Barnes Safe & Lock Co. v. Bloch Bros. Tobacco Co.

Dent, Judge:

The counsel for the defendant in error maintains that the judgment of the Circuit Court should be affirmed, because : (1) The safe had been sold by the plaintiff to the Globe Contract Company. (2) If that were not so, and the safe was in the hands of the Globe Contract Company as plaintiff’s agents, the latter had a lien for the general balance due them, and the plaintiff not having paid that balance can not recover. (3) The plaintiff stood by and saw the safe sold as property of the Globe Contract Company without making any claim. (4) The Globe Contract Company, a trader, not having complied with the provisions of section 13, c. 100, of the Code, this safe, acquired and used in its business, was liable for its debts. (5) If the contract was as claimed by plaintiff, it was an attempt to sell goods reserving the title, and such reservation is void under section 3, c. 74, of the Code.

On an examination of many decisions relating to contracts of this kind, we find them apparently contradictory and hard to reconcile; some holding that goods delivered under similar contracts are mere bailments for the purpose of sale; others, that they are sales with reservation of title and therefore void under the usual recording acts as to creditors. But from all the general rule is deducible, that the court must determine from the wordiug of the contract itself and the circumstances surrounding it the true intention of the parties in making it; and if the contract was entered into in the form of an agency contract for the purpose of evading the statute requiring all reservations of title to be recorded, then it should be held void as to creditors. Such was the determination of the court in the case of Chickering v. Bastress, 130 Ill. 206 (22 N. E. Rep. 542).

But where there is no attempt at evasion, but the contract is one of pure agency, providing for a consignment of goods to be paid for at a fixed price out of the proceeds of the goods when sold, this is a bailment for sale not a sale with reservation of title, and the title remains in the consignor, until the goods are sold to a bona fide purchaser for value. Walker v. Butterick, 103 Mass. 238; Plow Co. v. Porter, 82 Mo. 23; Middleton v. Stone, 111 Pa. St. 589 (4 Atl. 523); Dando v. Foulds, 105 Pa. St. 74.

“Ordinarily, if goods are ‘consigned’ for sale, it is a bailment, and not a sale to the consignee. The goods do not become his property or liable for his debts,” “even though consigned on a dd credere, commission.” And the fact that the goods consigned were invoiced at a stated price does not itself constitute the transaction a sale, unless the terms of the consignment be such as to make the consignee, when the goods are sold, the purchaser and principal debtor for the goods. Benj. Sales (6th Ed.) p. 7; also, 3 Amor. & Eng. Enc. Law, p. 340.

Applying these principles to this case we find, that the contract entered into was one of pure agency without any attempt or thought of evading the statutory law relating to the recordation of instruments, when sales are. made reserving the title, but a consignment of safes was made to the Clobe Contract Company as such agent, not in any sense a purchaser, to have on hand to sell for the Barnes Safe & Lock Company, whenever a purchaser could be secured on not exceeding thirty days’ time. If no sales were made, then there was no purchaser, and the safes could only be returned to the consignor. If a sale was made, the title passed not through the consignee but direct from the consignor to the purchaser ; and the price passed through the hands of the consignee to the consignor, after deducting all over a given amount to pay commissions and expenses.

It is true that the consignee could have become the purchaser of any of the safes, at any time it might wish to do so, by accounting for.or paying the fixed price according to the contract to the consignor; and, when the consignor gave notice of cancellation, it gave the opportunity to the consignee to become the purchaser of any unsold safes, but this the consignee refused to do, and notified the consignor, that the safes were at its disposal as soon as the accounts between them were properly adjusted.

Tlie consignor may have been guilty of some negligence in not taking steps at once after the cancellation of the contract to recover possession of the safes, but not as to divest it of its title, as it was waiting for the statement from its ageut. There is no sufficient evidence to show that it stood by and saw the safe sold as the property of the Clobe Contract Company without making claim. On the contrary, the proof clearly shows, that it had no knowledge of the levy or sale until the letter written it by the defendant in this case, informing it of the purchase, and asking to trade it for a safe of a different size.

It is hardly worth while to notice the fourth proposition of defendant’s counsel — that the Globe Contract Company was a “trader,” within the provisions of section 13, c. 100, of the Code — because the Globe Contract Company did not do busiuess as a trader with the addition of the words “factor,” “agent,” and “company,” or “& Co,” within the meaning and contemplation of the statute; but it was doing business in its corporate name, and while transacting other business it undertook to act as an agent for the Barnes Safe & Lock. Company which fact was plainly painted on every safe handled by it as such agents.

This being a bailment not a sale with reservation of title, as heretofore determined, does not come under the provisions of section 3, c. 74, of the Code.

To sustain the position takeu by the defendant, it§ counsel quotes the law virtually as set out in syllabus 1, Chickeriny v. Bastress, 130 Ill. 206 (22 N. E. Rep. 542): “(1) Contract —Whether a Sale or Mere Bailment. Where the identical thing delivered is to be restored in the same or an altered form, the contract is one of bailment; but when there is no obligation to restore the specific article, and the person receiving it is at liberty to return another thing of equal value, he becomes a debtor to make a return, and the title to the property is changed — it is a sale.”

The same law is laid down in Benjamin on Sales (6th Ed. p. 5) in these words : “On the other hand, it is now well settled that if the contract clearly contemplates, either by express provision or by established usage of the business, that the identical thing received will not be returned, but only its equivalent, either in the same form received, or in some manufactured condition, or else paid for in money, at the option of the receiver, the transaction is a sale or exchange. The title passes immediately on delivery, and the risk is on the receiver.”

This law, while it holds good as to certain kinds of bailments, has no application whatever to that class of bailments known as “ consignments for sale,” and was therefore improperly applied in the Illinois case above referred to. To so apply it is to do away with all bailments with power to sell, because there is no obligatioir in such case to restore the specific article, but only the value thereof in money, after a sale is made by the factor or consignee, or, in case no sale is made, then to restore the. specific article ; and the law quoted above from the fifth page of Benjamin on Sales would be directly in conflict with the law quoted from the seventh page of the same work, but to give the construction given in this opinion is to render both pages harmonious.

The only other point urged by the defendant’s counsel is the one, on which the Circuit Court appears -from the briefs, to have decided this case; and that is that the appellant was not entitled to recover possession of the safe in controversy; because the Globe Contract Company had a lien on it for unsettled commissions. It nowhere appears that such is the true state of affairs. Accounts appear to be unsettled, but which way the balance will fall, is not made evident. Xeither is the Globe Contract Company claiming any such lien. If it had one, it was personal to itself, and was waived when it permitted the safe to be taken from its custody and it can not be asserted by a third party. “ISTone hut the factor himself can set up this privilege against the owner. It is a personal privilege, and can not be transferred, nor can the question upon it arise between any but the principal and the factor.” 3 Amer. & Eng. Enc. Law, p. 339; Holly v. Huggeford, 8 Pick. 73.

The constable in this case levied on the safe by direction of the general manager, aud apparently the only secured creditor of the Globe Contract Company, then wholly insolvent. This is no protection to the officer, nor to the purchaser who bought at the sale, because the doctrine caveat empfor applies in such eases with full force, and the inscription on the safe, ‘ The Barnes Safe & Lock Co.,” “ The Globe Contract Co., Genl. Agfs. Wheeling, W. Va.,” was sufficient to put any reasonable man on his guard, especially as it was'a new safe that had never been used; and it can hardly be doubted that such shrewd business men as compose the defendant eompauy were fully informed as to the true state of the title to the safe, and purchased it as a matter of pure speculation. If not so informed,_ it was their own fault, as they knew where to lind the owners of. the safe. But whether they were or not does not. alter the law of this case.

‘‘Persons dealing with factors concerning goods intrusted io thenrare charged with notice of the extent and limitations upon their powers; and if they deal with them as if they were acting for themselves, or' if they were dealing with their own property, such persons do so at their peril that such is the fact, or that the factor has special authority from the owner, or that, by the well-established and recognized usage and customs of trade in that line, the factor is authorized to tleal with and dispose of the goods in the manner proposed. If the transaction is brought in question by the owner of the goods, the burden of proving the factor’s authority is upon the party dealing with him.” Kauffman v. Beasley, 54 Tex. 563; Story, Ag. § 225.

There is no pretence or claim in this case, that the Globe Contract Company through its general manager was authorized by the Barnes Bate & Lock Company to turn this safe over to the constable to be sold and applied on the debts of the Globe Contract Company, and he in so doing acted wrongfully towards the trne owners of the safe and the purchaser at the sale, but could not thereby deprive the true owners of their title nor confer any title on the purchaser, because he was exceeding the authority conferred by the agency.

For the foregoing reasons the judgment of the-Circuit Courtis reversed; and judgment is rendered for the appellant, the Barnes Safe & Lock Company, for the safe in question, or, in lieu thereof, the sum of one hundred and twenty live dollars, the agreed value, with interest thereon until paid, and his costs in this and the Circuit Court and before the justice of the peace expended.