
    HENRY RAWLS and CHARLES S. SEYMOUR, Respondents, v. JOHN G. DESHLER, Appellant.
    
      Innocent Persons — Loss by Third Party — • Which shall sustain f
    
    , Whenever one of two innocent persons must suffer by the acts -of a third party, he who has enabled such third party to occasion the loss must sustain it. When a party sells a cargo of corn and allows the purchaser to take the corn, ship it, receive a bill of lading therefor, and draw upon his consignee with bill of lading attached to the draft, such vendor will not be allowed the right of stoppage in transitu to obtain payment, when by so doing the consignee is to suffer for his acceptance and payment of such draft.
    
      John Gansen for Appellant.
    
      H. C. Day for Respondents.
   Davies, Ch.J.

On the 18th of September, 1860, one A. L. Griffin, of Buffalo, purchased of the Defendant a quantity of white corn. The Defendant had the corn on storage at the Hatch Elevator. He gave Griffin an order for the corn in these words:

Buffalo, Sept. 18,1860.
Hatch Elevator.
Deliver A. L. Griffin, Esq., or order, 4,328^^ bushels white corn, cargo Potomac, subject to my order until paid for.
John G. Deshleb.
The corn was delivered to Griffin on production of this order, and he, Griffin, shipped the corn, on the 18th of September, on board a canal-boat at Buffalo, and received the following bill of lading:
Buffalo, Sept. 19,1860
■' Shipped in good order, by A. L. Griffin, on board of canal-boat L. B. Trowbridge, B. T. Co. Line, - master, the following articles, to be carried under deck and delivered in like good order, as addressed, without delay, towing day and night, damages and deficiency to be deducted from charges by consignors.
Acct. A. L. Griffin or order.
4,328-y^ bushels white corn, care Rawls and Seymour, New York. Freight to New York 14£ c. per bushel, free of lighterage, consignees paying towing. James Vast Bukeh,
per Noble.
Entered Sept. 21, 1860.
Endorsed, A. L. Geieeiit.

It appeared that Van Burén had an office in Buffalo, and carried on business there under the name of The Buffalo Transportation Company; that Yan Burén was a public carrier, and had a regular line, and had an interest in some of the boats; he was what they call a scalper; he gets a cargo from the owner, and gets a boat to take it, and receives a commission from the boats; that Noble was the agent of the company, and had authority to sign the bill of lading.

On the 19th of September, 1860, Griffin advised the Plaintiffs of the shipment of com to them, and that he had drawn on them for the corn. This letter the Plaintiffs received in New York, on the morning of September 20. On the 19th of September, 1860, Griffin drew a draft upon the Plaintiffs for $2,120, and annexed thereto the bill of lading, signed by Yan Burén, and on that day procured the said draft to be discounted by the White Bank, in Buffalo, and received the avails thereof. This draft was presented to the Plaintiffs for acceptance in the city of New York, with the hill of lading attached, on the 20th of September, by the correspondent of the White Bank, and on the 21st was accepted by the Plaintiffs, and subsequently paid by them.

The Defendant intercepted the boat upon which the corn was laden at or near Boehester, while on its transit to the Plaintiffs, and, through the instrumentality of proceedings in replevin, obtained possession of the corn, and sold and converted the same to his own use.

The action of replevin was instituted in the name of this Defendant against Griffin, and C. H. Wendt, the captain of the boat upon which the corn was laden. Griffin was not served with any process in the case, and Wendt, upon whom the summons was served, made default, and judgment passed against him accordingly.

The Plaintiffs now bring this action, claiming to be the boná fide owners of said corn, to recover the value thereof. On the trial, in the Buffalo Superior Court, the jury were directed by the judge to render a verdict for the Plaintiffs, and judgment thereon was affirmed at the General Term.

It maybe concluded that as between Griffin and the Defendant the title to the corn did not pass to Griffin until the same was paid for. Notwithstanding this, the Defendant intrusted Griffin with the possession and control of the property. There is some evidence tending to show that the", sale was in fact a sale upon credit, and that both parties understood that the money to pay the purchase price was to be raised by a shipment of the corn by Griffin, and the discount of a draft drawn on the faith of the bill of lading thereof. The Defendant himself testified on the trial: “ It happens very often on the dock that purchasers buy grain and get the bill of lading, and raise money on it to pay the purchase .price; that witness knew Mr. Griffin did that business.” Taking the most favorable view of the facts for the Defendant, both he and the Plaintiffs are innocent sufferers from the fraud or defalcation of Griffin. Assuming they both occupy that position, which should suffer for Ms acts ? The rule on this subject was clearly enunciated by Ashurst, J., in Lickbarrow v. Mason (2 T. R. 63), and has been universally recognized and followed since: “ Wherever one of two innocent persons must suffer by the acts of a third, he who has enabled such third person to occasion . -the loss must sustain it.” Applying this doctrine to the present case, we have no difficulty in saying the Defendant must sustain the loss occasioned by the act of Griffin, and not the Plaintiffs.

The Defendant intrusted Griffin with the corn, and gave Mm the indicia of title. He was therefore enabled to deal with it as "his own. He shipped it in the usual course, consigned to the Plaintiffs, received a bill of lading therefor, which was negotiable, and did negotiate it, and the Plaintiffs became the owners and holders thereof in good faith and for a valuable consideration. Such negotiation of the bill of lading and transfer thereof to the Plaintiffs constituted them bona fide holders and owners of the corn, and the Defendant’s right of stoppage in transitu, for the purchase-money, was cut off and terminated (Lickbarrow v. Mason, supra; Holbrook v. Vose, vol. 4, Am. Law Reg., new series, notes 9 and 10, and cases there cited).

It is difficult to withdraw this case from the doctrine of Hollingsworth v. Napier (3 Caines, 182); and the leading and controlling facts in each are nearly identical. Hapier sold to one TTin-Avorthy, from whom the Plaintiff derived title, ten bales of cotton, under the following circumstances:

The cotton Avas lying in the public store, at the quarantine-ground at Staten Island, and the Defendant sold it to Iiinworthy in the city of Hew York, for cash payable on delivery.” Defendant made out a bill of parcels for the cotton, marked in the margin “ cash,” but containing no receipt for the money. This, together with an order on the storekeeper for the cotton, had, either by the Defendant or his clerk, been delivered to Kinworthy. He, without either paying for the articles, or having taken possession of them, met the Plaintiff at a public house, and producing the bill of parcels and order, offered them for sale, at the same price for which they had been bought, alleging as a reason that he had been pushed for money. The Plaintiff on this agreed to become the purchaser, received the bill of parcels and order, and paid for the goods, by giving part in cash and the balance in a check of a third party. Having made the purchase, the Plaintiff went to the quarantine-ground the next day, but at so late an hour that in the usual course it Avas impossible to have the goods shipped that night, and, producing the order, demanded the cotton, on the turning out of which to him he paid the amount of the storage, liad the bales marked with the initials of his name, and then returned them into the store.

The morning after this, the Defendant went to the quarantine-ground, took the cotton and sold it, and the Plaintiff brought trover to recover for the value of his cotton thus converted. The Plaintiff had a verdict, and the Supreme Court refused to grant a new trial.

The principles settled in the case of the Bank of Rochester v. Jones (4 N. Y. 497), would seem to be decisive of the present case. In July, 1843, Foster applied to the bank to borrow $950, for the purpose of buying two hundred barrels of flour of W. Ely. The cashier refused to make the loan without security. Foster proposed to procure the forwarder’s receipt for the two hundred barrels of flour to be purchased with the money received from the bank, on the loan, and to leave such receipt with the bank as security for the acceptance of the draft, to be drawn, on the Defendant. Foster delivered the draft and the forwarder’s receipt to the cashier, and the bank discounted the draft. The bank forwarded the draft, with the receipt attached, to their collecting agent at Albany, to be presented to the drawer, Jones, for acceptance. Jones took off the receipt, and refused to accept the draft. Jones received the flour, and, before the commencement of the suit, the bank demanded the flour of Jones. The bank recovered, and the following propositions may be considered as settled by this Court.

1. The delivery of the carrier’s receipt to the bank was a symbolical delivery of the flour.

2. The delivery of the carrier’s receipt or bill of lading to the bank, for a valuable consideration, passed to the bank the legal title to the same.

In the present case the White Bank had the legal title to this •com, and the Plaintiffs, by the acceptance and payment of the draft of Griffin, and the delivery and transfer to them of the bill of lading, succeed to all the rights, of the bank, and the legal title to the flour passed to them. It is insisted, on the part of the Appellant, that the instrument produced was not properly a bill of lading, as it was not signed by the master of the boat.

In Dows v. Greene (32 Barb. 490) the bill of lading was signed by the agent of Miles & Walker, who were partners, dealing in produce, and agents of a Transportation Company, and members thereof. Bloss obtained the bill of lading in good faith, who transmitted it to one Mack, who obtained from the Plaintiffs in that action an advance upon the faith thereof. The Supreme Court held that the instrument under which the Plaintiffs claimed was a bill of lading. If not exactly formal, it was substantially such. It did not detract from its force or validity that it purported to be the act of the owners of the goods, and also of the carrying vessel, instead of their agent, the master or captain. Hot only from its similarity to other bills of lading has this been argued to possess the character of such a paper, but this very instrument has in several instances been adjudged to be a bill of lading. That question is, therefore, no longer open for discussion (citing Dow v. Perrin, 16 N. Y. 325; Dows v. Greene, 16 Barb. 72; Dows v. Rush, 28 Barb. 183; Bank of Rochester v. Jones, 4 N. Y. 497; to which may be added Dows v. Greene, 24 N. Y. 638).

In this connection, the remarks of Baron Parke, in Bryans v. Nix (4 Meeson and W. 790), are apposite and conclusive. He says: “ The true question is, what is the meaning and effect of the two documents, by whatever name they are called, coupled with the letter from Tempany of the 2d of February, followed by the acceptance by the Plaintiffs of Tempany’s draft ? It seems to us to be clearly this — that Tempany agrees that the oats therein specified shall be held from that time by the boat-masters for the Plaintiffs, in their o,wn right, provided they accept the bill as a security for its payment; that the masters agree so to hold them, and that, by the Plaintiffs’ assent and acceptance of the bill, the conditional agreement becomes absolute. The transaction is in effect the same as if Tempany had deposited the goods with a stakeholder, who had assented to hold them for the Plaintiffs in order to indemnify them. As evidence of such a transaction, it is wholly immaterial whether the instruments are bills of lading or not; and it might equally be proved through the medium of carriers’ or wharfingers’ receipts, or any other description of document, or by correspondence alone. If the intention of the parties to pass the property, whether absolute or special, in certain ascertained chattels, is established, and they are placed in the hands of a depositary, no matter whether such depositary be a common carrier or shipmaster employed by the consignor or a third person, and the chattels are so placed on account of the person who is to have that property, and the depositary assents, it is enough; and it matters not by what documents this is effected; nor is it material whether the person who is to have the property be a factor or not, for such an agreement may be made with a factor as well as any other individual.”

In De Wolf v. Gardner (12 Cush. 19), Ch.J. Shaw cites this case with approval. It seems to me that the principles settled in the case of Dows v. Greene, and affirmed in this Court, establish the Plaintiffs’ right to recovery. In Crocker v. Crocker (31 N. Y. 507), this Court held that where a Plaintiff, by his own. voluntary act, has, through misplaced confidence, conferred the apparent right of property in bank stock upon a third party, a bond fide purchaser of such stock from such party will be protected against any secret trust in favor of the Plaintiff. In that case a learned judge of this Court said: “ The Plaintiff had, by his own voluntary act, caused Stephen Crocker to be invested with the legal title to the stock, and suffered Mm to deal with it as his own for years. Having through misplaced confidence conferred on him the apparent right of property as owner, a bond fide purchaser of the stock from him, in the course of commercial dealing, without notice, wTould be protected in his title against any latent equities of the Plaintiff. Foster and Livingston and Skinner & Co. lent their notes and acceptances to Stephen Crocker on the credit of the stock transferred to them, without notice of the secret trust in favor of the Plaintiff, and were bond fide purchasers— for the term ‘ purchaser,’ in this connection, includes ‘one who advances or incurs responsibility upon credit of property.-’ ” In Wait v. Green, decided in this Court at March Term, 1867, a Mrs. Com-ins owned a horse and sold it to one Billington, and delivered the same to him, taking his note for the amount of the purchase, with a memorandum at the foot of it “ that the title to the horse was to remain in Mrs. Comins until the note was paid.” Billington sold the horse to the Defendant, for value, and without notice, and he was a bond fide purchaser. Mrs. Comins sold the note to the Plaintiff, and the same not being paid at maturity, he demanded the horse of the Defendant, and on refusal brought this action to recover the value of the horse. This Court held that the Defendant had acquired a good title to the horse, and that the Plaintiff could not recover. Opinion by Boches, J.

If there could be any doubt on this point, I am unable to see why the first section of the Factors Act does not meet this precise case (Laws of 1830, chap. 179, p. 203). It is as follows : “§ 1. After this act shall take effect, every person in whose name any merchandise shall be shipped shall be deemed the true owner thereof, so far as to entitle the consignee of such merchandise to a lien thereon ; 1st, for any money advanced, or negotiable security given by such consignee, to or for the use of the person in whose name the shipment shall have been made.” Flow, in the case at bar, all these requirements are combined:

1. There was a shipment of merchandise, in the name of Griffin, consigned to these Plaintiffs.

2. The statute declares in such an event he, the shipper, is to be deemed the true owner of such merchandise.

3. These Plaintiffs advanced the amount of this draft to and for the use of Griffin, in whose name the shipment was made, and they have therefore -a lien upon such merchandise for the money so advanced.

These Plaintiffs had no notice by the bill of lading, or otherwise, at or before the said advance of money, that the person in whose name the shipment was made was not the actual and boná fide owner of said merchandise. That lien was not divested or impaired by the action of Defendant in taking the corn from the canal-boat by the instrumentality of an action of replevin, or by the proceedings in that action. They were res inter alios acta, and not affecting the rights of these Plaintiffs.

The judgment of the Superior Court of Buffalo was correct, and should be affirmed, with costs.

Same v. same.

For the same reasons, the judgment in this action should be affirmed, with costs.

Concurring: JJ. Bocees, Htwt, Poetek, and Weight.

Affirmed.

Grovere, J., for Reversal; Pabkeb, J., not voting.

JOEL TIFFANY,

State Reporter.  