24 N.Y. 521, Cartwright v. Wilmerding

Citation24 N.Y. 521
Party NameCARTWRIGHT et al. v. WILMERDING et al.
Case DateJune 01, 1862
CourtNew York Court of Appeals

Page 521

24 N.Y. 521

CARTWRIGHT et al.

v.

WILMERDING et al.

New York Court of Appeal

June 1, 1862

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COUNSEL

Charles O'Conor, for the appellants.

C. Van Santvoord, for the respondents.

GOULD, J.

This case involves the construction of the statute of this State commonly called the factors' act, which is an act "relative to principals, factors and agents, " passed April 16th, 1830; and is to be found in the Laws of 1830, page 203, and in 3 Revised Statutes, 5th edition, page 76.The act was intended to modify and make certain, (in its practical application to the current transactions of trade and commerce, ) the general common-law rule, that, where one of two innocent persons must suffer loss from the act of a third person, such loss shall be borne by him, who has placed the third person in the position which enabled him to do the act causing the loss.

The third section of that act is the most important one; indeed, the only important one, except that it is itself to be construed in part by the rest of the act. But for the purposes of the case before us, this third section is the only one to be referred to; and, in view of some decisions that have been had upon it, we shall need to examine but a part of that section. It is this: "Every factor or other agent entrusted with the possession of any bill of lading, custom-house permit, or warehouse-keeper's receipt for the delivery ofany such merchandise; and every such factor or agent, not having the documentary evidence of title, who shall be entrusted with the possession of any merchandise for the purpose of sale, or as a security for any advances to be made or obtained thereon; shall be deemed the true owner thereof, so far as to give validity to any contract, made by such agent with any other person, for the sale or disposition of the whole or any part of such merchandise,

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for any money advanced, or negotiable instrument or other obligation in writing given by such other person upon the faith thereof. "

The first section of the act speaks of any person in whose name "any merchandise shall be shipped, " and provides for liens in favor of the consignee of "such shipment. "So that the third section, in speaking of the possession of "any bill of lading, custom-house permit, or warehouse-keeper's receipt for the delivery of any such merchandise, " plainly and necessarily refers to such merchandise as has been named before; that is, merchandise which, in the course of trade, has been so shipped that, prior to its coming into the possession, (actual or legal, ) of the consignee, certain "documentary evidence of title" does, by the established usages of trade, (which make and which are the law merchant, ) give the entire and exclusive control of the delivery of the property to the person holding such documentary evidence. In contrast to this, (and making the construction more clear, ) the next clause of the third section speaks of a different subject--of merchandise which is so situated as not to require such documentary evidence of title, but is in the possession of the factor; and then it says, (not any such merchandise, ) but "any merchandise, " whether ever shipped, or ever connected with any bill of lading, & c., or not; it says, "any person, who shall be intrusted with the possession of any merchandise for the purpose of sale, " & c., shall be deemed the owner, & c. Thus we have two distinct classes of cases; one where a factor is intrusted with complete documentary evidence of title; the other where he is intrusted with the possession, which is, per se, evidence of title; and to avoid the evil of making this possession evidence of title in all cases, this section provides that the factor shall be intrusted with the possession "for the purpose of sale, or as a security for advances to be made, or obtained thereon; " while the sixth section guards expressly against a sale, & c., by any one who is a mere bailee "for transportation or storage only; " providing that no such bailee ("common carrier, warehouse-keeper, or other person, ") shall sell or hypothecate the merchandise so committed

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(intrusted) to him. And, in passing, we may note that this use of the word "hypothecate" shows that the statute has been properly construed, (in the decisions of our courts), as providing for a pledge of the merchandise, either by the holder of the documentary evidence, or by the possessor.

In the construction of this third section, it is claimed that the documentary evidence (as well as the possession, ) must be intrusted "for the purpose of sale, " & c. This is probably so, although the English statute, (6 Geo. IV, notedpost, ) does not require anything as to the purpose for which the documents shall be intrusted. But it is not necessary for the decision of this case that we decide that point; since there is no doubt that all the control, and all the evidence of title, which Acker & Harris had, they had "for the purpose of sale; " which includes (under the statute, though not at common law), the "disposition" of any title less than the whole. Being entrusted for the purpose of absolute disposition, and so considered the true owners, they could, of course, make a conditional one, even though the goods were not intrusted to them for that purpose.

The statute 6 George IV, chapter 94, section 2, differs decidedly from ours, as it says nothing of a factor in possession; being confined to those who have documentary evidence of title. Yet it is quite probable that the draughtsman of our act referred to this English statute for some of his terms; since, while using one of our technical terms (not used in the English act), "custom-house permit, " he adds, "warehouse-keeper's receipt, " a term not then known in our commercial vocabulary, as we then had no bonding or warehousing system. It was probably used in expectation of such a system, which had been called for by our importers. At any rate, if our previous construction of the words "such merchandise" be correct, this use of "warehouse-keeper's receipts" cannot refer to a private warehouse-man, who receives goods directly from the owner; although the sixth section of our act does use the word "warehouse-keeper" in that sense. The phrase in the third section, must have reference to a warehouse-keeper of shipped or

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imported goods; some one connected with, if not in, a public employment.

The English statute, and our own, were manifestly passed for the purpose of increasing the facilities of trade, by legalizing and explaining the cases in which a party could sell, or pledge, property at sea, in the ship at dock, or lying in the warehouse subject to the payment of duties. Historically, the necessities of trade and the custom of merchants had, in both countries, anticipated the statutes. And the benefits of the statutes and the custom are too evident, and too great to allow us to narrow the construction of the law. And there is no sound principle which would oppose a liberal view, tending to enlarge the facilities of transfer; since these acts but follow out the general rule, that every man is bound to take care not to select an agent, who will do acts to injure other persons.

To proceed with the case: To which of the two classes of factors above specified, did Acker & Harris belong? They had been "intrusted" with the bill of lading; and it had performed its office by securing to them an entry at the customhouse--a regular, legal, customary entry, known as a warehousing entry; by virtue of which they, and the person whom they might authorize--and no other--could, upon paying the duties, take delivery of the goods. Further, according to the custom of trade, they had, upon and as a consequence of such warehousing entry, procured a warehouse-keeper's receipt that he held the goods "for their account, " practically subject to their order so far as he was concerned, and, by law, absolutely at their risk. To be entitled to enforce that receipt, they needed to make a withdrawal entry at the custom-house; (which withdrawal entry could by law be made only by the party in whose name the merchandise was warehoused, or by some person duly authorized for the purpose by him; ) then pay the duties, and procure the "custom-house permit. "

The authority to a third person to make the withdrawal entry, was to be a simple writing: "I authorize A. B. to withdraw from warehouse the goods described in this entry; " and might be on the original entry, or on the withdrawal entry.

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The warehousing permit, (issued on the surrender of the bill of lading and the making of the warehousing entry, ) would regularly be followed by the withdrawal entry; and the withdrawal entry, (or the exclusive authority to make it, ) with the...

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44 practice notes
  • 256 N.Y. 482, Commercial Credit Corporation v. Northern Westchester Bank
    • United States
    • New York New York Court of Appeals
    • June 2, 1931
    ...v. Shaw, 61 N.Y. 283; 69 N.Y. 624; Kinston Cotton Mills v. Kuhne, 129 A.D. 258; Kuphick v. Levy, 114 Misc. 533; Cartwright v. Wilmerding, 24 N.Y. 521; New York Security & Trust Co. v. Lipman, 157 N.Y. 551; Freudenheim v. Gutter, 201 N.Y. 94; Clark v. Flynn, 120 Misc. 474.) The trial cou......
  • 305 N.Y. 180, Zendman v. Harry Winston, Inc.
    • United States
    • New York New York Court of Appeals
    • April 9, 1953
    ...Berg Bros., 239 N.Y. 229.) III. The Factor's Act (Personal Property Law, § 43) validates the sale to plaintiff. (Cartwright v. Wilmerding, 24 N.Y. 521; Freudenheim v. Gtter, 201 N.Y. 94.) IV. The Utica Trust & Deposit Co. v. Decker case (244 N.Y. 340), relied upon by the Appellate Divis......
  • 307 Mass. 577 (1940), Associates Discount Corp. v. C. E. Fay Co.
    • United States
    • Massachusetts Supreme Judicial Court of Massachusetts
    • December 31, 1940
    ...that the seller was an agent or factor and not the owner. Stevens v. Wilson, 6 Hill, 512; S. C. 3 Denio, 472. Cartwright v. Wilmerding, 24 N.Y. 521, 534, 535. Allen v. St. Louis Bank, 120 U.S. 20, 33, 34. Our construction is supported by Williston, Sales (2d ed. 1924) Section 322, and by an......
  • 157 N.Y. 551, New York Security and Trust Co. v. Lipman
    • United States
    • New York New York Court of Appeals
    • January 10, 1899
    ...v. Atkinson, 74 N.Y. 587; Moors v. Kidder, 106 N.Y. 40; Blydenstein v. N.Y. S. & T. Co., 15 C. C. A. 17; Cartwright v. Wilmerding, 24 N.Y. 521; Soltau v. Gerdau, 119 N.Y. 380; Kinsey v. Leggett, 71 N.Y. 387; Howland v. Woodruff, 60 N.Y. 73.)The Factors' Act, even if applicable, does not......
  • Request a trial to view additional results
44 cases
  • 256 N.Y. 482, Commercial Credit Corporation v. Northern Westchester Bank
    • United States
    • New York New York Court of Appeals
    • June 2, 1931
    ...v. Shaw, 61 N.Y. 283; 69 N.Y. 624; Kinston Cotton Mills v. Kuhne, 129 A.D. 258; Kuphick v. Levy, 114 Misc. 533; Cartwright v. Wilmerding, 24 N.Y. 521; New York Security & Trust Co. v. Lipman, 157 N.Y. 551; Freudenheim v. Gutter, 201 N.Y. 94; Clark v. Flynn, 120 Misc. 474.) The trial cou......
  • 305 N.Y. 180, Zendman v. Harry Winston, Inc.
    • United States
    • New York New York Court of Appeals
    • April 9, 1953
    ...Berg Bros., 239 N.Y. 229.) III. The Factor's Act (Personal Property Law, § 43) validates the sale to plaintiff. (Cartwright v. Wilmerding, 24 N.Y. 521; Freudenheim v. Gtter, 201 N.Y. 94.) IV. The Utica Trust & Deposit Co. v. Decker case (244 N.Y. 340), relied upon by the Appellate Divis......
  • 307 Mass. 577 (1940), Associates Discount Corp. v. C. E. Fay Co.
    • United States
    • Massachusetts Supreme Judicial Court of Massachusetts
    • December 31, 1940
    ...that the seller was an agent or factor and not the owner. Stevens v. Wilson, 6 Hill, 512; S. C. 3 Denio, 472. Cartwright v. Wilmerding, 24 N.Y. 521, 534, 535. Allen v. St. Louis Bank, 120 U.S. 20, 33, 34. Our construction is supported by Williston, Sales (2d ed. 1924) Section 322, and by an......
  • 157 N.Y. 551, New York Security and Trust Co. v. Lipman
    • United States
    • New York New York Court of Appeals
    • January 10, 1899
    ...v. Atkinson, 74 N.Y. 587; Moors v. Kidder, 106 N.Y. 40; Blydenstein v. N.Y. S. & T. Co., 15 C. C. A. 17; Cartwright v. Wilmerding, 24 N.Y. 521; Soltau v. Gerdau, 119 N.Y. 380; Kinsey v. Leggett, 71 N.Y. 387; Howland v. Woodruff, 60 N.Y. 73.)The Factors' Act, even if applicable, does not......
  • Request a trial to view additional results