July Term, 1851
C.W. Sandford for appellant.
B.W. Bonney for respondents.
Where goods are sold on condition of being paid for on delivery in cash or commercial paper, or on condition of receiving on delivery security for payment, an absolute and unconditional delivery of the goods by the vendor without exacting at the time of delivery a performance of the condition, or attaching any other condition to the delivery, is a waiver of the condition of the sale, and a complete title passes to the purchaser, if there is no fraudulent contrivance on the part of the latter to obtain possession. Where there is a condition precedent attached to a contract of sale and delivery, the property does not vest in the vendee on delivery, until he performs the condition, or the seller waives it. An absolute and unconditional delivery is regarded as a waiver of the condition. By an absolute delivery without exacting the performance of the condition, the vendor is presumed to have abandoned the security he had provided for the payment of the purchase money, and to have elected to trust to the personal security of the vendee. (2 Kent's Com. 496-7; Chapman v. Lathrop, 6 Cow. 110, and 115 note a; Lupin v. Marie, 6 Wend. 80, In error, Marcy J.; Furniss v. Hone, 8 Wend. 247, in error; Carleton v. Sumner, 4 Pick. 516; Hussey v. Thornton, 4 Mass. 405; Smith v. Dennie, 6 Pick. 262; People v. Haynes, 14 Wend. 562, In error, Per Chancellor, 566, Per Tracy Sen.; Shindler v. Houston, 1 Denio 51, Jewett J.; Buck v. Grimshaw, 1 Edw. Ch. R. 144.) The vendor to avoid a waiver of the condition of the sale, must either refuse to deliver the goods without a performance of the condition, or he must make the delivery at the time qualified and conditional. ( Lupin v. Marie, 6 Wend. 81, In error, Marcy J.; Hussey v. Thornton, 4 Mass. 405; 14 Wend. 566, Tracy Senator.) Justice Nelson, in Furniss v. Hone, (8 Wend. 256,) says, whether the delivery is absolute or conditional must depend upon the intent of the parties at the time the goods are delivered. And in Smith v. Dennie, (6 Pick. 266,) Parker, Ch. J. held, that this was a question of fact for the jury. He says, "We do not think after a conditional bargain has been "made and a delivery immediately takes place upon the expectation "that the contemplated security shall be produced, "without an express declaration that the delivery is also conditional, "that the sale, ipso facto, becomes absolute, because "there is an implied understanding that the vendee," c. "will furnish the security," c. "as soon as he shall have an "opportunity to procure it." In that case the sale was on the express condition that the vendee should give an endorsed note for the price, and the goods were delivered by the clerk of the vendor to the vendee without any express reference to the condition, and remained in the possession of the vendee for 8 days, during which time no claim was made by the vendor for the notes or the goods; and it was held that there was a waiver of the condition, and a verdict to the contrary was set aside by the court as against evidence. Parker, Ch. J. in giving the opinion of the court, says, "There is nothing "in the case from which an intention to hold on upon "the condition can be inferred, no declaration at the time, which " though not necessary is important, and no call for security until "it was forgotten or abandoned, and perhaps never would "have been recurred to if the goods had not been attached." According to this decision as well as the intimation of Justice Nelson in Furniss v. Hone, and the language of Chancellor Kent in his commentaries, (2 Kent, 496,) it does not seem to be necessary to a qualified or conditional delivery, that the qualification or condition intended to be annexed to the delivery, should at the time be declared by the vendor in express terms. The delivery will be conditional, if the intent of the parties that it should be so can be inferred from their acts and the circumstances of the case. The learned judge who tried this cause was evidently mistaken in the proposition advanced by him, that, to make a delivery conditional it must be declared to be so in express terms. Where the delivery is absolute without any contemporaneous declaration qualifying it, the onus of the proof of the condition rests upon the vendor. If no such proof is offered, the delivery will be deemed absolute, and the title to the goods will pass to the vendee. (8 Wend. 256, Nelson, J.; Buck v. Grimshaw, 1 Edw. Ch. R. 140.) Every absolute delivery of goods sold on condition, is presumptive evidence of a waiver of the condition by the vendor, and of an intention on his part to rely wholly on the personal security of the vendee for the payment of the price of the goods. The cases cited by the counsel of the appellant do not conflict with the foregoing propositions. In the cases of Russell v. Minor, (22 Wend. 659,) and of Keeler v. Field, (1 Paige 312), express conditions were annexed to the delivery of the goods. In Palmer v. Hand, (13 John. 434,) the delivery of the timber was not complete before payment was demanded. In Haggerty v. Palmer, (6 John. Ch. 437,) the delivery was held to be conditional in accordance with a usage of the city of New York, known to the purchaser, and the validity of which was not called in question by the parties to the suit.
In the case now under review the goods were sold on condition of being paid for, (excepting $2,000 worth,) on delivery, by endorsed notes. The goods were delivered in parcels at the purchaser's store on several days in January, February, and March. There is no evidence to show that the delivery of any of these parcels was in express terms made subject to any condition. The delivery being shown it belonged to the plaintiff to prove that it was conditional. No question can arise as to any of the parcels except the one delivered on the 7th of March. Several parcels had been delivered previous to that day without exacting the delivery of the endorsed notes stipulated in the contract. As to these parcels the delivery must be deemed to be absolute, and the condition regarded as waived. The memorandum endorsed on the receipt given for the goods delivered on the 7th of March, in which Lynes declares in substance, that on Wednesday or Thursday he will "have them ready," (which Lynes swears referred to the notes), tends to show a promise on the part of Lynes to procure the endorsed notes and deliver them to the plaintiff, and that the goods delivered on the 7th of March, were delivered on the condition of the subsequent delivery by Lynes to the plaintiff of such notes. If the goods were delivered on the faith of that promise, and in expectation that it would be performed, this case resembles that of Russell v. Minor, (22 Wend. 662.)
In that case the seller delivered a portion of the goods sold to the purchaser, and asked the latter for his note for the quantity delivered, and the purchaser replied that he would give his note for the whole when the remainder was delivered, and that the parcel then delivered could remain till that time. The court of errors held that the delivery of the parcel was conditional. Senator Edwards, with whom the majority of the court concurred, put the question of waiver of the condition of the sale, on the intention of the parties at the time of the delivery; and from the facts of that case, he came to the conclusion that neither party intended that the condition of the sale should be waived. Senator Wager took a similar view of the question. If the memorandum endorsed on the receipt of the 7th of March, tends to show a state of facts which will bring this case within the principle of the case of Russell v. Minor, (which I think quite clear), the non-suit of the plaintiff was erroneous so far as relates to the goods delivered on the 7th of March; and the judge who tried the cause, erred in not submitting it to the jury to determine whether the goods delivered on that day were delivered absolutely or conditionally; that is, whether the plaintiff intended to deliver them absolutely, and thereby to waive the condition on which the sale was made. (6 Pick. 266-7.)
There is no evidence in the case to show that the goods found in the possession of Thompson Co., and replevied by the sheriff, were a part of the goods delivered on the 7th of March. These goods they purchased from B. Lynes, without any notice, for aught the case shows, of the nature of the contract of sale between him and the plaintiff. As to all the goods therefore purchased by Thompson Co. from B. Lynes, and paid for by them, they are entitled to the protection of bona fide purchasers without notice, even if the delivery to Lynes was conditional. (6 John. Ch. 437; 1 Paige, 312; 1 Edw. Ch. R. 146.) As it does not appear that any part of the goods taken by the sheriff from the possession of Thompson Co. were a part of the goods delivered on the 7th of March, although a part of these goods should not have been paid for by Thompson Co. to Lynes, they can nevertheless justify under Lynes, whose title to all the parcels delivered previous to the 7th March is undoubtedly perfect, in consequence of the absolute and unconditional delivery to him by the plaintiff of all such parcels. The nonsuit was therefore beyond all question correct as to the defendants, Thompson, Schoonmaker and Dean, the members of the firm of Thompson Co. But for the reasons before assigned, it was erroneous as to Benjamin Lynes.
It must therefore be set aside, and the judgment of the superior court must be reversed.