Ellison v. Hunsinger

• Decision Date: 06 May 1953
• Docket Number: No. 308,308
• Parties: ELLISON, v. HUNSINGER et al.
• Court: North Carolina Supreme Court

Page 884

75 S.E.2d 884

237 N.C. 619

ELLISON, v. HUNSINGER et al.

No. 308.

Supreme Court of North Carolina.

May 6, 1953.

D.Z. Newton, Peyton McSwain, Shelby, and George F. Coleman, Winnsboro, for the plaintiff, appellant.

Tillett, Campbell, Craighill & Rendleman, Charlotte, for the defendant Crespi Cotton c., Appellee.

Joseph C. Whisnant, Shelby, for the defendants Planters & Merchants Warehouse, Inc., and J.E. Noggle, Manager of Planters & Merchants Warehouse, Inc. appellees.

Harry McMullan, Atty. Gen., and T.W. Bruton, Asst. Atty. Gen., for the defendants A. B. Fairley, State Warehouse Superintendent, and Brandon P. Hodges, Treasurer of State, Appellees.

PARKER, Justice.

Each state has the right to regulate the transfer of property within its limits. The prevailing modern theory is that the law of the situs in general controls transfers of personality. All the trans- actions between the plaintiff Ellison and Hunsinger occurred in South Carolina; the 43 bales of cotton were situated in South Carolina; according to Hunsinger's representations, Ellison was to be paid by Cooley's cheque; Cooley lived in Spartanburg, South Carolina. Hun- singer obtained possession of the 43 bales of cotton from Ellison by the crime of false pretense--to which crime he pleaded guilty, and is now serving a prison sentence in South Carolina. Whether Hunsinger acquired title to this cotton is to be determined according to the laws of the State of South Carolina, and the South Carolina law on the doctrine of comity in the forum will be enforced in the Courts of North Carolina, unless contrary to the public policy of this State. Handley Motor Co. v. Wood, 237 N.C. 318, 75 S.E.2d 312; Price v. Goodman, 226 N.C. 223, 37 S.E.2d 592; 11 Am.Jur., Conflict of Laws, § 66.

The facts in relation to one Hinson obtaining a Buick Convertible Coupe from Russell Willis, Inc., in the case of Russell Willis, Inc., v. Page, 213 S.C. 156, 48 S.E.2d 627, 629, are strikingly similar to Hunsinger obtaining this cotton from Ellison. On 11 May 1947 Mrs. E.F. Stacker, H. J. Saltzman and one, Bernard Hinson, the owner, gen- eral manager, and employee, respectively, of Farnsworth-Stacker, a reputable company, engaged in various lines of business at Clarksville, Tenn, a distance of about 40 miles from Nashville, Tenn., came into Russell Willis, Inc.'s place of business for the purpose of purchasing one or more Buick automobiles. At that time Russell Willis, Inc. had on hand a new four-door Buick Sedn and also a Buick Convertible Coupe. Mrs. Stacker purchased the four-door Sedan. While there Mrs. Stacker and especially Saltzman seriously considered buying the Convertible Coupe, which was priced to them at $3,595.00. As they were leaving Saltzman said: 'He would send back and get the Buick Convertible for $3595.00.'

On 29 May 1947, Hinson walked into the office of Russell Willis, Inc., and stated that he had come after the Buick Convertible Coupe for Saltzman. Hinson delivered to Russell Willis, Inc., a Farnsworth- Stacker printed cheque signed 'E. F. Stacker,' payable to Russell Willis, Inc., in the sum of $3,595.00. The signature to this cheque was a forgery.

Baker, C.J., speaking for the Court said: 'The trial Judge has very succinctly stated the governing law of this case as applied in South Carolina, and we quote therefrom. There can be no doubt but that the plaintiff did not divest itself of title to said automobile by the purported sale to H. J. Saltzman upon the false and fraudulent representation of Hinson that he was authorized by Saltzman to purchase said car for and on his behalf. It follows that the defendant, Page, acquired no title in the purchase of the car from Hinson. Under such circumstances, ordinarily, the original seller is entitled to the recovery of his property even as against a subsequent bona fide purchaser for value and in good faith. See the annotations contained in 13 L.R.A.,N.S., at page 413, and L.R.A.1916D, 801, See, also M. Brotchiner & Sons, Inc., v. M. Ullman, Inc. (141 Misc. 102), 252 N.Y.S. 244.' * * * The law of neither the State of Tennessee nor that of the State of Virginia having been pleaded, we must assume that it is the same as in this State, and therefore the law of the forum will govern.'

The annotation contained in 13 L.R.A., N.S., at page 416 states: 'There are numerous other cases holding that title will not pass where the alleged purchaser has falsely represented himself to be an agent for some third party, as in that case there is no meeting of the minds. ' (Citing numerous authorites).

In the annotation L.R.A.1916D, 801, it is said in part: 'The re- putation of a certain person or firm may be such that the party desires to contract with him and him only. If a mistake arises and such a party contracts with another in the belief that he is contracting with the desired person, the contract may be avoided. It is more accurate to say that no contract exists.'

In M. Brotchiner & Sons, Inc., v. M. Ullman, Inc., 141 Misc. 102, 252 N.Y.S. 244, 246, a man represented himself to be a brother of Victor Goodman, a reputable fur dealer in Toronto, Canada, for whom he said he was authorized to make purchases of furs, and purchased a num- ber of furs from the plaintiff by a cheque which purported to be signed by V. Goodman. The cheque was forged. The purported purchaser sold these furs to the defendant. On 11 May, 1929, the same in- dividual, now representing himself to be Victor Goodman, appeared in Buffalo at the factory where the defendant is engaged in manufacturing and trading in furs. He stated that on account of delays incident to importation into Canada he desired to sell the furs at cost. In con- firmation he exhibited the receipted bills received from the plaintiff, showing sale of the furs to V. Goodman for $1,451. He gave also the name of his hotel in Buffalo. Inquiry by the defenant showed that a Victor Goodman was registered there. The defendant finally agreed to buy the furs for $1,400 and delivered its check for this amount, which was immediately paid. The plaintiff, having thereafter ascertained that the defendant was in possession of the furs, made demand for them, and, the demand having been rejected, began this suit. The New York Court said: 'It is entirely clear under the circumstances here that the impostor acquired no title to the merchandise, and consequently that no title passed to the defendant. The impostor was only in- trusted by the plaintiff with possession of the merchandise for trans- mission to his alleged principal. The plaintiff never sold nor did it intend any sale to him.'

In Chiplock v. Steuart Motor Co., d.C. Mun.App., 91 A.2d 851, 853, the Court said:'We think it is correct to say that when a seller purports to transfer title to one who is in fact a stranger to the transaction, no title (void, voidable, or otherwise) flows from the seller to a wrongdoer who has fraudulently held himself out as agent of such stranger. This is so because one of the supposed parties to the legal transaction is actually wanting. In such a situation the seller may usually follow the property and recover it from an innocent purchaser. Russell Willis, Inc., v. Page, 213 S.C. 156, 48 S.E.2d 627 (and citing other authorities).'

The South Carolina law that one who has acquired possession of property by a crime such as false pretense cannot transfer a better title than he himself has, even to a bona fide purchaser, unless some principle of estoppel comes into operation, is in accord with the general rule. 46 Am.Jur., Sales, §§ 459 and 460.

It is stated in 77 C.J.S., Sales, § 294, page 1103: 'The defrauded owner of goods can recover them from a bona fide purchaser under one who has obtained them from the true owner by a pretended purchase for, or in behalf of, another person or of a firm, which representation of authority is false and fraudulent. ' C.J.S. cites as authority for its statement Russell Willis, Inc., v. Page, supra; Petty v. Borg, 106 Utah 524, 150 P.2d 776.

Under the South Carolina law title to the 43 bales of cotton remained in the plaintiff Ellison, and never passed to Hunsinger. On the doctrine of comity in the forum this South Carolina law will be en- forced in North Carolina, unless contrary to the public policy of this State. This Court has said in In re Chase, 195 N.C. 143, at page 148, 141 S.E. 471, 473: 'As pointed out in Northern Pacific r. Company v. Babcock, 154 U.S. 190, 14 S.Ct. 978, 38 L.Ed. 958, to justify a court in refusing to enforce a right which accrued under the law of another state, because against the policy of our laws, it must appear that it is against good morals or natural justice, or that for some other such reason the enforcement of it would be prejudicial to the general interests of our own citizens. (Citing authorities.) And this is a matter which each state must decide for itself. ' We find nothing in our own laws which declares it against public policy, good morals, or natural justice, or prejudicial to the general interest of our own citizens to recognize as a matter of comity the south Carolina law the the title to the 43 bales of cotton remained in the plaintiff, and never passed to Hunsinger.

It is a universal and fundamental principle of our law of personal property that the owner of such property cannot be divested of his ownership without his own consent, except, of course, by due process of law. Dows v. National Exchange Bank of Milwaukee, 91 U.S. 618, 23 L.Ed.214. the general rule of law is that a sale by a person who has no right to sell is not valid against the rightful owner. Even a bona fide purchaser obtains no title or right by a purchase from one who is not the owner, or not authorized to sell, which he can assert as against the true owner in the absence of some element of estoppel. It is a general rule that the fact that the owner has intrusted someone with mere possession and control of personal pro- perty is not sufficient...