Case Name: Francesco Romeo vs. Guiseppe Martucci
Court: Connecticut Supreme Court
Jurisdiction: Connecticut
Decision Date: 1900-01-04
Citations: 72 Conn. 504
Docket Number: 
Parties: Francesco Romeo vs. Guiseppe Martucci.
Judges: Andrews, C. J., Toeeance, Baldwin, Hamersley and Hall, Js.
Reporter: Connecticut Reports
Volume: 72
Pages: 504–519

Head Matter:
Francesco Romeo vs. Guiseppe Martucci.
Third Judicial District, Bridgeport,
Oct. Term, 1899.
Andrews, C. J., Toeeance, Baldwin, Hamersley and Hall, Js.
The possession of goods consigned and the right to sell them are the distinctive characteristics of an ordinary contract of consignment. The title to the goods, however, remains in the consignor, and is not defeated hy any disposition of them by the consignee which is not within the agency established by the contract.
A wholesale grocer in New York consigned a lot of groceries to a New Haven retailer for him to sell in his store atNew Haven and account therefor to the consignor. Upon receipt of the New York goods the consignee sold out his entire stock, including the groceries so consigned to him, and the good-will of his business, and immediately left town without accounting to the consignor. Held that there was nothing in the conduct of the consignor which was inconsistent with the x-eal nature of the transaction, or which would estop him from asserting his title to the goods in an action of replevin against the purchaser, even though the latter bought in good faith and for value. [Two judges dissenting.)
Argued Oct. 26th, 1899
decided Jan. 4th, 1900.
Action of replevin to recover a quantity of groceries, brought to the Court of Common Pleas in New Haven County and tried to the court, Bishop, J.; facts found and judgment rendered for the defendant, and appeal by the plaintiff for alleged errors in the rulings of the court.
Error, judgment reversed and cause remanded.
The finding states the facts on which the judgment is founded, as follows: —
“1. The plaintiff is in business in the city of New York, engaged in the wholesale grocery, provision and wine business, under the name of F. Romeo & Co. 2. On January 8d, 1899, through F. S. Saverese, bis agent at New Haven, the plaintiff agreed to ship to Orlando Ricciardelli & Bro., then engaged in the retail grocery business at 169 Wallace street in said New Haven, a lot of groceries, being the goods more specifically described in the complaint in this action, of the value of $559.57, which goods were shipped to said Ricciardelli & Bro. upon consignment to be sold by them at retail' in their business as retail grocers in their store at New Haven, the title to said goods to remain in the plaintiff until the same were sold at retail, the said Ricciardelli & Bro. acting as agents for the plaintiff, and to account to the plaintiff from time to time for the proceeds of such sales, said goods to be returned if not sold by the said Ricciardelli & Bro.; said goods were shipped January 11th, 1899, and received by said Ricciardelli & Bro. at New Haven, January 20th, 1899: 3. The defendant resides in New York, and is in the business of supplying laborers to contractors, and heard through a barber, whose name was unknown to him, that the store and business of Ricciardelli was for sale; this was prior to January 20th, 1899. He came to New Haven on said January 20th, 1899, went to the store, examined it, made inquiries in regard to the character of the Ricciardelli Brothers and about the store, and thereupon returning agreed with said Ricciardelli & Brother to buy the business and stock at said store for $965. 4. The defendant and Ricciardelli & Brother went to the office of one Joseph R. Manning, who is engaged in the real estate and insurance business hi New Haven, and had him draw up a bill of sale of the goods in said store and the good will of said business, which said bill of sale was executed in the presence of said Manning, a copy of which bill of sale is hereto annexed, and marked Exhibit A. 5. Said Manning saw no money passed, and had no part either in payment of any money or in the transfer of the possession. of said goods. 6. The defendant testified that he had paid said sum of $965 to said Ricciardelli for said goods, and there being no evidence to contradict him, the court finds that he did pay said sum for said goods. 7. The goods consigned by. the plaintiff to Ricciardelli & Bro. were in said store, and at the time of the sale were a part of the stock transferred in the sale, and there was nothing to indicate that they were held by said seller on any different terms than was the remainder of the stock, neither was any notice given to the defendant that any one had a claim on said goods. 8. The price paid for said stock and good will was not less than a reasonable price for the same. 9. The said Ricciardelli & Brother put the defendant into possession of said store, and immediately left town and have never returned, and have never accounted to the plaintiff for said goods, or any part thereof. 10. The plaintiff through his agent, F. S. Saverese, upon the following day learned of the transfer, and immediately made demand upon the defendant for said goods; the defendant refused to give up and deliver the same to the plaintiff. 11. The plaintiff thereupon brought this action of replevin.
“ Upon these facts the plaintiff claimed (1) that the alleged sale from Ricciardelli & Bro. to Martucci was not bona fide but fraudulent; (2) that the defendant was not in the lawful possession of said goods, as said alleged sale was fraudulent; (3) that the said Ricciardelli & Bro. had no title to said goods, and had no right or authority to sell the same as a whole to the defendant or any other person whatsoever; (4) that no title to said goods passed to the defendant, because said Ricciardelli & Bro. had no title or authority to sell said goods in any manner or form, except at retail in their business as retail grocers; (5) that said goods were the lawful property of the plaintiff and he was entitled to the immediate possession thereof, the said Ricciardelli & Bro. having abandoned the same ; (6) that the defendant had no title in said goods, and the said Ricciardelli & Bro. had no title in said goods; that the title was and remained in the plaintiff; (7) that the said Ricciardelli & Bro. never sold said goods to the defendant, having sold him only what they had title to, as appeared by the covenant of warranty in said bill of sale.
“ The court overruled said claims of the plaintiff, and rendered judgment for the return of the goods replevied in said action, and for the defendant to recover his costs.”
Richard S. Tyner, for the appellant (plaintiff).
James 17. O' Qonnor, for the appellee (defendant).
Exhibit A. “Know all men by these presents that I, Orlando and Eioravanta Ricciardelli, of the city and County of New Haven, State of Connecticut, for and in consideration of §965, receipt of which is hereby acknowledged, do grant, bargain, and sell unto Guiseppe Martucci, formerly of the city and State of New York, now of the city and County of New Haven, State of Connecticut, all of the stock, fixtures, implements, tools, household furniture, and good will of the business located at 169 Wallace street, in said New Haven, consisting of stock of groceries, provisions, meats, candies, cigars, and tobacco boxes, cases, bottles, jars, and all other apparatus for holding the same that is now contained in the said store, 169 Wallace street, fixtures, seals, furniture, implements of business, and all other tools now contained in the store No. 169 Wallace street, including hed, stove, two tables, household dishes, while contained in the rear of store No. 169 Wallace street, the good will, stock, fixtures, furniture, and tools used in his business as a grocer.
“ To have and to hold the said granted and bargained property as described above unto the said Guiseppe Martucci, his heirs and assigns forever, to his proper use and behoof forever; and the said Orlando and Eioravanta Ricciardelli does vouch himself to be the true and lawful owner of the property herein referred to, and has a good and lawful right and authority to sell the same in the manner as aforesaid.
“And he does for himself, his heirs, assigns, and administrators, forever warrant and defend the said Guiseppe Martucci from whatsoever demand they or all others may make.
“ In witness whereof the said Orlando and Eioravanta Ricciardelli have hereunto set their hand and seals, this 20th day of January, 1899.
“ Orlando Ricciardelli [l. s.] “Eioravanta Ricciardelli [l. s.]
“ The said Orlando and Fioravanta Ricciardelli acknowledge the same to be their free act and deed before me, this 20th day of January, 1899.
“ Joseph R. Manning, “Notary Public.”

Opinion:
Hambbsbey, J.
The finding is in some respects strongly suggestive of bad faith on the part of the defendant; but as the court, notwithstanding the suggestive appearances, finds that the defendant paid a reasonable price after inquiry and without notice of defect in title, he must be treated as an innocent purchaser for value.
.We have, then, these facts. Ricciardelli & Bro., retail grocers in New Haven, agreed to sell on commission for the plaintiff, a wholesale grocer* in New York, a quantity of groceiies valued at $559. The goods were received on consignment at New Haven on January 20 th, and the same day the Riceiardellis, for the lump price of $965, sold their grocery store, stock (including the plaintiff's property), fixtures, household furniture and good-will of business, to the defendant, a purveyor of contract laborers in New York, and then disappeared without accounting to the plaintiff. This action was brought the next day.
There is no doubt as to the relation between the plaintiff and the Riceiardellis: it is that of principal and factor, a relation long regarded as beneficial hi the transaction of business, and one whose, legal effect has been defined by numerous decisions. Lawrence v. Stonington Bank, 6 Conn. 521, 527. The property consigned is bailed, and remains in the ownership of the consignor until disposed of by the consignee in pursuance of the agency established by the fact of the consignment. If the consignee, in violation of the consignment and out of the usual course of business, transfer to another, the consignor is entitled to retake his property notwithstanding it may have been so transferred to an innocent purchaser for value. This principle is too thoroughly established to permit of argument. The transfer by the Riceiardellis was in plain violation of the consignment; no serious claim to the contrary is made or can be maintained.
The only real question is whether the plaintiff has done anything which estops him from setting np his right as consignor. If by his voluntary action he clothed the Ricciardellis with an appearance of ownership beyond that involved in the ordinary contract of consignment, and the defendant was thereby deceived to his damage, he is estopped from denying the authority thus evidenced by his acts. This principle is rooted in justice and has been applied to a great'variety of conditions. Such action by the.owner of property mayfurnish evidence of fraud, and the question of estoppel is sometimes confused with that of fraudulent transfer. Possession may be evidence of fraud when it conceals the usual evidence of a change of title. This applies especially to the mortgage or pledge of personal property where the mortgagor is presumed to remain owner of the property unless there is a change of possession. But it is different where property known to belong to one man comes into the possession of another; in such case it becomes a matter of inquiry whether he has borrowed it, or hired it, or purchased it; and this ought to be ascertained by him who proposes to trust his property upon the faith of this appearance. Forbes v. Marsh, 15 Conn. 384, 397. Accordingly, cases of conditional sale made bona fide have been held good; and in the modern and somewhat perilous enlargement of such sales, the fact of actual intent and good faith is made the test of the transaction. Lewis v. McCabe,, 49 Conn. 141, 155; Mack v. Story, 57 id. 407, 413.
But here there is no question as to the nature of the transaction ; it is the ordinary contract of consignment. There is no question of fraud on the part of the owner; the good faith of his conduct is neither directly nor indirectly impugned. The sole claim is that he has " voluntarily permitted another to hold himself out to the world as being the true owner, and for this purpose entrusted him with the exclusive possession or other indicia of title, under circumstances which would naturally tend to mislead." The cases where the real owner has been estopped by having clothed the possessor with indicia of title for such purposes and under such circumstances, are many; but " all these cases proceed upon the ground that the owner has deliberately assumed a false position, and a character inconsistent with that of owner, which, if changed, would result in fraud and damage." They have no application to a case where the acts of the owner are confined to those incident to a legitimate bailment or consignment. " Every borrower or bailee for hire uses the thing bailed, in many respects, as his own; and his conduct, to some extent, furnishes a false index of proj>erty; but yet, the legal powers and duties of bailee being entirely consistent with the-true position and character of the owner, the rights of the bailor will be protected against the abuse of the bailee's powers, though he were to sell the property bailed to a Iona fide purchaser." Baldwin v. Porter, 12 Conn. 473, 482, 483. A consignee differs from an ordinary bailee, mainly in that he is authorized to sell in the ordinary course of business; but if he sell out of the ordinary course of business he abuses his powers, and against this abuse the consignor is protected like any. other bailor.
When a mortgagee leaves the property mortgaged in the possession of the mortgagor, possession under such circumstances may be treated as an index of title; it is inconsistent with the real transaction which demands a change of possession, and the mortgagee deliberately puts himself in a false position. But in the case of a consignment, the reverse is true. Possession by the consignee is consistent with the transaction, and is evidence of the authority pertaining to that transaction, but furnishes no other index of title as against the consignor. Some act of the consignor inconsistent with the true relation is necessary for that purpose; as if the bill for goods consigned were made out as one for goods sold, or a bill of lading were given which treats the consignee as owner or purchaser. In such way the consignor may put himself in a false position, so that, if the rights of an innocent purchaser intervene, he cannot change that position without fraud and damage. There may be other acts by which a consignor may be estopped from asserting his title, but they must be equivalent in force to the ones indicated.
In the present case it does not appear whether the goods consigned and received on the day of the sale had been un packed when the defendant first examined the stock; it is immaterial, except as bearing on the good faith of the defendant ; but if he had then asked for some evidence of ownership, he could only have been shown a bill for goods consigned, and the real character of the Ricciardellis' possession would have been apparent. The defendant chose to rely on the authority of the possessors to sell in their retail business indicated only by the possession described. He would have been protected in a purchase within the scope of such authority, which was real as well as apparent. But the selling out of the whole business was not within the scope of that authority. It does not necessarily follow that a retail dealer authorized in the ordinary course of business to sell the articles on his shelves, is therefore the owner of the whole business and every article in his possession. If he attempts to sell his business and stock as a single chattel, he enters upon an outside and independent transaction ; the purchaser cannot retain, as against the real owner, portions of that stock held under consignment, unless the owner has clothed the consignee with some index of ownership beyond that incident to the fact of a consignment. Where a principal with full knowledge permits his factor " to transact the ordinary business of a merchant in his own name, he would even then be bound by his acts only so far as they were within the ordinary mode of transacting that particular branch of business, provided there were no circumstances tending to show that he permitted him to use his own name with a view of imposing upon others." Potter v. Dennison, 10 Ill. 590, 598.
The plaintiff has done nothing to mislead, unless every consignment is misleading. He gave the Ricciardellis possession, but it was the possession of consignees only. He knew that the goods were to be sold by the consignees in their retail store in connection with their other stock, and that the goods were to be sold at retail in the name of the consignees; but these are the ordinary incidents of a consignment to a retail merchant. Ex parte Dixon, L. R. 4 Ch. Div. 133, 136, 137; Slack v. Tucker & Co., 23 Wall. 321, 330; Potter v. Dennison, supra, p. 598. The conduct of the plaintiff amounts to a consignment of his goods for sale in the ordinary course of business, and nothing more. His title cannot be defeated by any disposition of his property not within the agency established by such consignment. A consignee cannot transfer the property in payment of his own debt. Benny v. Pegram, 18 Mo. 191. He must sell in the market where he transacts business. Wootters v. Kaufman, 73 Texas, 395, 399; Catlins v. Bell, 4 Campb. 183; Marr v. Barrett, 41 Me. 403. He cannot sell by way of barter. Guerreiro v. Peile, 3 B. & Aid. 616, 618. He cannot pledge the goods consigned. Paterson v. Task, Str. 1178; Kuckein v. Wilson, 4 B. & Ald. 443, 447; Kelly v. Smith, 1 Blatchf. 290, 293; Gray v. Agnew, 95 Ill. 315. To turn oyer the goods consigned to another by a sale of his business and stockún trade is as distinctly a disposition foreign to the consignment and for the benefit of the consignee, as a pledge, or sale in payment of consignee's debt, or a barter. " By the general rule a factor cannot bind the principal by a disposition of his property out of the ordinary course of business." Commercial Nat. Bank v. Heilbronner, 108 N. Y. 439, 444; Warner v. Martin, 11 How. 209, 224.
We are asked to treat the ordinary incidents of a bona fide consignment as sufficient indicia of title to enable the consignee to bind his principal by every act of ownership, as against an innocent third party. This would involve the reversal of the whole line of cases by which the contract of consignment has been recognized and defined.
The court erred in overruling the claim of the plaintiff that upon the special facts found the goods in question were still the property of the plaintiff, and that he is entitled to the immediate possession thereof.
There is error, the judgment of the Court of Common Pleas is reversed and the cause remanded for further proceedings', according to law.
In this opinion the other judges concurred, except Andbews, C. J., and Hall, J., who dissented.