Schwabacher v. Kane

• Decision Date: 02 January 1883
• Citation: 13 Mo.App. 126
• Parties: ABE SCHWABACHER ET AL., Respondents, v. PATRICK KANE ET AL., Appellants.
• Court: Missouri Court of Appeals

13 Mo.App. 126

ABE SCHWABACHER ET AL., Respondents,

v.PATRICK KANE ET AL., Appellants.

St. Louis Court of Appeals, Missouri.

Jan. 2, 1883.

APPEAL from the St. Louis Circuit Court, BOYLE, J.

Affirmed.

RUDOLPH HIRZEL, for the appellants: The evidence fails to show the debtor's insolvency.-- Durgy v. O'Brien, 5 Cent. L. J. 147; Rogers v. Thomas, 20 Conn. 54; 1 Pars. on Con. 595, 596. The laches of the vendor deprives him of the right of stoppage in transitu.--Calahan v. Babcock, 21 Ohio St. 281; Martin v. Fritch, 6 Wend. 103. Notice must be given.--Benj. on Sales, sects. 859, 860; Story on Sales, 267; 1 Pars. on Con. 597; Chitty on Con. 461; Whitehead v. Anderson, 9 Mee. & W. 518.

M. B. JONAS, for the respondents: If a vendor, after he delivers goods to a carrier, discovers his vendee is insolvent, he may retake the goods at any time before they reach the possession of the vendee.--Benj. on Sales, sect. 828; 1 Pars. on Con. 595. And the goods are not to be deemed in the possession of the vendee, so as to defeat this right, from the mere fact that they have been stored in the depot or warehouse of the carrier at the end of its route.-- White v. Mitchell, 38 Mich. 390; Buckley v. Furniss, 15 Wend. 143; Morris v. Shryock, 50 Miss. 597; 1 Pars. on Con., sects. 601, 602. Nor can this right be defeated by attachment of creditors of the vendee or consignee.-- Benj. on Sales, sect. 862, note c; Inslee v. Lane, 57 N. H. 454; Durgy Cement Co. v. O'Brien, 123 Mass. 12. Insolvency is defined by the supreme court of this state to mean, such a condition on the part of the debtor, that the payment of his debts cannot be enforced against him by process of law.-- Eddy v. Baldwin, 32 Mo. 369; Potter v. McDowell, 31 Mo. 62. Notice is not necessary.-- Morris v. Shryock, 50 Miss. 590; Inslee v. Lane, 57 N. H. 454.

LEWIS, P. J., delivered the opinion of the court.

This is an action of replevin for two barrels of whiskey. The plaintiffs were wholesale liquor dealers in Louisville, Kentucky, and James Manley kept a saloon in the city of St. Louis. About July 1, 1881, Manley ordered of the plaintiffs two barrels of whiskey, and the goods here in controversy were thereupon shipped by the plaintiffs to Manley, so that they arrived at the railroad depot in St. Louis about the 10th of July. At about the same time, Manley sold out his entire stock, fixtures, and business for $450, and disappeared from the city. The property sold was valued at $800, and was under a mortgage for $300. Manley was indebted to various parties, to the amount of about $400, including a debt due to the defendant, the J. A. Monks & Sons Distillery Company, of $194.51. On July 22d, the distillery company proceeded against Manley by attachment, on the ground that he had absconded from his usual place of abode in this state, so that the ordinary process of law could not be served on him. The defendant Patrick Kane, as constable, levied this attachment on the whiskey in controversy, which was yet in the keeping of the carrier railroad, and had never been delivered to the consignee. The attachment suit was pending when, on August 25th, a member of the plaintiffs' firm came to St. Louis, and, upon being then first informed of the facts above recited as occurring since the shipment, instituted the present suit. The sale by the plaintiffs to Manley was on a credit of ninety days. The circuit court, sitting as a jury, gave judgment for the plaintiffs.

It is insisted for the defendants that the plaintiffs had no right of stoppage in transitu, because it does not sufficiently appear that Manley was insolvent; and because, if he was so in fact, he was as much insolvent when the goods were shipped, as at any time afterwards; and it is essential to the right, that the vendee's insolvency shall have arisen after the sale and shipment. For the last proposition, there seems to be authority in Rogers v. Thomas (20 Conn. 54). A majority of the court so held; and agreed, further, that, if the insolvency existed at and before the shipment, it was immaterial whether the vendor was ignorant of such insolvency at the time, or not; the mere fact of its existence when the goods were shipped, would cut off the right of stoppage in transitu. But a dissenting opinion by Waite, J., clearly shows that the views of the majority are utterly inconsistent with the nature and foundation of the right in question, and are not sustained, even by the adjudications which are cited for their support. Either member of the general proposition seems to be at war with sound reasoning. All authorities agree that the right of stoppage in transitu is nothing but an extension of the vendor's lien on the goods for the payment of the purchase-money. The force of this lien is certainly not impaired by the insolvency of the vendee at the time of the sale, whether known to the vendor, or not. So long as the goods remain in the vendor's possession, his lien continues. But he may release it by a delivery into the actual possession of the vendee. If he delivers to the carrier, the vendee's agent, with full knowledge of the vendee's insolvency, he should not afterwards be permitted to set up that insolvency, to defeat the release of lien legitimately presumable from such delivery. But if he deliver to the carrier, in ignorance of such insolvency, it cannot be imputed to him that he has voluntarily surrendered his lien, until the goods are actually received by the vendee. From this it would seem to follow that, whether the insolvency of the vendee exist at the time of the shipment, or arise afterwards, is immaterial to the vendor's right of stoppage in transitu; but that the really vital question is, whether the vendor's knowledge of the insolvency came to him before or after the shipment of the goods? That such is the true rule, appears to be recognized in a number of cases; though it may be doubted that the legal issue was squarely presented in any except Rogers v. Thomas ( supra). In Litt v. Cowley (1 Holt's N. P. Cas. 238), the plaintiffs shipped goods at Manchester to their vendees in London. Two days afterwards, they were informed that the vendees were insolvent; whereupon they sent an order to the carrier to stop the goods, and not deliver them to the vendee. It was not pretended that any change in the circumstances of the vendees occurred between the time of the sale, or the shipment, and the order to stop the goods. The vendor's right of stoppage was sustained in an action of trover against the assignees in bankruptcy of the vendees. Gibbs, C. J., said: “It has never been doubted but that the goods vested in the...