Ball v. Liney.

John H. Reynolds, for appellant.

John B. Gale, for respondent.

EARL, C. It is undisputed that the plaintiff owned the goods which were stored with defendant. Indeed, no effort was made upon the trial to impeach his title. The defendant was, therefore, bound, upon demand, to deliver the property to the plaintiff; and an unqualified refusal to do so would, in law, amount to a conversion. Rogers v. Weir, 34 N. Y. 463; Holbrook v. Wright, 24 Wend. 169; Wilson v. Anderson, 1 Barn. & Ad. 456. But the defendant insists that he was so embarrassed by the conflicting claims to the property by the plaintiff and Gregory that he was justified in not complying with plaintiff's demand.

It was undisputed upon the trial that Gregory was merely plaintiff's agent, and that, as such, he took the property to the defendant's warehouse. He could give the defendant no authority to detain the property from his principal. The defendant had the right to qualify his refusal to deliver the property to the plaintiff until he could, in good faith, investigate the facts as to the real ownership of the property, and he could properly retain the property for a brief period for that purpose. But he had no right to ask that the plaintiff should get an order from Gregory, his agent, before he would make the delivery; and he had no right to call upon the plaintiff to litigate or quiet Gregory's claim. It does not appear that he prosecuted any inquiries as to the title of the property; and it does not appear that he had any reason to believe that it belonged to Gregory, for, when the latter brought it to the warehouse, he simply claimed to be agent, and marked his name upon the property as agent. But if the claim of Gregory had appeared to be more serious and better founded than it was, the defendant could not justify the detention of the property from the owner after he was offered a bond of indemnity, satisfactory to himself, against such claim. And, further, I can hardly conceive of a case where the bailee would be justified in detaining property from the real owner, from May 15 to August 6, nearly three months, to inquire into the title. The defendant, by his conduct, identified himself with Gregory, and, unless the executions which were issued furnished him a defense, he must stand or fall by his title. His retention of the property so long after he was offered a complete indemnity, satVOL. VIII.-65

Ball v. Liney.

isfactory to himself, against the claims of Gregory, furnished a justification for the conclusion of the referee that he withheld the goods from the plaintiff in collusion with and for the benefit of Gregory.

If, however, the defendant was so embarrassed by the conflicting claims of plaintiff and Gregory, each claiming to own the goods and to be his bailor, that he could not, even with a bond of indemnity, safely or properly deliver the property to the plaintiff, he could have relieved himself from all responsibility by promptly commencing a suit in equity, in the nature of a bill of interpleader against the plaintiff and Gregory, and thus had the controversy and the right to the property judicially determined. Story's Eq. Jur., § 805, etc.; Wilton v. Anderton, 1 Barn. & Ald. 450; Redf. on Car., § 712.

Hence, it is quite clear that the defendant, prior to August 6, became liable to the plaintiff for a wrongful conversion of the property; and we will inquire whether any thing occurred afterward to relieve him to any extent from responsibility.

It is not claimed that the executions against Gregory alone in any way affected the rights of plaintiff; but the defense is based upon the execution against the plaintiff. Nothing was really done by virtue of the latter execution. The property was not sold upon it, and nothing was realized or applied upon it. The property was sold by virtue of the execution against Gregory as his property, and the proceeds applied upon it in satisfaction, pro tanto, of Gregory's debt. I do not, therefore, see how it can be claimed that the execution against the plaintiff in any way furnishes any defense. If the property had been sold under that execution, it would have been otherwise.

After a conversion of property, the title still remains in the owner, and the property can be taken from the wrong-doer upon an execution against the owner and sold, and the proceeds applied upon his debt, and the owner will thus have the benefit of the property; and in such case the wrong-doer can set up his seizure and sale, not as an entire defense, but in mitigation of damages, for the reason that it would be unjust for the owner to recover the value of the property after he has thus had the benefit of it. It is not the fact of the seizure that gives the defense, but that it has been seized under such circumstances that the owner has had, or could have, the benefit of it. But to protect the wrong-doer, as the law is settled in this State,

Ball v. Liney.

the seizure must be at the instance of a third person, and not at the instance of the wrong-doer, or upon process in his favor.

In Hammer v. Wilsey, 17 Wend. 91, it was held that after the defendant had wrongfully converted a horse, he could not show in mitigation of damages that he had seized and sold the horse upon process in his own favor. But in Higgins v. Whitney, 21 Wend. 379, the property had been tortiously taken by the defendant, and was afterward taken from him by process against the plaintiff in favor of a third party, and the court held that this could be shown in mitigation of damages upon the ground that, without any agency of the defendant, the property had, since the conversion by him, been taken from him by legal process, and applied to the plaintiff's use, by paying the debt which he owed to a third person. In Sherry v. Schuyler, 2 Hill, 204, a similar case, the court says: "The evidence offered (that the property had been taken from the wrongdoer upon process against the plaintiff, in favor of a third person) and rejected, was clearly admissible in mitigation of damages, as it would have gone to show that, independent of any agency on the part of the defendant, the property in question had been applied to the payment of the plaintiff's debt, due to a third person." In Connec ticut, the courts hold, that the seizure and sale of the property after it has been converted upon process against the owner, can always be shown in mitigation of damages, even in cases where the process was in favor of the wrong-doer himself. In Curtis v. Ward, 20 Conn. 204, where it appeared in an action of trover brought by A, against B, that subsequently to the conversion complained of, B had attached the same goods in a suit against A, and having obtained judgment, levied his execution on such goods, and had them applied in satisfaction of his debt against A, all in due course of law, it was held that A could recover damages only for the original taking of the goods, and the detention of them until they were regularly attached. In this case the principle upon which such a defense in mitigation is allowed, is ably discussed in the opinion of the court. Judge WAITE says: "The plaintiff resists this claim, and insists that he is entitled to recover the value of the goods at the time of the conversion, with interest. This claim of the plaintiff would be well founded had he never, subsequent to the conversion, received any benefit from the property." "For it would be palpably unjust for the owner to recover the full value of his goods in their application to the payment of his debts, and then afterward recover that value

from another who has derived no substantial benefit from his property." While this case illustrates the principle upon which this defense in mitigation of damages is based, in allowing the defense to be based upon process in favor of the wrong-doer, it goes further than the cases in this State will warrant.

Hence, I am unable to see how the execution against the plaintiff furnishes any defense to this action. The property was seized and sold by virtue of the execution against Gregory. It matters not that the sheriff might have seized and sold the property as plaintiff's, or that he might have applied the proceeds of the sale upon the execution against the plaintiff. He did not do this. The owner of the execution against the plaintiff did not, so far as appears, claim or desire a sale upon his execution, and he did not claim to have the proceeds of the sale applied upon his execution.

The plaintiff lost and waived nothing by appearing at the sheriff's sale and objecting to the sale. The property remained his until he should receive in some way satisfaction for it (Osterhout v. Roberts, 8 Cow. 43), and he could claim it from and sue any person for it until he should procure satisfaction.

After the sale, the owner of the execution against the plaintiff did not claim the proceeds, but Harvey and Jaffray, the owners of the executions against Gregory, seem both to have claimed them, and the plaintiff interested himself to have the proceeds applied upon the Harvey execution instead of the other one. I do not see how this act of the plaintiff could affect his rights, so long as there was no proof or finding of the referee that he did any thing to prevent the application of the proceeds upon the execution against himself.

I have thus, by the application of plain principles of law to the facts of this case, reached a conclusion adverse to the defendant. While it may be hard for the defendant to be obliged to pay for this property, he has brought the hardship upon himself by his unnecessary interference with the property and rights of another, and he must abide the consequences of his own voluntary acts. The order of the general term must be reversed, and judgment upon the report of the referee affirmed with costs.

Judgment accordingly.

Parsons v. Loucks.

PARSONS et al. v. LOUCKS et al., appellants.

(48 N. Y. 17.)

Statute of frauds—contract for manufacture of goods.

The statute of frauds applies to an oral contract for the sale of goods in exist ence at the time of making the contract, but not to an agreement to manufacture and deliver goods.

Defendant made an oral agreement to manufacture and deliver a quantity of paper to plaintiff. In an action for breach of the contract, held, that the agreement was valid, notwithstanding the statute of frauds.

ACTION for breach of an oral contract to manufacture and deliver a quantity of paper. The opinion sufficiently states the facts. The action was brought in the superior court of New York city, where plaintiff obtained judgment. The judgment was affirmed at general term, whereupon defendant further appealed to this court.

Augustus F. Smith, for appellants.

John E. Parsons, for respondents.

HUNT, C. The paper to be delivered was not in existence at the tine of the making of the contract in October, 1862. It was yet to be brought into existence by the labor and the science of the defendants. Of the twenty thousand pounds to be delivered, not an ounce had then been manufactured. It was all of it to be created by the defendants, and at their mill. In such a case it is well settled that the statute of frauds does not apply to the contract. The distinction is between the sale of goods in existence at the time of making the contract, and an agreement to manufacture goods. The former is within the prohibition of the statute, and void unless it is in writing, or there has been a delivery of a portion of the goods sold, or a payment of the purchase price. The latter is not. The statute reads "every contract for the sale of any goods, chattels or things in action, for the price of fifty dollars or more, shall be void unless," etc. 2 R. S. 136, § 3. The statute alludes to a sale of goods, assuming that the articles are already in existence. This distinction was settled in this State in 1820, by the case of Crookshank v. Burrell, 18 Johns. 58,