Case Name: Penfield vs. Dunbar
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1864-01-05
Citations: 64 Barb. 239
Docket Number: 
Parties: Penfield vs. Dunbar.
Judges: Allen, Bacon, Morgan and Mullin, Justices.]
Reporter: Barbour's Supreme Court Reports
Volume: 64
Pages: 231–246

Head Matter:
Penfield vs. Dunbar.
In December, 1854, a verbal agreement was made between the plaintiff and 0., who was the lessee of a saw-mill, by which the former was to buy logs, pay hired help for sawing them, at said mill, and was to hold and own the lumber and have entire control, so far as selling was concerned, and when the lumber was sold, the plaintiff was to pay himself for all advances and interest, and the surplus was to be paid to 0. Held that the lumber made from logs purchased by the plaintiff under this agreement was, as between the plaintiff and C., the property of the plaintiff.
On the 24th of November, 1854, an arrangement was made between 0. and other persons, parties to a note made for the benefit of C., that he should get out and deliver to the defendant 100,000 feet of plank, in payment of said note; and the defendant agreed to assume the payment of the note. Under this arrangement lumber was made by C, out of the plaintiff’s logs, and delivered to the defendant The plaintiff was informed of the arrangement, and was told, in May, 1856, before any of the lumber was delivered to the defendant, that the latter was to pay §4.50 per thousand for it. He knew of the delivery, was frequently at the mill while it was being sawed, and never intimated that he was the owner, or had any claim on it, until after the spring of 1856. Held, 1. That the plaintiff being the owner of the lumber C. had no authority to sell it; and that the defendant, having pm-chased it of 0., he became liable to pay the price to the plaintiff, unless there was something in the case which estopped the plaintiff from asserting his title; or the defendant was shown to be a bona fide purchaser for value, and without notice.
2. That the circumstances that the defendant purchased of C., who was the ostensible owner, though with knowledge that the lumber was the property of the plaintiff; and that the plaintiff having notice that the defendant was receiving it in payment of an old indebtedness due to him from 0., made no claim to the property, or any objection to the delivery, did not constitute an estoppel unless the defendant was a bona fide purchaser,
3. That the defendant was not a bona fide purchaser, within the cases, for two reasons: 1st. He took the property in payment of a precedent debt; and 2d. He had notice of the plaintiff’s title.
4. That the principle that where one purchases property ñ-om a person in possession and clothed with the indicia of ownership, the title passes as against the true owner, had no application to the case; the indicia referred to in the decisions being written evidence of title.
The cases asserting that past indebtedness is not such a consideration as will render a purchase, unobjectionable in all other respects, bona fide, are seriously shaken by Thompson v. Blanchard, (4 N. Y. 303.)
It seems, the owner of property is not estopped from asserting title to it, by permitting another person to sell it to a third, to apply upon a prior indebtedness, where the latter is, at the time, aware of the owner’s title.
APPEAL, by the plaintiff, from a judgment entered upon the report of a referee.
The action was brought to recover the price of a quantity of lumber, to wit, 71,043 feet, sold and delivered to the defendant, by the plaintiff, at $4.50 per thousand feet. The plaintiff demanded judgment for $315.18, besides interest and costs.
The defendant, by his answer, denied any sale or delivery of lumber to him by the plaintiff, and alleged that some time in the summer of 1855, he purchased of one Henry T. Cleveland, a quantity of hemlock lumber, delivered at the railroad depot in Camden village, for which he paid said Cleveland the sum of $315.19. That he, as the defendant was informed and believed, was the owner, and in possession of the same, and which was the same lumber mentioned in the complaint.
The .action was referred to a referee, who found the following facts:
That Henry T. Cleveland'was, in the month of November, 1854, and for three or four years previous thereto had been, engaged in carrying on the sawing and lumbering business, in the town of Camden, two and a half miles from the village of that name. In October, 1854, the plaintiff and one Conant, under the name of Conant & Penfield, became the owners of a saw-mill in the village of Camden. On the 24th of November, 1854, an execution being in the hands of the sheriff upon a judgment for about $500 against Cleveland and Dunbar, the latter being surety of Cleveland upon the note in judgment, it was agreed, with a view to satisfy the execution, that a joint note should be made by Cleveland, Dunbar, (the defendant,) Amos Soper and Gfeorge W. Wood, for $400, the balance of the judgment being arranged in some other way, and that Cleveland should go on and get out 100,000 feet of plank-road plank at $4 per 1000 feet, and deliver the same to the defendant, who, upon that condition, was to take care of the note. The note was made payable on the 1st day of April, 1855. This arrangement was mutually understood between the makers of the note. About this time, and late in Hoy ember, or early in December, Cleveland’s mill was destroyed by fire, and a few days thereafter Cleveland leased Conant & Penfield’s mill for one year, the rent to be eight shillings per 1000 feet for hard wood, and six shillings per 1000 feet for soft wood sawed at the mill, the lessee to keep the mill in repair. And Cleveland entered at once into possession, and drew most of the logs at his own mill-yard, and contracted to be delivered there, to the mill of Conant & Penfield. Subsequently, but about the same time, a verbal agreement was made between Cleveland and the plaintiff, that the latter would buy logs and pay hired help for sawing them, and was to hold and own the lumber, and have entire control, so far as selling was concerned, and when the lumber was sold, Penfield was to pay himself for all advances and interest on the same, and the surplus to Cleveland for his services. Under this arrangement Cleveland did all the business at the mill, and during the winter of 1854 and 1855 he purchased logs at the mill, which were paid for at Conant & Penfield’s grist-mill in flour and other merchandise, and in money, and for which Penfield accounted or was to account as between himself and Conant. The logs were purchased ostensibly on his, Cleveland’s, own account, and in his own name, and he sold lumber from the yard. The arrangement between Dunbar and Cleveland was, from time to time, after the burning of Cleveland’s mill and after taking possession of Conant & Penfield’s mill, the subject of conversation between Dunbar and Cleveland, the latter excusing delay in delivering the plank, and renewing Ms promise to deliver it. Ho plank-road lumber was ever delivered, and in May, 3855, it was arranged between Dunbar and Cleveland that the latter should get out and deliver to the defendant 100,000 feet of canal timber at $4.50 per 1000 feet, instead and in place of the plank-road lumber previously agreed upon. That about the time of this change and before it was made, Penfield had notice, and by Dunbar was informed, that Cleveland had agreed to get out 100,000 feet of plank-road plank, and that Dunbar had agreed to receive the same on the note which Dunbar had obligated himself to pay for Cleveland, on a debt due from Cleveland to Dunbar, and of the proposed change or substitution of canal timber for plank in the former arrangement. On the 10th of April, 1855, Dunbar took up the joint note, paying about $50 of his own funds and the balance with proceeds of Cleveland’s note for $360, payable to Dunbar’s order, which he, Dunbar, endorsed and procured to be discounted. The latter note was paid in part by Dunbar with his own funds, and the balance in the proceeds of Cleveland’s note for $300, which Dunbar in like manner endorsed and procured to be discounted, and this latter note was paid and taken up by Dunbar. Soon after the arrangement substituting the canal timber for the plank-road lumber, Cleveland commenced sawing the canal timber, and from time to time in the course of the summer and fall of 1855, got out and delivered to Dunbar 71,043 feet of such timber. That as between Dunbar and Cleveland, and as between Dunbar and Penfield, this was a dealing with Cleveland, and that Dunbar had no reason to doubt that the timber then delivered was Cleveland’s; that as between Dunbar and Cleveland, the lumber was in feet sawed and delivered by Cleveland, and by Dunbar received on the arrangement between them; and that this timber was sawed from the logs purchased under the arrangement between Penfield and Cleveland. This lumber thus delivered is the subject of this action. The referee further found that Penfield, before any .of the timber in question was delivered; and during the summer and fall while it was being delivered, frequently saw Dunbar, and was at the mill-yard on one occasion at least and saw Dunbar loading some of the canal timber, and that he never intimated to Dunbar that he was the owner of, or had any claim upon, the timber in question until the spring of 1856, when he asked Dunbar to pay for the same. That Cleveland was at this time insolvent, and there had never been any settlement of accounts between Penfield and Cleveland, or between Conant & Penfield and Cleveland.
The referee found, as conclusions of law, that the defendant was entitled to judgment.
Upon this report, judgment was entered in favor of the defendant for costs.
C. H. Doolittle, for the appellant.
1. The issue is, whether the plaintiff or Cleveland owned the lumber in question.
The defendant’s answer denies the plaintiff sold or delivered to him the lumber; (that involves a denial that any authorized agent of the plaintiff sold or delivered it to him.) It then alleges that Cleveland owned the lumber, and that the defendant purchased it of him and paid him for it. 1. When the case was summed up, the question was distinctly presented to the referee. 2. Ho other defence can now be interposed in this action. The court say, in 20 Barbour, 473, “the rule requires a defendant, who makes a defence by answer, besides answering the plaintiff’s case made by Ms complaint, to state, in Ms answer, any matter of defence of wMch he intends to avail Mmself; and he cannot avail himself of such matter of defence if it be not set up in Ms answer. (2 Comst. 506.) Pacts proved but not pleaded are not available to the party proving them.”
II. The referee finds the issue in favor of the plaintiff, and yet dismisses the complaint. 1. He finds the logs the lumber in question was made from were paid for by the plaintiff, and the lumber was sawed for Mm. 2. He finds Cleveland never acquire^ any property in the logs purchased by the plaintiff, nor to the lumber manufactured therefrom. 3. There is no question of fraud in the case. It is nowhere pretended that the arrangement between Cleveland and Penfield was a fraudulent device, or anything but a 'bona fide arrangement; on the contrary, any fraudulent intent was disclaimed, and evidence on that point excluded. 4. The referee held the plaintiff was entitled to recover, when the plaintiff rested.
III. It is not a question, in this case, whether the plaintiff authorized Cleveland to sell the lumber to the defendant. . That question would arise only on the assumption that the plaintiff owned the lumber. To prove that the plaintiff authorized the sale would be to disprove that part of the answer that aEeges the plaintiff did not seE, &c., and would not tend to prove Cleveland was the owner. It would be proving a defence not pleaded, and one in direct conflict with the one pleaded, to wit, that the plaintiff owned the lumber and authorized the sale on the terms the defendant claims, to wit, to pay Cleveland’ s debt. 1. If the issue was, whether the plaintiff authorized Cleveland to seE the lumber to the defendant, to pay his own debts, as it is claimed he did sell it, the evidence shows, and the referee has expressly found, that the plaintiff never authorized Cleveland to seE or apply any of the lumber to pay his, Cleveland’s, debts. 2. There is no pretence that the plaintiff authorized Cleveland to seE any lumber of his, except the single lot in question, and that only for cash. 3. The only evidence there is that the plaintiff authorized Cleveland to' seE this lot of lumber is, that he stood by and saw Cleveland detiver it to the defendant without objection, after Cleveland’s statement to the plaintiff that the defendant knew it was. the plaintiff’s lumber, and he was to pay $4.50 per 1000 feet, in money. 4. If, on this evidence, Cleveland was the plaintiff’s agent to seE, he was a mere special agent authorized to sell for $4.50 per 1,000 feet for cash, but not authorized to sell to pay his own debt. 5. In such a case, the plaintiff was not bound by Cleveland’s sale, unless strictly within his authority. The party dealing with a special agent is bound to inquire and learn the extent of his authority. (Scott v. McGrath, 7 Barb. 53. Rossiter v. Rossiter, 8 Wend. 494.) 6. It cannot be claimed that the plaintiff ratified the alleged sale to pay Cleveland’s debt; for a ratification of an unauthorized act of an agent, to be binding, must be made with a full knowledge of the facts affecting his rights. The referee does not find, and there is no evidence that the plaintiff knew of the alleged terms of the sale; on the contrary, the plaintiff was informed the sale was for cash, and the plaintiff never heard of any claim that the lumber was sold to apply on Cleveland’s debt until the next spring, and after the defendant had sold it. (Nixon v. Palmer, 8 N. Y. 398. 2 Comst. 279.) It will hardly be claimed the plaintiff assented to the alleged sale, or ratified it, when the referee excluded evidence on the point, whether the plaintiff knew of the terms of the alleged sale.
IY. There are no acts of the plaintiff proved or found by the referee which are inconsistent with the plaintiff’s ownership of the lumber in question, (or with the allegation that he gave Cleveland no authority to sell it except for cash, if the question of authority should be deemed to arise.) If that is so, the plaintiff cannot be estopped by these acts from alleging the ownership. Nor can it be said that such acts clothed Cleveland with “the external indicia ownership,” a phrase which has sometimes been applied to a bill of sale, or some written evidence of title. These acts of the plaintiff, the referee finds, are each and all consistent with the plaintiff’s ownership of the lumber, and with the fact that he only authorized Cleveland to sell it for cash.
y. The referee found for the defendant, as a matter of law, on his first findings of fact. In his subsequent findings, he states what bis legal conclusion was, on which he gave judgment for the defendant. It is not that Cleveland was the owner of the lumber, it is not that he was authorized by the plaintiff to sell it to pay his own debts, but that the plaintiff, by his acts, so far conferred on Cleveland the apparent right to sell the lumber as owner—so far conferred upon him all the external indicia of ownership—as to make the sale good as against the plaintiff. He seems to have had the idea that if the plaintiff so acted as to convey the idea to a stranger that Cleveland was the owner, (when he was not in fact,) he (the plaintiff) was bound by any disposition Cleveland, without any authority in fact, might make of the property, however dishonestly he might act, whether the defendant was a bona fide purchaser for a valuable consideration without notice or not. 1. This conclusion of the referee is not justified by his findings of fact, or the evidence. 2. It does not follow from this conclusion of the referee that the defendant is entitled to judgment. The sale might be good as against the plaintiff, and yet the plaintiff might be the owner, and the sale good, because he authorized it as to third persons, &c. In that case the defendant could not recover, because he has set up no such defence. 3. The plaintiff may have, by his acts, given Cleveland the apparent right to sell, or conferred on him the apparent ownership, and yet not be bound by his sale.
VI. In those cases where the owner has, by his own direct voluntary act, conferred upon a person the apparent right of property as owner, or of disposal as an agent, when he is in fact not authorized, but fraudulently makes it as against the owner, the owner is not bound by the sale, except as against a bona fide purchaser, who buys for a valuable consideration in the course of trade, without notice of any adverse claim, or any circumstances which might lead a prudent man to suspect such adverse claim. (Saltus v. Everett, 20 Wend. 279.) They are cases where the purchasers have been induced to part with their money by the act of the owner. 4. In this case the referee expressly finds the defendant advanced no money, and incurred no new liability, by reason of any act of the plaintiff. 5. The defendant is not a bona fide purchaser for a valuable consideration without notice, (a.) A purchaser who receives the property in payment of an antecedent debt, does not stand in tb e condition of a bona fide purchaser. (20 John. 637.) (b.) The defendant had abundant reason to put him on inquiry as to whether Cleveland had a right to sell the lumber to pay his own debt.
VII. There is nothing in the evidence or referee’s findings by which the plaintiff is estopped from alleging that he was the owner of the lumber, as against the defendant. 1. The referee manifestly did not intend to decide that the plaintiff was estopped from denying he was owner as against the defendant. He finds no such conclusion, and he finds no facts that estops the plaintiff from alleging the ownership of the lumber in question, as against the defendant, and yet his general conclusions amount to nothing unless the circumstances are such as to amount to an estoppel. There is no finding or evidence that the plaintiff declared Cleveland to be the owner, or held him out as such. There is no finding or evidence that the defendant ever acted on any declaration or act of the plaintiff in regard to the lumber, (although the defendant himself was a witness.) 3. The referee expressly finds that the defendant neither advanced any money nor incurred any new liability by reason of any act of the plaintiff. This being true, there can be no estoppel. (2 Hill, 215.) 3. All the plaintiff’s acts in regard to the lumber are consistent with his ownership of it. That being true, there can be no estoppel. (Id.) 4. To create an estoppel in pais it must appear, (1.) The plaintiff’s acts were clearly inconsistent with his claim to own the lumber. (2) That these acts caused the defendant to believe Cleveland was the owner of the lumber. (3.) That the defendant, in good faith, purchased the lumber of Cleveland on such belief thus caused. (4.) That the defendant will be injured by allowing the allegation of Cleveland’s ownership to be disproved. (3 Hill, 215. 8 Wend. 483. 18 N. Y. 392. 5 Denio, 15. 1 Seld. 395. 2 id. 236.) (a.) An equitable estoppel never takes place when one party did not intend to mislead, and the other party is not actually misled. (6 Seld. 402.) 5. Cleveland’s notes are as good now. as when the defendant received the lumber. The defendant had his (Cleveland’s) note at the trial, and gave it in evidence, although for some reason it does not appear in the case, (a.) Cleveland had no written evidence of title. (5.) Possession of the logs to saw into lumber by a man who was doing a general sawing business, was no evidence of ownership, or of authority to sell, (c.) Allowing Cleveland to deliver the lumber to the defendant, on his information that the defendant knew it was the plaintiff’s, and that the defendant was to pay $4.50 per 1000 feet, in money, is not holding Cleveland out as owner, or authorizing him to sell otherwise than for cash; and the referee finds he was not authorized to sell to pay his own debt, (d.) The pretense that the plaintiff knew that Cleveland, who had 300 or 400 logs of his own at the mill, had proposed to get out some such lumber for the defendant to apply on his debt, don’t help the defendant. The referee finds the plaintiff did not authorize this lumber to be so applied. The plaintiff informed no one it might be so applied, but allowed it to be delivered only on the information that it was to be paid for in cash. The only consent he gave, if any, was to sell for the cash.
VIII. On the point upon which the referee has decided this case, to wit, that the plaintiff had so conducted himself in regard to this lumber, and the sale of it, as to be estopped from denying he owned it, or that he authorized Cleveland to sell it to the defendant to apply on Ms debt, it was important for the plaintiff to show he had no knowledge, when the lumber was delivered, of any such sale. The referee, in deciding the case, evidently put stress on the point of the plaintiff’s knowledge on that point. He speaks of his consent, and of his information of the proposed sale. Yet the referee excluded direct evidence on that point. The plaintiff was asked whether he was informed in any way of the alleged sale of the lumber to the defendant, to apply on claims the defendant had against Cleveland before the lumber was delivered, and the referee excluded the evidence. The exception to that ruling is well taken.
IX. On the point whether the plaintiff’s acts were such as to' confer on Cleveland such external indicia of ownership, or authority as to third persons, to make the alleged sale good, it was important to show what personal control the plaintiff had exercised over the lumber, to show how the parties acted in regard to it, but the referee excluded that evidence. The plaintiff’s exception to the exclusion of that evidence, was well taken.
Roscoe Conkling, for the respondent.
I. The plaintiff having leased to Cleveland the sawmill, wMch had not been run or stocked by the plaintiff, or any one else, after he acquired an interest in it till Cleveland took it; having given out that Cleveland had leased the mill and was responsible solely for repairs; having allowed Cleveland to hold himself out as the sole owner of the business and stock in trade; having allowed the defendant to deal with Cleveland as owner, he, the plaintiff, knowing and consenting to the defendant’s so treating Mm, and paying Ms money on the faith that he was owner, cannot now set up a private unrevealed contract between himself and Cleveland, by wMch, as against Cleveland, he in reality owned the logs. Whoever voluntarily and intentionally confers upon another the possession of personal property, together with all the indicia of ownership, cannot assert his right to the property against a bona fide purchaser. (Saltus v. Everett, 20 Wend. 267, and authorities cited 269 ; opinion of the Chancellor, 272; opinion of Senator Verplanck, 278-281. Mowrey v. Walsh, 8 Cowen, 238. Ash v. Putnam, 1 Hill, 302. [See distinction made against an owner who has not been defrauded of Ms property, but has voluntarily given to another iclicia of ownership, Id. 307.] Root v. French, 13 Wend. 570. Jennings v. Gage, 13 Ill. 610. Rowley v. Bigelow, 12 Pick. 307. 13 N. Y. 121, 126.) But still more strongly is he estopped, who having conferred upon another the indicia of ownership, knows that a third person is dealing with that other as owner, and by Ms conduct or even by silence gives consent. (Dezell v. Odell, 3 Hill, 215. Carpenter v. Stilwell, 12 Barb. 128.) 1. Dunbar was a bona fide purchaser, who incurred responsibility and parted with value on the faith that Cleveland was the owner of the lumber, (a.) Cleveland was not insolvent when the note and agreement were made. There were no judgments against him then. He was in business and going on, and Dunbar and the others incurred the liability of the note to enable him to go on. (b.) If Cleveland was, at the time the original note was made, destitute of property liable to execution, he was so in consequence of the mortgage to Penfield. This, Dunbar had a right to contest, and on Cleveland’s statement it was fraudulent in law. (c.) Whatever may have been Dunbar’s predicament as defendant in the judgment, he was, after signing the original note with Wood and Soper, released from all but his share of it. He was not to pay anytMng more unless the timber was delivered; it was so expressly agreed. But he did, upon receiving the timber, pay the whole amount. TMs was certainly parting with value. 2. Cleveland was the agent of the plaintiff, “entrusted with the possession of his merchandise for the purpose of sale,” and the defendant advanced money and gave an “ obligation in writing upon the faith thereof.” (Section 3 of Act of 1830 as to agents, &c. Laws 1830, ch. 203. Jennings v. Merrill, 20 Wend. 9. Stevens v. Wilson, 6 Hill, 512.)

Opinion:
By the Court, Mullin, J.
It is found by the referee that there was a verbal agreement between the plaintiff and Cleveland, that the former should buy logs, pay hired help for sawing them, and was to hold and own the lumber and have entire control, so far as selling was concerned, and when the lumber was sold, the plaintiff was to pay himself for all advances and interest, and the surplus was to be paid to Cleveland.
. The lumber in question was made from logs purchased by the plaintiff under this agreement, and was therefore, as between the plaintiff and Cleveland, the property of the plaintiff. It is found by the referee that there was an arrangement between Cleveland and other persons, parties to a note made for the benefit of Cleveland, that he should get out and deliver to the defendant 100,000 feet of plank-road plank, in payment of said note, and as between the parties, the defendant agreed to assume and pay the note. The plaintiff was informed of this arrangement, and of a modification of it by which another kind of lumber was to be delivered in place of the plank. It is further found that the plaintiff was informed before any of the lumber was delivered to "the defendant, that he would or was to pay $4.50 per thousand for it; that he knew of the delivery, was frequently at the mill while it was being sawed, and never intimated that he was owner or had any claim on it, until after the spring of 1856. It is also found that there was no evidence of any sale by Cleveland of lumber from logs purchased by the plaintiff, except that sold to the defendant. It is also found that Cleveland told the plaintiff that the defendant knew the lumber was his, and that Cleveland owned logs which he brought from his old mill to the one leased oí Conant & Penfield, and others which he had purchased but which had not been delivered.
It follows from these findings that the plaintiff owned the lumber in question; that Cleveland did not own it, and had no authority to sell it; that the defendant, having purchased it of Cleveland, became liable to pay the plaintiff the price, unless there is something in the case which estops the plaintiff from asserting his title, or the defendant is shown to be a bona fide purchaser for value and without notice. The estoppel rests on this: that the defendant purchased of Cleveland, who was the ostensible owner, the plaintiff having notice that the defendant was receiving it in payment of an old indebtedness due to him from Cleveland, and that he made no claim to the property, or any objection to the .delivery. It is found, however, that the defendant knew the lumber was the property of the plaintiff. The case then stands thus: Cleveland, being indebted to the defendant, sells and delivers to him property which he (defendant) knows is not Cleveland's, but is that of the plaintiff, in payment of such debt, and the plaintiff makes no objection to the transfer. This does not constitute án estoppel, unless the defendant is a bona fide purchaser. The defendant is not a bona fide purchaser within the cases, for two reasons: 1st. He took the property in payment of á precedent debt; and 2d. He had notice of the plaintiff's title.
• Then as to the fact that Cleveland was in the possession of the property and clothed with the indicia of ownership, and that therefore the title passed, it seems' to me that the principle which is sought to be applied, has no application to the case. The indicia referred to in the cases is written evidence of title. If these were not so, then every person in possession of another's property would be so far clothed with the indicia of ownership that he might sell and defeat the title of the true owner.
The cases asserting that past indebtedness is not such a consideration as will render a purchase, unobjectionable in all other respects, bona fide, are seriously shaken by Thompson v. Blanchard, (4 N. Y. 303.) In that case Thompson sued Blanchard and Wheeler in trover, for a quantity of wool, cloth, &c. On the trial it was proved that Wheeler was a manufacturer of woolen cloth, &c., at Granville in this State, and had gone to Mew York and purchased a quantity of wool, and paid for it by an endorsed note, on his return. After his arrival at home he procured the plaintiff to endorse a note for some of the wool, and the same was sent to the vendor and the wool forwarded. At the time of endorsing the note, Wheeler gave to the plaintiff, a writing, in which it was recited that the plaintiff had endorsed the note to pay for the wool, which had been purchased and sent forward tin his (Wheeler's) name, and he (Wheeler) agreed that the plaintiff should own the same, and if manufactured, might own the cloth until the'note was paid. Subsequently Wheeler purchased another lot of wool on the same terms, for which the plaintiff endorsed his note, and Wheeler gave him a writing in substance the same as the one above described. Both lots of wool were received by Wheeler and manufactured into cloth, and the same was disposed of by Wheeler. Blanchard received from Wheeler some of the cloth to apply on a previous mortgage held by him on Wheeler's factory, and to secure him for advances made for Wheeler. It was for the cloth so received that the suit was brought. It was proved that the plaintiff never had possession of the wool; that Wheeler carried on the business in his own name, claimed and sold the cloth as his own, and the plaintiff knew of his so doing. The judge charged the jury that the writings given by Wheeler to the plaintiff were not mortgages, but that title to the wool passed to the plaintiff, and that he was entitled to recover. The Court of Appeals held that the papers were mortgages, and not having been filed, were void against subsequent bona fide purchasers, and creditors and mortgagees, and that Blanchard, being a bona fide purchaser, was protected. Judge Jewett proceeds to say that the plaintiff, on the evidence, was estopped from alleging title to the property, having stood by and seen Wheeler dispose of the cloth, &c., as shown, to bona fide purchasers. If Blanchard, in that case, was a bona fide .purchaser, it would seem to follow that the defendant in this case was. But unfortunately the referee finds that the defendant knew .that the plaintiff was the owner of the property. I can find no case which holds that I am estopped from asserting title to my property because I permit another, to sell it to a third person to apply upon a-prior indebtedness, the latter being, at the time, aware of my title. I should be very glad to uphold this judgment, so far as would be giving effect to the principle that a person so standing by should be estopped, as it is applying to the business of life a rule resting on the highest justice and purest morality. But as I cannot make the law, I must administer it as. I find it; and I find no authority in the law books for such an adjudication.
[Onondaga General Term,
January 5, 1864.
Allen, Bacon, Morgan and Mullin, Justices.]
I think the judgment is wrong, and should be reversed, and-a new trial ordered, costs to abide the event.
New trial granted.