" If I am right in the view already expressed as to the effect of the acceptance by Read Co. and the payment of money by De Leon, the question raised by the appellants' proposition as to the effect of a mere delivery order is quite irrelevant and constitutes no legal excuse for the non-delivery of the goods. It may be conceded that if De Leon were to be regarded merely as an assignee, although for value, of a bill of lading or a delivery order, or a warehouse receipt, his right to recover would depend upon the title or right of his assignor, and thus be subject to any defense which might exist against Rasin Co. The appellants cite authorities to that effect; among them and as applicable as any others are Collins v. Ralli (20 Hun, 246, and 85 N.Y. 637); Hentz v. Miller ( 94 N.Y. 64); Farmeloe v. Bain (L.R., 1 C.P. Div. 445); Imperial Bank v. London St. Katharine Docks Company (L.R., 5 Ch. Div. 195, 200). But to what effect are the authorities?
"`The law is well settled that the owner cannot be divested of his property without his own consent, unless he has placed it in the possession or custody of another and given him an apparent or implied right to dispose of it.' Weaver did not acquire the property in the typewriter and cabinet; he therefore, did not pass ownership therein to appellee." In Hentz v. Miller, 94 N.Y. 64, it appears that a member of the firm of Cutter Co., cotton brokers, represented to the plaintiff that they had instructions from the Freeman Manufacturing Company to purchase for it a number of bales of cotton. The representation was false, but plaintiff believed it and contracted to sell the number of bales desired to the Freeman Manufacturing Company. The cotton was delivered to Cutter Co. for delivery to the supposed purchaser, but instead of making delivery to the Freeman Manufacturing Company, Cutter Co. stored the cotton in a warehouse, and it was finally sold to an innocent purchaser, and later found in defendant's warehouse.
A similar case is Mercantile Nat. Bank, N.Y., v. Silverman ( 148 App. Div. 1; affd., 210 N.Y. 567, on opinion below). Another class of cases such as Hentz v. Miller ( 94 N.Y. 64) and Consumers Ice Company of Buffalo v. Webster, Son Co. ( 32 App. Div. 592) illustrate the rule under different circumstances. In them, persons falsely stating that they are the agents or representatives of others fraudulently obtained possession of goods under a pretense of sale to such others.
There, as here, the broker pretending that he had effected a sale of the goods, obtained a delivery order from the plaintiff, and, thus having obtained possession of the goods, stored the same in his own name, and thereafter sold them to a bona fide purchaser. That case was subsequently followed by Hentz v. Miller ( 94 N.Y. 64), growing out of the misconduct of the same broker. The learned counsel for the defendant has attempted to distinguish those cases from this.
When interest is not made payable on the face of the instrument, it is in the nature of damages for the retention of the principal debt. Hamilton v. Van Rensselaer, 43 N.Y. 244; Byles on Bills, 240. And in such a case the payment of the principal is a bar to an action to recover the interest. Hamilton v. Van Rensselaer, supra; Hentz v. Miller, 94 N.Y. 64. But when interest is stipulated for in the contract, it is as much a part of the debt as the principal itself.
There was no notice of any kind given the plaintiff of the sale, or that the Linde Company intended to sell them. There was no notice given Kingsbury of the time of the sale until afterwards, nor were there any of the notices, required by sections 81 and 82 of the Lien Law, given by the Linde Company. Plaintiff having been induced by the false and fraudulent representation of Kingsbury to ship these hops, it is a question whether Kingsbury ever had such possession of the hops as is contemplated by section 3 of the Factors Act. ( Soltau v. Gerdau, 119 N.Y. 380; Howland v. Woodruff, 60 id. 73; Hentz v. Miller, 94 id. 64.) This, however, I shall not attempt to decide.
( Barnard v. Campbell, 55 N.Y. 456; Farnham v. Eichin, 230 App. Div. 639.) Thus where the goods had been obtained by false representations the true owner was not estopped. ( Hentz v. Miller, 94 N.Y. 64.) The Uniform Commercial Code has expanded the rights of a third person who has purchased the property in all innocence, even from a thief, or from a person who has been entrusted with possession, even if not authorized to sell.
Under those circumstances it was held that although Blenkarn obtained possession of the goods, he never acquired title." Further treating on the subject, the court writes: "Another class of cases, such as Hentz v. Miller ( 94 N.Y. 64) and Consumers Ice Co. of Buffalo v. Webster, Son Co. ( 32 A.D. 592), illustrate the rule under different circumstances. In them, the persons falsely stating that they are the agents or representatives of others fraudulently obtained possession of goods under pretense of sale to such others.
( Edmunds v. Merchants' Despatch Transportation Co., 135 Mass. 283.) The sale here was not merely voidable but void ( Hentz v. Miller, 94 N.Y. 64), because there was no purchaser and without a purchaser there could be no sale. Defendant relies, however, on the receipted bills delivered by the plaintiff to the imposter, and which, it is insisted, vested him with the indicia of ownership. ( Island Trading Co. v. Berg Bros., Inc., 239 N.Y. 229; Dows v. Kidder, 84 id. 121; Voorhis v. Olmstead, 66 id. 113.) These decisions rest upon principles of estoppel and proceed on the theory that where the owner vests ostensible ownership in another by whom the property is offered for sale, he is justly responsible for the consequences if third persons take him at his word.
" ( Phelps v. McQuade, 220 N.Y. 232, 235. See, also, Cundy v. Lindsay, L.R. 3 A.C. 459; Hentz v. Miller, 94 N.Y. 64.) "A method of fraud upon the seller not infrequently committed is for a fraudulent buyer to obtain goods by inducing the seller to believe that the sale is made to another person having good credit. * * * Thus, where the buyer in person obtains the assent of the seller to a sale to him of the goods by pretending to be some one else, title passes, although as between the parties the transaction is voidable. In such a case, though, it is true the seller intends to transfer title to the person of good credit, whom he supposes to be the person standing before him, his primary intent is to transfer title to the person before him. * * * On the other hand, if goods are ordered by mail, by a fraudulent person, the name of a responsible buyer being used as a means of deception to induce the seller to send forward the goods, the seller's primary intent is to sell the goods to the person whose name appears to be signed to the letter.