Capital Auto. Co. v. Ward
| Decision Date | 03 December 1936 |
| Docket Number | 25750. |
| Citation | 189 S.E. 713,54 Ga.App. 873 |
| Parties | CAPITAL AUTOMOBILE CO. v. WARD. |
| Court | Georgia Court of Appeals |
Rehearing Denied Dec. 18, 1936.
Syllabus by the Court.
Where an owner of personal property agrees to sell it to another person for cash, and on delivery of the property to the purchaser accepts checks in payment, and thereafter such purchaser, having been placed in possession of the property by virtue of such agreement to sell, sells it for a valuable consideration to a third person who has no notice of the true owner's title, the owner is thereafter estopped to set up his title as against such third person, although the checks so given, on due presentation to the drawee bank, are returned as worthless.
Error from Municipal Court of Atlanta; Ralph McClelland, Judge.
Suit by Fred L. Ward against the Capital Automobile Company. Judgment for plaintiff, defendant's motion for a new trial was overruled, and defendant brings error.
Affirmed.
Fred L Ward brought trover against Capital Automobile Company for a certain Oldsmobile automobile. The jury found in favor of Ward, and the defendant's motion for new trial was overruled. His writ of error presents exceptions to that judgment. Briefly summarized, the evidence discloses that some time during March, 1935, the plaintiff had purchased a Ford automobile from a Mrs. Cowan. Mrs. Cowan at that time was carrying on a garage business, dealing in new and used cars. On or about May 24, 1935, plaintiff approached Mrs Cowan with regard to the purchase of an Oldsmobile automobile. Plaintiff and Mrs. Cowan reached an agreement whereby she was to allow him $686 for his Ford, to be applied on the purchase price of the Oldsmobile, which was $868. It appears that Mrs. Cowan was not a regular authorized dealer in Oldsmobile automobiles, and did not have the type of car desired by plaintiff, and that she requested the plaintiff to advise her in this regard. On the same day plaintiff informed Mrs. Cowan that he had seen the type of Oldsmobile he desired, and she thereupon called defendant, Capital Automobile Company, which company was a duly authorized dealer in Oldsmobiles, and asked that they deliver to her this type of car. That afternoon, Robbins and Smith, agents of the defendant, delivered to her the car in question and in payment of the purchase price, she delivered to them two checks, one in the amount of $686 and one in the amount of $200, and advised them that at that time she did not have sufficient funds in the bank to cover said checks but that on the following Monday she would make a deposit sufficient to cover them, this transaction taking place on Friday afternoon. They thereupon delivered to her an invoice to said automobile, marked "paid by two checks." On the same day Mrs. Cowan delivered the automobile to the plaintiff in exchange for his automobile, and the next morning was given a check to cover the balance of the purchase price. The checks given by Mrs. Cowan were returned by the bank marked "Insufficient funds." Thereafter the Capital Automobile Company brought a possessory warrant against Ward gave bond, and took possession of the automobile. This court in Ward v. Capital Automobile Co., 53 Ga.App. 537, 186 S.E. 700, held that the possessory warrant would not lie.
Neely, Marshall & Greene and W. Neal Baird, all of Atlanta, for plaintiff in error.
Lyman H. Hilliard and Harllee Branch, Jr., both of Atlanta, for defendant in error.
It is true that, where an agreement is made to sell personal property for cash, and on delivery of the property a check is given for the purchase price, as between vendor and vendee the title to the property does not pass unless it be expressly agreed between the parties that the check is taken as payment, and, where the check is presented to the bank by the vendor in the usual course of business and is returned as worthless, the vendor may recover possession of the property from the vendee. Winton v. Butler, 53 Ga.App. 696, 186 S.E. 773. However, this principle, by its express terms, is applicable only as between vendor and vendee. "The general rule, applicable to property other than negotiable securities, that the seller can convey no greater right or title than he has, is only predicable of a simple transfer from one person to another where no other element intervenes." 24 R.C.L. 378, 379, § 665. Code, § 96-207, declares: "Where an owner has given to another such evidence of the right of selling his goods as, according to the custom of trade or the common understanding of the world, usually accompanies the authority of disposal, or has given the external indicia of the right of disposing of his property, a sale to an innocent purchaser divests the true owner's title." Now, it has been many times stated, and from practical necessity in the transaction of business should be adhered to, that possession of personal chattels, by virtue of which such person has been given dominion and control over the property as if it were his own, carries with it the presumption of ownership and consequent right of disposition of such chattel. Thus it would seem that where one, under a contract of sale, gives to another unrestricted and unqualified possession of personal property, to deal with and use as his own a bona fide purchase for a valuable consideration from such person in possession of the property, divests such owner of his title; although it may be said that the rights of such bona fide purchaser in such case do not depend upon the title or actual authority of the person with whom he deals directly, but are derived from the acts of the real owner, which preclude him from disputing, as against such bona fide purchaser, the existence of the title or power which, through negligence or mistaken confidence, he caused or allowed to appear to be vested in the person making the transfer. 24 R.C.L. 379, § 688. This is merely a special application of the statute or rule embodied in our Code, § 37-113, that "When one of two innocent persons must suffer by the act of a third person, he who put it in the power of the third person to inflict the injury shall bear the loss." We take it that no one would dispute the proposition that, if A and B should walk into a store and A should agree to purchase a certain article therein for cash, and gave a check therefor, and then immediately and in the presence of the seller and owner should turn and sell the article to B for a valuable consideration, under such circumstances the seller would be estopped to set up his title as against B, although the check might prove, upon due presentation to the bank, to be worthless. Then, could it be reasonably said that if, instead of standing by and watching the property sold by A to B, the seller allowed A to take the article away under a contract of sale and control and have dominion over it as if it were his own, and A later sold the property to B, a different rule would apply? We think not. In Redd v. Muscogee R. Co., 48 Ga. 102, the Supreme Court said in this connection: "Where one bought a negro slave at sheriff's sale, and permitted him to remain with the defendant to use as his own, and he was so used for years, persons dealing with the said defendant with no knowledge of who is the true owner, have a right to consider the slave as the property of the person thus 'using him as his own."' This was certainly recognized by our Legislature at one time to be the true law, for by Code, § 96-110 (Ga. Laws 1884-5, pp. 45, 52), they expressly made an exception to what we have said by providing that "cotton, corn, rice, crude turpentine, spirits turpentine, rosin, pitch, tar, or other product sold by planters and commission merchants, on cash sale, shall not be considered as the property of the buyer until fully paid for, although it may have been delivered to the buyer."
Thus it has been held that "Under the Civil Code §§ 4126, 4314 where a planter selling cotton on cash sale receives a check for the purchase-price, the title to the cotton, in the absence of an agreement to the contrary, does not pass until payment of the check; and where the check is dishonored he may in trover recover the property from one who, without knowledge of the title reserved by the statute, has bought the cotton from the original purchaser." Anchor Duck Mills v. Harp, 40 Ga.App. 563, 150 S.E. 572. However, Judge Jenkins clearly points out in the opinion that the statute makes an exception to the general rule, as to certain commodities: "It is true that there is a general principle of law to the effect that if one 'has given the external indicia of the right of disposing of his property, a sale to an innocent purchaser divests the true owner's title' (Civil Code 1910, § 4119), which is but an application of another and broader general principle to the effect that 'when one of two innocent persons must suffer by the act of a third person, he who put it in the power of the third person to inflict the injury must bear the loss' (Civil Code, § 4537), still the provisions of section 4126 of the Civil Code 1910, must be taken to establish a special rule with reference to sales of cotton or other products by planters or commission merchants on cash sale, such as will protect the seller in his title even as against one...
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