
    Joyce and Murphy v. Adams and Hawthorn.
    On a sale of cotton by a written contract, deliverable in thirty days, the buyers were to pay storage, insurance, and interest after ten days, and were to deposit with the sellers five dollars per bale. Before the thirty days expired, and before any delivery, or further act to pass the title to the buyers, the cotton was destroyed by fire. When it was burnt, and at the end of the thirty days, the value of cotton in the market, was much below the contract price. In a suit by the buyers to recover back the deposit; held, that the true construction and meaning of the contract, was that the deposit was to secure the seller against loss by means of a fail in the price of the cotton, as well as to constitute a part payment on the contract, and that although the title did not pass, the purchaser was entitled to retain the deposit, to make up the deficiency in the contract price, left after the application of the insurance money, which covered the value of the cotton at the time of its destruction.
    July 14;
    July 27, 1848.
    This was an action of assumpsit, brought to recover back money paid to the defendants, under the following circumstances :—
    On the 27th day of January, 1847, T. J. Stewart, a cotton broker, negotiated a sale of cotton by the defendants to the plaintiffs, upon which bought and sold notes were signed by or in behalf of the parties respectively. The following was the sold note delivered to the plaintiffs:—
    
      “New York, January 27th, 1847.
    
      Messrs. Joyce Sp Murphy,
    
    Bought of Messrs. Adams &p Hawthorn, South Street.
    259 bales of Cotton, viz., at 13 J c.
    A. P. L. 100 □ bales Charleston, at 13|- c.
    
    S. Hunt, 64 « “ “• “
    B. B. 95 “ “ Mobile, “
    And buyers to pay seven cents per bale storage.
    “ “ insurance.
    “ “ interest after ten days.
    “ “ deposit five dollars per bale.
    Deliverable thirty days from date. Cash on delivery..
    Thomas J. Stewart, Cotton Broker A
    
    The defendants gave a receipt for the deposit, in these words: 11 Rec’d from Messrs. Joyce & Murphy, twelve hundred and ninety-five dollars, being deposit of f 5 per bale on 259 bales cotton.”
    The purchase note delivered to the defendants, differed from the preceding in one particular only; the cotton was to be delivered within thirty days.
    The two lots of 100 bales and 64 bales, were destroyed by fire on the 23rd of February, 1847, before the expiration of the thirty days, and the suit was brought to recover the five dollars per bale paid as a deposit on those lots. The residue of the cotton was delivered and accepted, without prejudice to the claims of the parties in respect of the 164 bales ; and the questions in dispute were limited to the latter.
    The 164 bales remained in store, subject to the order of the defendant, until it was destroyed. The plaintiffs had procured it to be re-sampled, shortly before the fire, with a view to offer it for sale, and the same broker offered it for sale in their behalf.
    The defendants insured the cotton in their own names after the sale, but the insurance on the lot delivered was paid to them by the purchasers, in accordance with the contract of salé: as was also the storage.
    There was a change in the market, between January 27th and February 23rd, and the price of cotton generally declined about two cents a pound. The value of the cotton as appraised, for adjusting the loss after the fire, was for the 100 bales, 12-s-cents per pound, and for the 64 bales, 13 cents per pound. Evidence of the quantity was given by the weighers who weighed it before the sale to the plaintiffs. The insurance covering only the value, the defendants were left uncovered for the fall in price, except by the deposit in question. They received the insurance money, after this suit was commenced, and offered to return to the plaintiffs the surplus after making themselves whole, according to the terms of the sale. The plaintiffs objected to the testimony offered to show the weight of the cotton which was destroyed. The price of cotton at the end of the thirty days, was no more favorable to the plaintiffs, than it was on the 23rd of February.
    It appeared that the 164 bales were stored in such a manner, that any one going to examine them might see nearly all the bales, and the 164 bales sold constituted all of those respective marks which the defendants had in store. The defendants had not procured these two lots to be weighed for the plaintiffs prior to the fire.
    Mr. Stewart testified for the plaintiffs, that the course and practice of the trade in effecting a delivery of cotton, is as follows : When the contract matures, the buyer gives an order upon the seller to turn it out. The seller then employs a sworn weigher, of his own selection, and at his own expense, to weigh the cotton, and sends a bill for the price to the buyer, with the weigher’s certificate attached—naming parcels, weights and price. The seller is always to weigh the cotton on delivery, and to deliver it in good order. If the bales want ropes, or need mending, he supplies the ropes and has them mended, and he has the ragged parcels of cotton picked off. These are done before weighing.
    None of these things had been done in respect of the 164 bales before the fire. On the 2d March, the plaintiffs drew an order on the defendants for the 95 bales, and another for the 164 bales, offering to pay the price on receipt of the bill of the same.
    A verdict was taken for the plaintiffs, subject to the opinion of the court on a case, with leave to either party to turn it into a bill of exceptions or special verdict.
    
      A. P. Man, for the plaintiffs.
    I. The contract of the 27th January, was entirely executory. It was a mere agreement to sell, and the title did not pass. (Russell v. Nicoll, 3 Wen. 112; Boyd v. Siffkin, 2 Camp. 328; Tempest v. Fitzgerald, 3 B. & Ald. 680.)
    II. Where any thing remains to be done, by or on behalf of the vendor, to ascertain the quantity or price, or to put the property in a deliverable state, the sale is not complete, and the property does not pass. (Rapelye v. Mackie, 6 Cow. 250; Ward v. Shaw, 7 Wend. 406; Rugg v. Minett, 11 East, 210; Hanson v. Meyer, 6 East, 614; 7 Cow. 87; 2 Kent’s Com. 495; Blackburn on Sales, 150 to 152.)
    III. There is nothing in the contract to take the case from the general rule of law which throws the risk of loss upon the person in whom the property was vested at the time. (2 Kent’s Com. 492; Smith’s Merc. Law, 478, note, Ed. of 1847; Failing v. Baxter, 6 Barn. & C. 360.)
    The object of the deposit was to cover any failure to perform the contract by the purchaser. The only failure here is on the part of the sellers. They could not deliver the cotton.
    IV. The defendants bound themselves to deliver the cotton at all hazards, and having failed to do so, the plaintiffs had a right to rescind and recover the deposit. (Chitty on Contracts, 273, and cases there cited; Hadley v. Clarke, 8 T. R. 259, 265 to 267; Addison on Contracts, 683 and 712, and cases there cited; Story on Sales, § 424, 448.)
    
      D. Lord, for the defendants.
    I. The deposit of money was for the purpose of protecting the sellers against a fall of price. The risk of fire they were protected in by the insurance paid by the purchasers. The risk of a refusal to accept, they were protected in by the vendor’s lien. But both these protections would not cover a fall of price ; and for this the deposit was made.
    The sale was not exactly an executory contract of sale. What is the meaning of the contract ? What purpose was the deposit to answer ? The 259 bales were all specified by their marks.
    So there was a specific subject, and a valid contract in writing for its sale; and the deposit was not made by way of earnest. The buyers were to pay storage, because all the interest passed, though the property did not. They were to pay insurance, because the real interest passed to them, though technically the property was in the seller. And this shows, also, that the buyers meant to undertake all the risk. They were to pay interest after ten days, making it equivalent to a cash sale ; and the property was deliverable in thirty days, the" cash to be paid on delivery. The deposit must answer the gap which is left. The sellers were to be put in entire security. What was the gap? Not the insolvency of the buyers, because the sellers retained the property; but it was a depreciation in price. If there were a fire, the insurers would pay only the value of the property; and it was only by the deposit that the sellers could have entire security. This was just the amount requisite to cover the depreciation.
    II. The fall of price having taken place, and the policy against fire, being to the extent of such fall, unavailing, the deposit is properly resorted to by the defendants.
    III. The rights of the parties do not depend on the question whether the property passed before the fire. That was fully pi'ovided against, by the lien and insurance; the deposit was intended as an additional security against a fall of price; which was needed in both parts of the alternative, the safety or loss of the cotton.
    The testimony objected to, was properly introduced. The sellers were trustees of the buyers in respect of the insurance. ‘ We furnished the best evidence which the nature of the case admitted, as to the quantity and the value of the cotton which was burnt.
    
      
      Man, in reply.
    The deposit was made to secure against the inability of the purchasers to complete for any cause; as by their insolvency, their refusal to take the cotton, and the like. If the money were paid on the contract price, the defendants, cannot retain it; as they were incapable of performing their contract of sale.
   By the Court. Oakley, Ch. J.

In this- case there was a sale of cotton by a written contract, deliverable in thirty days, the purchaser depositing at the time, five dollars per bale. The property was to remain in the possession of the seller, at the expense of the purchaser, who was to pay storage and insurance ; and he was also to pay interest on the price after ten days. The property' was destroyed by fire within the thirty days, so that there could be no delivery by the seller. The purchaser now sues, on the ground that the contract has failed, and he is entitled to recover back the deposit.

The general principle undoubtedly is, that on a contract of sale, where the title to the goods does not pass, if there be a failure to perform on the part of the seller, the buyer may recover back whatever he has paid on the purchase. But the defendants contend, that although the title to the property did not pass, the actual interest did vest in the plaintiffs, and that the deposit was made, to indemnify the defendants against a depreciation in the price.

In this case, the obligation to deliver the cotton was complete by the contract. The purchaser was to pay insurance and storage, and the equitable interest was in him. The property was left with the seller as a security for the payment of the purchase money. The true construction and meaning of the parties, evidently was, that the deposit was to be a part payment of the price and to secure the seller against loss, the prop! erty remaining as security also, to the extent of its value.

The insurance money has covered its value, but the price fell in the market, and the sole question is, on whom is to fall the loss in the price.

We can see no other possible motive for the deposit, than to secure against this very contingency, where the seller retained the goods, their whole value was covered by insurance, and all was evidently at the risk of the purchaser. We have no doubt that this is the true construction of the contract between the parties; and the defendants are entitled to retain the deposit to make up the contract price of the cotton.

Judgment for the defendants.  