Abel v. Chase

In Connecticut the common-law rule still prevails that an unauthorized sale by a factor of his principal's goods confers no title on an innocent purchaser for value, unless the principal ratifies the sale, or by his own act has clothed the factor with an appearance of ownership beyond that involved in an ordinary contract of consignment. Romeo v. Martucci,72 Conn. 504, 45 A. 1, 99. Under such a contract the factor, in the absence of trade usage to the contrary, has no right to dispose of the goods by barter or exchange (Kearns v. Nickse, 80 Conn. 23, 25,66 A. 779) or by a sale or transfer otherwise than in the usual course of the business in which the factor is engaged.Romeo v. Martucci, 72 Conn. 504, 45 A. 1, 99. In this case the sale was in the usual course of Zaslave's business, as he was accustomed to visit prospective customers and display jewelry for sale.

The validity of the sale to the defendant is attacked principally on the ground that a factor cannot transfer the principal's goods as security for, or in satisfaction of, his own antecedent debt. In Warner v. Martin, 52 U.S. (11 How.) 209, 226, a creditor, to protect himself, had taken certain property from a factor with knowledge that the latter was about to fail, and the court said: "When such a transfer of property is made by a factor for his debt, it is a departure from the usage of the trade, known as well by the creditor as it is by the factor. It is more; it is a violation of all that a factor contracts to do with the property of his principal. It has been given to him to sell. He may sell for cash, or he may do so upon credit, as may be the usage of trade. A transfer for an antecedent debt is not doing one thing or the other."

In our opinion, however, the facts in this case do not warrant the conclusion that the article in question was transferred to the defendant in satisfaction of an antecedent debt. The finding is that Zaslave offered the article to the defendant "for the sum of $300 and the cancellation of the $210 which the said Zaslave owed the Wiehn estate." The defendant accepted the offer and paid the whole price, $510, in cash; $300 to Zaslave and $210 to the administrator of the Wiehn estate. It is of no legal importance that the defendant himself was the administrator of the Wiehn estate, or that at Zaslave's request he paid $210 of the purchase price to that estate instead of paying it to Zaslave upon the latter's promise to pay it to that estate. The point is that the antecedent debt of Zaslave to the Wiehn estate was not satisfied by the transfer of the property to the defendant, but was actually paid in cash. It may be added that the defendant in paying it acted at Zaslave's request and as Zaslave's agent.

It is claimed that Zaslave had no authority to sell unless he received cash, at least to the amount of the agreed wholesale price of the article; but this is not so found. For all that appears he might have sold wholly or partly on credit. If Zaslave exceeded his authority at all, it was not in selling the article for $510, but in offering to use, and in directing the defendant to use, a part of the purchase price to satisfy his debt to the Wiehn estate; and for such a default — if it be one — the defendant cannot be accountable, because it is found that he had no knowledge that Zaslave had the article on consignment. Ignorance of that fact would not protect him if the sale itself had been unauthorized; but it will protect him against any charge of complicity in an alleged wrongful disposition by Zaslave of a part of the proceeds of an authorized sale.

There is no error.

In this opinion the other judges concurred.