.html
Source: Caselaw Access Project
Author: {"author": "Wardlaw, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James C. Ayer vs. Benjamin Mordecai.
    A. sent to 0., a druggist, certain boxes of medicine, to be sold on commission. 0. failed and assigned bis stock of drugs, including A.’s medicines to H. a creditor and H. sold them to M. In trover by A. against M. Held, that although H., who paid no money, but whose assignment was in consideration of the indebtedness to him, could not have been protected had he been sued, yet that, if A., by his conduct, enabled 0. to hold himself out as the true owner to the deceit of those who dealt with him, and if M., who paid money, was really deceived by the appearances, A. could not recover against him.
    New trial ordered that the case might be submitted to the jury with proper instructions.
    BEFORE MACBETH, R., IN THE CITY COURT, OCTOBER TERM, 1856,
    Tbe report of bis Honor, tbe Recorder, is as follows:
    “ Tbis was an action of trover, brought to try tbe title to several boxes containing ‘Ayer’s Cberry Pectoral,’ wbicb were in tbe possession of tbe defendant. Prom tbe evidence, wbicb was principally by commission, it appeared that tbe plaintiff, wbo resided in Massachusetts, bad, sometime in September, 1854, sent to tbe firm of P. M. Cohen & Co., Druggists, of Charleston, five gross of Cberry Pectoral, to be sold by them, for bis account, on commission. About tbe 10th of March, 1855, P. M. Cohen & Go. failed in their business, and were utterly insolvent. At tbe time of their failure they were largely indebted to tbe firm of Hopkins, Hudson & Co. John J. Cohen, a brother of P. M Cohen,' was a member of tbe last named firm. With tbe view of settling their debt to Hopkins, Hudson & Co., P. M. Cohen & Co. transferred to them their store and their whole stock of drugs, etc., and, amongst other things, the boxes of ‘Ayer’s Cherry Pectoral,’ which are the subject of this suit. ^
    “About two months after, Hopkins, Hudson & Co. sold and transferred the said store and stock to the defendant, Mordecai, and with the store and stock the said boxes of Cherry Pectoral.
    “ On the 9th of May, 1855, P. M. Cohen and one Philip Wineman advertised that they would conduct the business. heretofore carried on by P. M. Cohen & Co., as the agents of B. Mordecai, (the defendant) at the store No. 29 Hayne street.
    “The value of the goods and the conversion were proved, and the plaintiff closed. The defendant offered no evidence in reply.
    ■ “I instructed the jury that P. M. Cohen & Co. had no right, after their known insolvency, to transfer the plaintiff’s boxes of Cherry Pectoral, in payment of their debts, to Hopkins, Hudson & Co. 1 Bay. 295. And, that as Hopkins, Hudson & Co. took nothing by the transfer, they could confer no title on the defendant, in the.ir sale to him, of the said boxes. ,.
    “The jury found for the plaintiff.”
    The defendant appealed and now moved this Court for a new trial on the grounds: ■
    1. Because his Honor erred in charging the jury, that the plaintiff had a right to recover his goods from the defendant, although a third party, and a Iona fide purchaser for valuable consideration, without notice, if the same were consigned on commission; that the said goods so consigned on commission, may be recovered, although they may have legitimately passed, by sale, through any number of hands.
    2. Because there was no evidence to prove that P. M. Cohen & Co. were factors.
    ■ 8. Because there was no evidence of the fact that Hopkins, Hudson and Co., or tbe defendant, B. Mordeeai, bad any notice tbat said merchandize, in question, was consigned to ■ P. M. Coben & Co., to be sold on Commission.
    Davega, Tobias, for appellant.
    1st ground. Was tbe sale, by P. M. Coben & Co., to Hop- . kins, Hudson & Co. valid, if so tbe defendant, B. Mordeeai, bad a good title?
    It is not disputed tbat tbe sale by P. M. Coben & Co., to Hopkins, Hudson & Co., was bona fide; but tbe question is made, wbetber tbe sale by P. M. Coben & Co. to Hopkins, Hudson & Co., and Coben & Co’s, acceptance of tbeir debt to H. H. & Co., in settlement, was obligatory upon tbe plaintiff.
    Conceding tbat a factor bas no right to pledge goods of bis principal as security for bis own debt; this was a sale, and •not a pledge, .and there is a material distinction between a pledge and sale. By a pledge is understood a thing that not only may be redeemed., but generally one tbat is intended to be redeemed. Bowie & Sons vs. Napier, 1 McCord, 1; 2 Kent Com. 626.
    Tbe position of defendant, B. Mordeeai, is tbat of a bona fide purchaser, for valuable consideration; and tbe law favors him, even though be bad purchased from a fraudulent vendee. Though a fraudulent vendee may be sued in trover by tbe vendor, yet tbe right of action does not exist against every person into whose bands tbe property may have passed subsequently. Sheppmxl vs. Shoolbred, 41 Eng. Com. L. E. 39; Buffington vs. Garish, 15 Mass. E. 156
    In Mowry vs. Walsh, tbe principle is maintained, tbat if one obtains goods by a fraudulent purchase, void as to himself, yet if be afterwards sell them to a bona fide purchaser, without notice of tbe fraud, tbe property passes to tbe latter. 8 Cowen, E. 238.
    2nd ground. There was no evidence to prove tbat P. M. Coben & Co. were factors; on tbe contrary, they were druggists, and beld themselves out to tbe world as owners. Tbe question is not whether a party can transfer that to another which he does not in reality own; but whether, where a party is ostensibly clothed with the ownership of property by the real owner, and thus has an apparent power to sell, should not a sale by him, to a Iona fide purchaser, be good. Root vs. French, 18 Wend. 571.
    It is a clear rule, at Common Law, that-if a principal permits his factor to assume the apparent ownership of goods, and to sell them in his, the factor’s own name, the vendee who bought them, in ignorance that the factor acted merely , as agent, may, to an action by the principal for the price, set off a debt due to him from the agent. 1 Chit. PI. 570.
    Mowry, contra,
    cited Story on Ag. § 113; 2 Kent, Com. 626; 1 Hill, 16; 11 Howard, U. S. E. 209.
   The opinion of the Court was delivered by

Wardlaw, J.

This case, like that of Carmichael vs. Buck, in which we have just delivered the opinion, was decided by rules of law supposed to settle it, without submission to the jury of facts which might have modified those rules. To the opinion we have mentioned, we refer fox much that is applicable to this case.

If Hopkins, Hudson & Co., had in the ordinary course of trade, bought the plaintiff’s goods from P. M. Cohen & Co., and this suit had been against them, then the inquiry should have been, first, were P. M. Cohen & Co., authorized to sell ? If not, second, which of two innocent persons shall suffer ? That second would have been equivalent to the question, which gave credit to P. M. Cohen & Co., by reposing trust in them ? and that question would have been resolved by evidence as to the nature of the appearances which the plaintiff permitted them to assume: Did be bold them out as bis agents authorized to sell, or did be permit them to appear as true owners of bis goods ?

But Hopkins, Hudson & Co., did not buy from P. M. Coben & Co., in the ordinary course of trade: — they took boxes of goods from them after they bad become insolvent in payment of a pre-existing debt; Hopkins, Hudson & Co., if they knew that P. M. Coben & Co., were agents to sell the goods on commission, could not have supposed that the authority to sell included an authority to assign after insolvency. If they "¡supposed that P. M. Coben & Co., were real owners, still Hopkifis, Hudson & Co., would not have stood in a situation entitled to regard equal to that bestowed upon the true owner: If they should have lost the benefit of their assignment of the goods in question, they would not have been sufferers in equal degree as the plaintiff would be if be should lose bis property: — for they paid no money for these goods, and upon return of the boxes to the plaintiff would have been in the same condition they were in before they took them in part satisfaction of their debt. Against Hopkins, Hudson & Co., the plaintiff would then have prevailed. 11 How. U. S. R., 209, Warner vs. Martin.

Is the defendant, Mordecai, in any better situation ? If Hopkins, Hudson & Co., acquired no title, they could have transferred, none: but their transfer, accompanied by the payment of a price to them, might have put Mordecai in the situation of an innocent purchaser, entitled to ask, that, as between himself and the plaintiff, the loss should fall upon him whose misplaced confidence occasioned it. If Mordecai, or his agent, knew that the goods really belonged to the plaintiff, and had been assigned to Hopkins, Hudson & Co., in payment of the debt of P. M. Cohen & Co., then Mordecai is affected with notice, which puts him in the same situation that Hopkins, Hudson & Co., were in. But if Mordecai and his agents did suppose, and from all appearances and circumstances should have supposed, that P. M. Cohen & Co., were the true owners of these goods, and that the assignment of them was in all respects fair, then Mordecai will stand in the same situation as if he had innocently bought the boxes from P. M. Cohen & Co., and the questions will be whether the plaintiff by his conduct enabled P. M. Cohen & Co., to hold themselves out as the true owners to the deceit of those-vjho dealt with them: and whether Mordecai was really deceived thereby.

We-desire to be understood to have formed no opinion on any of the questions that we think the defendant might .have required to be submitted to the jury, and we order a new trial only that an opportunity for a proper trial of these questions may be had.

Motion granted.

WhitNeb. and Munro, JJ., concurred.

O’Neall, J., I dissent.

Motion granted.