Court Opinion

ID: 5544135
Source: CourtListenerOpinion
Date Created: 2022-01-10 18:55:24.734494+00
Date Added: 2024-06-11T08:34:53.070397
License: Public Domain

Daly, J.,
(dissenting.) It is substantially shown by evidence that about September, 1883, one Gandolfo agreed to furnish the defendant John Dwight certain specified machinery at the estimated cost of $5,660. This machinery was intended for Dwight’s factory, and was to be put up and started running in connection with other machinery at an additional experise, which ultimately approached $7,000. Between October 23d and December 12th, Dwight paid Gandolfo in full for the specified machinery, although it had not then been delivered, Gandolfo representing at first that it was in process of manufacture, and afterwards that it was stored waiting for the completion of alterations in Dwight’s factory, where it was to be placed. In February, 1884, Gandolfo ordered the machinery in question in this action from the plaintiffs, at a cost of $4,700, giving them then his note and a chattel mortgage to se*64cure the purchase price. The-plaintiffs did not file their mortgage, and Gandolfo went on and delivered the machinery as he received it from plaintiffs to-Dwight, pursuant to'the original contract made in September, 1883, Dwight expending in the erection and fitting of it in his factory, and the purchase of necessary machinery for that purpose, about the sum of $7,000. The delivery was made between February and April, 1884. The chattel mortgage was not filed until May, 1885. It is claimed by the plaintiffs that their mortgage,', notwithstanding their failure to file it, was good as against Dwight, because, at the time of the delivery of the machinery to him, he did not part with anything of value to Gandolfo, having paid in full for it, in advance, by the payments made in- the previous year. It is undisputed that such advance payments included payment for the machinery in question, and- the right of defendant John Dwight to claim the position of a purchaser for value at the time of delivery was open to question upon the authorities. Kursheedt v. McCune, 20 Abb. N. C. 265; Dusenbury v. Hulbert, 59 N. Y. 541; Barnard, v. Campbell, 65 Barb. 286; affirmed, 55 N. Y. 456, and 58 N. Y. 79;. Voorhis v. Olmstead, 66 N. Y. 113. But under the circumstances it would seem that the plaintiffs should be estopped from asserting their mortgage-against the defendants. They sold and delivered their goods to Gandolfo; conferring upon him the apparent unincumbered title, withholding their mortgage from the files, and permitting him to impose upon the defendants,' to the latter’s damage, in the large outlay needed to set up the machinery and make it available. They knew that the machinery was to be set up in the factory of defendants, and must have known that large expenses would be-incurred for that purpose. The act of withholding their mortgage from the-files was evidently intended to induce the defendants to go on and deal with Gandolfo as one having an unincumbered title; and it did have that effect. The advantages to the plaintiffs by this course are conspicuous." Had they filed their mortgage or asserted their rights in any way at the time of delivery, the result would have been that the defendants could have refused to-receive the machinery from Gandolfo, and the plaintiffs would have had it back upon their hands. By the plaintiffs’ taking the course they did, the defendants were induced to make such outlays as woqld practically force them to pay the purchase price over again to plaintiffs, or lose the benefit of their subsequent expenditures. They were thereiore induced by plaintiffs’ act to alter their position, and are brought within the exception noted in one of the cases above cited, and relied upon by the plaintiffs. Barnard v. Campbell, 58 N. Y. 73-76. The court there lays stress upon the fact that the purchasers parted with no value, incurred no liability, and in no respect changed their situation in the interval between the delivery of the merchandise by the plaintiffs to Jeffries and their disaffirmance of the contract and reclaiming the goods. In other words, they did nothing in consequence of such delivery. So, in Weaver v. Barden, 49 N. Y. 286, it is said that the purchaser must have parted with something of value upon the faith of his purchase before he had notice of the prior right. In this case the expenditures in setting up the machinery, the purchase of shafting, belting, pulleys, etc., and for work and labor, amounting to nearly $7,000, largely exceed the value of the machinery itself, $4,700. This large expense was incurred in good faith in reliance upon Gandolfo’s apparent absolute ownership and unincumbered title, for which the plaintiffs are directly responsible. The case is within the principle stated in the opinion of Danforth, J., in Dows v. Kidder, 84 N. Y. 128, and the cases generally on the law of estoppel. The knowledge by the plaintiffs that Gandolfo was to set up the machinery in defendants’ premises, the delivery of possession to him, and the suppression of their mortgage, taken together, show an intent to induce the third parties with whom Gandolfo might deal to treat his title as unincumbered. The defendants should have judgment upon their verdict, and the motion for a new trial should be denied, with costs.