Opinion
March Term, 1865
E.F. Bullard, for the respondents.
N. Davenport, for the appellants.
The plaintiffs had a lien on these fifty barrels of flour for the purchase price, and, upon the insolvency of Poucher, they might have retained them until the price agreed upon had been paid. This they no doubt would have done if they had heard of the insolvency of Poucher. This right of withholding the property is not precisely the same thing as the right of stoppage in transitu, but it has a strong analogy to it. Where the vendee could stop the goods while in the hands of the carrier, he can retain them in his own possession if he has not delivered them to the carrier. But in this case the goods were sent to the defendants at Troy. I understand them to have been storehouse keepers, though this is not expressly stated. At any rate they were made the depositaries of the goods on their arrival at Troy, and they had no other right to them so far as the plaintiffs were informed. Their possession was not, under the circumstances, the possession of Poucher. They were third parties, who were to take and hold the goods on their arrival at Troy, not as Poucher's agents, but in the character of warehouse keepers. It was not the intention of the plaintiffs that the deposit with them should be an absolute delivery to Poucher. An arrangement as to the payment was to be first made. Stiles lived at Cohoes, near Troy, and could confer with Poucher any day. Poucher had agreed to take back the fifty barrels of flour at the price proposed, and had offered to give his paper at twenty-five and forty-five days for that price. The plaintiffs had not assented to this part of the proposal. On the contrary, the partner who wrote the letter in their name of the 8th January, 1857, said that, in regard to that part of the proposal which looked to the giving of Poucher's paper on time, he should leave it altogether with him, Poucher, and Mr. Stiles, to arrange. The effect of the transaction was that the flour should be forwarded to the defendants to abide the result of the arrangement to be made respecting the credit to be given, if Stiles should think proper to give a credit. If Stiles and Poucher had conferred together at any time after the failure of the latter, no credit would have been given without security. But without any attempt to answer the terms of payment or of credit, Poucher and the defendants contrive, so far as they were able to do it, to vest the title in the defendants. But Poucher could not confer upon the defendants any better title than he had, and he had none until he had arranged the terms of payment with Stiles. Until that should take place the flour was in the hands of the defendants as warehousemen.
It may be said that as the plaintiffs sent the flour as requested by Poucher, it was a perfect delivery to him, and vested the property in him. I doubt whether that is a fair construction of Poucher's own letter. He wished the flour sent to the defendants, not as parties who were entitled to it under an arrangement with him; no arrangement by which they were to have it had then been made, and if it had been it had not been communicated to the plaintiffs. I do not think Poucher contemplated an immediate absolute delivery. Upon his own proposal he was to give his paper on time, and as Mr. Stiles lived in his neighborhood he doubtless expected to deliver the notes to him before he should be entitled to the flour. The words "my care" do not necessarily mean on my account or for my use. But however this may be, and if the letter ought to be understood as looking to a delivery which should give Poucher the control of the property on its arrival, the plaintiffs did not assent to it in that sense, but required the terms of payment to be arranged in the manner mentioned, before Poucher should be entitled to the flour.
The facts upon which the plaintiffs' rights depended were undisputed, and the Judge was, in my opinion, right in directing a verdict in their favor. Hence I am for affirmance.
There is no evidence tending to show as suggested by the plaintiffs' counsel, that Poucher purchased the flour fraudulently. That he was insolvent at the time, and unable to meet all his liabilities, does not establish a fraudulent purpose, as has been held in this court in Nichols v. Pinvier ( 18 N.Y., 295). Nor does the omission to disclose his insolvency to the vendor prove the fraudulent intent. Where no inquiries are made of the vendee, and he makes no false statements, nor resorts to any artifices to mislead the vendor in regard to his condition and ability to pay, it is not fraudulent for him to remain silent in respect to his pecuniary resources. The present case is marked by the entire absence of anything of the kind. The negotiation with the plaintiffs was conducted on paper, and we are able to see precisely what was said and done. It is to be observed that Poucher did not apply to the plaintiffs to purchase the flour; they had purchased the fifty barrels, with others, from him; they became dissatisfied with the quality, it probably not suiting their customers, applied to him not to buy, but to take the flour back at the price they had paid for it. And when he acceded to their proposition to return the flour, he restored it to the manufacturers to whom he was indebted for it at the price which they charged him for it. In the conversation between Poucher and Loveland, one of the defendants, which resulted in their agreement to receive the flour again, the former spoke of the flour not giving satisfaction, and he would have to take it back, and that he wished the defendants to take it back from him. These facts repel, I think, all idea of fraud by Poucher, for he derived little or no benefit from the transaction. The appeal must be determined, I think, upon the single question whether the contract of sale between the plaintiffs and Poucher was executed or not.
I have suggested that the transaction had more resemblance to rescission of a sale already made, of an article which the vendee did not design to purchase, than a new or resale of the same article back from vendee to vendor. This may not be strictly and technically true. But it is a consideration which will aid us somewhat in understanding what the parties intended by what they did. It is suggested in the prevailing opinion in the court below, that the plaintiffs' letter to Poucher of the 8th January, in reply to his of the 7th of the same month, was not a meeting of the minds of the parties as to the sale or return of the flour, and that it left the terms of the contract as to payment still unsettled. If this suggestion be true, then certainly there was no sale, for if the minds of the parties did not meet through what was said in the two letters, they did not meet by any other means. Poucher, in his letter of the 7th, says, in substance, I will allow you damages on fifty barrels of flour kept, $40.00; expenses to cars, $12.50; give Lockwood, Stiles Co., my paper for the fifty barrels returned, at twenty-five and forty-five days, on interest. In this way only I consent to have it returned. You may ship it to Howland, Loveland Co. Mark the significance of the words, "In this way only can I consent to have it returned." On the 8th, the plaintiffs acknowledged the receipt of the proposition, and in reply, wrote: "The fifty barrels of flour we will send to the railroad in a few days, and in regard to the paper on time, I shall leave altogether with you and Mr. Stiles to arrange; we will send the flour, as you order, to Loveland, Howland Co." In no other way would Poucher take back the flour but that named in his letter, and forthwith the plaintiffs reply, we will send it as you order. And in execution of the contract the flour was sent to the defendant. This can mean nothing else but a meeting of minds upon the contract of sale, followed by an actual delivery in execution of the agreement. True, the plaintiffs also say, we shall leave it altogether with you and Mr. Stiles to arrange in regard to the paper on time; this was in effect to say, we accept your offer, and deliver you the property. You and Mr. Stiles can arrange in regard to the paper on time, at your convenience. No doubt they could have withheld the delivery of the flour until the delivery of the notes and the payment of the damages and expenses, because they were concurrent acts. Nor can there be any doubt that they could waive the act to be done by Poucher, and consent that it should be done at a future time. This is what I think they intended to do, for their acts in delivering the property to the defendants admits of no other sensible interpretation. The defendants received the flour without any notice that the plaintiffs claimed it; they gave Poucher credit for it and closed their accounts with him upon the faith of it, taking his note on time for the balance due them. They paid the freight to the depot, and incurred the expense of transporting it from them to their mill or warehouse. I think they are to be deemed purchasers in good faith.
In executory contracts for the delivery of goods sold, to be paid for at the time of delivery in the notes of a third person, who becomes insolvent between the time of making the contract and that appointed for its performance, the vendor is not bound to deliver the goods upon tender of the notes, because the consideration has wholly failed. ( Benedict v. Field, 14 N.Y., 595.) But even in such a case, if the goods have been delivered without qualification before the insolvency has happened or become known, the vendor cannot rescind the sale. His only remedy for the price is to accept the note.
There should be a new trial, with costs to abide the event.
Judgment affirmed.