Court Opinion

ID: 6970793
Source: CourtListenerOpinion
Date Created: 2022-07-24 02:02:02.837701+00
Date Added: 2024-06-11T09:12:16.504437
License: Public Domain

Mr. Chief Justice Magruder, dissenting: I do not concur in this decision, or in the reasoning of the opinion, for the following" reasons: The main contention made by the appellant relates to the character of the arrangement, embodied in the letters of March 30, 1892, and April 2, 1892. The appellant claims, that the transaction between Fleet and the S. A. Kessler Fur Company was a consignment, and not a sale, and that, therefore, the title to the goods remained in Fleet, so as to justify his replevin of them. On the other hand, it is claimed by appellee, representing the creditors of the fur company, and prosecuting this action in their interest, that the transaction between Fleet and the fur company was a sale, and not a consignment, and that the title to the g'oods was thereafter vested in the execution debtor at the time they were taken upon execution by the sheriff. The material question in the case, therefore, growing out of the instructions given by the court, is whether the arrangement in question was a consignment, or a sale. Whether the arrangement between Fleet and the fur company was a contract of bailment, or an arrangement for the sale of goods under the device of a consignment for sale, is a question of law to be determined by the court upon a construction of the letters of March 30,1892, and April 2,1892, giving due weight to all the provisions thereof with the view of finding out what was the real intention of the parties. (Chickering v. Bastress, 130 Ill. 206; Graham v. Sadlier, 165 id. 95). The correspondence, which took place between Fleet and the fur company after the arrangement was entered into, and the course of business, as conducted between them in the shipment of the goods and in the sending of statements and invoices, are acts on their part, indicating the construction placed by themselves upon the writ- • ten agreement embodied in the original letters. (Street v. Chicago Wharfing Co. 157 Ill. 605; Hall v. First Nat. Bank of Emporia, 133 id. 234; 1 Beach on Modern Law of Contracts, sec. 721). In determining the meahing of the agreement from the language used in it, and from the acts of the parties done under it, it is to be remembered that the policy of the law in Illinois does not permit the owner of personal property to sell it either absolutely or conditionally, and still continue in the possession of it. Possession is one of the strongest evidences of title to this class of property. In Hervey v. Rhode Island Locomotive Works, 93 U. S. 664, the Supreme Court of the United States, speaking through Mr. Justice Davis, said: “The courts of Illinois say that to suffer without notice to the world the real ownership to be in one person, and the ostensible ownership in another, gives a false credit to the latter, and in this way works an injury to third persons. * * * Secret liens, which treat the vendor of personal property, who has delivered the possession of it to the purchaser, as the owner until the payment of the purchase money, cannot be maintained in Illinois. They are held to be constructively fraudulent as to creditors, and the property, so far as their rights are concerned, is considered as belonging to the purchaser holding" the possession.” In Harkness v. Russell, 118 U. S. 678, the Supreme Court of the United States again said, speaking through Mr. Justice Bradley: “The law has been held differently in Illinois, and very nearly in conformity with the English decisions under the operation of the Bankrupt law. The doctrine of the Supreme Court of that State is, that, if a person agrees to sell to another a chattel on condition that the price shall be paid within a certain time, retaining the title in himself in the meantime, and delivers the chattel to the vendee so as to clothe him with the app)arent ownership), a bona fide pmrchaser, or an execution creditor of the latter, is entitled to pjrotection as against the claim of the original vendor.” It is also to be noted that, if the real purpose of the agreement is to cover up a sale and preserve a lien in the vendor for the price of the goods, it makes no difference that the transaction is called, or is designated upon its face, a consignment for sale. (Ex parte White, L. R. 6 Ch. App. 400; Chickering v. Bastress, supra; Hervey v. Rhode Island, Locomotive Works, supra). In the latter case it is said: “In determining the real character of a contract, courts will always look to its purpose, rather than to the name given to it by the parties.” (See also Jennings v. Gage, 13 Ill. 610; Brundage v. Camp, 21 id. 329; Murch v. Wright, 46 id. 487; Lonergan v. Stewart, 55 id. 44;, Michigan Central Railroad Co. v. Phillips, 60 id. 190; Lucas v. Campbell, 88 id. 447; Latham v. Sumner, 89 id. 233; VanDuzor v. Allen, 90 id. 499; House v. Beak, 141 id. 290). If the arrangement between appellant and the fur company be examined in the light of the principles thus announced, it cannot be construed otherwise than as a scheme for the sale of goods upon credit by Fleet to the fur company. The designation of the transaction as a consignment of goods to be sold was merely a device to cover up its real character. Before March 30, 1892, the fur company had been engaged in the manufacture of furs in Chicago, and Fleet had sold them goods upon credit. The fur company had become his debtor for goods so sold, and had executed notes to him, which he held against them at that time. All this is shown upon the face of the letter of March 30, 1892. It also appears upon the face of that letter,-that Fleet was unwilling any longer to continue the mode of doing business, which had theretofore existed between them. He tells Kessler of the fur company in that letter, that the mercantile agencies do not rate the fur company “very high.” It was his own opinion, that the sale of goods to the fur company was a risky business in view of the fact that its financial standing was not good. He, therefore, says that he will try to fix matters, so that he can ship the company “a great deal of stuff." The new arrangement, which he proposes to make, grows out of the fact stated by him, that he “cannot sell you the same (goods) outright.” The new arrangement was based upon the consideration, that the fur company was weak financially, and that it was not safe to' sell them godds “outright.” The plain inference is, that the matter should be so fixed, as to sell them goods, but so as not to make the sales thereof “outright.” The same circumstances, which exist in the case at bar, existed in the case of Chickering v. Bastress, supra, namely, that there had been previous business transactions between the parties making" the consignment arrangement, and that, in the conduct of such previous business, the relation of seller and purchaser had existed between them. Here, it is evident that the new arrangement-was merely for the purpose of avoiding the risks, which were likely to grow out of such relation of seller and purchaser. By the terms of the letter of March 30, 1892, Fleet was to consign to the fur company goods, “which you agree to handle for my account and hold the proceeds in trust, making settlement within 30, 60 or 90 days, as soon as the money may be collected.” He then tells Kessler that he is sure that this will be satisfactory to him, and requests him to send in his order for certain goods. He proposes that, as to some of these goods, the terms shall be, “on all money remitted within 30 days, 6% off, 60 days, 5% off, 90 days, 4% off.” As to other goods mentioned, and whose prices are fixed, he says, “These later articles all net, 30, 60 or 90 days, as you might collect the money.” It is to be observed that the company is not to hold the goods shipped in trust for Fleet, but only the proceeds. Settlement is to be made by the company with Fleet within thirty, sixty or ninety days “as soon as the money may be collected.” This does not mean, as is claimed by counsel for appellant, that the fur company is to sell the goods upon a credit of thirty, sixty or ninety dáys, but it means that the fur company, as between itself and Fleet, is to have a credit of thirty, sixty or ninety days, and shall remit the money, or make settlement, within thirty days if the money is collected within thirty days, or sixty days if collected within sixty days,, or ninety days if collected within ninety days. The discount, which is to be allowed on all money remitted, is a discount to be allowed the fur company, and not a discount to be allowed to the purchasers from the fur company. In the letter of March 30, 1892, and in the letter of April 2,1892, no provision of any kind is made, indicating that the relation of vendor and vendee is to exist between Fleet and the purchasers from the fur company. The fur company is to take the goods from Fleet at the prices fixed in the invoices or statements of shipment, accompanying the letters, which-passed between the parties. There is no direction in the original letters constituting the contract, or in any' of the letters subsequently written by Fleet, which fixes the prices at which the fur company is to sell the goods, or which fixes any terms or conditions, upon which the fu^ company is to dispose of the g'oods. It is left to the fur company itself to sell the g'oods upon whatever terms it chooses to fix. There is no provision in the contract, or in the letters embodying the contract, which imposes any obligation upon the fur company to return any of the goods shipped to them in case of failure to sell within thirty., sixty or ninety days, or any other.time. The features thus alluded to have been commented upon in many icases, as indicating that the intention of the parties to the arrangement made was to constitute between themselves the relation of vendor and purchaser, and not that merely of consignor and consignee for the purpose of' sale by the latter for the former. There is no provision made in the contract as to the party who shall bear the expenses of the shipments and sales, such as freight, storage and insurance. On the contrary, it appears that all of these expenses were to be borne by the fur company, and not by Fleet. It is furthermore to be noted that no provision is made in the contract for the compensation to be received by the fur company for selling Fleet’s goods, if they were to sell such goods as his agents. Nothing is said therein about commissions upon the sales. There is no provision, that the fur company is to retain all of the proceeds of the sales to be made by them, over and above the prices fixed in the invoices or statements sent with the letters. The features of this transaction, which have been thus mentioned, have been found to exist in many transactions declared by the courts to constitute sales, and not consignments. In Chickering v. Bastress, supra, it was said that the agreement there under consideration was not a contract of bailment, and that the provisions authorizing the purchasers, or alleged consignees, “to determine solely for themselves at what prices they would sell the pianos from their store, is almost conclusive that in reality they were not acting as the agents or factors of the Cliickerings; but that, with the further provision that they were to bear as their proper burden all the expenses of shipment, etc., the same, precisely, as purchasers, would leave no doubt that the contract was not one of bailment, or of principal and factor.” In Lonergan v. Stewart, supra, this court, speaking through the late Justice Breese, said: “When the identical thing delivered is to be restored, though in an altered form, the contract is one of bailment, and the title to the property is not changed, but when there is no obligation to restore the specific article, and the receiver is at liberty to return another thing.of equal value, he becomes a debtor to make the return, and the title to the property is changed—it is a sale.” This same language is used in Chickering v. Bastress, supra, with the addition of the words, “or the money value,” after the words, “another thing of equal value.” In Lonergan v. Stewart, supra, where it was, held that there was a sale of the corn i'n controversy in that case, it was said by the court: “It was well understood by the parties to it, and it was their intention that the identical corn was not to be returned, but that it was to be shipped and sold by Bradt in the usual course of his business. This being so, Bradt became the owner of the corn, as all the authorities hold.” (See also Ex parte White, supra; Richardson v. Olmstead, 74 Ill. 213; Sturm v. Boker, 150 U. S. 329). In the case at bar, there is nothing in the letters, expressed in explicit terms, or that can reasonably be implied, which permits Fleet to demand a return of the goods invoiced, or gives the fur company the right to return the same in case of q failure to sell the same. On the contrary, the letters are full of requests to the fur company to forward money in payment of its account. This money, when forwarded, was applied upon general account, and not in payment of any particular lot of furs shipped at any one time. The contract, embodied in the letters, nowhere requires the fur company to render any account of sales. All of the goods, which were sold, appear to have been sold in the name of the fur company, and not in the name of Fleet, or of the fur company as the agent of Fleet. No sign was put up by the fur compahy at their store in Chicago, indicating" that they were acting as agénts for Fleet in the sale of any of the latter’s goods. The proof shows that the fur company was engaged in the manufacture of the goods shipped to them by the appellant. Upon all the letter-heads used by the fur company in their correspondence with the appellant, they used the words, “cash paid for raw furs and fur cuttings,” showing that the goods purchased by them were used in their own business of ^manufacturing, rather than for the purpose of making sales to third persons. After repeated requests for the remission of money by Fleet, the fur Company, in a letter written to Fleet on May 28, 1892, sent him two notes aggregating $447.75. These notes were received by the fur company from their customers in payment of goods sold by the company, which were not received from the appellant, but from other parties than the appellant. These notes did not represent the proceeds of the sales of goods shipped to the fur company by Fleet, but they were the proceeds of the sales of goods with which Fleet had nothing to do. -In the correspondence Fleet is continually referring to the indebtedness, which exists from the fur company to him, although he knew at the time that the goods, representing" such indebtedness were still in the' possession of the fur company, and had not yet been sold by them. In a letter written.to Fleet on August 4, 1892, the fur company tells Fleet that it has in it-s possession “over $3000.00 worth of your goods on hand this day; all the hares, thibets, angoras and leopards cats bought of you are stock keepers, and they may not move for the next two months to come. * * * Now, Fleet, old boy, you need not worry for the amount of money due you, as we have sufficient, two dollars for every one we owe.” This letter not only refers to over $3000.00 worth of goods as having been bought by the fur company of Fleet, but it refers to money due from the company to him. Knowing, as Fleet* must have known, that the company had $3000.00 worth of his godds in their possession still unsold, he wrote to them in August, 1892, as follows: “You must send along a check for $400.00 to $500.00 as I must get some money out of this business with you. Already you owe me over $3000.00.” It is impossible to believe that the fur company were merely agents of Fleet to sell his goods, if they owed him for $3000.00 worth of goods which he had shipped to them, and which they still had in their possession, and which they had not yet sold. All the statements and invoices, which accompanied the letters, were prefaced at the top of each letter, above the description of the goods shipped, and their prices, with the following words: “S. A. Kessler Fur Go. to William H. Fleet, Dr.,” thus designating the fur company hs the debtor of Fleet. The mere fact, that, by the terms of the arrangement, as embodied in the letters, the fur company -was to make settlements, or remit money, within thirty, sixty or ninety days “as soon as the money may be collected,” or “as soon as goods are sold,” does not necessarily imply a consignment, instead of a sale. The wholesale merchant, who ships goods to the retail merchant, expects the retail merchant to sell the goods to bis customers, and out of the proceeds of such sales to pay the wholesale merchant. Indeed, the retail merchant relies upon his business in making sales to realize the money to pay for the goods which he procures at wholesale. The mere fact, that the fur company was within a certain time to pay for the goods, shipped to it by Fleet, out of sales which it might make, is not a conclusive indication that they were receiving the goods upon, consignment for sale, rather than as purchasers. In several cases decided by this court, the fact, that the alleged consignee of goods was required by the contract to execute to the consignor notes for the purchase price of the g'oods so shipped, was held to indicate that the transaction was a sale, and not a consignment, upon the ground that the execution of such notes made the consignee a debtor directly to the consignor for the invoice price of the goods. Chickering v. Bastress, supra; Lenz v. Harrison, 148 Ill. 598; Peoria Manf. Co. v. Lyons, 153 id. 427). There is no difference between such cases and the case at bar, because, here, the-fur company was to remit money, or make settlement, with the appellant evei-y thirty, sixty or ninety days without any provision as to the return of the goods to the appellant in case of failure to sell the same within the time so limited. No notes of any kind were to be taken from the purchasers, to whom the fur company should sell goods, either payable to the order of Fleet, or to the order of the fur company as agent of Fleet. As Fleet was not to determine the terms of the sales to be made by the fur company, nor receive anything" whatever, directly or indirectly, from the parties, to whom the fur company should make sales, as evidencing purchases of his goods by them, no relation of seller and purchaser was to exist or could exist between Fleet and the purchasers from the fur company. The conclusion is inevitable, therefore, that, in case of failure to sell the g'oods within the time limited by the contract, and in the absence of any provision for their return, the fur company was to remain the debtor of the appellant, the same as though it had executed its notes to the appellant. (Ex parte White, L. R. 6 Ch. App. 400). After a careful consideration of the case, and of all the authorities referred to by counsel, I am of the opinion that the transaction here, under consideration was a sale, and not a consignment, and that the lower courts decided correctly in so holding and that their judgments ought to be. affirmed.