Winter v. Coit and another

Winter v. Coit and another. Rights of factors. Where goods are shipped to a factor for sale, with a letter directing him to insure, and informing him of a draft on account of the proceeds, he acquires no lien, until an acceptance of the consignment, upon the terms of the letter. A factor acquires no lien for his general balance, until the property is actually received, unless in pursuance of an agreement expressed or necessarily implied. Appeal from the general term of the Supreme Court, in the first district, where a judgment of the Superior Court of the city of New York, in favor of the plaintiff, had been affirmed, on error. This was an action of replevin for ninety-four bales of cotton, brought by John G. Winter, the plaintiff, as mortgagee of John Hunter, against the firm of Henry Coit & Co., merchants in New York. In January 1844, John Hunter, a resident of Columbus, in Georgia, consigned a quantity of cotton to the defendants for sale, under an arrangement that he might draw on them for three-fourths of its cost at Columbus. They had accepted his bills for an amount, which on the 8th March 1844, at the prices paid by him, would leave a balance in his favor of $674.97. Most of the cotton was then unsold. „ On the 5th and 7th March 1844, Hunter purchased the 94 bales in question, with funds obtained from the plaintiff, upon the promise of a bill upon the defendants for the amount. The cotton was shipped on the 8th; and on the same day, Hunter drew a bill upon the defendants, payable to his own order, at sixty days’ sight, for $3500, which he indorsed and delivered to the plaintiff. *At the same time, he notified the defend- ^ ^gg ants, by letter, of the consignment, instructed *- them to insure at $45 per bale on his account, and informed them of the draft for $3500. The bill was protested for non-acceptance, and on its return, in conformity to the expressed wishes of the defendants, that he would draw at ninety instead of sixty days, Hunter drew another bill for the same amount at ninety days’ sight. Subsequently, in conformity to instructions, not to draw for more than three-fourths of the amount of shipments, he drew another bill against the same consignment, for $2400, at ninety days, and delivered it to the plaintiff; and at the same time, gave the latter a chattel-mortgage upon the cotton, then in transit, to be void on the acceptance and payment of the last-mentioned bill. *He simultaneously delivered to the plain- ^ tiff’s agent, a letter addressed to the defendants, ^ informing them of the draft, and of the mortgage to Winter to secure its payment. On the 2d April 1844, the draft was presented to the defendants for acceptance, with Hunter’s letter. The defendants refused to accept, saying that Hunter had no right to overdraw his account. The plaintiff’s agent, then, demanded the cotton; it had not arrived, but the defendants said they would not deliver it, on arrival. After the arrival of the cotton, there was another demand, *and refusal, either to accept -the draft # ^g^ or deliver the cotton, the defendant Coit denying Hunter’s right to assign, as he never drew against specific shipments. The mortgage was received at New York on the 11th April, and on the 12th, the cotton was replevied. It was admitted, on the trial, that the charges paid by the defendants upon the consignment were $431.08, and that their customary commissions for selling the same would be $75. These facts having been proved, the plaintiff rested; whereupon, the defendants’ counsel moved for a nonsuit, on the following grounds: 1. That replevin could not be sustained by the plaintiff, against the defendants, under the circumstances of the case: 2. That the defendants, at all events, had-a lien upon the cotton, at the time when the action was commenced, for the expenses paid by them thereon and their commissions, which the plaintiff was bound to tender to them, as a condition precedent-to his right to the possession of the cotton, and which had not been done. The learned- judge before whom the case was tried (Jones, O. J.) denied the motion for a nonsuit; and the defendants took an exception. It was then shown by the defendants, that their acceptances, at the time they received the bill of lading of the .94 bales of cotton, would exceed by $5000 the amount realized from previous consignments, after deducting expenses and charges; and that the price of cotton was continually falling from the 8th March to the 2d April 1844. The testimony being closed, the defendants’ counsel requested the court to charge the jury: 1. That the mortgage given by Hunter to the plaintiff, unaccompanied by possession or delivery of bills of lading, did not vest in him the title, so as to enable him to bring the present action. 2. That Hunter could convey no title to the plaintiff, beyond what he'himself possessed. 3. That as soon as the cotton in question was placed in a course of conveyance to the defendants, their lien attached for the balance of their *general account * OQO 1 u J against the shipper, and' when it reached Butts, the (intermediate) consignee, at Apalachicola, it reached the possession of the defendants. 4. That the defendants, at all events, had a lien on the cotton for their expenses, advances and commissions thereon, which the plaintiff should have paid or tendered, as a condition precedent to his right of action. The learned chief justice, without answering specifically the defendant’s points, charged the jury, that the cotton, at the time of its original shipment, was shown to belong to John Hunter, and to have been shipped according to the bills of lading, invoices and letters of shipment given in evidence, and if the jury should find that the same was shipped to the defendants as a consignment on account of Hunter, to them, as his factors, accompanied with advice of a draft and order to insure, and not with intent of transferring to them the property of the cotton, or on any agreement to consign the same to them in payment or security of any previous debt owing by Hunter to the defendants, then that, in judgment of law, the cotton remained subject to the disposal of Hunter, until it should have come to the actual possession of the defendants, unless they should have actually accepted the consignment, according to the letter of consignment. That if, before such acceptance, and before the cotton should actually have come to the possession of the defendants, Hunter mortgaged it to the plaintiff, for the consideration of the moneys advanced for its purchase, or to secure the same, then such mortgage gave the plaintiff the right to demand the cotton, if the draft, by the mortgage intended to be secured, was not accepted, and the mortgage was a valid title for the plaintiff, if asserted by him with reasonable diligence. That if the charges of insurance, freight, cartage, labor, storage and fire insurance were incurred, after the defendants had declined the consignment, on the terms expressed in the letters of shipment, and if, on being apprised of the plaintiff’s claim to the cotton, the defendants put themselves on the denial of his right, and did not set up their lien for such- charges, but claimed the property in hostility to the title of Hunter, and of the plaintiff under the mortgage, then the defendants had no right to detain the cotton for the charges. That if, * 298 1 uPon ma^ers so submitted *to them, the jury -* should find, that the cotton was shipped as a consignment, as claimed by the plaintiff, and that the defendants did not accept of the consignment, according to such terms of shipment, and that Hunter made the mortgage, before any acceptance by the defendants of the consignment or actual possession of the cotton by them, and that the mortgage was for such consideration, and if the draft therein mentioned was not accepted, upon due presentment, and if the title of the plaintiff was asserted, without unnecessary delay, then the plaintiff was entitled to recover, unless the defendant could establish a lien for the charges; otherewise, the defendants were entitled to recover. If, on these points, the jury should find for the plaintiff, then, if the charges for insurance, freight, &c., were incurred by the defendants, after they had declined the assignment as aforesaid, and if, on being apprised of the plaintiff’s claim, they put themselves on the denial of the plaintiff’s right, and did not set up their lien for such charges, but claimed the cotton in hostility to the title of Hunter, and of the plaintiff under the mortgage, then the defendants had not made out any defence on the ground of lien, and were not, on this ground, entitled to a verdict, but otherwise they were so entitled. The defendants’ counsel excepted to each of the propositions in the charge, and to the omission to charge as requested. There was a verdict for the plaintiff; and on argument of the exceptions before the general term of the superior court, they were overruled, and judgment given in favor of the plaintiff; which having been affirmed by the supreme court, on error, the defendants took this appeal. Noyes, for the appellants.. Lord, for the respondent. [MAJORITY — Johnson, J.] Johnson, J. The jury wore properly instructed as to the waiver of the defendants’ lien for their charges for insurance, *freight, cartage, labor, storage and „ ^ fire insurance, that if on being apprised of the plaintiff’s claim, they put themselves, not upon their lien, but only upon the denial of the plaintiff’s right, they could now assume a different ground. (Holbrook v. Wright, 24 Wend. 169.) The jury were likewise instructed, that if the cotton in question was consigned to the defendants as Hunter’s factors, with advice of a draft, and directions to insure, and not with intent of transferring to them the property in the cotton, or on any agreement to consign the same to them in payment of, or security for, any previous debt owing by Hunter, to the defendants, then that the cotton remained subject to Hunter’s disposal, until it should come to the actual possession of the defendants, unless they should have actually accepted the consignment, according to the terms of Hunter’s letter of consignment.. Patten v. Thompson (5 M. & S. 350) shows, that though the factor is under acceptance, on general account, for a consignor, and has the bill of lading, yet, that until the actual receipt of the property, the vendor of the consignor may stop them in transitu. It was so held, upon the ground that there was neither a pledge by way of security for advances made, nor an assignment of the bill of lading, except for the purpose of enabling the factor to receive the property, and carry it to the account of his principal, and without any reference to a loan or balance due the factor. Lord Ellenborough refers to Kinloch v. Craig (3 T. R. 119), as going upon the same ground, although, in that case, the bill of lading was unindorsed, and as to that circumstance, he says, “ with respect to the indorsement of the bill of lading, if it be made to the party,- merely as factor, I conceive, it carries his rights no further, being made for the benefit of the principal.” The same doctrine is recognised in Grosvenor v. Phillips (2 Hill 147). None of the cases hold, or at all countenance, the doctrine that a factor or consignee can acquire a lien for his general balance, before he gets possession of the property, unless it be in pursuance of the agreement of the parties, express or implied, from their acts and course of dealing. In this case, the question whether such an ^ • agreement existed, depending *upon both the J letters and the course of business of the parties, as they appeared in evidence, was submitted to the jury, who have found that no such agreement existed. The judgment should, therefore, be affirmed. Judgment affirmed.