Romeo v. Martucci , 72 Conn. 504 ( 1900 )

Some features of the parol agreement made by the plaintiff's agent with Ricciardelli Bro., at New Haven, suggest that a conditional sale rather than a consignment was really intended by the parties. We are required, however, by the finding of facts, to treat the contract as a consignment and not as a sale.

The cases cited by counsel upon the law of conditional sales, are applicable only so far as they determine the respective rights of the owner of the goods and a bona fide purchaser from a conditional vendee who was either the apparent owner or had an apparent right to sell as owner.

The cases in this State which most strongly favor the claims of the vendors in contracts of conditional sale, are Lewis v.McCabe, 49 Conn. 141, and Mack v. Story, 57 id. 407, 411. In neither of these cases was the defendant a purchaser, or one who had suffered loss from an apparent title in the conditional vendee. While in both cases, by the agreement between the vendor and vendee, the latter might for his bar trade use from the barrels of liquor which were sold to him, and afterwards attached by his creditors, it was not intended that the barrels of liquor themselves should be placed on sale.

These decisions were governed by the law peculiar to contracts of conditional sale, and only hold that as between the parties to those cases the condition in the contract of sale, that the title should remain in the vendor until the goods were paid for, was not rendered void by a provision giving to the vendee a right, as agent of the vendor, to transfer the latter's title. In the opinion in the first case it is said that if the contract of sale should be construed as authorizing the conditional vendee to sell as owner, such a provision would be inconsistent with the retention of title in the vendor. No case in this State has gone to the extent of holding, as was held in Burbank v. Crooker, 7 Gray, 158, 159, that the title of the vendor was superior to that of a bona fide purchaser from a conditional vendee clothed with an apparent authority to sell the goods as owner.

But in the case before us, the trial court having found that the goods were consigned to Ricciardelli Bro. to be sold by them as the plaintiff's agents, the transaction between the original parties was a bailment, and the case must be determined by applying to the facts the principles of the law of agency.

It must be conceded that it was not within the commission of Ricciardelli Bro. to sell the entire quantity of goods to the defendant in the manner they did; and that, as they were not the owners of the goods, they had no title of their own to convey. Did they transfer to the defendant the title of the plaintiff? Or, in other words, is the plaintiff under the circumstances, estopped, as against the defendant, from denying the authority of his agents to sell the whole stock of goods to him?

These are the facts relevant to those questions: The plaintiff, who was a wholesale dealer in groceries in New York under the name of F. Romeo Co., shipped to Ricciardelli Bro., who under that name were engaged in the retail grocery business at New Haven, a lot of groceries of different varieties of the value of $559.57, upon consignment, to be sold by them at retail, in their business as retail grocersin their store at New Haven, as agents of the plaintiff. After the goods had been received by Ricciardelli Bro. and had been placed in their store as a part of their stock, with nothing to distinguish them from the goods owned by them, or to indicate that they held them on any different terms, the defendant who had before learned that the store and business were for sale, after having visited the store, and examined it, and inquired about the character of Ricciardelli Bro. and the store, in good faith purchased the business and entire stock for $965, which was not less than a reasonable price, and took possession of the same. Ricciardelli Bro. absconded without having accounted to the plaintiff.

We cannot review the conclusion of the trial court that the defendant acted in good faith. He must be considered as an innocent third party, who, without knowledge or notice of the agency, dealt with Ricciardelli Bro. as principals, and upon the belief that they were the owners of the goods. If that belief was a reasonable one under the circumstances and was induced by the voluntary acts of the plaintiff, he rather then the defendant should suffer the consequences resulting from the fraudulent act of his agents and of his own misplaced confidence.

The authorities upon this subject are numerous. In the often cited case of Pickering v. Busk, 15 East, 37, the action was trover, and it appeared that one who was both a broker and also engaged in the hemp trade, purchased for the plaintiff, a merchant, a quantity of hemp which at the plaintiff's request was delivered to the broker, and upon the wharfinger's books was transferred from the name of the seller to that of the broker. The latter, without actual authority to sell, sold the hemp to the defendant's assignors for value. Lord Ellenborough, C. J., said: "I cannot subscribe to the doctrine, that a broker's engagements are necessarily, and in all cases, limited to his actual authority. . . . It is clear that he may bind his principal within the limits of the authority with which he has been apparently clothed by the principal in respect to the subject-matter. . . . The sale was made by a person who had all the indicia of property."

This court said in Baldwin v. Porter, 12 Conn. 473, 482: "It is a general principle, that no man can sell property or transfer title to that which he does not own; nor can one man's property, without his consent, be rendered subject to the demands of another. To this rule there are exceptions; but they are such as become necessary to protect innocent persons against fraud. . . . Therefore, it has been holden, that if the owner of goods voluntarily permit another to hold himself out to the world as being the true owner, and for this purpose, entrust him with the exclusive possession or otherindicia of title, under circumstances which would naturally tend to mislead, he shall be concluded by the sale of it to an innocent and mistaken purchaser."

Nixon v. Brown, 57 N. H. 34, was an action of trover. An agent with the plaintiff's money purchased a horse for him, taking, without authority, a bill of sale in his own name. With knowledge of the facts, the plaintiff permitted him to go away with the horse and bill of sale. The agent having sold the horse to the defendant, who purchased for cash and without notice of the agency, absconded. In sustaining the title of the defendant, Smith, J., said: "When the purchaser knows he is dealing with an agent, it is his duty to inquire into the nature and extent of the authority conferred by the principal, and to deal with the agent accordingly. But when the agency is not known, and the principal has clothed the agent with powers calculated to induce innocent third persons to believe that the agent owned the property, or had power to sell, the principal is bound, and strangers will not suffer."

The case of Heath v. Stoddard, 91 Me. 499, decided in 1898, was an action of replevin by the owner of a piano who had intrusted it with one Spencer, who was a dealer in pianos, to take it and leave it at the defendant's house, but without authority to sell it; the plaintiff himself to go there in a day or two and sell it if he could. The plaintiff had a verdict. We quote from the opinion of the Supreme Court sustaining defendant's exception to the charge of the trial judge. "A principal is not only bound by the acts of his agent, whether general or special, within the authority which he has actually given him, but he is also bound by his agent's acts within the apparent authority which the principal himself knowingly permits his agent to assume, or which he holds the agent out to the world as possessing. . . . Whether or not a principal is bound by the acts of his agent, when dealing with a third person who does not know the extent of his authority, depends, not so much upon the actual authority given or intended to be given by the principal, as upon the question, what did such third person, dealing with the agent, believe and have a right to believe as to the agent's authority, from the acts of the principal." Among the many other cases in which the same principle is applied are Saltus v. Everett, 20 Wend. 267, 268, McNeil v. Tenth National Bank, 46 N.Y. 325,Barnard v. Campbell, 58 id. 73, Edwards v. Dooley, 120 id. 540, Locke v. Lewis, 124 Mass. 1, Hubbard v. Tenbrook,124 Pa. 291, and Griggs v. Selden, 58 Vt. 561.

The apparent authority of the agent which thus binds the principal, beyond that actually conferred, must always be deduced from authorized acts of the agent, and from surrounding facts with a knowledge of which the principal is chargeable, and not from the acts of the agent himself in excess of his authority and of which the principal had no notice. The public may safely judge the agent's authority from the garb with which his principal has invested him, but not from that with which he has clothed himself. To intrust an agent or bailee with the mere possession of property does not give him an apparent authority to sell, nor will possession with power to sell always justify an inference of ownership in the agent. Whether an innocent third person may justly attribute to an agent powers which he does not possess, whether he may properly deal with him as a principal, or may treat one who is intrusted with both the possession and the power to sell as the owner of the goods, must depend to a great extent upon the facts peculiar to each case. Established customs, and usages of trade, the character of the agent's business, and the manner in which it is conducted, and other circumstances which ought to warn a prudent person against treating as owner, one who has the possession of personal property and who offers it for sale, often control the decision of particular cases.

In Levi v. Booth, 58 Md. 305, the owner of a valuable diamond ring placed it in the hands of a street peddler of articles of jewelry, and who had no established place of business, with authority to obtain a match for it, or failing in that, to procure an offer for it, but without authority to sell. The defendants who claimed to have purchased the ring of the peddler for cash and other goods, were pawnbrokers and dealers in jewelry, who had been in the habit of selling goods to the peddler on credit. Upon these facts a verdict for the plaintiff for the value of the ring in an action of trover was affirmed upon appeal.

In Meldrum v. Snow, 9 Pick. 441, 445, in sustaining the title of the brewers of certain casks of beer, against the attaching creditors of a retail dealer in whose hands the brewers had placed it to be sold in his retail trade, the court said, that the custom of poor persons, of taking beer to sell, appeared to be so general, that the retailers would not be supposed to be the owners of the beer, and that therefore no injury could arise to their creditors. As a further reason for its decision, the court said: "It being beneficial to the community to introduce the use of beer, public policy would justify us in favoring the custom."

In the present case a small retail grocery business was carried on by two brothers, at an established place of business, under their own name of Ricciardelli Bro. There was nothing to indicate that they did a commission business, or that they had goods in their store which did not belong to them, or that they acted as the agents of any one. On the contrary, by carrying on the business in their own names, in the manner in which such a business is ordinarily conducted, they held themselves out to the world, not only by selling the goods in their store as their own, but by the various ways in which the proprietorship of such a business is advertised, as the owners of the business and of the stock in trade in their store. With full knowledge of these facts, the plaintiff shipped to them a quantity of groceries to be placed by them in their store as a part of the stock of their said business, and to be sold by them in their said business at retail, in the same manner that they sold their own goods in their retail business. The authority thus conferred included, and doubtless contemplated, the right of Ricciardelli Bro., not alone to sell the goods at retail, but, in the general conduct of their retail business, to hold themselves out as both having the right to sell and as having the full title to these goods as a part of their entire stock. The right of ownership and the right to sell are of course to be distinguished, but in the conduct of their retail business Ricciardelli Bro. properly represented themselves as possessing both. If they were authorized in the conduct of their retail business to hold themselves out to the public as being the owners of their stock in trade, they were clothed with the power to lead people to believe that they had such a title as would enable them to sell the entire stock at one time. The defendant evidently purchased the goods, not in reliance upon an apparent right of Ricciardelli Bro. to sell at retail, but upon the indicia of ownership with which they were clothed by the plaintiff. The defendant visited the store and examined it, and inquired about the business and its proprietors. He learned nothing to indicate that it was a commission or agency business, but everything to indicate that it was a retail grocery business, carried on in the ordinary manner; and that Ricciardelli Bro. were the proprietors and owners of the business and stock.

I am of the opinion that the facts found show that the plaintiff voluntarily clothed his agents with the indicia of a full title to the goods in question; that the defendant had reasonable ground to believe that Ricciardelli Bro. were the owners of the goods; that the plaintiff is estopped from denying the authority of his agents to sell to the defendant, and therefore that there was no error in the judgment of the Court of Common Pleas.

In this opinion ANDREWS, C. J., concurred.