Court Opinion

ID: 5760622
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:13:53.784475+00
Date Added: 2024-06-11T08:41:32.641969
License: Public Domain

McNally, J. (dissenting).
This action is in conversion. Plaintiff’s assignor, Aceites Roig, S. A., in September, 1959 owned 50,000 kilos of Spanish pure edible olive oil located in Spain. Roig employed Jose M. Calderon, Inc. to sell the olive oil in the United States of America. J ose sold the oil on September 4,1959 to Pompeian Olive Oil Corp. of Baltimore. Pompeian rescinded the purchase because of delayed delivery. On December 15, 1959 the title documents to the oil were delivered *375to William H. Masson, Inc. of Maryland. Masson was customs broker for Jose. Roig had instructed Jose to sell the oil and submit to arbitration its claim against Pompeian. Jose was to pay all costs, including shipment to Maryland, customs duties, demurrage, warehousing, freight and insurance and, after deducting 3% of the sales price, remit the proceeds to Roig.
In December, 1959 Jose arranged with his brother, the defendant Victor M. Calderon, for the advance by his corporation, the defendant V. M. Calderon, Inc., of the funds required to pay the expenses incident to the proposed sale of the olive oil. Jose authorized V. M. Calderon, Inc. to invoice the sales of the olive oil and to reimburse itself for expenses of the sales, and after paying to itself 1%% of the total sales price, to remit to Jose. Defendants sold the olive oil. The sales price and reasonable value of the olive oil was $30,040.53, of which Roig has received no part except $2,500.
Finding “21” is that “Roig knew or should have known that Jose M. Calderon, Inc. did not have sufficient funds at its disposal to cover the shipping charges, customs fees, demur-rage and warehousing costs, etc., as called for by its agreement with Roig.” There is no evidence to support this finding.
The trial court properly found plaintiff’s proposed finding number “ Twentieth ” that at the time of the transfer to Victor and his corporation they knew that Jose was the agent for Roig and under the duty to remit the proceeds of the sale to Roig. The evidence in support of said finding is compelling. In September, 1959, Roig transmitted to Victor 30,000 pesetas ($500) for payment to Jose under Roig’s agency agreement with Jose to enable Jose to pay Pompeian said sum to close the sale to Pompeian later rescinded by it. Victor knew Jose was without funds to pay the charges on the olive oil to be sold following the rescission of the Pompeian sale. The checks of defendant corporation to Jose bore the legend “ On account Roig oil consignment ”. Implicit in the provision for payment of 1%% commissions to defendant corporation, which is one half of the customary commission of 3%, is an arrangement to share Jose’s commission as broker, as opposed to a commission incident to a sale of Jose’s property.
Jose’s authority to sell did not enable a pledge. (Shaw v. Saranac Horse Nail Co., 144 N. Y. 220, 224; Howland v. Woodruff, 60 N. Y. 73, 79; Potter v. Hodgman, 81 App. Div. 233, 235, affd. on opn. below 178 N. Y. 580.) Had Jose advanced the expenses of the sale, he would have been entitled to reimbursement and had a lien therefor against the documents of title and the olive oil. Jose, however, was not authorized to assign *376or pledge either the documents of title or the goods without the express authority of Roig, nor was Jose authorized to delegate to defendants the power to sell the olive oil. The record does not support the implied power to do so. We may not assume Roig would have entrusted Jose with the documents of title if Roig had known Jose was financially unable to advance the necessary funds on the security of the documents of title.
Respondents’ principal reliance is on the Factors’ Act (Personal Property Law, § 43, repealed Sept. 27, 1964). Thereunder a factor or agent entrusted with possession of documents of title or with possession of the goods is deemed the owner thereof as to any purchaser or lender “ upon the faith thereof.” The trial court found and the evidence establishes Jose did not have possession of the title documents or the olive oil when the alleged transfer was made to defendants-respondents. The alleged constructive possession by Jose does not satisfy the requirements of the statute. (Howland v. Woodruff, supra; Dorrance v. Dean, 106 N. Y. 203.) Cf. Dyer & Co. v. Monitz, Wallack & Colodney (16 Misc 2d 1033, mod. 12 A D 2d 594, affd. 11 N Y 2d 654) where defendant-respondent relied on a negotiable bill of lading covering a shipment of sugar duly indorsed in blank by the owner’s representative. Moreover, the Factors’ Act is not available to defendants-respondents because they in fact knew Jose was not the owner of the olive oil.
Pledging the olive oil and authorizing defendants-respondents to sell it and receive the proceeds thereof constituted a conversion thereof. Defendants-respondents knowingly participated in the conversion. (Kilmer v. Hutton, 131 App. Div. 625, 636-639.) That defendants-respondents allegedly accounted to Jose is irrelevant. It may not be assumed that Roig would have either authorized Jose’s arrangements with the defendants-respondents or that Roig would have entrusted Jose as agent to sell if informed of its financial inability to advance the preliminary expenses of the sale of the olive oil.
Plaintiff-appellant is entitled to judgment in the sum of $30,040.53, the reasonable value of the goods, less $2,500 and the reasonable expenses of the sale thereof.
Eageb, J. P., Stetteb and Capozzoli, JJ., concur with Rabin, J.; McNally, J., dissents in opinion.
Judgment affirmed, with $50 costs and disbursements to the respondents.