Chandler v. Fulton

• Decision Date: 01 January 1853
• Citation: 10 Tex. 2
• Parties: CHANDLER v. FULTON AND OTHERS.
• Court: Texas Supreme Court

10 Tex. 2

CHANDLER

v.FULTON AND OTHERS.

Supreme Court of Texas.

1853.

Where the assignee of a bill of lading sued forwarding merchants for the unlawful detention of the goods, the consignors were permitted to intervene and defend, claiming that the goods were detained by virtue of their right of stoppage in transitu.

Where goods have been shipped upon credit, the unpaid vendor, in case of the vendee's insolvency, may countermand their delivery and resume possession of them, at any time before their arrival at the place of destination, provided the bill of lading has not been assigned to a bona fide purchaser. The term insolvency, in this connection, means a general inability to pay, evidenced by the stoppage of payment.

The right of stoppage in transitu continues until the termination of the voyage, and the delivery of the goods to the consignee, or his agent. In general the termination of the voyage is at the place of ultimate destination, mentioned by the vendee to the vendor; but the consignee may determine the voyage and the right of stoppage in transitu, by receiving the goods, by agent, at an intermediate point, provided such receipt be not made with a view to the transmission of the goods to their original destination.

It is not necessary, to a valid stoppage in transitu, that the party by whom it is effected should have received a special authority to that effect. The authority of a general agent is sufficient. A merchant to whom goods are sent with directions to forward, may stop them in transitu for the benefit of the consignor, provided the latter affirm the act.

A general assignment for the benefit of creditors, or a seizure by an execution creditor, or under process of foreign attachment against the consignee, or a sale for a valuable consideration unaccompanied by a transfer of a bill of lading, will not defeat the right of stoppage in transitu. But the assignment of the bill of lading, bona fide, for a valuable consideration to an assignee without notice of the insolvency of the consignee, does defeat the right of stoppage in transitu.

It is not sufficient that the assignee knows that the goods are not paid for; but he must have notice of such circumstances as render the bill of lading not fairly and honestly assignable; but it is not necessary to show that he actually intended to commit a fraud.

Although this court may be satisfied with the verdict, yet if an erroneous charge was given, which may have influenced the finding, and in the absence of which the finding might have been different, the judgment must be reversed.

A peremptory refusal to deliver, by a bailee, dispenses with the necessity of a tender of charges before bringing suit.

Stoppage in transitu is neither inconsistent with nor a rescission of the act of sale; the goods remain the property of the vendee, subject to the vendor's rights as they exist before delivery, consequently a letter written to the vendee, by an intermediate agent, advising of their arrival and that they are held subject to his orders, does not preclude such agent from stopping the goods in transitu for the benefit of the vendor, even as against a purchaser upon the faith of such letter.

Where the transfer of the bill of lading is by way of mortgage or pledge the right to stop the goods is not absolutely defeated; for if the mortgage should be held to have been made bona fide the vendor may still resume his interest in them, subject to the rights of the mortgagee, and will have a right to the residue after satisfying the mortgage.

Appeal from Calhoun. Richard Patrick & Co., of New York, sold to James Nicholson, of Bastrop, a bill of goods, amounting to $2,200, on a credit of twelve months, and shipped them, on the 12th of April, 1851, to the care of Fulton & Hensley, commission merchants at Port Lavaca, with instructions to forward them to their destination. Fulton & Hensley received the goods in their warehouse, and wrote to Nicholson, advising him of their arrival, asking orders, and stating that they would “hold on to the goods until he should order them away.”

In May following Nicholson, being in failing circumstances and unable to pay, assigned the bill of lading to Chandler, to obtain time upon, and to secure a debt of $1,700, which the latter held for collection, in favor of Peet, Sims & Co., of New Orleans. It was agreed between Chandler and Nicholson that the goods should be transported to Bastrop, and delivered into the custody of the agent of Chandler there, who was to retain them for the period of four months, when, if Nicholson paid or secured, in a manner agreed upon, the debt of Peet, Sims & Co., the goods were to be returned to Nicholson; otherwise Chandler was to have judgment for his debt and sell the goods for its payment. In June following Nicholson informed Chandler that he might send for and take charge of the goods, (which remained in the care of Fulton & Hensley at Port Lavaca,) and make what disposition he pleased of them to secure the payment of his debt. Chandler sent for and demanded the goods of Fulton & Hensley, offering to pay their charges, which they refused to receive, or to deliver the goods without an order from the consignors, Patrick & Co. The latter afterwards ratified and adopted their act in refusing to deliver the goods.

Chandler brought suit against Fulton & Hensley. They answered, alleging the purchase of the goods by Nicholson of Patrick & Co. on time, the insolvency of Nicholson, and that they, as agents of Patrick & Co., had exercised the right of the latter, of stopping the goods. Patrick & Co. at the same time intervened, claiming to be the real party in interest. They were admitted to defend, and answered, justifying and adopting the acts of Fulton & Hensley in stopping the goods, on the ground that they were not paid for; that Nicholson was insolvent, and that the assignment to the plaintiff was in fraud of their rights.

There was a mass of evidence introduced on the trial, which it is unnecessary here to detail. Various instructions were asked by the parties respectively, some of which were given and others refused. Among the instructions asked by the plaintiff, and refused, was the following: “The ultimate destination of the goods is the point where the vendee directs the vendor to send them, and if Nicholson named Lavaca as the point where the goods were to be sent, then the arrival and delivery of the goods at Lavaca to the consignee would be an executed delivery such as to destroy the right of stoppage in transitu.” The court instructed the jury as follows: “If the jury believe from the evidence that the goods in question were transferred to Chandler by Nicholson in good faith and for a valuable consideration, he, Chandler, having no knowledge of the failing circumstances of Nicholson, and that the goods had not been paid for, and if you shall further believe that Port Lavaca was the ultimate destination of the goods in question, and that they had been placed in the warehouse of Fulton & Hensley, then the right of stoppage in transitu was gone; and if you shall further believe that the plaintiff or his agents offered to pay the charges on the goods, then you shall find for the plaintiff the value of the goods at Port Lavaca.”

2. (In substance) that if Bastrop was the place of the ultimate destination of the goods, they were subject to the right of stoppage in transitu at Lavaca.

3. That if, at the time of the transfer, Nicholson was insolvent and the goods not paid for, and Chandler knew the facts, the transfer to Chandler would not destroy the vendor's right of stoppage in transitu.

4. That if, at the time of the demand of the goods by Chandler, Fulton & Hensley had been notified by Patrick & Co. not to deliver them, in consequence of the insolvency of Nicholson, or if Patrick & Co. subsequently adopted or recognized their acts, and Nicholson was in fact insolvent, the plaintiff could not recover.

5. That if Fulton & Hensley proposed to Patrick & Co. to act as their agents in retaining the goods, and the latter accepted their proposition, the former were their legally constituted agents from the date of the acceptance of the proposition.

There was a verdict and judgment for the defendants, and the plaintiff appealed.

Jones & Ballinger, for appellant. I. The first point relied on is, that the court erred in overruling plaintiff's motion to strike out the petition and pleadings of Richard Patrick & Co.

The suit was an action in tort against Fulton & Hensley for the unlawful detention of goods and conversion of them to their own use. The cause of action against them was complete, and entirely distinct from and independent of Patrick & Co. The suit was not to recover the goods, but to recover damages for unlawful acts in regard to them; and even admitting that R. P. & Co. might have been jointly sued, yet it was plaintiff's right to make his election. The responsibility of F. & H. was complete. They were citizens of the State--a judgment against them could be enforced. Patrick & Co. were non-residents, against whom a judgment would probably be valueless, and they had no right to obtrude themselves into the case; nor could the court require Chandler to litigate with them, when it was not his own pleasure to do so. Their position in the case is most anomalous. No relief is sought against them--they seek no relief; nor is their presence as formal parties necessary or useful to determine any right in controversy before the court. Had the plaintiff recovered, it would not have been against them, for against them he asked nothing and wished nothing. And yet the record is encumbered with the demurrers of these parties, with many pages of their pleadings, and with much proof taken by them. The costs of the suit were greatly increased. It is evidently a hardship upon the plaintiff, which the court had no right to impose. That the plaintiff could elect, see 1 Chitt. Pl., 89.

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