Procter & Gamble Co. v. Peters

• Decision Date: 28 February 1922
• Citation: 134 N.E. 849,233 N.Y. 97
• Parties: PROCTER & GAMBLE CO. v. PETERS, WHITE & CO.
• Court: New York Court of Appeals Court of Appeals

233 N.Y. 97

134 N.E. 849

PROCTER & GAMBLE CO.

v.PETERS, WHITE & CO.

Court of Appeals of New York.

Feb. 28, 1922.

Action by the Procter & Gamble Company against Peters, White & Co. From a judgment of the Appellate Division (194 App. Div. 892,184 N. Y. Supp. 946), affirming judgment of the Trial Term entered on a verdict directed by the court in favor of plaintiff, defendant appeals.

Reversed, and new trial granted.

See, also, 187 App. Div. 376,176 N. Y. Supp. 169.

Appeal from Supreme Court, Appellate Division, First Department.

Sullivan & Cromwell, of New York City (E. H. Sukes, of New York City, of counsel), for appellant.

Eugene Lamb Richards, of New York City (Rutherford B. Meyer, of New York City, of counsel), for respondent.

CRANE, J.

On the 29th day of January, 1914, the Atlantic Phosphate & Oil Corporation, a New York company, entered into a contract with the plaintiff in this case, the Procter & Gamble Company of Ohio, wherein the Atlantic Phosphate & Oil Corporation agreed to sell to the plaintiff all the menhaden oil, grade A, to be produced by the seller at its plant at Promised Land, Long Island, New York, during the period from the date of the contract to December 31, 1914. The contract contained the following provision:

‘The purchaser shall receive the oil in purchaser's tank cars, to be supplied by the purchaser at the seller's said factory at Promised Land, or at the purchaser's option, from time to time, in purchaser's barrels, to be furnished by the purchaser at the said factory at Promised Land. * * * The purchaser shall provide enough tanks or barrels at the factory as aforesaid to take and receive all said oil as and when produced by the seller, except as hereinafter provided. * * * If at any time there shall not be at the factory sufficient tank cars or barrels furnished by the purchaser to receive all the oil as fast as produced, the seller shall store the said oil in its own tanks at its factory, and Marden, Orth & Hastings Company shall invoice the oil so soon as stored in said tanks to the purchaser, and shall be entitled to draw on the purchaser at sight, at the same rate of 25 cents a gallon for the said oil so stored in storage tanks, as well as for the oil placed in said tank cars or barrels; provided, however, that if at any time the oil so stored in the seller's storage tanks shall reach the amount of fifteen thousand barrels, and there shall not be enough tank cars or barrels provided by the purchaser to take care of all excess as fast as produced, the seller may ship such excess oil to the purchaser or store the same in any way that may be possible, and the purchaser in that event shall pay to the seller any extra expenses thus incurred by the seller.’

The contract further provides for an advanced payment of $25,000 by the purchaser and the terms of subsequent payments, which need not here be referred to.

Although the purchaser was to take all the menhaden oil manufactured by the seller during the period specified, there was excepted from this amount 6,000 barrels, or such part thereof as Marden, Orth & Hastings Company might take under an agreement between it and the Atlantic Phosphate & Oil Corporation, dated the 15th day of October, 1913.

Marden, Orth & Hastings Company, by an agreement of said date, appeared to have been appointed the factors, or agents, of the Atlantic Phosphate & Oil Corporation, and to have procured the Procter & Gamble Company contract above referred to.

By another contract, dated May 1, 1913, the defendant in this case, Peters, White & Co., a New York corporation, was appointed factor for the Atlantic Phosphate & Oil Corporation, and given the exclusive right and authority to make agreements for the sale of the oil product, to invoice for the same, and make all collections.

During August and September of 1914 seven carloads of this oil were taken from the storage tank of the Atlantic Phosphate & Oil Corporation and shipped to Swift & Co. of Chicago, Ill., pursuant to the directions of the defendant. For six of the carloads the defendant was paid by Swift & Co. Two of the tank cars thus loaded and shipped had been sent to the seller's plant at Promised Land by the plaintiff. The order for the bill of lading for these two cars was drawn to the order of Peters, White & Co., with instructions to notify Swift & Co., the destination being Union Stock Yards, Chicago, state of Illinois. The other five cars were not furnished by the plaintiff, and were consigned by orders for bill of lading in the same way to the order of Peters, White & Co., with directions to notify Swift & Co. at the Union Stock Yards, Chicago, Ill.

There is no question about the direction and control of the defendant over this oil and the shipments made by the Atlantic Phosphate & Oil Corporation.

This action has been brought by the plaintiff against the defendant, the factor, to recover for a conversion of this oil, the plaintiff contending that, having purchased all the oil to be manufactured by the Atlantic Phosphate & Oil Corporation, title had passed to it when the oil entered the storage tanks, and that the subsequent shipment and delivery by the defendant to Swift & Co. amounted to a conversion of the oil. The plaintiff thus far has been successful in this contention, and has recovered the full value of the seven cars thus shipped to Swift & Co. The opinion of the Appellate Division on a previous trial of this case will be found in 187 App. Div. 376,176 N. Y. Supp. 169. The point in the case is the question whether or not title was in the plaintiff, whether there had been such an appropriation of this oil to the contract by the Atlantic Phosphate & Oil Corporation as to pass title.

As the passage of title depends in each case upon the circumstances and the intention of the parties (Hatch v. Oil Co., 100 U. S. 124, 25 L. Ed. 554), we must first ascertain the exact facts, and from these gather the intention of the parties, aided by our Personal Property Law (Consol. Laws, c. 41). The oil which the plaintiffs purchased was made from fish by a process described as follows:

‘The oil, after it was pressed from the fish, after the cooking process, the oil came out cloudy and more or less solid matter mixed through it. It had to be cooked after the pressing and permitted to stand for several days before it was clean and in condition to ship. There are a number of tanks in Promised Land, cooking tanks, in which the preliminary cooking takes place and settling tanks in which solid matter is permitted to settle out, and then storage tanks in which the oil is stored after it is settled. * * * The oil that was accumulated after settling in the storage tanks was drawn from the storage tanks into tank cars and the tank cars were weighed by the railroads and shipped to destination.’

The oil, therefore, went into the storage tank as part of the precess of manufacture in any and at all events. When the agreement made with Procter & Gamble Company provided, as above quoted, that in case of the plaintiff's failure to have the tank cars or barrels at the seller's plant at Promised Land the seller should store the said oil in his own tanks at the factory, it did not contemplate a setting apart and separation of the manufactured oil for the plaintiff. The oil would have gone into the storage tanks whether intended for the plaintiff or any other purchaser or any number of purchasers. It was the place for keeping it after manufacture, in the same way that a bin may be a receptacle for keeping grain or a warehouse for storing merchandise. There was nothing in the nature of the act in sending the oil into the storage tank which indicated in itself that it was set apart for the plaintiff. Marden, Orth &...