Case Name: Covell v. Hill and another
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1852-04
Citations: 6 N.Y. 374
Docket Number: 
Parties: Covell v. Hill and another.
Judges: 
Reporter: New York Reports
Volume: 6
Pages: 359–368

Head Matter:
Covell v. Hill and another.
Conditional sale. — Bill of lading. — Factor.—Conversion.— Damages.
A conditional sale and delivery on credit, the goods being shipped to a consignee, in the name of the vendor, the proceeds to be paid, in the first place, to the latter, to the extent of the unpaid purchase-money, and the overplus to the vendee, does not pass tire title, nor enable the purchaser to create a valid lien thereon for advances.
Where goods are shipped in the name of the owner, a consignee who makes advances to another, on the faith of the shipment, is not within the protection of the act of 1830, c. 179.
*A paper signed only by the consignor of goods, who is not the r * g^g owner, and intrusted to the master of the vessel, is not a bill L of lading, within the meaning of the factor’s act: what is sufficient to affect the consignee with notice of the ownership of the goods, so as to deprive him of the character of a bond Jide incumbrancer.
If a consignee, with power to sell, dispose of the goods in hostility to the rights of the owner, it amounts to a conversion.
In such case, the owner, in an action of trover, is entitled to recover the value of the goods, at the time and place of conversion, with interest thereon, deducting the amount advanced for freight.
Appeal from the general term of the Supreme Court, in the sixth district, where a judgment entered upon a verdict in favor of the plaintiff had been affirmed. (Reported below, on a former trial, 4 Den. 323; which, however, was reversed for an informality in the special verdict, 1 N. Y. 522.)
This was an action of trover for a quantity of white pine lumber, the property of the plaintiff, which, it was alleged, the defendant had converted to his own use.
On the 6th December 1841, the plaintiff and Bradford A. Potter entered into a written contract, whereby the latter purchased of the plaintiff all his white pine boards and plank, at his two saw-mills, amounting in quantity to about 200,000 feet, at $8.25 per thousand, to be delivered at two specified points on the bank of the Chemung canal, before the opening of the navigation in the spring of 1842. When delivered on the bank of the canal, and counted, Potter was to give the plaintiff his draft on Hill & Sandford, the defendants, payable on the 1st April 1842, for an amount sufficient to pay for the whole quantity delivered — the lumber to remain in the' possession of the plaintiff, until the draft should be accepted and returned to him. The lumber was delivered on the bank of the canal, but Potter failed to perform his part of the contract.
On the 1st July 1842, the parties entered into a new agreement, reciting the former contract, that the plaintiff had, in pursuance thereof, placed the lumber, which amounted to 173,000 feet, on the banks of the canal; that Potter had not performed the agreement, by giving a draft on the defendants; that the plaintiff, therefore, still retained possession; and that the parties were desirous that the lumber should be taken to market and sold. * Q-yfi i *A.nd it was, therefore, agreed between them, that -* Potter should, on that day, pay the plaintiff two dollars per thousand feet on the lumber, and the plaintiff should hold the title and possession thereof, until he should be paid the full amount of the purchase-money, with interest from the 1st of April, then last, and it was further agreed, that Potter, as the agent, and in the name of the plaintiff, should ship the lumber to the defendants, at Albany, he paying freight, to be sold by the defendants as the property of the plaintiff, and the avails thereof, to the amount of the residue of the purchase-money, and interest, to be accounted for and paid by the defendants to the plaintiff.
On the following day, Potter, by his son and agent, A. F. Potter, shipped on board the canal-boat Occidental, H. Banks, master, 59,900 feet of the lumber, to be de livered to the defendants, at Albany. Potter paid $100 towards the freight, and took from the master, and delivered to the plaintiff, a bill of lading, as follows:
“ Received of A. F. Potter, for Miles Covell, 52,900 feet boards and plank, to be delivered to Messrs. Hill & Sanford, Albany, in good order; also one hundred dollars on freight. H. Banks.
Elmira, July 2d, 1842.”
At the same time, Potter gave the master of the canal-boat an order on the defendants for the balance of the freight. And also delivered to him a paper, in the words following:
“ Elmira, July 2d, 1842.
Shipped on board Occidental, H. Banks, master, 48,750 feet white pine boards and plank, for Albany.
A. F. Potter.”
No bill of lading was sent to the defendants; but on the 16th July 1842, the master delivered the lumber to them at Albany, with the paper signed by A. F. Potter, and they paid the balance of freight, amounting to $109, at the time of delivery. The defendants, in answer *to an inquiry as to the ownership, were informed f ^ that it was “ the Covell lumber.” On the' same *- day, they sent to B. A. Potter their acceptance for $250, as an advance on the lumber, which was duly paid. The $100 paid by Potter for freight was also their money.
On making inquiry in reference to his lumber, the plaintiff was informed by the defendants that they had no lumber belonging to him; they asserted that they had received it as Potter’s lumber, and had applied it on his account; that they had made advances to Potter upon the lumber, and that he was indebted to them in more than $5000. A formal demand was then made, with an offer to pay the charges, but not the advances to Potter, which was refused. The defendant's sold the lumber, and retained the proceeds. *On the *378 ] trial, the plaintiff limited his demand to the value of the lumber, at Albany, after deducting the amount paid for freight, and $46 which had been paid by Potter on account of his purchase. ■
'The learned judge (Mason, J.) charged the jury, that if the defendants received the lumber as the property of the plaintiff, and sold it, they were not liable; but if they received it as the property óf Potter, and held it in defiance of the rights of the plaintiff, and sold it as their own, with knowledge that the plaintiff claimed to ■ be the owner, such sale was evidence of a conversion. That the plaintiff, if entitled to recover, was entitled to the value of the lumber, at Albany, at the time of the conversion by the defendants, with interest from that time, deducting from such value the amount paid for freight, and the $46 paid by Potter. The defendants excepted to the charge, both as to their liability and as to the measure of damages.
The plaintiff had a verdict, accordingly, under the charge of the court; and a motion for a new trial, made on a bill of exceptions, having been denied at general term, and judgment entered on the verdict, the defendants took this appeal.
Collier, for the appellants.
Hill, for the respondent.

Opinion:
Gridley, J.
— The questions involved in the decision of this cause are: 1. Whether the plaintiff was the owner of the lumber delivered to the defendants on the 16th of July 1842. 2. Whether the defendants were guilty of a conversion of it; so as to authorize an action of trover against them. 3. Whether there was any error in the charge, as to the amount of damages, or otherwise.
I. There is nothing developed by the evidence on this trial, of the relations between the plaintiff and Potter, nor of the dealings between Potter and the defendants, that in the slightest degree *affects the title of the " t plaintiff to the lumber in question. The evidence on this point is the same that was given on the former trial, and the adjudication of the court on this point is just as applicable now, as it was when the opinion was delivered in 1847. By both contracts between the plaintiff and Potter, it was provided, that the plaintiff should hold the title and possession of the lumber, until he should be paid, the full amount of the pwrchase-money, with interest; and that Potter, as the agent, and in the name of the plaintiff, should ship the lumber to the defendants (Potter paying the freight), to be sold by them as the property .of the plaintiff. In addition to this, Banks, the master of the boat, who transported the lumber to Albany, gave a bill of lading to the plaintiff, which expressed on its face that he had received the lumber of A. F. Potter, for the plaintiff, to be delivered to the defendants, at Albany. All the interest which Potter had in the lumber, so far as respected his right to dispose of it as his own, was no more than of a common carrier; and the defendants could derive no more interest in the lumber from him, than if he had been a common carrier.
The authorities cited by Bkonson, J., in the opinion delivered in this cause, when it was before the court on a former occasion (4 Denio 323), abundantly established this proposition. The remarks of the Chancellor in Saltus v. Everett, in the court for the correction of errors (20 Wend. 272), are to the same effect. "The plaintiffs in error were not entitled to the goods in question, on the ground that they were the purchasers thereof, without notice of the rights of the real owner; they were in the same situation in this respect, as every other purchaser of goods from a person who had no authority to sell. If . the owner of the goods had caused the bill of lading to be made out in the name of Collins, so as to give him a primd facie right to the goods as owner, or consignee for his own. benefit, a bond fide purchaser might have been entitled to protection. Here, the change of the bill of lading itself was a fraudulent act on the part of the master of the vessel, or his agent, and could not defeat the right of the owner of the goods, who had not authorized any such change."
* 380 1 *"*"n ^le case now under consideration, the -* only bill of lading was delivered to the plaintiff. The paper signed by Potter was not a bill of lading, in any of its features, nor did it possess the transferable quality of a bill of lading. (Jac. Law Dic., tit. Bill of Lading; 1 H. Bl. 359, 360; Bouv. Law Dic., tit. Bill of Lading.) But if it were a good bill of lading, then it is exposed to the charge of being manufactured in fraud of the plaintiff's rights, which was held to be fatal in the case of Salim v. Everett. (See also, 15 Wend. 474 ; 2 Kent's Com. 323; 1 Cush. 545; 3 Id. 492.)
Again, the defendants are not protected under the statute relating to principals and factors. (Laws of 1830, c. 179; 1 R. S.' 762-3; 2d ed.) The defendants do not come within either section of the act. They are not within the first section, because the lumber was not shipped in the name of Potter, but of Covell, the regular bill of lading being made out to the latter. The defendant also had notice of the true ownership of the lumber; the witness Waier testifies that he delivered the lumber to the defendants; at Albany, and told them it was the Covell lumber, in answer to a question put to him, to whom the lumber belonged. This was certainly enough to put them on inquiry, especially, as they had no legal documentary evidence of title furnished by a bill of lading. The second section of the act declares, that no lien shall exist, when the consignee shall have notice, from the bill of lading, or otherwise, that the person in whose name the shipment is made is not the bona fide owner. The defendants are not within the third section, because the owner never intrusted Potter with a bill of lading, nor with the possession of the lumber for sale, or as security for advances to be made thereon. (4 Denio 331; 6 Mees. & Welsb. 572; 9 Id. 647. ) There does not appear to be any reason to dissent from the construction which is given to this act, by Judge Bronson, in Stevens v. Wilson (6 Hill 512), which is the same that is given to it by the chancellor, in the same case in error (3 Denio 472), where the judgment was affirmed. The result is, that the plaintiff was the sole and exclusive owner of the lumber in *the hands of the defendants, unin- # ^ cumbered by any lien for advances made by *- them to Potter, and he had a right to control and dispose of it as he saw fit.
II. The second question is, whether the defendants have been guilty of a conversion of the lumber. The case is now unembarrassed by the difficulties with which it was beset when it came before this court on a former occasion. (1 N. Y. 522.) It came up then on a special verdict, which did not find the fact of a conversion, but which found some facts that seemed to be inconsistent with it. Now, however, the facts are all before the court, and the jury have found as a question of fact, " that the defendants had unlawfully converted the lumber of the plaintiff," and unless some error was committed by the judge, in submitting the question to the jury, there can no longer be any controversy on this point. This leads us to consider the evidence upon which this question was submitted to the jury.
It will be borne in mind, that the plaintiff was the exclusive owner of the lumber, by virtue of the contract between him and Potter; and also, that there was evidence given by the witness Waier, that the defendants were informed of the ownership of the plaintiff, when the lumber was delivered; certainly, evidence enough to warrant its submission to the jury. In addition to this, the witness Hiram Gray testifies, that after a sufficient time had elapsed for the lumber to reach Albany, he called and informed a man apparently in charge of the defendants' business, of the facts in relation to the lumber in-question. In a week or two, he called again, and saw Mr. Hill, one of the defendants, and told him that the lumber was owned by the plaintiff, and that he had forwarded it to be sold for himself. Mr. Hill replied, that the lumber was passed to the credit of B. A. Potter, on their books,' that Potter was largely indebted to the defendants, and that " they were glad to get so much." The plaintiff wrote two letters afterwards, one on the 22d of August, and another on the 8th of October, asserting his right to the lumber, and insisting that the defendants should sell it for him. Mr. Hathaway, about the 1st of September in the same year, demanded the ^ lumber, in the *name and on behalf of the plain- -* tiff, and offered to pay any charges upon it; but the defendants refused to accede to this demand, and claimed the lumber, on the ground that Potter was indebted to them, and' that they had passed it to his credit; in other words, that they had appropriated it to the payment of a debt due from Potter to them.
Now, it is nowhere shown by the defendants, when they sold any part of this lumber. The book-keeper, Thomas, proves nothing about it, and the parcels of lumber sold on the 21st and 22d of July, and on the 11th day of August, were not parcels of the lumber in question, but parcels of the 329,000 feet, received between the 26th of May and the 16th of July 1842. Nor did the defendants, at any time, take the ground, that the lumber or any part of it had been sold, but reposed, themselves on their right to apply it to the satisfaction of their debt against Potter. There was no reason to believe that any portion was sold, when Mr. Gray first informed Mr. Hill that the plaintiff owned the lumber; nor is there any proof, that any of it was sold, when the demand was made by Mr. Hathaway.
Under this evidence, the judge submitted the question to the jury, to decide whether the defendants sold the lumber for themselves, claiming the right to do so, after notice that it belonged to the plaintiff; and instructed them, that if they did, such act would be evidence of a conversion. In this, we think, there was no error. The sale was not by consent of the plaintiff. The plaintiff never authorized a sale of the lumber by the defendants, under an adverse and hostile claim of title, and in assuming to make the sale in subversion of the plaintiff's rights, instead of making it in subordination to them, and in pursuance of his request, was a conversion, according to all the authorities. In Murray v. Burling (10 Johns. 175), Mr. Justice Thompson says, "assuming to one's self the property and right of disposing of another man's goods, is a conversion, says Lord Holt, in the case of Baldwin v. Cole (6 Mod. 212.) And this principle is adopted and sanctioned by Lord Ellenborough, in the case of McCombie v. Davies (6 East 540)." Mr. Justice Beardsley *says, in Schroeppel v. Corning (5 Denio 240), "a wrongful taking, or assumption ^ of a right to control or dispose of property, constitutes a conversion. Indeed, any wrongful act which negatives or is inconsistent with the plaintiff's rights, is per se a conversion. It is not necessary, that the defendant should have made use of the property in any way. Does he exercise a dominion over it, in exclusion, or in defiance, of the plaintiff's right ? If he does, that is, in law, a conversion, be it for his own or another person's use." In Connah v. Hale (23 Wend. 462), it was held, that to constitute a tortious taking, it was not necessary that there should be an actual manucaption of the goods; a mere claim of dominion, an intention intimated, to interfere with the goods, under a pretence of right or authority, amounts to a constructive trespass, and no demand is necessary, before bringing an action of trover. (See also 24 Wend. 169; 2 Fairf. 28.)
III. When the testimony was all given, the counsel for the plaintiff limited his claim to recover, to the value of the lumber, deducting the forty-six dollars and the money paid for freight, and the judge charged in accordance with that principle. The defendants, certainly, could not claim their commissions for selling the lumber, as the act of sale was a violation of the plaintiff's rights; and we have already seen, that they had no claim for their advances. Potter's contract had been forfeited by his failure to pay for the lumber, and his fraud in disposing of it as his own and getting an advance upon it. His conduct amounted in law to a rescission of the contract, and a forfeiture of all his rights under it. More over, by the terms of the contract, the plaintiff was enti. tied to receive the entire avails of the lumber.
Judgment affirmed.
Gage v. Jaqueth, 1 Lans. 207.
See Bank of Toledo v. Shaw, 61 N. Y. 283.