Case ID: ohio-st_39/html/0100-01.html
Source: Caselaw Access Project
Author: {"author": "Doyle, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Crosby v. Hill.
    A broker, who was not intrusted with tbe possession of the property, contracted in bis own name to sell the same to a vendee, who had no knowledge that the broker was not the real owner, but dealt with him as such. The broker notified his principals that he had sold for them, and directed where to ship the property to the purchaser. The owners, without any knowledge that the broker had contracted in his own name, and without any conduct on their part clothing the broker with authority to receive payment for them, or any possession, actual or constructive, of the property, delivered the same to the vendee. Held : .Payment by the purchaser to the broker, under such circumstances, is not a bar to the right of recovery by the owner.
    Motion for leave to file petition in error to tbe Superior Court of Cincinnati.
    Tbe plaintiffs, I. S. Crosby and W. W. Collins, filed tbeir petition against tbe defendant William H. Hill, alleging tliat on or about March 12, 1881, they were partners and engaged in tbe lumber business at Greenville, Micb. That one Rotb, a lumber broker in Cincinnati, represented to them that be bad, as sucb broker, sold for them to tbe defendant one car-load of shingles at $3.55 per thousand; that thereupon tbey shipped to tbeir own order 70,000 shingles, to be delivered to Hill by the railroad company, upon payment by Hill of tbe freight thereon; that about March 31,1881, Hill, or some one for him, paid the freight and received the shingles, but he has refused and failed to pay plaintiffs for them, or to return them, and prays for a judgment for $197.50, the value of the shingles after crediting the freight paid.
    The answer denies the conversion of the shingles, the ownership of the plaintiffs, and any indebtedness to the plaintiffs; and avers that defendant bought the shingles of Roth, and paid him the full value thereof, and that when he made such payment he had no knowledge from whom Roth purchased the same, or that plaintiffs claimed any title or interest therein. The allegation of want of knowledge is denied by the reply.
    Upon the trial the plaintiffs offered evidence that Roth in advising them of the sale, directed them to ship the goods to Glendale and send the invoice to Cincinnati; that thereupon they shipped the goods to Glendale to their own order and mailed to defendant at Cincinnati an invoice and also an order on the railroad agent at Glendale to deliver the goods on payment of the freight.
    The defendant offered evidence that he dealt with Roth as a principal, not knowing that he was a broker; that he never received the invoice and delivery order; that from the time of making the contract with Roth until after the middle of April, he was a member of the legislature and living at Columbus attending its sessions; that he there received notice from Roth that the shingles were about to arrive ; that he instructed his agent to receive them and pay the freight, which was done; that he paid Roth for the same on April 21, 1881, and that, lie never heard that plaintiff claimed any interest in them until May 26, 1881, when they wrote demanding payment.
    It was admitted upon the trial that the plaintiffs were in fact the owners of the shingles, notwithstanding the denial of such ownership in the answer.
    Part of the testimony of the plaintiffs consisted of a deposition of one of them, taken under a notice which omitted to state that such plaintiff would be examined.
    The court, by agreement of counsel, submitted to the jury the single question whether the defendant at the time he paid Rqth, had notice of plaintiff’s rights or claim; and the jury having reported that they were unable to agree upon that question, the court directed them, that however that question might be determined, the plaintiffs were entitled to a verdict, and to return such verdict, leaving only the question of the value of the property for their determination. In response to such charge a verdict was returned for the plaintiff. The charge was excepted to by the defendant, who also excepted to the refusal of the court to give certain instructions asked by him. A motion for a new trial was made and heard by the court in general term ; overruled and judgment entered on the verdict. Leave is now asked to file a petition in error in this court to reverse that judgment.
    
      Cornell & Marsh, for the motion :
    Cited Judson v. Stillwell, 26 How. Pr. 513 ; 46 Iowa, 181; Bordmanville Mch. Co. v. Dempster, 2 Canada S. C. R. 21 ; Boulton v. Jones, 2 H. & N. 564; 123 Mass. 28.
    
      Wilby <& Wald, contra :
    Cited, Hamet v. Letcher, 37 Ohio St., 356 ; 2 Kent (12th ed.) *622; 1 Moody & Rob. 326; 2 Barn. & Ald. 137; 7 Best & Smith, 515 ; 24 Mich. 36: 88 Ill. 298; 15 Reporter, 127; 105 U. S., 360.
   Doyle, J.

The allegations of tbe petition that Roth, a lumber broker in Cincinnati, represented to plaintiffs that, as such broker, he had sold for them to the defendant, a car load of shingles, and that such shingles were shipped by them to their own order, to be delivered to the defendant by the railroad company upon the payment of the freight, are not denied in the answer. There is no allegation in the answer, nor is there any thing in the evidence tending to show that the plaintiffs ever authorized the broker to receive payment for them, ever intrusted the broker with the possession of the property, or by. any conduct of theirs, enabled him to appear as owner of the goods, and thereby impose upon a third person who was without fault; or that the plaintiffs had any knowledge that Roth contracted in his own name and not in theirs, from which any ratification of such contract can be inferred, but the contrary affirmatively appears from the allegations of the petition. The case made by the defendant is that he dealt with Roth, believing him to be the owner, and paid him as such without knowledge of the rights of plaintiffs.

The answer contained a denial of the ownership of plaintiffs, but that was withdrawn upon the trial and the title of plaintiffs admitted. Without such denial the question now presented, might well have been raised by a demurrer to the answer. In view of the peremptory charge of the court, all the proof offered by the defendant pertinent to the issue, must be taken as true, and as that proof tends to sustain the allegations of the answer (with the denial of ownership omitted), the question is substantially the same as would be presented by such a demurrer.

The case presented, therefore, is this : A broker who is not intrusted with the possession of property, contracts in his own name to sell the same to a vendee who has no knowledge that he is not the real owner, but deals with him as such. The broker notifies his principal that he has sold for them, and directs where to ship-the property to the vendee. The owners, without any knowledge that the broker has contracted in his own name, and without any conduct on their part clothing the agent with authority, express or implied, to receive payment for them, or any possession actual or constructive of the property, deliver the same to the vendee. Will payment by the vendee to the broker under such circumstances, without knowledge of the rights of the owner, prevent the owners from recovering ?

In Baring v. Corrie, 2 B. & Ald. 137, this question is distinctly answered in the negative. The broker has not the possession of the goods and so the vendee cannot be deceived by that circumstance ; and besides, the employing of a person to sell goods as a broker does not authorize him to sell in his own name. If, therefore, he sells in his own name he acts beyond the scope of his authority, and- his principal is not bound. But it is said that by these means the broker would be enabled by his principal to' deceive innocent persons. The answ-er, however, is obvious, that he cannot do so unless the principal delivers over to him the possession and indicia of property.” Ibid. 148.

In Drakeford v. Piercy, 7 Best & Smith, 515, there was a declaration for goods sold and delivered; plea, that the plaintiff sold and delivered the goods by one Davies, his agent in that behalf; that defendant purchased of Davies, not as agent, but as vendor on his own account; that Davies sold as actual vendor; that defendant had no notice or knowledge to the contrary until after payment; that he paid the whole price to Davies, bona fides, believing that he was vendor on his own account and entitled to receive payment. A demurrer to the plea was sustained.

After citing Barring v. Corrie, Blackburn, J., says : “ The defense of payment here must rest on the plaintiffs having by improper conduct, enabled Davies to appear as proprietor of the goods, or having clothed him with real or apparent authority to receive payment. But the plea carefully avoids any statement to that effect.”

To the same effect is Semenza v. Brinsley, 114 E. C. L. 18 C. B. (N. S.) 467.

On the other hand in Borries v. Imperial Ottoman Bank, 9 L. R. (C. P.) 38, to a similar declaration the plea was u the goods were sold and delivered to the defendants by S. & Co., then being the agents of the plaintiff, and intrusted by the plaintiff with the possession of the goods as apparent owners thereof; that S. & Co. sold in their own name as their goods, and that defendants had no knowledge that plaintiffs were the owners of the goods, &c. The plea was held to be good because of the statement, absent from the pleas in the former cases, that the agents were intrusted with the possession as apparent owners.

The American authorities sustain the rule thus established by the English courts. Wharton on Agents & Agency, §§ 712-714 ; Story on Agency, §§ 28, 33, 109, Benjamin on Sales, 3 Am. ed., 742: Seiple v. Irwin, 30 Pa. St. 514; Riggins v. Moore, 34 N. Y. 417; Saladin v. Mitchell, 45 Ill. 83 ; Brown v. Morris, 83 N. C. 254; Clark v. Smith, 88 Ill., 298; Korneman v. Monaghan, 24 Mich. 36 ; McKindly v. Dunham, 55 Wis. 515; and see Roland v. Gundy, 5 Ohio, 202.

To the rule thus established there are certain exceptions, resting upon the usages of certain lines of business. Wharton on Agency, § 713 ; Story Agency, § 109 ; Benj. Sales, § 742. But such usages are matters to be pleaded and proved, and are wholly absent from the case at bar.

The distinction between this case, a.nd one where an agent is acting within the scope of his authority, or a bailee, factor or commission merchant, intrusted with the possession of the property and the power to sell, and thus enabled to deal with it as his own, is very apparent. In the latter cases like Thorne v. Bank, 37 Ohio St. 254, where the agent sells the property, receives payment and appropriates it to his own use, the loss must fall upon the principal who confides in the agent and places the power in his hands to deceive purchasers.

The question submitted to the jury, whether defendant had knowledge of plaintiff’s claim was not controlling. Its determination in favor of the defendant, would not have defeated plaintiff’s recovery. It was therefore an immaterial issue, and the peremptory charge was right. There were no facts in the case that tended to show a ratification of the unauthorized contract of the agent, for the reason that such unauthorized contract was not known to the plaintiffs. Bennecke v. Insurance Co., 105 U. S. 360. Defendant had the means of knowledge at his command, and tiie fact that Roth had not the possession of the property he was selling, was sufficient to require of defendant that, before payment, he should ascertain to whom payment was due.

There was no error in admitting the deposition. Where a witness is competent and the testimony relevant, and no exceptions are taken to it before the commencement of the trial, the objection is waived. Rev. Stats. § 5285. Besides, in the view we take of the case, there could be no injury to the defendant thereby.

Motion overruled.