Schutz v. Jordan

• Decision Date: 25 May 1891
• Parties: SCHUTZ et al. v. JORDAN et al
• Court: U.S. Supreme Court

141 U.S. 213

11 S.Ct. 906

35 L.Ed. 705

SCHUTZ et al. v. JORDAN et al.

May 25, 1891.

that the defendants have not paid the same, nor any part thereof, though due and payable.' The answer at some length developed a defense, which may be briefly stated as follows: That the defendants never purchased the goods in question; that among their various departments was one known as the 'cloak department,' which was in charge of one John H. Hewes, an employe, as superintendent; that, while the superintendents of these various departments had general authority to buy, these defendants, finding that the stock of goods in this department was more than that desired, directed such superintendent not to increase the stock; that such directions were communicated to the plaintiffs; that, disregarding such instructions, they entered into a fraudulent combination with Hewes, by which they were to ship the goods to the defendants, and that he was to receive and distribute them alongside of the other goods in his department. The scheme further contemplated that by reason of the confidence and powers vested in Hewes by the defendants, and his management of the details, payment was to be secured in the name of the defendants, and from their funds, though without their knowledge. In other words, the plan as developed was that the plaintiffs, finding a general agent of defendants with authority to purchase, but aware of special restrictions on that authority, conspired with him to ignore such restrictions, and in defiance thereof to purchase these goods in defendants' name, and secure payment therefor out of the funds of the defendants in their name, and without their knowledge. On trial before a jury the verdict was for the defendants in respect to these matters, and of the judgment entered thereon the plaintiffs now complain. 32 Fed. Rep. 55.

Alexander Blumenstiel, for plaintiffs in error.

Nathaniel Myers, for defendants in error.

BREWER, J.

On the general merits of the case, it may be observed that the action is on a contract for goods purchased by defendants. If no such contract of purchase was in fact made, the verdict was right; and this, although goods of the plaintiffs were surreptitiously put into the possession of defendants, and the proceeds of sales made thereof by their employes passed in their hands. While from the fact that goods belonging to one party pass into the possession of another a contract of purchase may sometimes be implied, it will not be implied when it appears that such transfer of possession was surreptitious, and without the knowledge of the latter. A party cannot be compelled to buy property which he does not wish to buy; and no trick of the vendor, conspiring with an agent of such party, by which possession is placed in him, creates on his part a contract of purchase. Nor is any contract of purchase created, even if it also appears that, unknown to the party, his agent who has entered into this wrongful combination has sold the property, and put the proceeds into his principal's possession. Whatever liability might exist in an action brought under those circumstances for money had and received, no action will lie for goods sold and delivered. The party is not responsible under a contract and as a purchaser, whatever may be his liability for the moneys which he has received as the proceeds of the sales. The law in respect to these matters is clear, and the verdict of the jury was fully justified by the testimony. It would be a needless waste of time to develop the various details of the plan by which the plaintiffs and the agent of the defendants sought to take the goods of the plaintiffs, put them in the store of defendants, incorporate them with the general mass of their goods, and secure payment out of the funds of the defendants without their knowledge. As might be expected, reliance was placed on the confidence and powers reposed and vested in Hewes by the defendants, and his familiarity with the details of their business. The plan worked successfully so far as regarded the introduction of the goods into the store of the defendants without their knowledge; but Hewes was not so successful in ecu ring payment; so that, after nearly a year and a quarter, over $30,000, according to the price agreed upon between Hewes and the plaintiffs, for goods thus transmitted, was still unpaid. It is true that the plaintiffs, and their agent by whom the arrangement was in the first instance made, denied the existence of any such arrangement. Upon this question of fact the verdict of the jury would be conclusive; and, notwithstanding their denial, the whole conduct of the business, as developed by their own testimony, makes strongly in favor of the truthfulness of Hewes in respect to the transaction. The verdict of the jury properly responded to the testimony.

There are several assignments of error, but the conclusions we have expressed upon the merits of the controversy avoid the necessity of referring to most of them. It would have been obviously improper to instruct the jury to find a verdict for the plaintiffs for all or any part of the goods thus surreptitiously placed in the store of the defendants. There are two matters, however, which require special notice one is as to the instructions respecting the burden of proof. The court was asked by the plaintiffs to charge: 'The burden of establishing the defense set up in the answer is upon the defendants, and, such defense being founded upon allegations of fraud and conspiracy, the same must be proven to the satisfaction of the jury. Fraud is never presumed. It must be proven by facts which warrant such an inference.' This request was refused, and the law was thus laid down: 'I have been requested to instruct you as to the burden of proof. As to that I can only say that the burden of proof is on the plaintiffs to make out their case, and make it out all the way through; that is, in the first place, they must show you that these goods were sold in the usual course to Mr. Hewes, acting for the defendants; but, if they fail in that, it is for them to satisfy you that this quantity of goods was so large that the defendants must gave known about it, and ratified it by going right along and selling after they had found out about it,—that is, it is on the plaintiffs to make out their case. The fact that the goods got into the establishment of the defendants, or that the goods were received by the carrier which the defendants authorized to take the goods here in New York, is made...