Opinion
May, 1915.
Foster Cunningham, for plaintiff.
Butler, Brown, Wyckoff Campbell, for defendant.
The plaintiff was the owner of an automobile which was insured by the defendant for the sum of $1,500 under a policy of insurance issued by the defendant to the plaintiff on the 24th day of May, 1914, against loss or damage to said automobile by theft, robbery or pilferage by any person or persons other than those in the employment, service or household of the plaintiff. The automobile was valued at the sum of $1,500. Thereafter, about the 28th day of September, 1914, said car was placed in the garage and salesroom of R.W. Lewis, Inc., in the city of New York, under instructions of the plaintiff to his chauffeur to take said car to the garage of R.W. Lewis, Inc., for the sale of the same. Thereupon an agreement was entered into, which reads as follows: "This is to acknowledge receipt of your 1913 Hudson touring car, with the following equipment: Two shoes, regular equipment. It is agreed and understood that R.W. Lewis, Inc., is to sell said car and pay you the sum of $700 in full payment for same, said payment to be made after R.W. Lewis, Inc., has sold above mentioned car. It is further agreed and understood that there is to be no charge for storage or other charges and that you may end this contract and remove car at any time prior to sale without notice. I am the sole owner of the above mentioned automobile and guarantee same to be free and clear from all incumbrances. These statements are made by me for the purpose of inducing the R.W. Lewis, Inc., to accept my car as above mentioned. Date, September 28, 1914. Witness, E. Garcel, R.W. Lewis, Inc. By A.E. Kannengieser, H.A. Siegel. Accepted, Harry Prince, 19 West Twenty-third street. Chelsea 5936." Harry Prince was the chauffeur of the plaintiff, who was directed by the plaintiff to take said car to the garage of Lewis, Inc. About five o'clock in the afternoon of said day the plaintiff had a conversation by 'phone with Kannengieser, the representative of R.W. Lewis, Inc., notifying him to do nothing further with the car until the plaintiff communicated with R.W. Lewis, Inc., which he would do in the morning; that on the following morning, September twenty-ninth, about noon, plaintiff endeavored to get into communication with Lewis and found that the said Lewis had the night before disposed of the car for the sum of $400. Lewis admitted that the car was sold about seven o'clock in the evening of September 28, 1914, to a man whose name is unknown, for the sum of $400. Plaintiff contends that by the disposal of the car by Lewis without waiting the further instructions from the plaintiff and after signing the agreement hereinabove quoted there was a larceny or theft of the property insured under the policy issued by the defendant for which the defendant would be held liable, because Lewis disposed of the car without returning the proceeds thereof and disobeying the conditions of the agreement aforesaid, to wit, "and it is agreed and understood that R.W. Lewis, Inc., is to sell said car and pay the sum of $700 in full payment for same, said payment to be made after Lewis, Inc., has sold above mentioned car." By the said Lewis, Inc., disposing of said car and appropriating the money to its own use, the plaintiff contends that this in itself was a larceny or theft for which the defendant would be liable under its policy, but reference must be had to the Personal Property Law (Consol. Laws, chap. 41; Laws of 1901, chap. 45; Laws of 1911, chap. 571) for the contract of sale on which the defendant relies, contending that thereunder no liability exists against it for the retention of the proceeds of the sale of said car by Lewis, Inc., under and pursuant to the contract made between the plaintiff and the said Lewis, Inc., for the sale of said car. Section 100 of the Sales Act of the Personal Property Law expressly rcognizes the contract of "sale or return," and makes provision for it in section 100, which reads in part as follows: "Unless a different intention appears, the following are rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer * * * Rule 3. When goods are delivered to the buyer `on sale or return,' or on other terms indicating an intention to make a present sale, but to give the buyer an option to return the goods instead of paying the price, the property passes to the buyer on delivery, but he may revest the property in the seller by returning or tendering the goods within the time fixed in the contract, or, if no time has been fixed, within a reasonable time." The reasonable time in said rule refers to when the contract was to be terminated between the parties by demand made by the vendor upon the vendee, as in the case at bar. Lewis, Inc., had the privilege of returning the automobile to the plaintiff at any time prior and up to the time the plaintiff might make a demand upon him for the return of the same. Thereafter R.W. Lewis, Inc., was indebted to plaintiff in the sum of $700 for goods sold and delivered. This section of the Personal Property Law has been passed upon in numerous cases wherein the courts have held that they were of the opinion that it only applies to cases in which a sale has been agreed upon, subject to the test being satisfactory; in other words, the statute was intended to apply to conditional sales of goods. The legislature did not intend to attempt to force a sale where the goods have merely been delivered on trial. Goods are often thus delivered with a view to negotiating if the test proves satisfactory. That is a reasonable inference to be drawn from the evidence with respect to the delivery and installation of the property in question. Fox v. Proctor, 160 A.D. 712. To quote from House v. Beak, 141 Ill. 290: "A contract, on sale and return, is an agreement by which goods are delivered by a wholesale dealer to a retail dealer to be paid for at a certain rate, if sold again by the latter; and if not sold to be returned (Story on the Law of Sales, sec. 249). If the vendee returns the goods, the contract of sale is at an end; if he does not, the sale becomes absolute, and the price of the goods may be recovered in an action for goods sold and delivered. If no time is specified within which the return is to be made, the law implies that they are to be returned within a reasonable time. What is a reasonable time will depend upon the circumstances of each case (id.). In such cases, the property in the goods passes to the purchaser, subject to an option in him to return them within a fixed or reasonable time; the price is fixed at the time of the sale and delivery of the goods; the purchaser deals with the goods as his own, disposes of them as he pleases, for cash or on credit, is under no obligation to give any account of his disposition of them, and is only liable to pay for them at a price fixed beforehand, without any reference to the price at which he sells them. Jameson v. Gregory, 4 Metc., Ky. 363; In re Linforth, 4 Sawy. 370; Ex parte White ( In re Nevill), L.R. 6 Ch. App. 397; see also Schlesinger v. Stratton, 9 R.I. 578; Buswell v. Bicknell, 17 Me. 344; Smith v. Clews, 105 N.Y. 283; Benjamin on Sales, 7th ed., sec. 597, at pp. 606 and 607, American Note." The reasoning underlying the foregoing authorities and underlying section 100 of our Sales of Goods Act, above quoted, is doubtless that when one passes the sole dominion over his goods to another, giving to the latter power to dispose of the same in any way he pleases, and requiring from him only that he pay, if the goods are so disposed of, a sum fixed in advance, title to such goods has for all practical purposes passed to the recipient, and thereafter, unless the recipient chooses to return the goods within the time allotted to him for such purpose, he may be held for the price of the same in an action for goods sold and delivered. The plaintiff cites a number of authorities holding to the effect that where one disposes of property belonging to another or diverts the same from the proper channel to which it is agreed it should be devoted or applied, that in itself is larceny or theft of the property in question, but in People v. Cruger, 102 N.Y. 510, where one intrusted another with a diamond pin for the purpose of obtaining a loan thereon for the owner, the recipient of the pin obtained such loan, but failed to account for the proceeds. He was indicted for larceny of the pin. The Court of Appeals held that under those circumstances there could be no larceny of the pin, Danforth, J., writing the opinion of the court, saying at page 512: "If the owner intended to part with the property for a special purpose, and the defendant used it only in the way prescribed, it could not be said to be stolen. There could have neither been a false pretense nor a felonious taking on his part. It is said, however, by the learned counsel for the respondent, that the request asked too much, because it did not take in the possible intent of the defendant, `at the time of procuring the loan' to appropriate the proceeds to his own use. This by no means answers the exception, for if found according to the propositions of the request, it would appear that the defendant received the property lawfully and disposed of it according to the wish of the owner, that he not only obtain the loan, but obtain it as authorized. The request might have been amplified, but it was unambiguous, and contained a proposition good in law and to the benefit of which the defendant was entitled. An omission to account for the proceeds of the loan could not, by relation, change the voluntary act of the owner in parting with the pin into a larcenous taking by the defendant, nor sustain the allegation upon which the indictment stood, that the defendant `feloniously did steal, take and carry away' the property in question. There may have been a breach of trust and even fraudulent conversion of the proceeds of the loan, but that does not constitute the offense charged." Under said agreement between the plaintiff and R.W. Lewis, Inc., the plaintiff parted with the automobile with the expectancy of receiving the sum of $700 from said R.W. Lewis, Inc. All dominion over said car had been transferred to R.W. Lewis, Inc., for the moment, and the said R.W. Lewis, Inc., having disposed of the automobile the same day without awaiting further instructions from the plaintiff on the following morning and appropriating the proceeds thereof to its own use and benefit, the plaintiff putting the automobile in possession of a person who has disposed of it and appropriated the proceeds, I fail to see, nor can the law hold, that the defendant under its policy is liable for theft, larceny or pilferage. The plaintiff failing to submit proper proof under the policy, no liability exists, and the court was justified in dismissing the complaint. The motion for a new trial must therefore be denied, with exception to the plaintiff, and ten days' stay and thirty days to make a case.
Motion denied.