Mich. Cent. R.R. Co. v. Phillips

• Decision Date: 30 September 1871
• Citation: 60 Ill. 190,1871 WL 8112
• Parties: MICHIGAN CENTRAL RAILROAD CO.v.WILLIAM N. PHILLIPS et al.
• Court: Illinois Supreme Court

60 Ill. 190

1871 WL 8112 (Ill.)

MICHIGAN CENTRAL RAILROAD CO.

v.WILLIAM N. PHILLIPS et al.

Supreme Court of Illinois.

September Term, 1871.

OPINION TEXT STARTS HERE

APPEAL from the Superior Court of Cook county; the Hon. JOSEPH E. GARY, Judge, presiding.

Messrs. HOYNE, HORTON & HOYNE, for the appellants.

Messrs. GOUDY & CHANDLER, for the appellees.

Mr. JUSTICE SHELDON delivered the opinion of the Court:

The principal question which arises on this record is, whether there was such a delivery of the highwines in controversy, to Ames, as to vest title in him.

The contract of sale was from Moir & Co. to Ames, and on the 18th of July, 1870, Moir & Co. not having the highwines on hand, Phillips & Carmichael, the appellees, commission merchants of Chicago, for Moir & Co., purchased from Conklin & Bro. and Lynch & Co. one hundred barrels of highwines, fifty from each firm, to be delivered on that day to Wilson Ames, with directions, when delivered, to collect from him $1.07 per gallon, that being the contract price with Moir & Co., and pay Phillips & Carmichael nine cents per gallon of the sum collected--the price paid Conklin & Lynch being ninety-eight cents.

The fifty barrels bought of Conklin & Bro. are the wines replevied in this suit. They were at the Rock Island depot at the time of the purchase, the 18th of July. On the afternoon of that day, the whole one hundred barrels were hauled by the teamsters of Conklin & Lynch, and delivered at the store of Ames. To countervail the effect of this as an absolute delivery, the testimony of Phillips, one of the appellees, is relied upon, who testified that, on the afternoon of the 18th of July, he went twice to Ames' business house, once between 4 and 5, and again between 5 and 6 o'clock, for the purpose of tendering to him the wines, and did not find Ames, nor any book-keeper or clerk, either time; found a laboring man there; and near 6 o'clock, when he left, he says: “I remarked to the man that I would leave those wines there until morning; I wanted to collect for them before I delivered them, and would be there in the morning; told him to tell Mr. Ames I would come down.”

The next morning, Conklin & Lynch sent the bills to Ames' place of business to collect, but Ames did not pay them, and was not found, and failed in business, his store being closed by the sheriff that forenoon.

No time being stipulated by the contract for payment of the purchase price, its payment was a condition precedent implied by law, and the property would not vest in the vendee until he performed the condition, or the seller waived it. An absolute and unconditional delivery is regarded as a waiver of the condition. In this case, we should incline to hold that, as between the parties, the delivery was but conditional, and that, on the morning of the 19th of July, when Ames failed to pay the purchase price, the seller might have reclaimed the property from his hands.

It would be similar to the case of Mathews et al. v. Cowan et al., 59 Ill. 341, where we held that the delivery of goods, and taking for the purchase price a worthless check, did not vest the property in the vendee.

But here, between the time of placing the goods in the control of Ames, and any movement to reclaim them, Ames had removed the goods and shipped them on board a car of the Michigan Central railroad for transportation to New York; had obtained bills of lading therefor for their delivery to the consignee, and the National Bank of Commerce, of Chicago, had cashed two drafts drawn by Ames on the consignee, with the bills of lading attached to them, in pursuance of a previous arrangement he had made with the bank to cash seven hundred barrels of highwines he was about to ship to New York, on bills of lading attached to drafts. The drafts amounted to $5700, were duly presented, but neither accepted nor paid by the consignee, and are still the property of the bank, wholly unpaid.

Although there might not have been, here, any waiver of the condition of payment as to the vendors, we are of opinion there was as to the bank, and that it is entitled to the protection of a bona fide purchaser without notice, if such be the position it occupies, which will be hereafter considered.

The rule in this respect, whether a bona fide purchaser, for a valuable consideration, without notice, in such case, is protected, is held differently in different States.

Such rule of protection is denied in Dishon v. Bigelow, 8 Gray, 159, it being held that such purchaser acquires no better right than his vendor had, and stands in the same situation. See, also, Sargent v. Gile, 8 N. Hamp. 225; Sawyer v. Fisher, 32 Maine, 28. While, in New York and Pennsylvania, the contrary rule seems to obtain. Smith v. Lynes, 1 Seld. 42; 6 Johns. Ch. 437; 1 Paige, 312; 1 Edw. Ch. R. 146; Martin v. Mathiot, 14 Serg. & Rawle, 214; Rose v. Story, 1 Barr, 190. In this State, the rule of protection of bona fide purchasers, in such case, must be regarded as the one established by judicial decision. Jennings v. Gage et al. 13 Ill. 614; Brundage v. Camp, 21 Ill. 330; Butters v. Haughwout, 42 Ill. 18; The Chicago Dock Co. v. Foster, 48 Ill. 507; O. & M. R. R. Co. v. Kerr et al. 49 Ill. 459.

In Brundage v. Camp, the authorities on both sides are reviewed to quite an extent.

That was a case of the sale of personal property, upon condition of giving a note with security for the purchase price, and permission to the purchaser to take the property, on the express condition that the note should be given by the following Monday. The sale of the property by the purchaser, a day or two afterwards, without giving the note, was held to pass a good title. The great stress of the argument in support of the claim of the appellees, is, that all depends on the intent, and that there was here no intent to part with the property, or to give Ames any control over it, until they were paid. Nevertheless, the fact remains that they placed the highwines in the store of Ames, and gave him apparent dominion and disposing power over them, and enabled him to exercise the same, as he did. Now, as we regard the rule of the foregoing cases, had there been an express agreement made on entrusting the highwines in the hands of Ames, that he should have no control over them, and that they should remain the property of the vendors until paid for, it would not have availed to prevent the acquirement of a good title to the property by a bona fide purchaser from Ames, for a valuable consideration, without notice. And Phillip's declaration to the laboring man at Ames' store, could have no greater effect than such an express agreement.

The property here, where nothing remained to be done to complete the sale, either to identify the property or ascertain the price, was entrusted to the possession of the purchaser by the consent of the owner, under the form of a regular sale and delivery, and in the completion of the same; and by its being thus placed under his control, Ames was enabled to obtain credit by pledging it to an innocent party.

The sellers did not see fit to exact payment at the time, as they might and should have done, where rights of innocent purchasers might intervene, but trusted to the personal security of Ames till the following morning; and the consequence of this misplaced confidence should be borne by them rather than that the bank should be the sufferer by it. It is an instance for the application of the familiar rule, founded on sound reason, that where one of two innocent persons must suffer from the fraud of a third, the loss should fall on him who, by his imprudence, enabled such third person to commit the fraud.

It is sought to bring this within the class of cases where the property has been held not to pass, where something remained to be done to complete the sale, from the circumstance that the coupons, which accompany sales...