Case Name: John H. Gass, Respondent, v. Astoria Veneer Mills, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1907-07-23
Citations: 121 A.D. 182
Docket Number: 
Parties: John H. Gass, Respondent, v. Astoria Veneer Mills, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 121
Pages: 182–187

Head Matter:
John H. Gass, Respondent, v. Astoria Veneer Mills, Appellant.
Second Department,
July 23, 1907.
Sale — date of passing of title — stoppage in transitu —: when seller may negotiate note given in payment.
Under a contract for .the delivery of lumber f. o b. on a dock] such delivery of lumber of the quality and character contemplated together with a delivery of the bill of lading to the buyer with an intention to pass ti tie vest the buyer with title and the goods are thereafter at his risk. The fact that the buyer did not have opportunity to inspect the lumber is immaterial when no question is raised as to its quality.
When the contract of sale requires the buyer to pay cash for freight charges at time of delivery and to give his promissory note for the balance of the purchase price, he cannot after the passing of title as aforesaid restrain the seller from transferring or enforcing payment of the promissory note given in payment merely because the carrier refused to accept the seller’s check loaned to the buyer to pay the freight; in lieu of the cash payment required. This is so although the carrier subsequently refused to deliver on a tender, of cash owing to the fact that the original .consignor ordered stoppage in transitu by reason of the buyer’s failure to pay. As the buyer acquired title an'd could ■ have secured possession by the cash payment- required by the contract, he has only himself tó blame for the refusal to deliver.
Hookeb, J., dissented.
Appeal by the defendant, the Astoria Veneer Mills, from a judgment of. the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on- the 30th day of July, 1906, upon the decision of the court, rendered after a trial at the Kings County Special Term, restraining the defendant from transferring or enforcing payment of a promissory note made by the plaintiff to the order of the defendant, and directing the surrender and cancellation’ thereof.
John W. Weed [Richmond Weed with him on the brief], for the appellant. ■
John F. Brush, for the respondent.

Opinion:
Woodward, J.:
There is no substantial dispute as to the facts in this case. The plaintiff, on or about the 3d day of January, 1905, ordered from one John 33. "Vickery, an' agent of the International Mahogany Company, 25,000 feet of cypress lumber of specified quality and size, to be delivered to plaintiff free on board the dock in the city of New York, at the price of twenty-seven dollars per 1,000 feet, the plaintiff to pay- therefor by paying cash for the freight charges at the, time of delivery, and the balance by his promissory note payable in ninety days thereafter. On or about the 4th day of March, 1905, a carload of cypress lumber was shipped from Gibson, La., by the Gibson Cypress Lumber .Company, by way of the Morgan's Louisiana and Texas Railroad and Steamship Company, consigned to the International Mahogany Company at the city of Mew York. On the eighteenth of the same month the International Mahogany Company assigned its claim for payment of the purchase price. of said bill of lumber to the defendant, the plaintiff assenting. This carload of lumber arrived - at the Morgan Steamship Company's dock in the. city of Méw York on the 30th . day of March, 1905, and was completely discharged on said dock at three p. M.'on March' 31, 1905. On the thirty-first of March the International Mahogany Company and ,the defendant notified the plaintiff in writing of the' arrival of said lumber, • and this notification was received, on Saturday, the 1st day of April, 1905, together with an unreceipted bill for the lumber and a. bill of lading, by the plaintiff. There is no question here that the lumber delivered was of the.'quality and character' Contemplated, or. that there was the amount agreed upon,' and imder- well-settled rules' the plaintiff, oñ the delivery óf the. lumber at the point fixed in the contract, became vested with the title to such lumber, It may be assumed'that, there was, as- between- the vendor: and purchaser,; a right ón the part of the plaintiff to inspect the lumber, and to reject the same if it did not come up to the requirements, but'there can be no presumption that -the sellers violated the obligations of their contract, and clearly in the absence of allegations and proofs showing that the lumber was not shell as the contract called for there can he no doubt of the fact that upon, the delivery by the car-' rier at the. point designated in the contract the title would vest immediately-in the plaintiff, and the lumber would thereafter be at ihe risk of the plaintiff. (Pierson v. Crooks, 115 N. Y. 539, 548.) Under the facts as they must be presumed here, the lunlber was just what the plaintiff had.bargained' for, and if this is true, the fact that the plaintiff did not. have^ an opportunity to inspect the lumber. previous to the time that'the steamship company refused to deliver' the same to him, has no possible bearing upon the case. He owned, the lumber '; it had not only been delivered to him at the point designated, but he had been given the bill of lading with the intention on the part of all parties that it should be effective, and it is set-, tied beyond'dispute that in such a case the delivery of the bill of lad-, ing not only passes title to the party receiving the same, but, in the eye of the law, the transfer of the bill of lading is regarded as an actual delivery and an actual change of possession of the property (Commercial Bank of Keokuk v. Pfeiffer, 108 N. Y. 242, 250, and authorities there cited.)
With the title to the lumber thus vested in the plaintiff a complicating transaction took place, although we do- not see that it really made any particular difference with the merits of the case. On Monday evening, April 3,1905, three days after the delivery on the dock, and two days after notification of such delivery and the delivery of the bill of lading, representatives of the defendant went to the office of the plaintiff and the latter, requested Mr. Williams, secretary of the defendant, to loan him $214:50, the amount of the freight. An arrangement was entered into by which the plaintiff borrowed of Mr. Williams the above-mentioned amount, giving his" promissory note therefor, at the same time delivering his other promissory note for $538.12, the agreed amount of the bill for said lumber. At the same-time'the plaintiff gave a chattel mortgage upon certain machinery to secure the payment of these notes, it béing agreed that the chattel mortgage should not be recorded, and that it should be surrendered, together with the said note for $538.12 upon the payment of the smaller note and the delivery to the defendant of a new note for the larger amount, indorsed by one John Mulstein and payable in ninety days from the third day of April, which, it will be observed, is in accord with the contract of sale alleged and proved, except that there was originally no provision for an indorser of this note, and the plaintiff had agreed to pay the freight on the delivery. Defendant's secretary delivered a check to the plaintiff for .the amount of the freight, and receipted the bill for the lumber, at the same time delivering the notice of the arrival of said lumber, indorsed by the International Mahogany Company,' with a direction to the said steamship company to deliver said lumber to the plaintiff. On April 4,1905, the plaintiff sent a truckman with Mr-. Williams' check, the shipping papers, etc., and the truck-man delivered the check with such papers, but the steamship company refused to deliver the lumber, stating that it would not accept the check for the freight. On the following day the plaintiff made a second demand for the delivery of the lumber, tendering the check, and delivery was again refused, the steamship company returning the check and the shipping papers. On the sixth of April the plaintiff secured the cash upon the check, tendered the same, with the shipping papers, and demanded the lumber. At this time the steamship company refused to deliver the goods, stating that the delivery had been stopped by notice from New Orleans, from whence the lumber was shipped, because it had not been paid for, and the steamship company persisted in its refusal to deliver the lumber. Within-one week of April 3, 1905, the plaintiff delivered $214.50 in cash to the defendant, taking up the note for that, amount, at the same .time delivering- a new note, for the sum of $538.12, indorsed as per.agreement,'whereupon the notes and chattel mortgage first above referred to were surrendered, and this action is brought to restrain the defendant from collecting or transferring the note for $538.12, the plaintiff haying demanded the surrender of. such note or the delivery of the lumber, and having offered to deliver up the shipping papers, the defendant refusing to comply, with the demand. The plaintiff'has judgment in his favor, the, defendant appealing.'
Whether we regard the note here involved as resting upon the .original consideration, or as having vitality through the considera-, tion of the surrender of its predecessor, does, not seem important. The title to the lumber vested in the- plaintiff, as a matter of law, as early as April 1, 1905, if not on the thirty-first day of March. From that time forward he owed the purchase prick of the lumber to the defendant, and it remained in the possession of the steamship company at the risk of the plaintiff. If the plaintiff had secured the cash upon the check on the fourth day of April, and had tendered the same, with the shipping papers, there is no reason to believe that the lumber would not have been delivered. Certainly at that time the steamship company did not refuse delivery because of any stop orders, but because the plaintiff had tendered a check instead of cash. The plaintiff appears to have persisted in tendering a check on the fifth day of April, and it was "not until -the sixth day of April that, upon a tender of cash, the steamship company refused to deliver because of the alleged stop order*. There- is no question raised that- the plaintiff had a perfect right to' receive the lumber oh all of these days so far >as the defendant is concerned ; it had done everything that was required to vest title and possession in the plaintiff, and if the latter had paid the freight,' as he was obligated to do under liis Contract, it must be presumed that the lumber would have been delivered. This was clearly the plaintiff's understanding of the situation, for he gave his note and received in return a receipted bill for' the lumber, and now to prevent the defendant from making use of this note would be to impose upon it the penalty of the plaintiff's delay in reducing the lumber to possession as contemplated by the contract. The defendant had delivered the lumber; the plaintiff had accepted the delivery by taking the bill of lading and delivering his note in payment, and from that time, under all of the authorities, the lumber remained in the hands of the carrier subject to the plaintiff's risk. What might be the situation if the lumber actually delivered had not complied with the requirements of the contract it is not necessary here to determine,-for no such facts are disclosed, and the presumption must be what appears to have been assumed in the pleadings, that the lumber delivered and accepted by the plaintiff was the samé ' lumber contemplated in the contract. He has only himself to blame, so far as appears from the record, for not having the. lumber in his own possession, and it would be contrary to law to permit this judgment to stand.
The judgment appealed from should be reversed.
Hirschberg, P. J., Jenks and Miller, JJ., concurred; Hooker, J., dissented.
Judgment reversed and new trial granted, costs, to abide the final award of costs.