text:
    Smith v. B. Lynes and Thompson & Co. Read & Hoppock v. Gibbs and others.
    Where goods are sold, to be paid for on. delivery, either in cash or commercial paper, and the goods are delivered without exacting the money or the securities, such delivery is absolute, and a complete title vests in the buyer, unless the delivery was procured by fraud.
    If the seller intend to make the delivery conditional, he must do it in express terms. The act of delivering, without obtaining the stipulated payment or security, imports a waiver of the terms of the conditional sale.
    Though the sale be conditional, the delivery will be held absolute, where no condition is expressly attached to the latter.
    A custom or usage of trade, to the effect, that on a sale of goods for cash, they are delivered to the buyer without payment or demand of payment, and after a few days a bill of the goods is sent to the buyer, and the price demanded, and in the meantime the seller retains a lien on the goods for the price, and that such a delivery is conditional, is contrary to law, and invalid.
    (Before Oakley, Oil J., and Vanderfoel and Sandford, J. J.)
    Sept. 25 ;
    Oct. 6, 1849.
    These suits, involving substantially the same question, were argued together, on a case made in each respectively. The suit of Smith v. Lynes, was an action of replevin, to recover forty-five pieces of carpeting. Of these the sheriff, on the 15th of March, 1848, replevied fifteen pieces, twelve from the possession of Lynes, and three from the possession of Thompson & Co.
    At the trial before Sandfoed, J., December 19th, 1848, the following facts appeared in evidence on the part of the plaintiff. The plaintiff, Smith, was a carpet manufacturer at West Farms, Westchester Co., and the defendant, Lynes, a carpet merchant, in the city of New York. Thompson & Co. were merchants and manufacturers, having a store in New York.
    On the 3d of November, 1847, Smith and Lynes entered into a sealed agreement, by which Smith was to manufacture carpeting for Lynes to the first- day of June, 1848, at- prices stipulated. Lynes was “ to pay for such quantity or quantities of the said goods that might be delivered to him” by Smith, in notes of Lynes, “ payable six months after the delivery of the goods to the order of Thompson & Co., and by them indorsed,” or in their notes indorsed by Lynes. Smith was to take Lynes’ individual notes for goods to be delivered in January, to not more than $1000.
    Smith proceeded to manufacture and deliver carpeting under this agreement. The delivery in January, 1848, was beyond the $1000 last mentioned, previous to the sending of any of the carpeting in question. Sundry indorsed notes were also given under the agreement.
    The carpeting for which the suit was brought was delivered at the following dates:
    January 22, 1848 — 7 pieces, of which 4 were replevied. “ ’ 28, “ 8 “ “ 5 “ February 8, “ 9 “ “3 “ “ 14, “ 8 “ “ 2 “ 25, March U U 4 9 1 none a u

    The last notes given by Lynes were given February 8th, 1848. When the nine pieces were delivered on the 7th of March, Lynes gave a receipt for them, on the back of which he wrote in pencil, these words : “ Messrs. Thompson & Co. are up at Thompson-ville, but expect to be down on Wednesday or Thursday, and I will have them ready. B. L.” Lynes testified, that hy this he meant to say to Smith lie would have the notes ready for him.
    When the suit was commenced, no payment had been made for the carpeting in question. Before commencing it, Smith went to Lynes’ store, and demanded the goods or the indorsed notes; and he also demanded of Thompson & Co. the carpeting in their possession. They claimed the same by a sale from Lynes.
    On the plaintiffs resting, the defendants moved for a nonsuit, on the ground that the delivery of the goods by the plaintiff to Lynes was absolute, and vested the title thereto in him. The court granted the motion, and the plaintiffs’ counsel excepted.
    The second suit, Head c& Hoppock v. C. V. S. and G. W. Gibbs, and M. G. Leonard, was an action of replevin for twenty hogsheads of molasses, sold by the plaintiffs to defendants, Gibbs, and replevied in consequence of non-payment by them of the price. The cause was tried before Oakley, Ch. J., on the 22d December, 1848. The writ was issued on the 21st February, 1848, and the molasses replevied by the sheriff on the same day, from the possession of the defendant, Leonard, to whom, as alms-house commissioner, the defendants Gibbs had previously sold and delivered the same at the Alms-ITouse, Blackwell’s Island.
    John Quackenboss, a witness for the plaintiff,
    testified that he is their clerk. That he was not present at the sale of the molasses, but he understood that it was sold to the Messrs. Gibbs. They took the molasses from the wharf. He does not know any thing about the delivery, except that an order came from the Messrs. Gibbs, in writing, for the molasses. He does not know whether any one went to the wharf to deliver it. Witness called with the bill for payment on the Messrs. Gibbs a few days— five or six days afterwards ; saw one of the firm. He did not pay ; be said he thought the molasses was bought on time.
    Cross-Examined. — He said Messrs. Gibbs sent an order for the molasses the same or the next day, and after the sale it was delivered on that order.
    Ellis F. Ayees, for the plaintiffs,
    testified that he was present at a conversation at the office of the Messrs. Gibbs, between George W. Gibbs and Mr. Ely Hoppock respecting the molasses. Hoppock asked pay for the molasses. Mr. Gibbs said his brother was in Boston, and they would pay when lie returned. Hoppock seemed displeased. After this conversation, Gibbs told witness that the molasses was bought for cash, and that three or three and a half per cent, was allowed for cash. Witness was present at a second conversation at the office of Gibbs. The first conversation took place a day or two after the failure of the Messrs. Gibbs. The second was between Mr. Hoppock and Mr. C. Y. S. Gibbs. Hoppock asked for an order for the money on the alms-house commissioner, to whom Gibbs had sold the molasses. Gibbs refused to give an order, but said he would collect the money and pay the plaintiff. It was then well known that the Messrs. Gibbs had failed. After the first conversation, G. W. Gibbs came to witness’s office, and said the molasses had been bought for cash, three or three and a half discount off; the sale was on the 2d or 3d day of February last. There was six or eight days between the time of the first and second conversation. Witness had a conversation with one of the Messrs. Gibbs to-day. He said the suit was not carried on at their instigation, but at that of their assignees. Witness had no recollection of hearing any one say that the molasses was to he paid for on the 10th of February. The Gibbs’s both admitted that it was bought for cash less three and a half per cent. The demand of the goods from Mr. Leonard, the alms-house commissioner, before the replevin, was admitted, and that Mr. Leonard had not then paid for the molasses to the Messrs. Gibbs.
    The plaintiffs here rested, and the counsel of the defendants Gibbs moved for a nonsuit.
    The plaintiff then offered to prove, that by the custom and usage of merchants in Xew York, the delivery of merchandise upon cash sales in Xew York, was conditional that the money was paid, and that the vendor held a lien upon the goods after such delivery for the price.
    The court decided that there could be no such custom as that contended for, as it would conflict with established principles of law, and the plaintiff excepted.

      The plaintiffs claimed the right to go to the jury upon the question, whether the delivery of the goods was not conditional, and whether the taking of the molasses upon a cash punchase, and not paying for it, was not, under the circumstances in this case, a fraud upon the plaintiffs.
    The court decided that there was not sufficient evidence of a conditional delivery to go to the jury, and no evidence whatever of fraud, on the part of the defendants, and directed a nonsuit to he entered. The plaintiffs’ counsel excepted.

      C. IF. Sandford, for the plaintiffs
    in both suits, relied upon Haggerty v. Palmer, 6 J. C. R. 437; Russell v. Minor, 22 Wend. 659 ; Palmer v. Hand, 13 John. 435 ; Lord SeafortPs Case, 19 Ves. 235 ; 2 Kent’s Comm. 497; Keeler v. Field, 1 Paige 315 ; Acker v. Campbell, 23 Wend. 372 ; Allen v. Orary, 10 Ibid. 349 ; Barrett v. Warren, 3 Hill, 348.

      B. W. Bonney, for the defendant,
    Lynes, referred to Chap-mam v. Lathrop, 6 Cowen 110; Lupin v. Mame, 6 Wend. 247.; Furniss v. Hone, 8 Ibid. 147, 266; The People v. lLayes, 14 Ibid. 546 ; Hussey v. Thornton, 4 Mass. 405 ; Ccmiton v. Sumner, 4 Pick. 516 ; Smith v. Peming, 6 Ibid. 262.

      W. S. Sears, for the defendants,
    Thompson & Co., cited Andrew v. Dieterich, 14 Wend. 34; also 6 Ibid. 77, and 8 Ibid. 247.

      W. Stoughton, for the defendants,
    Gibbs and others, in addition to the cases cited by Mr. Bonney, relied on Cross v. Peters, 1 Greenl. 376 ; Conyers v. Ennis, 2 Mason, 236; Rowley v. Bigelow, 12 Pick. 307; Hone v. Mutual Safety Insurance Company, 1 Sand. S. C. R. 137; 1 East 375 ; 1 Bing. R. 310* 16 East 130 ; 8 Ad. and Ell. 758, 770 ; Chitty on Cont. 844; 2 Kent’s Comm. 391.
   By the Court.

Sandford, J.

We have frequently decided the principal question involved in these eases, and have supposed the law applicable to it, was perfectly established in this state. The plaintiff’s counsel relied upon the case of Russell v. Minor, (22 Wend. 656.) as deciding a different rule from that enforced at the trial, and we have examined the subject anew, with the view of putting it at rest, so far as this court is concerned.

The question arises upon the delivery of goods, which have been sold conditionally, as for cash or for indorsed notes. The fact that the sale was conditional, is not at all conclusive; for, however numerous the conditions of the sale, if the vendor deliver the goods absolutely to the purchaser, the title vests'in the latter. On a full consideration of the matter, we are satisfied that the well-settled rule of law is this :• — Where goods are sold, to be paid for on delivery, either in cash or commercial paper, and the goods are delivered without exacting the money or the securities, such delivery is absolute, and a complete title vests in the purchaser, unless the delivery was procured by fraud.

A mere expectation that the buyer will comply with the terms of the sale, does not qualify the delivery or affect its character. Such expectation exists in every sale, conditional or otherwise. If the seller intend to make the delivery conditional, he must do it in express terms. The very act of delivering the goods without at the same time obtaining the stipulated payment or security, imports a waiver of the terms of the sale. The seller cannot, when doing that act, rely upon his mental reservation that he still looks for a performance of the condition, and does not intend to pass the title of the goods.

There is no hardship in this principle of law. If the seller is unwilling to trust to the personal responsibility of the buyer for the performance of the terms of the sale, it is only necessary for him either to refuse to deliver without a simultaneous performance, or to attach the express condition to the delivery. In the latter event he will be safe, except against bond fide purchasers without notice. A contrary rule would lead to great confusion, as is the tendency of every deviation from the general principle that the possession of personal property is evidence of title.

In Chapman v. Lathrop (6 Cowen 110,) the supreme court held the title to have passed by the delivery, on a sale made for cash; the goods having been removed by the buyer to Ms own store without payment, and without any express condition or reservation, although payment was demanded on the following day.

In Lupin v. Marie, (6 Wend. 77,) which was in the court for the correction of errors, the goods were sold on the 24th of August, to be paid for in notes of the buyer, and were delivered the next, day without the notes being exacted or given. The buyer failed on the fourth of September, and on the fifth the seller demanded the goods, claiming that the deli very had been conditional, and the title had not passed. On the ninth of September, the seller assigned the goods, with his other property, for the benefit of his creditors. The court decided that the delivery without requiring the notes, or annexing any condition, was a waiver of the condition on which the sale was made; the buyer became the absolute owner of the goods, and the title passed to his voluntary assignee.

In Furniss v Hone, (8 Wend. 247,) in the same court, where on a sale of goods at auction, the sellers failed to prove that the delivery was on the condition claimed by them, it was decided that the same was absolute, and the title vested in the buyer. Mr. Justice Kelson, and Senator W. II. Maynard, in their opinions, affirmed the general doctrine which we have laid down.

In the case of The People v. Haynes, in the same court, (14 Wend. 546,) the chancellor said, that where goods are sold upon the understanding that they are to be paid for on delivery, if they are delivered without insisting upon payment at the time of the delivery, the title passes absolutely to the purchaser, unless there is a special agreement, or a usage of trade, by which it is made conditional. Senator Tracy, in the same case, said if goods sold for securities, were actually delivered to the purchaser, without any arrangement as to the security for the payment, the vendor’s lien upon them was gone ; and to constitute a conditional delivery, it was necessary the condition should be express. The case before the court was not one of a conditional sale; but the positions laid down by the members of the court were pertinent to the conclusion adopted, which was unanimous.

Chancellor Kent folly concurs in this doctrine as to the effect of delivery. It is trae he makes an exception upon usage in particular cases, and speaks of the seller’s exacting or expecting payment as qualifying a delivery; but it is evident from the illustrations which follow, that the learned commentator had in view an expectation, expressed at the time, and attached to the set of delivery. Indeed, no other could have been supposed; for an expectation locked up in the seller’s own bosom could have no possible influence upon his act in delivering, even with the buyer’s title or right thereby acquired. (2 Kent’s Comm. 498.)

The plaintiffs referred to Haggerty v. Palmer, 6 John. Ch. R. 437, and Keeler v. Field, 1 Paige, 312. In the former the delivery was held to be conditional, upon the force of a usage admitted to exist, known to the buyer and to his assignee, and the force of it not called in question. In Keeler v. Field there was an express condition annexed to the shipment and delivery of the goods.

The case of Russell v. Minor, 22 Wend. 659, was this :— Minor had contracted for a quantity of paper, for which he was to give his note. A part of the paper was brought to him, and he was asked for Ids note for the price of that portion. He declined giving it until the residue was delivered, when he would give his note for the whole; but he said the parcel brought could remain until then. When the residue was offered he would not give his note, and replevin was brought for the parcel first delivered. The supreme court nonsuited the plaintiff', and the court of errors reversed the judgment, by a divided court, and against the opinion of the chancellor and Senators Maynard and Verplanck. The majority of the court held that the partial delivery was conditional, because of Minor’s express promise at the time to give a note when the residue was delivered. This, it will be observed, was an express condition proposed by the buyer in answer to the seller’s demand of a note as a term of the delivery. It, therefore, does not conflict with the position that there must be an express condition annexed to, or qualifying the act of delivery, to prevent it from vesting the title. Another good reason existed in that case for holding the delivery to have been conditional, in the fact that it was not a full performance of the seller’s contract, (which was to make a single delivery of the entire quantity at once,) and it was received and accepted conditionally by the buyer. He simply suffered the paper to be left, and to remain until the residue was brought, and the contract thereby performed. Of course, lie could not afterwards claim that the delivery which he received conditionally, was an absolute and unqualified delivery on the part of the seller.

The supreme judicial court of Massachusetts has settled the law in accordance with the view of it which we have uniformly entertained. In Carlton v. Sumner, (4 Pick. 516,) goods were sold, for which the buyer’s acceptances were to be given. They were, by his order, put on board a vessel, without the acceptances being given, and the same day were attached upon a debt owing by the purchaser. It was held that the vendor could not retain the goods.

In Smith v. Dennis, (6 Pick. 262), a quantity of sugar was sold, on the express condition that an indorsed note should be given for the price. The sugar was delivered to the buyer by the seller’s clerk, without anything being said as to the condition ; but the seller knew of it the following day. The note was not given, and eight days afterwards the goods were attached as the property of the buyer. It was decided that the delivery was absolute. The court said, “ The principle is, that if the vendor who has sold upon condition, permit the vendee to take the goods without exacting of him a compliance with the terms of the sale, he shall be presumed to have abandoned the security he intended, and to trust to the personal security of the vendee.”

In the first case before us, it is contended that there was sufficient evidence in the pencil memorandum made by Lynes, on the receipt dated March 7th, relative to not sending the notes, to bo submitted to the jury, as proof that the notes were demanded when that delivery was made. In our opinion it was quite unimportant whether such a demand was proved or not; if made, it was not complied with, and the goods were left with ] .ynes, without any reservation or condition. If it be said Smith was not present to assert the condition, we answer, first, he should have sent the goods with proper instructions ; and second, he should have repudiated the delivery, immediately on the return of his agent. Rut there was a difficulty in the way of any inference which would qualify the delivery of March 7th, in the fact that there were similar deliveries of goods on the 22d and 28th of January, and the 8th and 14th of February, for which no notes were given, and which, with that of March 7th, form the subject of the suit. The pencil note was as applicable to each and all of those, as to the last parcel sent; and in any way of applying it, could not sustain the presumption that a condition was attached to either of the deliveries. Considering the manner in which the goods had been sent to Lynes from time to time, the fact that almost eight weeks had elapsed between the delivery of a part of those claimed and the demand made for the notes or a return of the goods, and the entire absence of proof that any condition or qualification was attached to either of the parcels delivered, the case was altogether too bald to go to the jury, and the plaintiff was properly non-suited.

The second suit at bar, (Read & Hoppock's,) is in its facts precisely like that of Chapman v. Lathrop, before cited. The sale was for cash, the goods were delivered on the buyer’s order without any condition imposed, and the price was demanded five or six days afterwards. The plaintiffs further offered to prove, that by the custom and usage of merchants in this city, the seller retained a lien for the price of goods sold for cash and deli vered as these were, and that the delivery was conditional by such usage.

This the judge rejected, because the custom alleged was contrary to law : and in this he was undoubtedly right. (Hone v. Mutual Safety Ins. Co., 1 Sand. 137.)

The plaintiffs also claimed the right to present the case to the jury on the ground of fraud ; but there was not a particle of evidence from which fraud could be inferred.

The nonsuits were right in both suits, and the motion in each for a new trial must be denied.


source: Caselaw Access Project

author: Sandford, J.

license: Public Domain

text:
    Hargous, Brothers, v. J. Lahens & Co.
    In an action by the holder of a bill of exchange against the drawers, an indorsement by the plaintiff to a subsequent indorsee remaining upon the bill, uncancelled, after the suit is brought, is no objection to the plaintiff’s recovery, if he produce the bill as the holder. And it is immaterial whether he is the owner, or the agent of the owner, as long as he is the holder.

    Where a bill of exchange drawn in New York on parties in France, and accepted, has been protested for non-payment, the holders are entitled to damages from the drawers, and the right to recover becomes perfect on the return of the bill. A subsequent part payment by the acceptor, has no influence in reducing that fixed and determinate liability.
    Where a protested foreign bill, after being returned, has been sent back, to the place of payment, and partial payments are made by the acceptor, a tender of the balance due upon the face of the bill is defective, if accompanied by the condition that the bill be delivered up without an offer to pay damages.
    The holders are entitled to retain the bill, to enforce their claims for damages against the proper party.
    Where a bill is payable in Paris, a tender to a clerk of the sub-agent in Havre of the holder’s agent in Paris, to whom the bill has been sent, is insufficient.
    The holder of a foreign bill is entitled to his damages, on its non-payment, irrespective of the place where he may subsequently receive entire or partial payment of its amount.
    (Before Oakley, Ch. J., and Vakderpoel and SaNdford, J. J.)
    Sept. 21;
    Oct. 6, 1849.
    This was an action brought to recover a balance due to the plaintiffs, as holders, from the defendants, as the drawers, of a bill of exchange for 50,000 francs, dated Feb. 24th, 1848, drawn by the defendants, merchants in New York, in favor of the plaintiffs, directed to Melnn & Co., at Havre, and payable at Paris, sixty days after sight. The plaintiffs resided in New York. The draft w^as accepted by the drawees, and at its maturity, May 15, 1848, was presented for payment, and payment being refused, was protested, and notice thereof given to the defendants. Subsequently to the notice of protest, the draft was sent by the plaintiffs from New York to their correspondents in France, to whom payments were thereupon made by the acceptors, to the amount of $7,559 79, leaving a balance due and unpaid upon the draft, for which balance and the damages and protest, this action was brought.
    The answer of the defendants denied that the plaintiffs were the legal holders of the bill, at the time of the notice, or the commencement of the suit, but that on receiving notice, they, believing the plaintiffs to be the legal holders, had entered into a new contract with the plaintiffs, as a substitute for the one arising out of the bill in question, by which the plaintiffs were to return the same to their correspondent in France, and seek to recover the amount thereof, or as ranch as could be realized from the acceptors, the deficiency to be paid by the defendants, together with all legal damages. That various payments were thereupon made by the acceptors, and that the balance due upon the draft, with interest, had been tendered to the plaintiffs’ correspondent, or bis agent, which was refused, and that such refusal was in violation of the substituted contract between the parties. The reply denied that any new contract had been entered into; and as to the alleged tender, it averred that there was a pretended offer to pay a sum of money equal to the balance mentioned in the bill with interest, but that such tender was unaccompanied by any offer to pay damages, and was upon the condition that the bill should be delivered up.
    At the trial before the Chief Justice, in May, 1849, after proof of the protest of the bill, and notice to the defendants, it appeared that the following correspondence took place between the parties:
    On the 12th June, 1848, the defendants addressed a letter to the plaintiffs, as follows :
    “ GeNtlemeN You hold the following bill of exchange, now under protest, and for which we are liable to you, with the usual damages, viz.
    “ No. 229. J. Lahens & Co. on Ye. L. Melun & Co., Havre, payable in Paris, at 60 days’ sight, dated 24th February, 1848, for 50,000 fes.
    “We deem it essentially for our interest, that that hill should be returned to France, where the funds and provisions to meet It are deposited, and where we hope and believe that you will realize the amount. We therefore authorize you and mpiest you to return that bill to your correspondent in France, to take such measures, either in concert with our house there, or otherwise, as you or your agents may see fit, for its recovery, we holding ourselves responsible to you, (though not claimed by others,) for the usual damages thereon, allowed by law in this country, in case such damages are not recovered or received by you in France; and also holding ourselves responsible to you for the whole amount of such exchange, or so much thereof as shall not be recovered or received by your agent from the other party, liable to the same.”
    The plaintiffs answered, the next day, in these words:
    “ GeNtlemeN : — We have just received your letter of 12th inst., which is perfectly satisfactory, with one exception. As the transaction upon which we are entering is a new transaction, we wish it to be well understood, that we will credit you but with the net proceeds of the amounts collected by our friends in Paris, and that if any commissions are charged, that they will be borne by you.”
    After their signature, they added,
    “ In regard to your remark concerning the damages claimed, we wdll state, that inasmuch as we have always paid them, we think it but just that we should in our turn claim them.”
    The bill was accordingly sent back by the plaintiffs to their agent at Paris, M. Suberveille.
    It was admitted that the balance claimed, with interest, was the sum of $3,198 84. The plaintiffs thereupon rested.
    It appeared in evidence on the part of the defendants, that the bill of exchange in suit had been purchased by the plaintiffs with the funds of Garruste & Co., of Mexico, and had been forwarded by them for collection to J. V. Suberveille, of France, the agent of Garruste & Co. That after its protest, the plaintiffs remitted funds for the purpose of covering the bill. The account current of the plaintiffs with Garruste & Co., under date of March, 1849, in which the bill was charged to the latter, was given in evidence. It also appeared, that on the 8th of August, 1848, a tender was made in Havre, to a clerk of Mr. Bielley, merchant, of Havre, who was the agent there of Suberveille, of Paris, of an amount equal to the balance of the face of the bill, with interest and expenses; and that the tender was accompanied by a demand for the delivery of the bill, without any offer to pay damages. The hill, wdien produced upon the trial, appeared toiiave been indorsed by the plaintiffs to M. Suber-veille ; and it was shown that such indorsement had been erased with a pen, after the action was commenced.
    The defendants moved for a nonsuit, on the following grounds : — 1. Because the plaintiffs had no title to the bill at the time of the bringing of tbe suit. 2. Because no contract was established between the parties, to warrant the claim for damages. 3. Because, if any contract was made, it was not fulfilled by the plaintiffs, they having broken it by refusing to accept the tender, given in evidence.
    The court denied the motion, and the defendants’ counsel excepted.
    The counsel for the defendants then asked the justice to charge the jury, that the defendants were entitled to their verdict on the same grounds. The justice refused so to charge, and directed the jury that the plaintiffs were entitled to a verdict for the whole amount claimed, -«'hereupon the defendants’ counsel excepted. The jury found a verdict for the plaintiff^ for the sum of $3,198 84 damages; and from the judgment entered upon that verdict, the defendants appealed to the general term.

      W. W. Van Wagenen and Wm. Kent, for the appellants.
    I. The plaintiffs had no title to the bill at the time of the bringing of the suit.
    II. No contract was established between the parties to warrant a claim for damages. The exception contained in the plaintiffs’ letter of June 13th was never assented to.
    IH. If any contract was made it was not fulfilled by tbe plaintiffs; they having broken it by refusing to accept the tender given in evidence.
    IY. The plaintiffs having received from the acceptors, on account of the said bill, over $7,500, would not be entitled by law to recover damages upon the amount so received; and the verdict, under the charge of the judge, given for damages on the whole amount of the bill, is erroneous.
    V. The judge erred in refusing to nonsuit the plaintiffs, and in charging the jury that they were entitled to recover the whole amount claimed.

      T. J. Glover, for the plaintiffs.
    I. The bill of exchange was remitted for collection, and never ceased to be tbe property of the plaintiffs, who would have been entitled to recover, even without any erasure of the indorsement. (Chautauque Co. Bit. v. Davis, 21 Wen. 584; Dugan v. U. S., 3 Wheat. 172; Dolfus v. Froseh, 1 Denio 367.)
    II. The jury were authorized to presume, from the acquiescence of the defendants, that the terms of the plaintiffs’ letter of June 13th, were accepted by the defendants. Besides it only expresses what was implied in the defendants’ letter of June 12th.
    III. Even if there had been no acceptance of the terms of that letter, the defendants’ liability for the damages would have been the same; it is imposed by the law-merchant, and was prior to the correspondence of the parties. (Story on Bills, § 107.)
    IY. The refusal of the tender, even if validly made, was not in violation of any contract between the parties. And we were entitled to retain the bill to recover our damages against the drawers.
    Y. The tender was clearly bad. (1st.) It was subsequent to the day of payment. (Sume v. People,, 8 East 168.) (2d.) It was not a personal tender. {Smith v. Smith, 2 Hill 351.) (3d.) It was conditional. (Wood v. Hitchcock, 20 Wend. 47 ; 1 Ch. Gen. Pr. 506-7.) It ought to be such as not to prejudice any claim the holder may have against other parties.
    (4th.) It was insufficient, inasmuch as the acceptors being in funds, and bound to accept and to pay, were liable for damages. (Story on Rills, 464, note 4; 465, note 1, 1st ed.; Bayley on Bills, 353; '7 Orancli 500; Potbier de Change, n. 115 to 117; Jouss, Comm,.sur 1’ord., pp. 140, 141; Bell’s Comm, p, 407.)
   By the Court.

Sandford, J.

We decided in Mottram v. Mills, (1 Sand. R. 37,) that the plaintiff’s full indorsement of a bill to a subsequent indorsee, remaining thereon uncancelled at the trial, is no objection to his recovery against a prior party, if he produce it as the holder. But it is said, these plaintiffs were never the proprietors of the bill; they were agents merely of J. Garruste & Co. We suppose it is of no consequence whether they held the bill as owners, or as agents. They were the holders, in either event, and entitled to recover, either for their own benefit, or that of their principal. But we think, on the evidence, they were the exclusive owners of the bill.

The defendants next contend that they were discharged from liability, by the plaintiffs’ omission to receive the sum offered by the acceptors at Havre; it being a violation of the agreement upon which the bill was returned to France.

It is not material, probably, whether the agreement was fully made, or whether the plaintiffs ought to have accepted the offer at Havre; because, if both points were conceded, their remedy on the hill against the defendants as drawers, was unimpaired.

But the objections are all untenable. The agreement was perfect. The qualification in the plaintiffs’ note of June 13th, was no more than an expression of what was fairly implied in the defendants’ proposal; and if it were a new term of the contract, their silence would furnish plausible evidence of their assenting to it.

The tender or offer was defective, for two reasons : — 1. It was made to a clerk of the sub-agent in Havre of the plaintiffs’ agent in Paris, to whom the bill was sent. The clerk declared that he could make no answer to the offer, and there is no ground for inferring that he had any authority to act in the premises. 2. The party tendering, required the bill to be given up, without any offer to pay the damages which the holders were entitled to receive. The acceptors were not bound, (we will assume,) to pay those damages; but until they were paid, the holders were entitled to retain the bill to enforce their payment. All the- acceptors would ask was, an exoneration from the bill, on paying their own liability.

The principal point in the case remains. The plaintiffs, after the bill was returned here dishonored, remitted to their correspondent at Havre to cover the same; and subsequently returned the protested bill to Paris, and there received from the acceptors, $7,559 79. On this portion of the amount of the bill, it is contended they are not entitled to damages.

We are unable to perceive any good reason why they are not. The allowance of damages rests upon the theory, that the holder of the bill, by reason of its non-payment, is put to the expense of remitting the same amount to replace that expressed in the bill, in the country where it was payable. The rate of exchange measures the damages, in the absence of a statutory or customary regulation. This allowance is made without any inquiry as to the fact of a remittance to cover the amount of the protested bill. The liability to pay the damages becomes perfect, on the return of the bill protested. A subsequent part payment by the acceptor, can have no greater influence in reducing or extinguishing that liability, than a similar partial payment by the drawer or any other party. It is as fixed and determinate an obligation, as the debt represented by the sum expressed in the bill itself.

We were referred to two decisions, as supporting the defendants’ position on this subject. In one of them, Laing v. Barclay, 3 Stark. R. 38, the bill was drawn at Deinarara on London, for £500. The case states it was protested for only £100; £400 having been paid upon it by the acceptors. The damages were limited to the £100. It is evident to us, from the report of the case, that the partial payment was made either before or at the time the bill was presented for payment; so that there was not even in theory, any re-exchange incurred by the holder in respect of the £400.

The other case cited, was The Bangor Bank v. Hook, 5 Greenl. R. 174, which was an action against the indorser of a bill, drawn at Belfast, in Maine, on a party in Boston, duly accepted and protested for non-payment. The plaintiffs had sued the acceptor in Boston, and collected nearly the whole bill. In the suit against the indorser, they claimed the balance of the bill, and damages on the whole amount for which it was drawn. Weston, J., in delivering the opinion of the court, stated the ground on which damages were allowed on bills of exchange, and that the statute intended to give damages on the same principle as they were given by the common law in the cases to which that was applicable. That according to the common law principle, if the bill, after being dishonored, was paid or received at the place where it was payable, the holders’ claim for damages was reduced pro tanto; that incident which would have otherwise attached to it ceasing, because the money was paid at the place appointed. The learned judge declared that the right to receive, and the liability to pay damages, accrued on the protest of the bill. The holders could then have enforced it against the indorser: they were under no obligation to sue the acceptor, or to receive the contents of the bill without the damages; but when they did receive from the acceptor at Boston, where the bill was payable, the greater part of the bill, they were to be considered, (nothing appearing to the contrary,) as having pro tanto waived and lost their right to recover the re-exchange, or the damages substituted therefor. The court decided that, the plaintiffs’ claim for damages was limited to the sum uncollected from the acceptor.

If the position of the judge as to payment of the bill by the acceptor, had been limited to a partial payment made at or before a protest of the bill, it would have been precisely the same as that ruled by Chief Justice Abbott in the nisi prius case cited from 3d Starkie. The argument in the Bangor Bank v. Hook, evidently rests upon the ground, that because the holder of a protested bill ultimately receives it, in whole or in part, at the place where it was due and payable, he is placed in the same situation as he would have been had the bill been paid when it matured. After fully considering the subject, we are satisfied that the argument is fallacious. On the protest of a bill abroad, the remitter, for the protection of his credit, must at once take it up ; and for this purpose he must encounter the expenses of re-exchange. So the Bangor Bank in the case cited, having remitted the bill in suit to Boston to supply funds there for their business occasions ; on its being protested, were doubtless compelled to remit to Boston, other funds to the same amount, to supply the deficiency made by its non-payment. Now it is obvious, that the subsequent collection of the amount of the protested bill at the place where it was payable, will not make the remitter whole in the transaction, unless it shall so happen that the rate of exchange is at that time so favorable to him, that he can sell a bill drawn by him against such collection, for as much as it cost him to remit and take up the protested bill when he received notice of its dishonor — together with his expenses in the collection. Thus the result, in reference to an actual reimbursement of the remitter, or a restoration to the same state he would have been in if the bill had been paid according to its tenor and obligation, would depend upon the fluctuations of exchange, the credit of the holder as a drawer of foreign bills, the continued solvency of his agent abroad; and other considerations, which we need not enumerate. It was intended by the rule of fixed damages provided in the statute, to avoid all inquiries of this character, in every case of protested bills of exchange. . And we think the good sense of the thing, whether regarded as under the statute or the law merchant, entitles the holder of a foreign bill to his damages on its non-payment, irrespective of the place where he may subsequently receive entire or partial payment of its amount.

In the case at bar, we might reasonably hold that there is no room for inferring any waiver of damages, by the proceeding against the acceptors. The bill was sent back oil a stipulation, which, fairly construed, continued the liability of the drawers for the damages to which the plaintiffs were at that time entitled.

The judgment at the special term must be affirmed.


author: Duer, J.

text:
    White & Sheffield v. The Springfield Bank and others.
    The discharge of an antecedent debt, is a valuable consideration, within the meaning of the rule which protects the title of the holder for value of negotiable paper, when the transfer is made in the usual course of business, before it has arrived at maturity.
    It is otherwise, where the paper i$ received as collateral security to an antecedent debt, which is retained in full force.
    Where a bank, holding several unaccepted drafts of a manufacturer, with collateral securities, pledged for all drafts of the manufacturer, which they should have not accepted, discounted a note for the drawer, and, in payment thereof, gave up to him one of the unaccepted drafts, and subsequently, before notice of any equity of the maker of the note, received other drafts not accepted, to an amount, with those previously held, exceeding the collaterals ; it was held, that the bank had parted with value on the faith of the title to the note, irrespective of the consideration founded on giving up the draft relinquished on receiving the note ; and that the bank could enforce the note against the maker, although it was obtained from him without consideration, and transferred to the bank fraudulently as against him.
    The eases of Stalker v. McDonald, 6 Hill, 93 ; Coddington v. Day, 20 John, 651; Swift v. Tysen, 16 Peters 1 ; commented upon by the court.
    (Before Dues, Mason, and Campbell, J.J.)
    Sept. 20 ;
    Oct. 20, 1849.
    The Till in this cause was filed in the late court of chancery, to compel the Springfield Bank, to deliver up and cancel a note of $2,000, made by the plaintiffs, dated December 10th, 1845, payable at seven months, to Howard & Lathrop, or order; and in the meantime to restrain the bank from collecting the note. The cause was heard on pleadings and proofs. The facts appearing were as follows:
    Howard & Lathrop were manufacturers of paper, at South Hadley, in Massachusetts, who transacted their banking business at the Springfield Bank, in Springfield, Mass. The plaintiffs were commission merchants in the city of New York, and frequently accepted bills for the accommodation of Howard & Lathrop. The latter failed in March, 1846. In December, 1845, previous to the 27th, the plaintiffs had accepted and paid such bills for 1J. & L.’s accommodation, to the amount of about nineteen hundred dollars. On the 27th December, 1845, the note in question was delivered by the plaintiffs to Lathrop, in Hew York, on his agreement to get it discounted and remit to them the avails to meet the amount of drafts so paid by them. Two or three days afterwards, Lathrop took the note to the Springfield Bank, and on the bank’s refusing to discount it, and furnish him the avails in money, he delivered the note, indorsed by II. & L., to the bank, and received from the bank a draft for $2,000, drawn by II. & L. on the plaintiffs, but not accepted by them, dated December 13th, 1845, at six months, which the bank had discounted for II. & L. on the 15th December.
    At the time the bank received the plaintiffs’ note and gave tip this draft, the bank held certain promissory notes delivered to them by Howard, as collateral security for the acceptance of any drafts that might be drawn by his firm of Howard & Lathrop, and discounted by the bank. These notes amounted to $6,680 09; they were security for unaccepted drafts only, and could not be applied to any other purpose. The unaccepted drafts of II. & L. then held by the bank, including the $2,000 given up on that occasion, amounted to $6,091 94. Subsequently and before the bank had any notice of the plaintiffs’ securities, (so far as the testimony showed notice,) they discounted other drafts of II. & L., which were not accepted, and for which those notes remained as collateral security, viz. one of $1,500, January 31, 1846, payable at six months ; one of $1,325, at six months, February 26th, 1846; and one of $1,325, at six months, February 27th, 1846; all of which were unpaid when they put in their answer.
    The cashier of the bank testified, that when he received the note of $2,000 from Howard & Lathrop, and gave up their draft, the officers of' the bank had no knowledge, intimation, or suspicion, that the note was an accommodation note, or that it did not belong to H, & L., or of the object for which it was made.

      G. C, Goddard and 8. P. Staples, for the plaintiff,
    cited Stalker v. MPJonald, 6 Hill 93, and cases there cited; Olcott v. lidtfibom, 5 Wend. 490; also 9 Ibid. 170; 12 Ibid. 600; 3 Edw. Oh. R. 182.

      J. 8. Huggins and II. Ketchum, for the defendants,
    cited Bank of Salina v. Babcock, 21 Wend. 499 ; Bank of Sam dusky v, Seoville, 24 Ibid. 115 ; Swift v. Tyson, 16 Peters 1.
   By the Court.

Duer, J.

It is certain that the negotiable note of the plaintiffs, which is the subject of controversy in this suit, was taken by the defendants in the ordinary course of business, without any knowledge or suspicion of the equity which is now relied on to impeach their title. Neither at that time, nor at any subsequent period until near the commencement of this suit, had the officers of the bank any notice, actual or constructive, of the facts upon which the plaintiffs found their claim for relief. Tile only question, therefore, is, whether the bank is a holder of the note for a valuable consideration.

The note was discounted at the request of Howard & Lathrop, the payees and indorsers — the proceeds, however, were not paid to them, nor passed to their general credit, but by agreement, were applied to the extinguishment of an existing debt. The bank had previously discounted for them their draft upon the plaintiffs, which had been returned unaccepted, and it appears from the entry made at the time in the books of the bank, that the note was accepted in exchange for the draft, The note, however, was discounted, since it appears from the same entry, that the interest for the time it had to run, was deducted from the sum credited to Howard & Lathrop, and hence the entry is only a form of stating, what was certainly the case, that the proceeds of the note were applied to the satisfaction of the draft. That the parties meant to extinguish the subsisting debt, is rendered evident by the fact that the draft, the proper and sole evidence of the debt, wras delivered up to the drawers.

The case, therefore, is exactly the same, in all its material circumstances, as that of The Bank of Sandusky v. Scoville and others, (24 Wend. 115;) nor in principle is it distinguishable from the previous case of The Bank of Salina v. Babcock, (21 Wend. 99,) and the subsequent ease of The Mohawk Bank v. Cary, (1 Hill, 512,) and unless the judgments of the supreme court in these cases are to be rejected as evidence of the existing law, they must of necessity control our decision.

In The Bank of Sandusky v. Scoville, the note in controversy was transferred to the bank for the purpose of satisfying an existing debt, but no money was paid to the person making the transfer, and the application of the proceeds to the payment of the debt, appeared only from an entry in the books of the bank. The court said that the transaction was substantially tire same as if the proceeds had been paid in cash to the person making the transfer, and he had personally applied them to the satisfaction of Iris debt-; and they added that the bank in relinquishing the debt parted with value. It is true that tire defence in this case was founded upon a provision in the revised statutes, since repealed, which protected the holder or indorser in good faith, and for a valuable consideration, of negotiable paper, tainted with usury, (1 R. S. 772, § 2 ;) but we have been unable to discover any reasons for supposing that the words, “ valuable consideration,” as used in this statute, were meant to be understood in any different or wider sense, than that which the law attributes to them in all analogous cases. At any rate, the opinion of the supreme court, it is certain, was not founded upon any such hypothetical distinction, since they refer to their former decision in The Bank of Salina v. Babcock, as having settled the principle by which they were governed. In the case of the Salina Bank it was not pretended that the note in question was void for usury, but the fraud which was relied on as vitiating the title of the bank, was precisely of the same nature as that of which the plaintiffs complain in the present suit.

Whatever doubts, therefore, might previously have existed, arising from prior decisions of the same court, the cases to which we have referred plainly established the doctrine, that the mere discharge of an antecedent debt is a valuable consideration, within the meaning of the rule which protects and confirms the title of the holder for vafee of negotiable paper, when the transfer is made in the usual course of business before the paper has arrived at maturity.

It was, however, contended upon the argument, that this doctrine has since been overruled, and that the more recent decision of the court of errors in Stalker v. McDonald, 6 Hill 93, has settled the law, that the transfer of negotiable paper upon no other consideration than the discharge of a precedent debt, gives no security to the title of the holder, but leaves him exposed to every defence that might have been urged against the person making the transfer; and that such is the effect of that decision, we believe has been the general impression of the bar. We are satisfied, however, from an attentive examination of the case, that it neither requires nor justifies this interpretation, but that the court of errors meant only to re-affirm its own prior decision, in the leading case of Coddington v Bay, 20 Johnson 651. The only question that was discussed by the counsel, or that could properly arise upon the facts, was whether the court should adhere to that decision or renounce its authority, in deference to the judgment of the supreme court of the United States, in Swift v. Tyson, 16 Peters 1. There was no question as to the effect of a transfer, intended to operate, and actually operating, as a payment of a precedent debt. The notes in controversy in Stalker v. McDonald, had been transferred to the plaintiff in error, not for the purpose of then satisfying, but as a collateral security for the eventual payment of an existing debt, he retaining in his hands the evidence of the debt, and never for any period of time relinquishing the right, or losing the power, of enforcing its payment, and it was upon these circumstances that the sound and judicious lawyer, (Senator Lott,) who, as a senator expressed his concurrence in the judgment pronounced, laid the entire stress of his opinion. It cannot be denied, that in the elaborate opinion of Chancellor Walworth, there are many expressions which prove, if literally construed, that he meant to reject entirely the distinction between a transfer in payment or as a collateral security, as affecting the title of the holder of negotiable paper; but his remarks upon this point, if meant to be thus understood, were extrajudicial, and are evidence only of his private opinion, and not of the grounds upon which the judgment of the court was placed. Hence, although the observations of the chancellor may be thought to have weakened in some degree the authority of the cases in the supreme court which we have cited, they afford no warrant for saying that those cases have been overruled, and, until a decision directly overruling them shall have been pronounced in the court of appeals, we must continue to regard them as evidence of the law, which we are bound to follow.

Por shall we dissemble our satisfaction that our inquiries have terminated in this result. It would have been a subject of just regret, liad we been compelled to say that we have departed, in this state, from a general and undoubted rule of mercantile law. As the case now stands, the doctrine of the supreme court, to which we adhere, is in perfect harmony with the decisions in England, and in most, if not all, of our sister states. The distinction which Chancellor Walworth is supposed to have rejected, has been admitted and followed in Ohio, Carlisle v. Wishart, 11 Ohio Report 172, Riley v. Anderson, 2 McLean 589; in Pennsylvania, Petrie v. Clark, 11 Sergeant and Rawle 377; in Connecticut, Brush v. Scrivener, 11 Connecticut 388; in Maine, Holmes v. Smith, 4 Shepley 177, Norton v. Waite, 2 Appleton 175; and in New Hampshire, Williams v. Little, 1 N. Hampshire 66; and in this last case, Chief Justice Parker, with great clearness and force of reasoning, has vindicated its propriety and justice. We add that the validity of the distinction was very plainly admitted in Coddington v. Bay, not only by the chancellor in the court below, but by one or more of the judges of the supreme court in the court of errors ; and that Chancellor Kent, in the last edition of his commentaries, has given to it tlie sanction of Ids deliberate approval.

Although we believe and so decide, that the Springfield Bank, by surrendering, as paid, the draft of Howard & Lathrop, gave a valuable consideration for the note of the plaintiffs, it is not necessary, nor do we intend to place our decision solely upon this ground. We arc satisfied that, independent of the discharge of a debt then due from Howard & Lathrop, the bank parted with value upon the faith of the title which it acquired to the note in controversy, and whether this value was parted with at the time the note w as accepted, or at any subsequent period before notice of the claim of the plaintiffs, we hold to be immaterial. It is now impossible to restore the bank to the condition in which it was when tiro note was accepted. A decree, such as the plaintiffs would require, would cast upon the bank an inevitable loss, arising solely from a discount in the usual course of banking business of negotiable paper, on account of those who upon the face of the paper were its absolute owners; and to such a loss a bank can newer be subjected, without an entire abandonment of the rales by which the indorsers of negotiable paper have hitherto been protected. Before the transaction which has led to the present suit, the bank was in the practice of discounting the drafts of Howard & Lathrop, before they were transmitted for acceptance ; but, to secure it against the unusual risk which was thus incurred, certain promissory notes belonging to Howard & Lathrop, admitted to be good, and amounting in the aggregate to nearly $7,000, had been delivered to the bank. When the note in controversy was discounted, the unaccepted drafts held by the bank, including that which was then surrendered, amounted to something less than $6,000, so that the bank, at this' time, had ample security for the payment of the draft, which, upon the faith of the note, was given up to the drawers. By the acceptance of the note this security was of necessity relinquished, for, by the terms of the agreement of the parties, it was only to unaccepted drafts that it could be applied. It is said, however, that the bank retained, and still retains, in its possession, the promissory notes that form this collateral security, and consequently that the avails may still be applied to the satisfaction of the original debt, which, should a decree be made in favor of the plaintiffs, will certainly be revived. And this reply would perhaps be satisfactory, had it not appeared in evidence that, subsequent to the acceptance of the note in controversy, and long before any notice of the claim of the plaintiffs, other drafts of Howard & Lathrop were discounted by the bank, three of which, amounting in the aggregate to $4,150, still remain unaccepted and unpaid. To this sum must be added $2,650, the amount of two unaccepted and unpaid drafts previously discounted, and the result is that the collateral securities are completely exhausted by the debts, to the satisfaction of which, under the agreement of the parties, they are justly and exclusively applicable. Hie right of the bank to make this application under the terms of that agreement, cannot be disputed, nor is there any principle of law or equity that can justify us in preventing the exercise of this right. But -we shall prevent its exercise if we compel the bank to apply any portion of ⅛. collar, teral securities to the payment of the original debt, which . the:, acceptance of the note of the plaintiffs was meant to extinguish. If we order that note to be surrendered or cancelled, the bank must lose the whole amount of the debt which it represents, solely from its reliance upon the note as a valid and independent security. It has been urged that there is no positive evidence that any of the subsequent drafts were discounted upon the faith of the note. But we are clearly of opinion that no further evidence of this fact was necessary to be given than was actually produced. It was sufficient to prove the general agreement that collateral securities were to be applied to unaccepted drafts, and we are bound to presume that every such draft was discounted in reliance upon this agreement, and it is a necessary consequence of this presumption that the note of the plaintiffs was held and considered by the bank as an independent security..,, ,

The equity of the case, upon the facts that have been stated, is exceedingly clear. This suit is evidently a contest between two innocent parties — which shall sustain a loss resulting from the fraud of a third person, for that the act of Lathrop in transferring to the bank the note in controversy, in satisfaction: of a debt due from his firm, was a fraud upon the plaintiffs, is nofc disputed. What, then, is the rule of law, and, we add, of reason and of equity, which is applicable to all such cases'?! It is that the loss shall be borne by the party who employed and trusted the person from whose act or default it proceeded. (Hazard v. Treadwell, 1 Strange 506; Fitzherbert v. Mather, 1 Term. R., p. 12; Barring v. Corrie, 2 Barn. & Ald. 143; Whitehead v. Tucker, 15 East 400; Smith v. East Ind. Co., 16 Sim. 16; Story on Agen., §§ 127, 264; Smith’s Mer. Law, p. 116.)

The plaintiffs employed and trusted Lathrop — they placed their note in his hands as a business note — they authorized him to procure it to be discounted as on account of his firm — they knew that he or his firm might misapply its proceeds when discounted ; they therefore took upon themselves the risk of such misapplication, and it would be palpably unjust to permit them to charge the bank with the consequences of a fraud which they enabled Lathrop to commit, and the risk of which, they chose to incur.

The bill must be dismissed, with costs.


author: Vanderpoel, J.

text:
    Stanton v. Small. The Same v. The Same.
    A contract for the sale of goods, to be delivered at a future day, Is not Invalidated by the circumstance, that at the time of the contract, the vendor neither has the goods in his possession, nor has entered into any contract to buy them, nor has any reasonable expectation of becoming possessed of them at the time appointed for delivering, otherwise than by purchasing them after making the contract.
    Where a valid executory contract is entered into for the purchase oí a large quantity of flour of a specific quality, to he delivered at a future day, a notice on the day fixed of readiness to deliver, accompanied by accepted orders upon the party having the flour in store, with an offer to make an actual delivery, is sufficient.
    Where goods are ponderous or bulky, or cannot conveniently be delivered manually, the law does not require an actual delivery thereof, but only that they should be put under the absolute power of the vendee, or that his authority as owner should be formally acknowledged ; or that some act should be done typical of a surrender of them on the one side, and of an acceptance of them on the other.
    The law only requires such a delivery as is consistent with the nature and situation of the thing sold.
    Where, in an action upon a contract for the sale and purchase' of flour, brought by the vendor against the purchaser, it. is proved that it is the usage for flour, in a storehouse or vessel, to be sold by accepted delivery orders, and to pass by the transfer of the orders from hand to hand, without actual delivery of the flour, such usage will be held to have entered into the contemplation of the parties, and to have constituted a part of the contract.
    Where a vendor of flour, upon the purchaser’s objecting to the manner of the tender of the flour, (which was made by accepted orders of persons having it in store,) offers to turn it out on the side-walk, or to cart it to the purchaser’s door, or to any other part of the city he will name, provided the purchaser will say he wall take it, and the purchaser tells the vendor to do as he pleases, without telling him what to do, nor whether he will take it, it is a sufficient tender, on the part of the vendor.
    Upon an agreement for the purchase of flour, deliverable at a future day, the damages for a refusal to accept, and pay for the flour, is the difference between the contract price and the market price at the time specified for delivery, with interest.
    (Before Oakley, Ch, J., and Vanderpoel and Sandpoiid, J. J.)
    Sept. 20, 21 ;
    Oct. 20, 1849.
    These were actions brought to recover damages for the nonacceptance of a quantity of flour sold by the plaintiff to the defendant, under the following contracts:
    “In consideration of one dollar, to me in hand paid, the receipt of which is hereby acknowledged, I have purchased of A. P. Stanton fifteen hundred barrels superfine flour, (Ohio, Genesee, or Michigan,) flat hoops, in good order, at the rate of eight dollars, thirty-seven and a half cents per barrel, deliverable, at the option of the seller, at any time (half each month) during the months of July and August next, cash on delivery, and not to consist of more than six different brands.
    “ New York, June 11th, 1847.
    “ William Small.”
    “In consideration of one dollar, to me in hand paid, the receipt of which is hereby acknowledged, I have purchased of A. P. Stanton fifteen hundred barrels superfine flour, (Ohio, Genesee, or Michigan) flat hoops, in good order, at the rate of seven dollars per barrel, deliverable, at the option of the seller, at any time (half each month) during the months of July and August next, cash on delivery, and not to consist of more than six different brands.

      “ New York, June 17, 1847.
    “William Small.”
    The causes came on to be tried before Sandford, Justice, and a jury, on the 20th June, 1848. Upon the trial, after proof of the contracts, it appeared in evidence, that on the 30th day of July, 1850, the plaintiff made to the defendant two tenders in writing, each of 750 barrels, upon each of the two contracts, with an offer to deliver the flour, at the same time tendering accepted orders for the flour upon the parties having the same in store, on the wharf, or in barges. At the time of the tender, the plaintiff rendered to the defendant the bills of the flour, and demanded payment. It further appeared, that on the 24th of August, the plaintiff made to the defendant similar tenders upon each of the contracts, accompanied as before by accepted orders for the flour upon the persons having the same in store and in barges. Bills of tbe flour were also rendered, and payment demanded. In each case the written tenders stated the flour to be in accordance with the terms of the contract. It further appeared in evidence, that the flour embraced in the tender of the 30th of July, was superfine Genesee flour, in barges at piers Nos. 4, 5, and 6 East Elver, and that on the orders being tendered, the defendant said he would take no man’s orders for the flour. The acceptor of the orders being present, informed him, that he, the acceptor, had 1500 barrels of flour of plaintiff’s, which he was ready to deliver to the defendant on those terms. That subsequently, however, he accompanied the plaintiff to examine the flour. That at pier No. 4, there was a lot of flour of 699 barrels, marked “ Orleans Culvert,” partly on the dock and partly landing. At pier No. 5, a lot marked “ II. B. Williams,” of 550 barrels, landing from a barge; and at No. 6, a lot marked “ S. Mills,” on a barge, sufficient to make up the 1500 ban-els. Each of these lots was tendered to the defendant. At the time the tender of the first two lots was made, the defendant simply remarked, “ oh ! well, where is the rest of it ?” but he made no objection as to quality. To the third lot he remarked, that it was not such flour as the contract called for. It appeared from the testimony, that the flour corresponded with the contract, and was in good order.
    On the 24th August, the defendant replied to the tender made at that time, that he would take no man’s orders for the flour; but subsequently accompanied the plaintiff to examine it. A portion was “New York Mills,” 341 barrels on the wharf at Cortlandt street. Tbe plaintiff tendered this to the defendant, so far as it was superfine and in good order. The next lot, 222 barrels, was in the hold of the barge Superior. A barrel of this was exhibited, and the plaintiff made a similar tender. The next lot was 100 or 800 barrels, in the loft of Dows & Cary’s store. Out of this the plaintiff tendered sufficient to make up the 1500 barrels, after taking what there was of the previous lots in good order, and also which was superfine and in order of a lot of 500 barrels in Greenwich street, of Erie Mills. After the examination was concluded, the plaintiff again offered and tendered the several lots on either of the contracts, and demanded payment. The defendant replied, he did not think he was bound to take flour in the hold of a vessel, or in the fourth story of a store. The plaintiff then offered to turn the flour out on the sidewalk, or cart it to the defendant’s door, or to any other part of the city he would name. The defendant replied, he could do as he pleased. No objection was made to the quality or condition of the flour. It was all Genesee flour, and in good order.
    It appeared by the testimony on the paid of the defendant, that a portion of the flour tendered by plaintiff had been contracted for by the party by wdiom the accepted order had been given, upon a verbal agreement, and that nothing had been paid on the purchase, although it was in his possession. That another portion had been agreed to be purchased for a price not then named. That some of it had not been inspected or coopered, and upon some the freight remained unpaid, and that no particular 1500 barrels had been set apart for tbe defendant at the time of either tender. A witness for the defendant swore to the inferior character of some of the flour, and the defective condition of some of the barrels embraced in the quantity examined.
    Evidence was given of a usage in respect of the delivery of flour, when sold in large quantities in the city of New York, and as to inspection and cooperage, which is stated in the opinion of the court.
    It appeared that the market price of the flour in July was $5 75, and in August, $5 81J per barrel.
    A verdict was rendered for the plaintiff, subject to the opinion of the court on a case to be made, for tbe amount claimed, being the sum of $3309 76 in one cause, and $3072 43 in the other, besides costs.

      F. B. Cutting, for plaintiff.
    I. By the memorandum of the defendant, (dated 11th June, in the first cause, and 17th June in the other,) a valid executory contract was made by him to purchase flour, not identified at the time, but to be taken of a specified quality, on a future day, and at a specified price, payable on delivery, leaving it undecided and unimportant whether the vendor had an article of the kind on hand at the time of the contract, or was to procure it after-wards. The validity of the contract was assumed by both parties, by their conduct. There is nothing to show that either understood it was a wager, and no point was made as to its validity, on the trial. Every intendment, even of extraneous facts and circumstance, may he made if necessary to maintain it. (1 Comstock 90.) For contracts of similar character, and for distinction between executed and executory, &c., see Howard v. Homy, 23 "Wend. 350, and cases there cited; 17 Wend. 277 ; Downer v. Thompson, 1 Hill 138; 6 Ibid. 208; Hague v. Porter, S Hill 141, and cases there cited. The English courts also maintain such contracts. (HeJMewMte v. Mclforine, 5 Meeson & Welsby, 462.)
    II. It appears the defendant has not taken nor paid for the flour, nor demanded its delivery, nor offered to pay for it. The plaintiff had only to satisfy a jury, that when he gave notice, and offered to complete the contract, lie could and would have done so, if the defendant had performed on his part. It is a question of fact, whether he was substantially ready and willing. A technical tender, with the exact formalities required to pass the title, or to place the goods at the risk of the buyer, was not necessary to entitle the plaintiff to the difference between the contract and the market price. The action, in this view, is not for goods sold and delivered, nor even for goods bargained and sold, in which the full price might he recovered; hut on the special contract, for not taking and paying for the flour. (Starkie oil Evidence, part 4, p. 162 — 4; Sands v. Taylor, 5 John. Rep. 395; Dement v. Smith, 15 Wend. 493; Downer v, Thompson, and Hague v. Porter, before cited.)
    HI. The notice of readiness to deliver, was abundant. The interest of the plaintiff to perform the contract is apparent. The evidence shows clearly that he was ready and willing to deliver. The fact of his readiness and design to make a full delivery, is not shaken by the defendant’s objections. Until the defendant showed an intention and readiness to accept and pay, (which he did not,) the plaintiff was not bound to go further. (Milk v.
      (Jhrixdr, t ITiH’s Rep,lufi; Coke, Lift., 21u, b.; 2 Kent’s Com. 506-7.)
    TY. The flour be¡ug bulky and ponderous, a tender of the goods from the stores and boats, In' mere notice, and by orders, in compliance with the usual custom, was sufficient, i 12 Mass. Rep. 3o0 : 1 Shaw’s Rep. 144 ; C>(f r. Jlms-fmi, ?> John. Cases, 243 ; S'niii/sv. Tayh>i\ 5 John. Rep. 305 ; Sf/tu/i 8a nd w Morse, 8 John. Rep. 372; Phoney v. Hull, 1 Hill 89: Plmsnnt v. Paallefim, G Rand. 474, 486.)
    Y. The existence of liens, for freight, &c., was unimportant. They were not claimed nor enforced by the parties entitled to them. The objections as to liens, inspection, quality, place, Me., are all unimportant, were not made at the time, and were obviated by the general otters to deliver free of charge, and according to the contract. These miuufhn must obviously be left until an actual delivery, which defendant at no time acquiesced in or entered into.
    Yl. The damages are the difference between the contract price and the market price, at the time of the offer, with inf ere,-t, and the actual expense of finally disposing of the flour.

      A. 8. Johnson, for defendants.
    I. Upon a contract of sale, the vendor, in order to put the vendee in fault in not accepting and paying for the subject matter of the sale, must perform everything which in compliance with his contract he is bound to do, save the actual delivery and parting with the possession, so that the vendee, upon payment, may, without any further act on the part of the vendor, take into his actual possession the subject of the sale, in such condition as by the contract lie is entitled to have it, and thereby obtain a complete and perfect title to it. If the subject of the sale be indeterminate, the vendor must select and specify the objects on which he intends the sale to operate. (Bell’s Gout, of Sale, 82, 79; Smith’s Law of Contracts, 331.) The rule does not embarrass real business, and the court should not frame a rule for the convenience of speculative business, or which will encourage it.
    II. The offers made by the plaintiff to the defendant, relating to the July delivery, were not such as to put the defendant in fault, especially as they were accompanied by a demand of payment. (1.) As to the IT. B. Williams lot. The title had not passed from Wolfe to Cowing & Co., there being no contract in writing and no delivery, and no money having been paid — nor from Cowing & Co. to Stanton, for the same reasons. If the property did pass, Wolfe & Cowing had each a lien for the price. The carriers had likewise a lien, so far as the flour remained in their possession. (2.) As to the “ Orleans Culvert” lot. So much as remained in the boat was subject to a lien for freight. None of it was coopered, and some not inspected. (3.) As to the “ United States Mills.” Cowing & Co. had no title, nor any right to dispose of it. They held it as warehouse-men. They had not agreed to take it at all. No price for it was agreed upon between them and the owner.
    III. Take the three parcels together, no particular 1,500 barrels were set apart by Cowing & Co. for Stanton, not by Stanton for Small. As to part, neither Cowing nor Stanton had the property in the flour. Some of it was subject to liens for the price, and some for freight. Some was not inspected nor coopered.
    IY. The offers made by Stanton, were made as a full compliance with the contract on his part. lie proposed to do nothing further, except to receive the money. If Small, when Stanton finally offered the flour and demanded payment, had yielded to the demand and paid, he could not have taken any particular 1,500 barrels of flour as his own. If he had accepted it, and taken some 1,500 barrels from the lots, Banks might have replevied from him the “United States Mills” flour, Wolfe might have refused him possession of Ms lot, and the carriers of that on which they had a lien; and he would have had no remedy for the expense of coopering or inspection,
    Y. Small ovas not bound to take the risk of the loss of the flour, not landed from the boats at the time of the tender, as he would-have done, had he accepted Stanton’s offer as a delivery, and paid the price.
    YI. The non-delivery by Stanton in July, formed a complete answer to any demand founded upon the contracts for delivery in August, the contracts being entire.

      TIL At the time of the August tender, the title to the flour offered, remained in Dows & Cary. There was no contract of sale in writing, no part of the price paid, and no actual delivery or acceptance of any part of the flour, and no designation of any particular 1,500 barrels. (1.) As to so much as was not landed, it was uninspected, not coopered, nor completely delivered. While on the boats it was at Dows & Cary’s risk, and subject to a lien for freight. (2.) The 500 barrels in Hobby’s store were not inspected, formed part of a larger lot from which they were not separated, and were not so delivered, as to pass the title to Cowing & Co. or Stanton. (3.) The portion tobe delivered from Dows & Cary’s store was uninspected, was not set apart, and the title had not passed to Cowing & Co., and Dows & Cary had a lien for the price.
    VIII. The defendant had a right, before accepting or agreeing to accept, to have an opportunity to examine the flour; and his objections on this ground, and also because the flour was in the boat and in the loft, were well founded, and were not obviated. {Avery v. Stewart, 2 Conn. K. 69 ; Barnes v. Graham, 4 Cowen 452; Lorimer v. Smith, 1 B. & C. 1; Isherwood v. Whitmore, 11 M. & W. 347.)
    The same matters urged against the July tender, are also applicable to the August tender.
   By the Court.

Vanderpoel, J.

The actions are brought on two executory contracts, the one dated on the 11th, and the other on the 17th June, 1847, each for the purchase by the defendant, of fifteen hundred barrels of flour, at the rate of $8 37⅛ per barrel, deliverable at the option of the sell,or, at any time, (half each month.) during the months of July and August. The actions are brought for the non-acceptance of the flour, when offered to the defendant.

By these memorandums of the defendant, a good executory contract was made by him to purchase flour at a specified price, payable on delivery, and we regard it as immaterial whether the plaintiff had an article of the kind on hand at the time of the contract, or was to procure it afterwards. Many moralists doubt the policy of permitting a party to contract for the sale of goods which he does not own at the time of making the contract, because it partakes of the nature of a gambling transaction ; but it is now well established, that a contract for the sale of goods to be delivered at a future day, is not invalidated by the circumstance, that at the time of the contract, the vendor neither has the goods in his possession, nor has entered into any contract to buy them, nor has any reasonable expectation of becoming possessed of them by the time appointed for delivering them, otherwise than by purchasing them after making the contract. (Hebblewhite v. McMorine, 5 Mees. & Wels. 462.) Alderson, Baron, there says, that if it were necessary that the vendor should own the property at the time of the contract, it would put an end to half the contracts made in the course of trade. In that case, the nisi prius decision of Ch. J. Abbott, in Bryan v. Lewis, (1 Ryan & Moody 382,) was overruled. And see Mortimer v. McCallan, 6 M. & W. 58. The legislature has seen fit to interfere and regulate stock jobbing, by providing that all contracts for the sale of shares of stock shall be void, unless the party contracting to sell or transfer the same, at the time of making such contract, shall be in the actual possession of the certificate or other evidence of such shares, or be otherwise entitled, in his own right, or be duly authorized by some person so entitled, to sell or transfer the certificate or other evidence of shares so contracted for. (1 R. S. 710, § 6.) This act is peculiar, and applies only to stock jobbing operations. The lawmaking power has not yet seen fit, by similar provisions, to regulate or embarrass ordinary commercial contracts. In the absence of any legislative prohibition, I concur with Maule, Baron, in Hebblewhite v. McMorine, that the doctrine laid down in Bryan v. Lewis is against all law, and against all commercial convenience. The contracts were, therefore, valid executory contracts, which the defendant was bound to fulfil, if the plaintiff performed all that devolved upon him by way of condition precedent. As the case stands, was the defendant excused from accepting the flour %

It is alleged that no sufficient delivery or tender was made of that flour. First. As to the fifteen hundred barrels to be delivered in July. It must be borne in mind, that the action is not for goods sold and delivered, nor for goods bargained and sold, where the full price is sought to be recovered; but on the special contract, for not taking and paying for the flour. From the evidence of Cowing, it appears that while the plaintiff evinced an entire willingness to deliver, the defendant showed a decided unwillingness to receive. Ilis studious attempt not to commit himself, his want of frankness in not specifying objections to bis receiving the flour, all showed a design, if possible, to get rid of his contracts. After the plaintiff tendered the flour on piers Mo. 4, 5, and 6, the defendant barely remarked, that “he did not think it such flour as the contract called for,” or something to that effect. No objection was made by him as to the character of the tender or oiler to deliver. He saw fit to repose upon a single objection ; that is, the quality or kind of the article. If not satisfied with the place at which, or the manner in winch, the delivery was made, or offered to be made, he ought to have stated his objection to these particulars. He omitted to do so, but took another objection, which turns out not to have been well taken. This objection, however, to the quality or kind was applied only to the flour at pier No. 6, on board of the ba$ge “Iowa.” As to the first two lots, he did not object that the description of the flour was not according to the contract; but remarked, “ Oh, where is the rest of it ?” All this time he was perfectly silent as to the insufficiency of the delivery.

Considering the ponderous character of the article, we think here was a sufficient delivery or offer to deliver. At all events, enough to impose upon the defendant the obligation of saying where he wanted to have it delivered. But the character of the tender or delivery did not then seem to trouble him. Ho merely felt, or affected to feel, some concern about the quality or kind of the flour ; but even, his objections in this respect, he would not condescend to particularize. It was not incumbent on the plaintiff, especially when the defendant was so taciturn and mysterious, to roll out every barrel on the dock, or cart it to the defendant’s store or place of business. His whole conduct showed an unwillingness to receive and pay the contract price, and neither is the law, nor the custom of dealers in the article, so unreasonable as to require that the plaintiff should have gone through, the expensive ceremony, unasked by the defendant, of rolling out the flour on the dock, or carrying it to his store. Where goods are ponderous or bulky, or cannot conveniently be delivered manually, the law does not require an actual delivery thereof, but only that they should be put under the absolute power of the vendor, or that his authority as owner should be formally acknowledged; or that some act should he done, typical of a surrender of them on the one side, and of an acceptance of them on the other. (Story on Sales, § 301.) Thus, the delivery of the key of the warehouse containing the goods sold, or the bill of lading of goods at sea; or of the receipt, ticket, sale note, dock warrant certificate, bill of parcels, or other usual type and evidence of title to goods, will, in most cases, be a sufficient constructive delivery of them to pass the title. (Chaplin v. Rogers, 1 East 3 R. 192; Wilkes v. Ferris, 5 John. 335; Story on Sales, § 311.) The law only recpiires such a delivery as is consistent with the nature and situation of the thing sold. When the articles are ponderous and bulky, a different rule prevails from what would be applicable to articles easily capable of manual transfer. In Jewett v. Warren, 12 Mass. 300, the vendor, on the sale of certain logs lying within a basin, took the vendee in sight of them, and showed them to him; it was held to be a sufficient delivery, on the ground that no other delivery was practicable under the circumstances, and that this act was intended as a delivery of the logs.

We have thus far considered the case independently of any usage proved, or attempted to be proved, in reference to this article. We think, considering the ponderous nature of the article, that the defendant only urged the inferiority of the flour to the contract standard, and that he showed anything but a willingness to receive it; the tender of the fifteen hundred barrels deliverable in July was sufficient for the purposes of this action. The plaintiff, in law, and according to good morals, did enough to place the defendant in the wrong. The plaintiff showed a desire to fulfil, the defendant the opposite sentiment. The frankness and apparent anxiety of the plaintiff to deliver to the defendant the property according to the contract, were met by a most significant spirit of non-committalism, a spirit showing a design not to fulfil his contract, but by skilful manoeuvre to escape, if possible, its unpalatable consequences. The law is not so unreasonable as to require from the vendor more than the plaintiff here did or offered to do, nor is it so blind as not to see that more pains and ceremony on bis part would not have changed the manifest predetermination of the defendant, not to accept of the flour. The delivery was in our view sufficient, without reference to the question of usage.

.But the usage testified to, surely fortifies the plaintiff’s case. In Pleasants v. Pendleton, 4 Rand. 474, it was held that an established usage constitutes the common understanding of parties, and ought to be resorted to as the interpretation of the contract; and that an usage that flour in a store is sold by order, and passes by the transfer of the order from hand to hand, without actual delivery of the flour, is a reasonable usage, and ought to be enforced as part of the contract. There, too, the court received and sanctioned evidence as to cooperage, as to where and at whose expense it was done. Cabell, Justice, says that the usage of trade there proved, for flour in store to be sold by mere draft or order on the warehouse-man, and to pass through many hands before it is called for, is entitled to great consideration ; that the usages of trade are presumed to enter into the contemplation of the parties to a contract, and that they are supposed to contract on their basis. See also as to usage, Bourne and others v. Gatliffe, 7 Man. & Grang. 851. According to the usage as testified to by Cowing, Dows & Wolfe, the plaintiff placed himself in a right position. According to this testimony, particularly that of Cowing, it is the usage hi the sale and transfer of flour in large quantities, for the seller to deliver to the buyer his orders, or the orders of some other person, on the barge or store where it may be. The buyer receives these orders, and then usually goes and looks at the flour. If it agree with the purchase, lie takes it, and if not, lie reports to the seller. If the flour is in barges, the practice is to cooper it at the time it is delivered to the cart. The usage proved, as to coopering, inspecting, and separating a smaller from a larger lot, favors and fortifies the plaintiff’s case.

As to the fifteen, hundred barrels, deliverable in August, the plaintiff’s case is, if possible, stronger than the one proved in respect to the July delivery. As to the August delivery, the defendant said he did not think the plaintiff had complied in delivering-, according to contract; that he did not think he was bound to take flour in the hold of a vessel, or in the fourth story of a building. Plaintiff said he would turn the flour out on the walk, or cart it to his door, or to any other part of the city he would name, provided he wmld say he would take it. Defendant remarked, plaintiff “ could do as he pleased.” He did not tell him where to cart it to, nor whether he would take it. It seems to have been impossible to satisfy the defendant. We think the plaintiff is entitled to recover in each suit the difference between the contract price and the market price at the time of the offer, with interest.

Judgment for the plaintiff.