Gilman Linseed Oil Co. v. Norton , 89 Iowa 434 ( 1893 )

Eobinson, O. J.

In the year 1889 the plaintiff was engaged in business in Gilman-, in the state of Illinois, and E. M. Lamar & Co. were doing business at George, in this state. In March of that year the plaintiff entered into an agreement in writing with Lamar & Co., by which the former agreed to furnish to the latter one thousand bushels of flax seed for the purpose of having it loaned to farmers for use as seed, for the purpose of procuring the product of the seeding. Lamar & Co. were to loan the seed to farmers for the purpose stated only, for and in the name of the plaintiff, on terms specified in the agreement, taking notes to secure payments for the seed, and making contracts for the product thereof at the rate of twenty-five cents less than the Chicago prices for each bushel delivered to .the agent of the plaintiff at George. Lamar & Co. were to keep an account of their transactions, on books of account which were to be furnished by and remain the property of the plaintiff, and to make reports to it when demanded. They were to ship to the plaintiff all the products of the loaned seed which they should receive, under the contracts with the farmers, and were not to loan, sell, or buy any flax seed during the continuance of the agreement for any one excepting the plaintiff, without its written consent. They were to receive as their only compensation for services rendered in performing the agreement on their part, the sum of five cents per bushel for the flax seed bought for and shipped to the plaintiff. The agreement also contained a paragraph in words as follows: “It is further mutually agreed- that all seed purchased under the agreement is from the time of such purchase the sole and absolute property of the party of the first part (the plaintiff), and that the party of the second part (E. M. Lamar & Co.), has no right or interest in, or lien on, the same, save only for money they have actually advanced, and that so long as it remains in their actual possession they hold it only as the agent of the party of the first part.” There was also a provision for the payment of a commission for purchasing seed not under contract, but it is not involved in this case.

In the latter part of the year 1889 Lamar & Co. purchased flax seed under that agreement with money furnished by the plaintiff. In November, 1889, they shipped to the defendants in Chicago two car loads of flax seed, and drew on them for nearly the amount of its value. The flax seed was received by the defendants and sold, and the drafts were paid. The seed so received and sold was purchased by Lamar & Oo. under their agreement with the plaintiff, with its money, and .they had no lien upon it for any purpose. The defendants claim that they received and sold the seed only as brokers and commission merchants, acting for the shippers, and receiving a commission for their services, and that they did not purchase it on their own account. It appears that in'December, 1888, they arranged with Lamar & Oo. to furnish them two thousand dollars, for use in their grain and seed business, and the next year the amount was increased to three thousand dollars. Shipments were made by Lamar & Oo. to the defendants to the amount of thirteen thousand dollars, and drafts to the amount of sixteen thousand dollars were drawn on them and paid, leaving a balance due from Lamar & Oo. to the defendants of three thousand dollars. When the shipments in question were made, the drafts drawn against them were charged to Lamar & Oo., and the proceeds of the shipments were credited to them.

1- Igentof'prpptoprfMipfh18 title of vendee. I. The defendants contend that the agreement between the plaintiff and Lamar & Oo. was in the nature of an extension of credit, and that the latter were charged with the cash advanced them, and received credit onlv ' . J wnen the flax seed was delivered m Gil-man; that they were required to guaranty weights and quality, and that the plaintiff reserved the right to refuse any flax seed if the weights and quality were not satisfactory. The claims thus made are not supported by the evidence. It is true that Lamar & Oo. guarantied the weights at Gilman, and that they were responsible for damages which should result from shipping inferior, dirty, or unmerchantable seed, but the right to reject seed was not reserved to the plaintiff. On the contrary, the title to all seed purchased under the agreement vested in it at once, and the obligations in regard to weight and quality of seed placed upon Lamar & Co. were designed to secure a faithful performance of the agreement on their part, or to require them to make good the loss which should result from their failure to do so. The transfer of title did not depend upon any condition, and the transaction was not, in any sense, a conditional sale of property; and section 1922 of the Code, which requires sales, contracts, and leases wherein the transfer of title or ownership of personal property is made to depend upon any condition to be in writing and recorded, to be valid against certain creditors and purchasers without notice, has no application. See Van Sandt v. Dows, 63 Iowa, 594. The flax seed, when shipped to the defendants, belonged to the plaintiff, and Lamar & Co. had no .authority to divest it of its title by selling the seed to others. It is said that for a time the plaintiff was unable to receive flax seed; that Lamar & Co. had filled their bins and were compelled to ship some of their contents away. But, if that be true, it gave them no right to ship in their own name, and sell it as their own.

2 _._. estoppei. II. It is contended that the plaintiff is estopped to deny the right of Lamar & Co. to sell the seed, for the reason that it had given them the possession and control of it, and the apparent right to treat and dispose of it as their own. The plaintiff did not authorize Lamar & Co. to ship the flax seed to anyone but itself, and it did not know anything of the shipments until after they were made. If it is estopped to claim the seed, it is because Lamar & Co. were buying wheat and other grain, and selling it on their own account. But, in our opinion, that fact alone was insufficient to bind the plaintiff by selling the seed in question. “The mere possession of chattels, by whatever means acquired, if there be no other evidence of property or authority to sell from the true owner, will not enable the possessor to give good title.” McNeil v. Tenth Nat. Bank, 46 N. Y. 329; Ballard v. Burgett, 40 N. Y. 314; McGoldrick v. Willits, 52 N. Y. 617; Barnard v. Campbell, 55 N. Y. 462; Sanders v. Keber, 28 Ohio St. 640; Osborn v. McClelland, 43 Ohio St. 307, 1 N. E. Rep. 644; Reed v. Upton, 10 Pick. 522; Coggill v. Hartford & N. H. Railroad Co., 3 Gray, 545; Dunlap v. Gleason, 16 Mich. 158; Kohler v. Hayes, 41 Cal. 455; Mechem on Agency, sec. 788; 1 Benjamin on Sales, sec. 437.

Some of the authorities cited refer especially to conditional sales, but are applicable to the question under consideration. The doctrine which they announce is applicable to cases where personal property has been delivered to a person who is engaged in the business of buying and selling such property. In Levi v. Booth, 58 Md. 305, it is said that, aside from statutory provisions regulating such matters, “it is very clear * * * that the bare possession of goods by one, though he may happen to be a dealer in that class of goods, does not clothe him with power to dispose of the goods as though he were owner, or as having authority as agent to sell or pledge the goods, to the preclusion of the right of the real owner. If he sells as owner, there must be some other indicia of property than mere possession. There must * * * be some act or conduct on the part of the real owner whereby the party selling is clothed with the apparent ownership or authority to sell, and in which the real owner will not be heard to deny or question to the prejudice of an innocent third party dealing on the faith of such appearances.” Following that rule, it was held, in effect, that a dealer in jewelry, who received a valuable diamond ring to obtain a match for it, or, failing in that, to get an offer for it, could not by a sale thereof to an innocent purchaser divest the owner of his title. In Conable v. Lynch, 45 Iowa, 84, it was held that an agent who received a wagon and other property under a contract to retail them for his principal could not sell the wagon as his own to an innocent purchaser, and receive credit for its value on a debt owing to him by the agent. See, also, Baehr v. Clark, 83 Iowa, 313; Crooker v. Brown, 40 Iowa, 144.

The case of Wright v. E. M. Dickey Co., 83 Iowa, 464, relied upon by the defendants as being decisive of the question under consideration, is notin conflict with the conclusion we reach. It appeared in that case that a landlord having a lien upon certain grain knew that his tenant was selling it, but was silent, when, by making known his lien, he would have prevented the sale to an innocent purchaser. In this case, however, the plaintiff not only had no knowledge of the intention of its agents to sell, but had no reason to believe that they intended to do so.

3' ' ’ ' III. It is insisted that the plaintiff is estopped, by its conduct subsequent to the sale, to assert ownership of the flax seed, and that it has in effect ratified the sale. It appears, that some attempt was made by the plaintiff to obtain a settlement with Lamar & Co., and that it made no demand upon the defendants for the seed until this action was commenced. There was no ratification of the sale, and the defendants have not been prejudiced in any manner by the delay of the plaintff in demanding the compensation it seeks to recover in this action. It was justified in endeavoring to obtain redress from Lamar & Co. Having failed in that, under the circumstances we have stated, it is not estopped to assert its claim against the defendants. We have stated the facts as the district court was authorized to find them. With respect to some there was a conflict in the evidence, but the conclusion of the court is so far supported by the evidence that it must be treated as conclusive. It rendered judgment in favor of the plaintiff for the value of the flax seed in dispute, with interest and costs. We find no cause to disturb that judgment, and it is, therefore, AEEIRMED.