Andrews v. Durant

Full title: ANDREWS and others against DURANT and others

Court: Court of Appeals of the State of New York

Date published: Jun 1, 1854

11 N.Y. 35 (N.Y. 1854)

Opinion

June Term, 1854

N. Hill, Jun., for the appellants.

S.H. Hammond, for the respondents.

DENIO, J.

In general a contract for the building of a vessel or other thing not yet in esse, does not vest any property in the party for whom it is agreed to be constructed during the progress of the work, nor until it is finished and delivered, or at least ready for delivery and approved by such party. All the authorities agree in this. ( Towers v. Osborne, 1 Stra. 506; Mucklow v. Mangles, 1 Taunt. 318; Johnson v. Hunt, 11 Wend. 139; Crookshank v. Burrill, 18 John. 58; Sewall v. Fitch, 8 Cow. 215; Mixer v. Howarth, 21 Pick. 205.) And the law is the same though it be agreed that payment shall be made to the builder during the progress of the work, and such payments are made accordingly. In Mucklow v. Mangles, which arose out of a contract for building a barge, the whole price was paid in advance, the vessel was built and the name of the person who contracted for it was painted on the stern, yet it was held that the title remained in the builder. In Merritt v. Johnson, (7 John. 473,) where a sloop was agreed to be built and one-third of the price was to be paid when one-third of the work was done, two-thirds when two-thirds were done, and the balance when it was completed, and before it was finished it was sold on execution against the builder after more than a third had been done and more than that proportion of the price had been paid, the court decided that the vessel was the property of the builder and not of the person who engaged it to be constructed.

Where during the course of the transaction the vessel or other thing agreed to be built is identified and appropriated so that the mechanic would be bound to complete and deliver that particular thing, and could not without violating his contract substitute another similar article though otherwise corresponding with the agreement, there would seem to be more reason for holding that the property was transferred; still it has never been held that this was enough to pass the title. In Laidler v. Burlinson, (2 Mees. Welsb. 602,) the vessel was about one-third built when the contract was made. The builder and owners agreed to finish that particular vessel in a manner specially agreed upon for a price which was the equivalent for the finished vessel. Before it was completed the builder became bankrupt, and the possession passed into the hands of his assignee. The court of exchequer held the true construction of the contract to be that the title was to pass when the ship was completed and not before. The parties only agreed to buy a particular ship when complete, and although the builder could not comply with the contract by delivering another ship, still it was considered an executory contract merely. In Atkinson v. Bell, (8 Barn. Cress. 277,) the same principle was held in respect to a contract for making spinning machinery, and in Clark v. Spence, (4 Adolph. El. 448,) which is the case principally relied on by the defendants, it was admitted by the court that the appropriation of the particular ship to the contract, then in question, by the approval of the materials and labor by the superintendent, did not of itself vest the property in the purchaser until the whole thing contracted for had been completed.

In the case before us, it cannot be denied but that the barge, as fast as its several parts were finished with the approval of the superintendent, became specifically appropriated to the fulfilment of this contract, so that Bridger Company could not have fulfilled their agreement with the defendants in any other way than by completing and delivering that identical boat. This results from the consideration that the superintendent could not be called upon to inspect and approve of the work and materials of another barge, after having performed that duty as to one; so that the contract would be broken up unless it applied itself to this vessel. But it is clear that this circumstance alone does not operate to transfer the title. The precise question in this case is whether the concurrence of both particulars — the payment of parts of the price at specified stages of the work, and the intervention of a superintendent to inspect and approve of the work and materials — produces a result which neither of them separately would effect. It is no doubt competent for the parties to agree when and upon what conditions the property in the subject of such a contract shall vest in the prospective owner. The present question is therefore simply one of construction. The inquiry is whether the parties intended by the provisions which they have inserted in their contract, that as soon as the first payment had become payable and had been paid, the property in the unfinished barge should vest in the defendants, so that thereafter it should be at their risk as to casualties, and be liable for their debts, and pass to their representatives in case of their death. Such an agreement would be lawful if made, and the doubt only is whether the parties have so contracted.

The courts in England, under contracts in all material respects like this, have held that the title passed. In Woods v. Russell, (5 Barn. Ald. 942,) the question came before the court of king's bench, and Abbot, C.J. distinctly declared his opinion that the payment of the instalments under such a contract vested the property in the ship in the party for whom it was to have been constructed. But there was another feature in the case upon which it was finally decided. The builder had signed a certificate for the purpose of enabling the other party to procure the vessel to be registered in his name and it was so registered accordingly while it was yet unfinished and before the question arose. The court held that the legal effect of signing the certificate for the purpose of procuring the registry was, from the time the registry was complete, to vest the general property in the party contracting to have the ship built. This case was decided in 1822, and was the first announcement of the principle upon which the defendants' counsel rely in the English courts. The case of Clark v. Spence was decided in 1836. It arose out of a contract for building a vessel, which contained both the features of superintendence and of payments according to specific stages of the work, as in Woods v. Russell, and as in the contract now before the court. The court of king's bench was clearly of opinion, that as fast as the different parts of the vessel were approved and added to the fabric they became appropriated to the purchaser by way of contract, and that when the last of them were so added and the vessel was thereby completed it vested in the purchaser. The court conceded that by the general rules of law, until the last of the necessary materials was added the thing contracted for was not in existence; and they said they had not been able to find any authority for holding that while the article did not exist as a whole and was incomplete, the general property in such parts of it had been from time to time constructed should vest in the purchaser, except what was said in the case of Woods v. Russell; and that was admitted to be a dictum merely, and not the point on which the case was decided. The court however decided upon the authority of that case, though with some hesitation, as they said, that the rights of the parties in the case before it, after the making of the first payment, were the same as if so much of the vessel as was then constructed had originally belonged to the party contracting for its construction and had been delivered by him to the builder to be added to and finished; and they said it would follow that every plank and article subsequently added would, as added, become the property of the party contracting with the builder. The dictum in Woods v. Russell was incidentally referred to as the law in Atkinson v. Bell, (8 Barn. Cress. 277,) and the doctrine there stated, and confirmed in Clark v. Spence, was assumed to be correct in Laidler v. Burlinson before referred to. It has also been generally adopted by systematic writers in treatises published or revised since the decision of Clark v. Spence, that case and Woods v. Russell being always referred to as the authority on which it rests. ( Story on Sales, §§ 315, 316; Chit. on Cont. 378, 9; Abbot on Ship. 4, 5.)

It is scarcely necessary to say that the English cases since the revolution are not regarded as authority in our courts. Upon disputed doctrines of the common law they are entitled to respectful consideration; but where the question relates to the construction or effect of a written contract they have no greater weight than may be due to the reasons given in their support. Can it then be fairly collected from the provisions of this contract, that the title to the unfinished barge was to be transferred from the builder to the other party upon the making of the first payment, contrary to the principle well settled and generally understood that a contract for the construction of an article not in existence is executory until the thing is finished and ready for delivery? In the first place, I should say that so marked a circumstance would be stated in words of unequivocal import; and would not be left to rest upon construction, if a change of property was really intended. The provision for superintendence by the agent of the intended owner, though it serves to identify and appropriate the article as soon as its construction is commenced, does not, as we have seen, work any change of property. Such would not ordinarily be the intention to be deduced from such a circumstance. Many of the materials of which a vessel is composed are ultimately covered so as to be concealed from the eye when it is finished; and as the safety of life and property is concerned in the soundness and strength of these materials, it is but a reasonable precaution to be taken by one who engages a vessel to be constructed, to ascertain as the work progresses that every thing is staunch and durable; and such a provision, as it seems to me, does not tend to show a design that there shall be a change of property as fast as any materials or work are inspected and approved. It amounts only to an agreement that when the whole is completed the party will receive it in fulfillment of the contract. The provision for advances at particular stages of the work is a very usual one where an expensive undertaking is contracted for, and it only shows that the party advancing is willing thus to assist the artizan provided that he can see that the work is going on in good faith, so as to afford a reasonable prospect that he will realize the avails of his expenditure in a reasonable period. The argument for the defendants would be somewhat stronger if we could say that the amount to be advanced at the several stages mentioned was understood by the parties to be the price or equivalent for the labor and materials already expended. This by no means appears, but on the contrary there is strong reason to believe, that in this case a considerable portion of the price was to be at all times kept back in order to secure the speedy completion of the contract. When Bridger Co. failed only three thousand dollars of the five thousand had been paid, and they would not be entitled to any more until the barge was finished, and yet it cost only seven hundred dollars to complete it. This renders it improbable that the parties could have intended the sale and purchase of so much as was done at the several stages of the work at which payments were to be made, if indeed such a contract were not in itself so much out of the course of the ordinary conduct of parties as not to be assumed without unequivocal language.

The decision in Clarke v. Spence is placed very much upon the idea, that parties may have contracted in reference to the doctrine announced in Woods v. Russell. That argument can have no force here, but on the contrary the inference to be drawn from our own cases and particularly from Merritt v. Johnson, would be that the title remained in the builder under such a contract until the completion of the vessel.

The foregoing considerations have led me to the conclusion that the modern English rule is not founded upon sufficient reasons and that it ought not to be followed. The judgment of the supreme court should therefore be reversed and a new trial ordered.

PARKER, J.

The question we are called upon to decide is, whether, under the rules of law applicable to the contract, the barge, at the time of the assignment to the plaintiffs, belonged to Bridger Bishop, who constructed it, or to the defendants, who employed them to build it.

The general rule is, that if a person contract with another for a chattel, which is not in existence at the time of the contract, though he pay him the whole value in advance, and the other proceeds to execute the order, the buyer acquires no property in the chattel till it is finished and delivered to him. The case of Mucklow, assignee of Royland, v. Mangles, decided in England in 1808, (1 Taun. 318,) recognized, to the fullest extent, the general rule I have stated. It was an action of trover by the assignees of a bankrupt for a barge and other effects. Royland, who was a barge builder, had undertaken to build the barge in question for Pocock. Before the work was begun Pocock advanced to Royland some money on account, and as it proceeded he paid him more, to the amount of £ 190 in all, being the full value of the barge. When it was nearly finished, Pocock's name was painted on the stern. Two days after the completion of the work, and before a commission of bankruptcy had issued, the defendant, who was an officer of the sheriff, took the barge under an execution against Royland, the barge at the time of the levy not having been delivered to Pocock. It was held that the title to the barge had never passed from Royland to Pocock, and judgment was given for the plaintiff. The correctness of this decision has never been questioned, either in England or this country, but has been repeatedly followed in both. In this state, the more prominent cases are Merritt v. Johnson, (7 John. 473;) Gregory v. Stryker, (2 Denio, 628;) and Johnson v. Hunt, (11 Wend. 139.)

But it is sought to take this case out of the general rule, because the work was to be performed under the direction of a superintendent employed by the defendants, and was to be paid for at specific stages of the work. The first of the English cases relied on to sustain that position, is that of Woods, assignee of Paton, v. Russell, (5 Barn. Ald. 942,) which was decided in 1822. Paton, a ship-builder, had contracted with Russell to build a ship for him and complete it in April, 1819; Russell to pay in four instalments. The first and second instalments were duly paid. In March, 1819, Russell appointed a master, who superintended the building. On Paton's signing the usual certificate of her build, the ship was registered in Russell's name, and on that day he paid Paton the third instalment. It was held that the general property was vested in Russell from the time the registry was completed, but that the plaintiff had a lien for the work done after payment of the third instalment. There seems to me to be enough in that case to sustain the judgment, independent of the circumstances relied upon by the defendants in this action. The registry of the vessel in the name of Russell on the certificate, and by the aid and procurement of Paton was equivalent to a delivery, and was conclusive to show that the parties to the contract agreed that from that time the property belonged to Russell.

In delivering the opinion of the court, Abbot, Ch. J. said, "It is part of the terms of the contract, that given portions of the price should be paid according to the progress of the work: part when the keel is laid and part when they are at the light plank. The payment of these instalments, appears to us, to appropriate specifically to the defendant, the very ship so in progress, and to vest in the defendant a property in that ship; and that as between him and the builder, he is entitled to insist upon the completion of that very ship, and that the builder is not entitled to require him to accept any other. But this case does not depend merely upon the payment of the instalments; so that we are not called upon to decide how far that payment vests the property in the defendant, because, here, Paton signed the certificate to enable the defendant to have the ship registered in his (the defendant's) name, and by that act consented, as it seems to us, that the general property in the ship should be considered from that time as being in the defendant."

The decision in Woods v. Russell seems very improperly to have been considered as resting on the ground first stated in the extract I have made. ( Atkinson v. Bell, 8 Barn. Cress. 277; 15 Eng. Com. L. 216.) And so far it has evidently been looked upon with distrust and followed with reluctance in the later decisions of the English courts.

In Clarke et al. v. Spence et al. (4 Adol. Ellis, 448, 31 Eng. Com. L. 107,) the plaintiff contracted with a ship-builder to build him a ship for a certain sum, to be paid in instalments, as the work proceeded. An agent of the plaintiff was to superintend the building. The builder became bankrupt before the ship was completed. Afterwards the assignees completed the ship and all the instalments were paid or tendered. In trover, by the plaintiff against the assignees, for the ship, it was held that on the first instalment being paid, the property in the portion then finished became vested in the plaintiff, subject to the right of the builder, to retain such portion for the purpose of completing the work and earning the rest of the price, and that each material, subsequently added, became, as it was added, the property of the general owner. This decision was made, as was said by Williams, J. who delivered the judgment of the court, "with some hesitation," and entirely upon the authority of the expression in the opinion of the court in Woods v. Russell, first above quoted. Williams, J. conceded, that the facts in the case of Woods v. Russell, did not make it necessary to determine the point, whether the building of the vessel under the superintendence of a person appointed by the purchaser, and the payment of instalments at particular stages of the work, vested the general property in the purchaser, and added, "Neither did the decision of the court proceed ultimately on any such point, but on the ground that the vessel by virtue of the certificate of the builder had been registered in the name of the purchaser, and that the builder had by his own act declared the general property to be in the purchaser." And he proceeded in a very full and able opinion to show that the opinion, thus extra-judicially expressed in Woods v. Russell, was in conflict with well established rules of law. Williams, J. said, "Until the last of the necessary materials be added, the vessel is not complete; the thing contracted for is not in existence; for the contract is for a complete vessel, and not for parts of a vessel; and we have not been able to find any authority for saying, that whilst the thing contracted for is not in existence as a whole, and is incomplete, the general property in such parts of it as are from time to time constructed shall rest in the purchaser, except the above passage in the case of Woods v. Russell." And he followed the authority of Woods v. Russell on the ground that it had been subsequently recognized, and that such construction had probably been acted upon since the decision, by persons engaged in ship-building.

The case of Woods v. Russell, and Clarke v. Spence, were recognized in Laidler v. Burlinson, (2 Mees. Wels. 602,) though they were not followed, being inapplicable to the case then before the court.

It cannot be denied but the decision in Clarke v. Spence covers the whole ground assumed by the defendant's counsel in this case, but it has never yet been followed in this country. In Moody v. Brown (34 Maine R. 107) allusion is made to such an exception to the general rule, but it was unnecessarily said, inasmuch as it was adjudged that the case did not come within such an exception. It has also been stated in the elementary books as resting on the English decisions I have cited. ( Story on Sales, § 315, 316; Chitty on Cont. 378; Long on Sales, 288. I find no adjudged case in which the exception claimed has been applied in this country, and the case of Clarke v. Spence not being authority of itself, ought not to be followed here if it is in conflict with well settled principles of law, or inconsistent with decisions made in our own state. We are not placed in a situation to feel any of the embarrassment from a supposed precedent under which the court felt compelled in the case of Clarke v. Spence, to make a decision inconsistent with their own reasoning and against their own good judgment. A well established general rule, if founded upon principle, should not be invaded by an exception without good reason.

The question is simply what was the contract of the parties. (2 Mees. Welsb. 602.) If it was intended that certain parts of the vessel should pass to the defendants, as the work progressed and was paid for, it was very easy for the parties to have so provided in the contract in express terms. As they did not do this, we must gather the intent from the contract as expressed. It is not a contract to purchase parts of a barge, but an entire vessel; and the general rule that the title does not pass till completion and delivery, must control the construction unless a different contract is to be implied from the fact that the barge was built under the superintendence of a person employed and paid by the defendants, and was paid for by installments at certain stages of the work.

It cannot be claimed that the employment of a superintendent who decided upon the quality of the materials and approved the work, amounted to a delivery of the parts as the work progressed; but it is supposed that inasmuch as it bound the builders to deliver that particular barge and took away from them the right to substitute another in its place, it amounted, together with the payments, to a transfer of the general property to the purchaser. The mere payment by instalments at specific stages does not of itself imply anything further towards a change of title to property, than the payment of instalments at fixed periods of time. Now, conceding that the effect of both these circumstances combined, is to place the builder in a situation in which he would be bound to finish and deliver the specific vessel begun, it by no means follows, that they vest the title to the vessel in the purchaser before its completion. It becomes, in such case, simply a contract for the finishing and delivery of that particular vessel; and the obligations upon the parties are the same, as if the builder had contracted to finish and deliver a particular vessel partly constructed at the time of the contract.

Merritt v. Johnson (7 John. 473) was a case in which it was adjudged that the property to the vessel remained in the builder until completion and delivery, though some of the materials employed had been furnished by the purchaser.

The question of ownership by no means depends upon the right that a particular article in preference to another shall be finished for the purchaser. In Merritt v. Johnson, ( Supra,) Travis agreed to build a ship for E. Merritt and to furnish the timber for the frame, and E. Merritt was to pay in instalments and furnish the materials for the joiner's work. E. Merritt furnished various materials and advanced money to Travis with which to purchase other materials, and afterwards assigned the contract to D. Merritt, who continued to furnish materials and advance money to Travis on the contract, until about one-third the vessel was finished, Travis having furnished the materials he was bound to supply under the contract, when it was levied on under an execution against Travis and sold by the sheriff to C., who afterwards completed the vessel and sold her to Johnson. An action of trover being brought by D. Merritt against Johnson, it was held that the property in the vessel was in Johnson, and that D. Merritt could not have any property in the vessel under the contract until she was completed and delivered to him. This was therefore a case where the ownership remained in the builder, though he would have no right to have substituted another vessel in its place, part of the materials having been furnished by the purchaser. It appeared in Merritt v. Johnson that the ship was built upon ground hired by Travis, and in this suit the barge remained at the yard of the builders. It is said however in Johnson v. Hunt, (11 Wend. 139,) that had the fact been different in Merritt v. Johnson it would not have changed the result. ( See also Blackburn on Sales, 158; 2 Denio 628; 21 Pick. 205.)

I think the legal title to the barge remained in the builders at the time of their assignment to the plaintiffs, and the judgment of the supreme court should be reversed and a new trial ordered.

Judgment reversed, and new trial ordered.