Sattler v. Hallock

• Decision Date: 03 October 1899
• Citation: 54 N.E. 667,160 N.Y. 291
• Parties: SATTLER v. HALLOCK et al.
• Court: New York Court of Appeals Court of Appeals

160 N.Y. 291

54 N.E. 667

SATTLER

v.HALLOCK et al.

Court of Appeals of New York.

Oct. 3, 1899.

Appeal from supreme court, appellate division, Second department.

Action by Theodore Sattler, assignee, against George W. Hallock and others, for conversion. From a judgment of the appellate division affirming a judgment entered on a verdict in favor of defendants and an order denying a new trial (44 N. Y. Supp. 543), plaintiff appeals. Affirmed.

John E. Brodsky, for appellant.

Ackerly & Miles, for respondents.

MARTIN, J.

On the 21st day of February, 1895, 25 farmers, residents of the town of Smithville, L. I., were the owners of a building or premises used as a pickle factory, situated in that town. On that day they entered into a written agreement with the firm of John A. Meierdiercks & Sons, in relation to the production, manufacture, and sale of pickles, sauerkraut, and other like products. So far as material to the question involved, the contract was substantially as follows: The parties agreed to organize a responsible company or corporation for the purpose of conducting or aiding in the production and manufacture of the articles referred to in the contract. It then provided that the farmers were to prepare and deliver to the plaintiff's assignors, at the factory, pickles, cabbage, dill, etc., to be raised upon an acreage which was given, and at prices stated therein. If the building proved insufficient, the farmers were to provide an additional one at a cost not to exceed $300, to be paid by the assignors and deducted from the net profits at the end of the season, they guarantying that such profits should amount to at least that sum. If they were more than the cost of the building, then the farmers were to receive 20 per cent. thereof, to be divided between them according to the amount of produce furnished by each. The assignors were to take the pickles, cabbage, and other produce, pay the prices named at the times and in the manner stated, furnish the labor, machinery, barrels, tanks, salt, spices, and other necessary material, and pay the freight and cartage. These expenses were to be deducted from the gross receipts of the sales of the pickles, sauerkraut, and other goods so manufactured. A list was then given of the number of acres of each kind of produce which was to be furnished by each of the 25 farmers named. To receive products at the factory, the assignors were to furnish one man and the farmers another, who were to attend to their reception, and decide all matters of dispute in relation to them. The representative of the farmers was to be given full and complete data of all the produce delivered, and all barrels, salt, spices, and utensils furnished, and all the goods of every description received and shipped by the assignors, so as to show the gross receipts and expenses for the year. The agreement then provides: ‘The manufacture and sale of all the products of the Long Island Farmers' Co. shall be done by J. A. Meierdiercks & Sons. * * * It is hereby agreed by the undersigned, of the Long Island Farmers' Company, that at any time should the business of the Long Island Farmers' Company cease, and the property, including buildings, utensils, bbls., etc., be sold or bartered, the members of the Long Island Farmers' Company, other than J. A. Meierdiercks & Sons, guaranty to J. A. Meierdiercks & Sons 35 per cent. of the amount realized.’ This agreement was signed by the 25 farmers mentioned, and by the plaintiff's assignors. Subsequently, the Long Island Farmers' Company was organized in accordance with the contract. By-laws were passed, and the defendants were elected as its managing officers. Soon after the execution of the contract, the plaintiff's assignors went to the factory, proceeded to manufacture the produce which was delivered under it, and continued that business until they made a general assignment to the plaintiff. The keys of the factory were retained by, and continued in the possession of, a representative of the farmers, who, after the produce was delivered at the factory and manufactured, shipped it to various purchasers. During the continuance of this business, the executive officers of the farmers' company, or some of them, were usually present at the factory, and engaged in looking after the business there transacted. They gave directions, passed judgment upon the quality of the produce, and were often consulted by the assignors' representative in regard to affairs connected with the business. Although the manufactured products were sold by the plaintiff's assignors, they were billed, ‘J. A. Meierdiercks & Sons, Agents Long Island Farmers' Company.’ These bills were sent, and checks drawn to the order of the company were received, when the assignors requested the committee of the company to give them a power of attorney to indorse them, which it refused to do. On the 17th of September, 1896, the firm of John A. Meierdiercks & Sons made a general assignment to the plaintiff for the benefit of its creditors. Subsequently the plaintiff went to the factory at Smithtown, and demanded all the products, manufactured and unmanufactured, claiming that they were owned by the assignors at the time of the assignment, and were a part of the assets of that firm. With this demand the managers of the company refused to comply, claiming that by the terms of the agreement the company and the farmers it represented were the lawful owners of such products. This action was to recover their value at the factory at the time of the assignment, upon the ground that the defendants had wrongfully converted them to their own use. The defendants alleged title in the Long Island Farmers' Company, and that they, as its representatives, were entitled to the possession of the property.

Thus is it obvious that the single question involved is whether, under the contract between the parties, the title to the property in suit vested in the plaintiff's assignors and was transferred to him by the assignment, or whether it remained in the farmers' company or the farmers furnishing it. On the trial the court held that the contract imported a sale, but submitted to the jury the question whether, under the facts and circumstances proved, including the acts of the parties, the contract had been substantially altered, so that the title rested in the defendants or the company or persons they represented. The jury found for the defendants. The appellate division, however, held that the evidence was not sufficient to justity the submission of that question to the jury, but that the contract between the parties was one of bailment or partnership, and not of sale, and hence the plaintiff was not entitled to recover, and judgment for the defendants was properly rendered. With this situation, it is obvious that the determination of the courts below can be sustained only in case the transaction between the parties was a bailment or joint enterprise. If it was a bailment, manifestly the defendants were entitled to retain the possession of the property. If it was a joint enterprise, the plaintiff could not recover in an action for the conversion of the property, as the defendants were entitled to its possession, as against the plaintiff, until...