Case Name: ROCKMORE v. AMERICAN HATTERS & FURRIERS, Inc., et al.
Court: United States Court of Appeals for the Second Circuit
Jurisdiction: United States
Decision Date: 1926-11-01
Citations: 15 F.2d 272
Docket Number: No. 23
Parties: ROCKMORE v. AMERICAN HATTERS & FURRIERS, Inc., et al.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 15
Pages: 272–274

Head Matter:
ROCKMORE v. AMERICAN HATTERS & FURRIERS, Inc., et al.
(Circuit Court of Appeals, Second Circuit.
November 1, 1926.)
No. 23.
David Haar, of New York City, for appellant.
C. Edward Benoit, of New York City, for appellees.
Before HOUGH, MANTON, and HAND, Circuit Judges.

Opinion:
HAND, Circuit Judge
(after stating the facts as above). We see no reason to differ with the learned District Judge in his finding that the transaction between Bleetstein and Gross was not a sale. Indeed, there is no substantial evidence to the contrary. Gross's testimony, whieh alone could be counted on to establish one, is to the last degree unsatisfactory, yet, so far as it permits of intelligible understanding, it seems to us to bear out Bleetstein's story that he did not mean to accept Gross as a buyer, but to give him the skins to sell on commission. It is true that his language is not wholly consistent, but he was ignorant, spoke English badly, and it is impossible to reconcile all that he said. At worst, it was a fair question of fact, and we are not disposed to disturb the finding of the experienced judge who saw the witnesses and reached his own conclusion.
This being true, there was nothing unlawful in Bleetstein's reclaiming so many as he could find in specie, either in Gross's possession or in that of the dyers, whose lion he paid. Ludvigh v. American Woolen Co., 231 U. S. 522, 34 S. Ct. 161, 58 L. Ed. 345. Similarly, as to the notes of the buyers from Gross, we agree that, so far as these represented the original value of the skins, independently of Gross's payments for their dressing and dyeing, Bleetstein might retain their proceeds. As to the remainder, Gross had a Ken on the notes, and they were general assets in his hands, which he might not transfer to Bleetstein in recoupment for other skins, whose proceeds he had dissipated. Finally, we agree that the skins, received in recoupment for those skins which Gross had sold, and whose proceeds he had converted, were also general assets, and might not be so transferred. In short, we altogether agree with the division of the property received.
However, it seems to us that the defendant, although it was not a creditor of Gross in the sense of accepting him as a purchaser, was Bleetstein's principal, and was equally liable with him, to the extent that he took property, not its own, in satisfaction of Gross's liability, arising from his conversion of the purchase price of its skins. The relation of Bleetstein to the defendant was that of a del credere factor, who is none the less an agent, though he guarantees the credit of those buyers whom he selects. The faet that, upon shipping goods to Bleetstein, the defendant charged him on its books, did not change the relation manifested by the faet that he was to receive only a commission upon their sale, and might return them if he was unable to sell. On the one hand, the defendant retained title to the skins both in Bleetstein's hands and in Gross's; and, on the other, it was charged with Bleetstein's knowledge at the time when he received the preference.
Therefore it makes no difference whether Gross knew the defendant in the transaction or not. If not, the defendant was none the less Bleetstein's undisclosed principal, and when Gross sold the skins and converted the proceeds he became liable as well to the defendant as to Bleetstein. Nor does it matter whether Bleetstein exceeded his authority in consigning the skins. They remained none the less the defendant's. When Gross sold them, he may have converted them; that is, if Bleetstein had no power to authorize their sale, but only to sell them himself. If so, Gross was personally liable to the defendant, whose agent might not receive a preferential discharge of that liability. If, on the other hand, Bleetstein was authorized, while Gross's sales were not a conversion, the proceeds still were the defendant's, as the skins had been. His conversion of these created a liability to the defendant, and that might not be preferred.
The only difference which can arise from Bleetstein's lack of authority is that the whole value of the notes might then be a liability of the defendant's on which no payment would stand. But certainly Bleetstein was acting in the defendant's behalf; if so, it could ratify his attempted bestowal on Gross of a power to sell. This would make the notes, to the extent of the value of the raw skins, its property, and allow it to retake them pro tanto. It may assert its right to ratify Bleetstein's exercise of a dubious authority. Hence it is liable on any theory to the extent that Bleetstein was held liable, but to no more.
Moreover, the defendant may not claim to be a bona fide purchaser for value on the theory that, when Bleetstein turned over the proceeds, he was discharging his obligation to the defendant as a del credere factor. It was charged with Bleetstein's notice of Gross's insolvency when he collected the salvage.
Since Bleetstein did not appeal from the decree against him, he is not a party in this court. The decree against him cannot, therefore, be disturbed; but the decree dismissing the bill against the defendant is reversed, and the cause remanded for further proceedings in accordance with the foregoing.