shares of the stock which she purchased in good faith and without ad verse notice, from Alexandria, and has also the legal title derived by legal transfer, and by quiet possession of more than 30 years. Her right therefore must prevail. :Entertaining these views on the merits of the case, it was useless for me to go into the question of jurisdiction raised at bar, or into the question how far governments and states are bound by the laches of their public offices, or by the lapse of time. The petition .of the United States must be dismissed.
and another v.
(Uircuit Oourt, W. D. Tennessee. March 15, 1884.)
L CONTRACTS-SALE-EXCHANGE AssOCIATIONS-RuLES AND REGULATIONS-EFFECT OF NON-OBSERVANCE. Where merchants form voluntary associations" to establish just and equitable principles, uniform usages, rules, and regulations, which shall govern all transactions" between the members, parties dealing with each other, who are memhers, make the rules and regulations a part of their contract, and the courts will enforce the\Il as such; but this onlv when they are observed by the mem" bers involved in the controversy; for the habitual non-observance by them in their dealings with each other will abrogate the particular rule violated, and relegate the contract to the ordinary rules of law governing it. 2. I:)AME-COTTON EXCHANGE OF MEMPHIS-RuLE 9-RISK OF Loss BY FIRE. Where two members of the Cotton Exchange of Memphis, in their dealinis with each other,for a series of years paid no attention on either side to a rule of the exchange which provided that delivery of cotton should not be considered final untillhe cotton was paid for, the contract involved in this suit should not be governed by the tule of the exchange, but by the genernllaw. Where, therefore, a sale of 2iO bales was made by sample, an order giv:en by the seller to the warehouseman to deliver to the buyer, the warehouseman and the buyer the cotton, the buyel' sampled it, approved 268 bales, and rejected two, put his "class" and "shipping" marks upon it, and gave written directions to his drayman to remove it from tbe shed, held, that the title passed to the buyer when these things were done, and a loss by fire before removal from the warehouse wall his loss, although the cotton had not, at the time of the fire, been actually paid for. 3. SAME-CONSTRUCTION OF THE RULE-WAIVER. Where the rule of the Cotton Exchange of Memphis provided "all cotton shall be received within five working days from date of sale. The weighing and examining of cotton shall constitute a confirmation of sale, but delivery shall not be considered tinal until paid for,-the factor's policy of insurance to cover until delivered and paid for i payment heing considered final act of de!iverY,"-it seems that a transaction under this rule 1S not an executory agreement to sell when payment is made, but that it is mere stipulation for the securityof the seller, which enables him at his option to refuse to part with the posession until payment is made. But, whatever be the proper construction of the parties by an habitual course of dealing with each other had wholly disregarded it on both sides, and the seller in the particular transaction, as in all others, delivered unconditionally, .and without restraint as to possession and use, and manifested no concern about. securing payment through the rule, held, that this p,lllounts to waiver by the seFer of a stipulation s(}lely for his benefit, and the risk of loss by tire passed with the title to the buyer on actual delivery to him. This waiver by the sellerneed not be in express terms, but may be fairly in [erred from his conduct and acts. . . ..
FEDERAL REPORTER. FINDING OF FACTS.
This case, by stipulation of the parties under the statute, was sub· mitted to the court without a jury. The court found the following to be the material facts:
1. The plaintiffs and defendants are members of the Memphis Cotton Exchange, an incorporated association, the purposes of which are thus described by its constitution:
"Section 1. The purposes of this association shall be to provide and ma;intain suitable rooms for a cotton exchange in the city of Memphis; to adjust controversies between members; to establish just and equitable principles, uniform usages, rules, and regulations, and standards for classifications, which shall govern all transactions connected with the cotton trade; to acquire, preserve, and disseminate information connected therewith; to decrease the risks incident thereto; and, generally, to promote the of the trade, and increase the facilities and the amonnt of the cotton business in the city of Memphis." II. Among other things, not necessary to mention, the constitution also contains the following:
"ARTICLE VIIL-DUTIES OF l\rEMBERS.
"Section 1. Every member, upon admission, pledges himself to abide by the constitution, and also by all by-laws, rules, and regulations of the exchange." III. The rules and regulations for the sale and transfer of cotton prescribed by the association are as follows: "1. All resampling, or examination by boring, shall be performed after cotton shall have been weighed. "2. All cotton must be examined and received by the purchaser before removal from its plac!3 of storage. "3. The seller of cottonis entitled to his samples, but, when required by the buyer, shall allow him to take them to his office for the purpose of comparison, and whlln that is done shall return them, and a failure to do so will forfeit his right in the future to remove them from the office of the seller. "4. Three hundred pounds shall constitute the minimum weight of a merchantable bale of cotton, and the buyer shall have the right to reject all bales below that weight; but if received an allowance of four dollars per bale shall be made to the buyer. "5. Six ties only shall be permitted on each bale, unless an allowance is made of two pounds for every tie above that number. "6. All seedy, mixed, fraudulently packed, and damaged cotton may be rejected, and must be done at its relative value in the list purchased; but the grade of the cotton by marks shall be given to the buyer at the time of sale, or before the day of delivery, if required by him. and cotton sold by.samples must be delivered accordingly, unless rejected for causes above stated. "7. The practice of examination by boring cotton, which prevails in this market, before. passing of same, is 'understood to be the rule as to the mannel of receiving. and relieves the seller from any liability for reclamation on mixed, fraudulently packed, or damaged cotton. "8. All cotton shall be understood to be in good order; but if not, it shaH be repaired within twenty-four hoursfrom the time of delivery. and if not tione within that time the necessary repairs may be made by the at
DILLARD V. PATON.
the expense of the seller. No claims for repairs shall be allowed after the removal of cotton from its place of storage. "9. All cotton shall be received within five working days from date of sale. The weighing and examining of cotton shall constitute a confirmation of sale, but delivery shall not be considered final until paid for. The factor's policy of insurance to cover until delivered and paid for; payment being considered final act of delivery. "10. No order for the delivery of cotton is transferable without the knowledge and consent of the seller."
IV. When rule 9 of the cotton exchange waR under consideration by the association it did not contain the last clause, viz., "payment being considered the final act of delivery." But a resolution was adopted appointing a committee to confer with the board of underwriters "to gain information regarding the insurance of cotton under process of delivery," and upon suoh conference a report was made that "after a lengthy discussion as to the indorsement and acceptance of rule 9 by the board of underwriters," a committee was appointed by that body to meet the directory of the, exchange. "in order that rule 9 may be so amended, if thought proper, as to harmonize the different views." Whereupon the matter was discussed between the directors and the underwriters' committee, and resulted in adding the above clause to the rule, its acceptance by the underwriters, and at the same time ,the adoption by them of the follOWing resolution: "Resolved, that our policies on cotton in sheds as now written provide all the security to the assured which they require, therefore additional legislation on the subject is superlluous." V. The plaintiffs are cotton factors, and the defendants cotton brokers or buyers, doing business in the city of Memphis; and at the time of the tl1ansaction in controversy in this suit were members of the cotton exchange, while the above provisions of the constitution and by-laws were in force. VI. The plaintiffs and defendants bargained with each other for the sale and purchase of 270 bales of cotton, selected by sample, and identified by certain marks upon the bales and samples. '.rhe cotton was at the time, with other cotton of the plaintiffs', stored in a. public warehouse in ¥emphis. The date of this bargaining was on the seventeenth and eighteenth of October, 1882. VII. The plaintiffs, as soon as the was made, sent to the warebouseman, according to the usual course of business, written orders for its delivery to the defendants, specifying the lots and marks corresponding to those upon the samples, of which orders the-followmg is aspecimeti: "MEMPHIS, TENN., Oct. 17, 1882. Merchants' Cotton Compress & Storage Co. please deliver to A. A. Paton & Co. nineteen bales of ootton, of the following marks and numbers. DILLARD & COFFIN." VIII. Upon the receipt of these orders the warehousemen turned out the lots ot cotton specified, and aligned them in the yard of shed forconvenience of examination, weighing, and marking. On Saturday, October 21, 1882. the agents of the defendants appeared at the shed, and the weigher of the warehouse, jointly with the weigher of the defendants, weighed. this cotton, each taking down the weights and agreeing as tQ the weight of each bale; whereupon the borers of the defendants examined .each bale by boring with the auger, and t,he "classer" of defendants sampled and classed it, two of the bales being rejected and discarded from the lot.. . These of the defendants then marked the cottonwith the "class" and "shipping" marks of the defendants, and, according to the usual course of business, placed upon a hook, kept for the purpose outside the warehousll office, a written direction to defendants' drayman to remove the cotton to the place designated t1).erein. It was the habit of defendants' drayman to come to the shed whenever, in th..
'coutseof thebi.isiness, he could, and to take this order from the hook and reo move the cotton. The plaintiffs and the warehousemen had done everything -required of either in the usual course of business to place the cotton in possession of the defendants, and nothing remained to be done by either to com· ·plete the transaction, so far as the right of removal of the cotton by the de'fendants was involved. About noon this part of the business was completed, and the defendants' agents left the shed, taking with them, as usual, the 'borings or loose cotton. 'rheyreported their weights, etc., to the defendants' office, but at what precise time does not appear by the proof, though it does appear that, in the usual course of business, this was done the same day, or that night, or next morning. IX. The warehouseman,. according to his custom, promptly reported his weights and the rejections to the plaintiff's office, and thereupon, during the ·afternoon of f:!aturday, October 21, 1882, they sent their bill or account of the cotton to defendants for $14,945.56, the price agreed upon for the 268 bales, -which was not paid. The messenger was instructed to deliver the bill and bring back tho check, if paid, but not to insist on payment. 'rhe bill was handed to some one in defendants' office, and left there by the messenger. It was the usual custom of defendants to pay for cotton purchased by them at about 2 o'clock P. M., on the day follOWing the examination and weighing, after comparison of the factor's bill as rendered with their own report of the weights and rejections. It was also their custom to have cotton hauled to the comlffess, and, on receipt of the dray tickets shOWing its delivery there, to take the tickets to their transportation agent, receive bills of lading, attach them to drafts on their correspondents at Liverpool, or elsewhere, negotiate them in their bank at Memphis, and pay factors by checks on that 'bank. It was also their custom to remove cotton promptly after examination and weighing, but pressure of business, bad weather, and like circumstances, sometimes delayed removals, so that there was no fixed business custom in that matter,except to remove as speedily as possible in all cases. X. The defendants were and are entirely solvent, and paid 'promptly for their purchases, lIever asking indUlgence of plaintiffs. XL The plaintiffs never insisted that defendants should pay for their purchases of cotton before its removal from the warehouse Or before they took possession, and it was their custom to present their bills to defendants as soon as they received reports of weights, and 'sometimes, when their bank account wasl1oteasy, to ask payment on account before the bills were made out, but not to press for payment on the same day of receiving reports of acceptance by defendants. XII. The defendants, in a very large proportion of their dealings with the plaintiffs, which dealings covered many years prior and subsequent to the organization of the Cotton Exchange, removed the cotton purchased before paying for it. In the same season of this transaction there were given in evidence 17 other transactions between them of like character, and in 13 of them the cotton was removed before payment; in one instance how this fact .was does oot appear, and in two of them the cotton was removed and paid for the same day, but which preceded the other, does not appear; and in the remainirig transaction the largest part of the lot was removed and paid for the same day, but whether removal or payment first took place does not ap,pear, while a few bales of the lot were paid for before removal. Or, to state these facts somewhat differently, there were covered by these 17 transactions 2,294 bales of cotton, of which 1,720 were removed by the defendants before payment, 531 were removed and paid for on the same day, but whether payment ol'removal came first does not appear; as to 30 bales no showing whatever is made by the proof, and 13 bales were paid for before removal. XIII. About 7 o'clock Saturday evening. October 21, 1882, the cotton in the warehouse caught" fire, including the 268 bales in volved in this contro-
DILLARD V; PATON·.
. versy and Was almost Elntirelyconlllimed,. one bale 0'111y Of this lot without damage. There were besides this lot of 26S, bales in dispute between the parties, 618 bales belonging to tije plaintiffs burned in the fire, thIs disputed lot being in the yard of the shed in the same place it Was left at the '. time of the weighing, examination, and'marking above mentioned. . XIV. One of the defendants was at the fire for a short time and knew that their agents had weighed and examined this cotton on that day at this shed, but supposed it was in the compress building, which was separated from the shed by a wall between the two; and onthe following morning plldntifl;s sent a message to defendants' manager that the cotton could be partiallly saved, and invoked the assistance of defendants to that end, but he declined to llave anything to do with it, and denied the defendants had any interest in the cotton. 'l'he plaintiffs did all that could be done towards saving this 268 bales with theirs, and, it haVing become indistinguishable from. the other cotton by thedestruction of the marks, the whole was sold in a mass as damaged cotton, and plaintiffs did then and now offer to give defendants credit for their share of the proceeds, amounting to $1,110.74, about which estimate there is no dispute; nor is there any dispute about the woights and price of . the entire lot of 139,388 pounds for $14,945.56. XV. The plaintiffs have frequently demanded payment of the defendants, which has been refused.
CONCLUSIONS OF LAW.
The court found the following conclusions of law, arising upon the foregoing facts: .
1. The delivery of the cotton was complete and sllfficient to pass the title to defendants before the fire, and the risk'of 1058 was theirs.
2. The plaintiffs are entitled to jUdgment against the defendants for· the sum of $13,834.82, and interest thereon at 6 per cent. per annum from th,e twenty-first day of October, .to this date, and the amount of the judgment shouid therefore 'be and costs.
.Wright, Folkes cf Wright and Metcalf cf Walker, for plaintiffs. Gantt cf Patterson and Dyer, Lee et Ellis, for defendants. HAMMOND, J. Olltside of the rules of the ootton exohange there could be no possible doubt about this case·. The delivery was as com· plete as it was possible to be, and under the general law the title passed to the defendants from the moment they examined, approved; and marked the cotton, and the risk of loss by fire was theirs. Leonard v. Davis, 1 Black, 476,483; Hatch v. Oil Co. 100 U; S. 124, 128; Tome v. Dubois, 6 Wall. 548, 554; Williams v. Adam8,3 Sneed, 358; Bush v. Ba1:field, 1 Cold. 93; Porter v. Coward, 'Meigs, 25; 1 Amer. Law Rev. 413, and authorities cited. The defendants concede this; but they say that under 'these cotton"Elxchange. rules the;con· tract of the parties was "not a sale, but a mere executory agreement to sell," by the terms of which contract the'salewas not cOll1plet:ed by the agreement'as to quantity, quality, and price, or by that agtee 1 ment accoll1paniedby delivety, but only by the actual paYIl1Mtof the price, un'til which paymenttbe title remained with the plaintiffs, and the riskof loss by fire was theirs.. And"iHs as frankly conceded by these plaintifi's that if this case faHs within the rulesof thecottoIi
exchange, and this be the proper and legal construction of the con· tract, the defenda.nts are not liable. The first inquiry then is, does this contract come within rule 9 of the exchange? It cannot be denied that parties may contract as they please, no matter how injudiciously, in the light of subsequent events, the contract may appear to have been made, or how absurd it may seem in the relation of the parties to it. Nor can it be de· nied that merchants may voluntarily associate together, and prescribe for themselves regulations to establish, define, and control the usages or customs that shall prevail in their dealings with each other. These are useful institutions, and the courts recognize their value and enforce their rules whenever parties deal under them, in which casa the regulations become, undoubtedly, a part of the contract. Thorne v. Prentiss, 83 Ill. 99; Goddard v. Merchants' Exchange, 9 Mo. App. 290. But they have not, any more than other customs and usages, the force and effect of positive statutes nor of the rules of the common law, and the courts do not particularly favor them. The Reeside, 2 Sumn. 568; The Illinois, 2 Flippin, 422. Parties are not bound to contract under them if they choose to disregard them, and they may, -and often do, observe part and discard part, as the plaintiffs and defendants here have evidently done. In all the dealings between these parties during that season, exclusive of this, amounting to more than 2,000 bales, only 13 were actually paid for before they were in fact delivered to defendants and by them removed, so far as we can certainly see how that fact was, while more that 1,700 bales were permitted by the plaintiffs to pass into the hands of defendants without payment. And yet, we are asked, as to these 268 ba.les, to reverse, on the strength of this rule, such a course of dealing, and adhere to its literalism in order to throw this loss on the plaintiffs. Take the rule for all it is worth and it amounts only to this: The plaintiffs and defendants have voluntarily agreed to be bound by it, and, by the same volition, have in all their dealings hitherto paid no at.tention to it. They have thus established, for themselves and as be. tween each other, a different and special custom to which this rule has had no application, and in direct contravention of it; and this they can always do. Thorne v. Prentiss, supra.. Nor is it necessary to expressly stipulate for such exclusion of the operation of the rules, usage, or custom. "And not only," says Mr. Parsons, "is a custom inadmissible which the parties have expreSSly excluded, but it is equally so if the parties have excluded it by a necessary implication, as by providing that the thing shall be done in a different way. For a custom can no more be set up against the clear intention of the parties than against their express agreement." 2 Pars. Cont. 59; Id. (6th Ed.) 546, which was approved in Ins. Oos. v. Wright, 1 Wall. 456, 471. . The supreme court says the usage or custom, when the contract is made with reference to it, becomes a part of the contract,and may not improperly
be considered the law of the contract. Renner v. Bank of Columbia, 9 Wheat. 581, 588. And the actual custom or usage of the parties in dealing with each other is as much a part of the contract under this rule as a general custom prevailing in the trade. Bliven v. New England Screw Co. 23 How. !l20, 431. "A general usage may be proved in proper cases to remove ambiguities and uncertainties in a contract, or to annex incidents, but it cannot destroy, contradict, or modify what is otherwise manifest. Where the intent and meaning of the parties are clear, evidence of a usage to the contrary is irrelevant and unavailing." Nat. Bank v. Burkhardt, 100 U. S. 686,692. Here the intention of the parties to deal with each other, without reference to this custom or rule established for them by the cotton exchange, is manifested in the clearest way by their habitual and uniform dealings with each other for a long series of years prior and subsequent to the organization of the exchange. Neither party has thought it necessary to be governed by it, and like many other rules, usages, and cuseoms it has become, by their voluntary disregard of it, a dead letter. And the explanation of this is found in the fact that the plaintiffs, for whose protection it was evidently intended, did not deem it necessary to enforce it against the defendants, who are so amply solvent that it is their boast in the proof that they never asked indulgence. If it be conceded that the defendants had an interest in this rule, by reason of the provisions in reference to insurance, the principle is not changed. It would be, then, a stipulation collateral to the contract of sale, and wholly so. Whether the plaintiffs or defendants should, under this rule, have insured the cotton is immaterial and unimportant to the issues in this case. Its insurance or noninsurance by either could not affect the title, or change the risk of loss by fire which always follows the title in the absence of any agreement to the contrary. Either or both might have insured their respective interests in the cotton; and whether one or the other did insure, or omitted to insure, would only tend to show, if they did not 'intend to assume their own risk, that in their opinion they had an interest, or did not have an interest, as the case might be. But such an opine ion hy either would not bind the other as to which of them the cotton belonged, in a controversy about the title, as this is. The title must depend on the facts about the contract of sale, and wholly on them. Nor, if we treat it as a question of evidence, does the existence of any supposed interest of the defendants in rule \:) change the result. It is perfectly plain to my mind, in view of the history of this rule in its relation to the underwriters, as shown by the proof, that this last clause was added by the underwriters to make more clear the reqllirement that the factor's policy should terminate with payment for the cotton; and' it may be a proper construction of the rule, as between a factor and his underwriters, if it be true that the policy be written v.19,no.9-40
by this rule, that his policy shall cover his interest in the cotton until it is paid for, no matter how long payment may be delayed, or where the cotton may be, whether in the shed or at Liverpool, or en route to that or some 9ther destination. But what interest does this give the buyer in that question, or how can it affect his obligation to pay? Not in the least, it seems to me. Suppose the factor has no insurance,-and he need have none,-of what concern is that to the buyer, and how can it affect his obligation to pay, after he has taken the cotton into his possession and, it may be, consumed it in the mills? Insured or uninsured, as the factor may be, the contract of sale between him and the buyer is independent of the fact, and must stand upon its own bottom, and be determined on its own facts. This rule is clearly not a stipulation by the factor to keep the cotton insured for the buyer's benefit; but if it were, the remedy would be a suit by the buyer against the factor for a breach of that stipulation, if it had not been complied with, and not to withhold the purchase money on the theory that there had been no sale. He might 'set off his claim for damages in a suit for the price, but this case presents DO feature of that kind. The provision in this rule about insurance, then, if Dot one wholly relating to the factor and his underwriter, with whom the buyer has no concern, as it manifestly is, can only be a collateral contract between the factor and the buyer, and in no sense does it afford any solution to the question we have in hand. All evidence whether either plaintiffs Or defendants were insured as to this cotton was therefore .properly excluded as irrelevant and immaterial. Looking, then, as we must, beyond and outside of all questions of insurance Or supposed insurance, and we are brought back to the fact that, in all their dealings with each other, notwithstanding the pledge contained in article 8 of the constitution of the cotton exchange, the plaintiffs and defendants have,. in violation of their constitutional pledges, dealt with each other without regard to the stipulation of rule 9, that "delivery shall not be considered final until paid for;" that is, until the cotton is paid for. The plaintiffs have never refused delivery or retained the cotton until paid for, but have almost always delivered before payment,while the defendants have never been care· ful to pay before taking possession of and removing the cotton, nor at all scrupnlous in regard to it. Perhaps, in the usual order of business, they would prefer to get the cotton, put it under bills of lading, assign them and the cotton to their bank in negotiation of bills of exchange with which to supply the funds, and thereby make each shipment or purchase of cotton pay for itself. This is not according to rule 9, for :wlien they have put their bills in bank they have not only had "delivery," but have likewise "delivered" the cotton to an.other. There is nothing very sacred about the constitutional pledge or rule 9 when the parties mutually agree to the violation, and they need not do this byexp'rcs8 agreement, as 1. have already shown. On this subject the supreme court of Illinois says:
·DILLARD V. PATON.
"We do not· 'entertain a doubt but that all contracts of sales within the contemplation of these rules must be construed as, if the rules were expressly made a part of the contract j but there is nothing to which our attention has been directed, in the charter of the board of trade, and certainly nothing in the general law which prohibits members of that board from contracting · on 'change,' or elsewhere, so as to bind themllelves to obligations ,beyond and independently of these rules. The only diffiCUlty that arise in this respect must be in determining whether the parties intended their contract should be construed with reference to the rules of the board of trade, or that obliKations were assumed outside of those rules." Thurne v. Prentiss. 83 Ill. 99, 100.
We may add that the presumption of the law is that merchants deal with each other under the, wise provisions and protection of the general law that governs all men in their dealings, unless the contrary clearly appears; and if they expect the courts to observe their rules and enforce them they must themselves observe them. Otherwise, they are neither a custom or usage to control the contract. . This view of the ease disposes of it, and, strictly, we need take no further notice of rule 9, but might leave it until its perplexities appear in some dispute between a factor and an insolvent buyer or his attaching creditors, or between a dishonest factor and conflicting buyers, or between some factor and his insurance company.-all of which situations have been suggested in aid of its interpretation. But the learned argument of the defendants' counsel in favor of their contention that this was an executory agreement to sell, and not a sale, under rule 9, should receive from the court that attention it deserves, particularly since this may not be a final disposition of, the case, and another eourt may, possibly, think it necessary to construe this rule as a part of the contract. But I must be permitted to say that the real contention of the defendants is that their risk on cotton purchased by them does not attach until they actually remove it from the warehouse; but there being no such rule among these regulations, they have seized on this contrivance of an executory agreement to sellin order to effectuate the same result. Yet it needs only a little analysis to show that this construction of rule 9 ,goes further than this and leads to some very absurd oonsequences, so far, at least, as it concerns the factor-so very absurd that the wonder is sane men should ever have adopted a rule td be so construed. If the title does not pass to place the risk of loss by fire on the buyer until the buyer pays for the cotton, why draw the line at the cottonshed? When it reaches the compress, if not yet paid for, the risk of loss by fire is still with the faotor. 80 it is, if not paid for, on the rail or river, at a sea-port, on the ocean, in Liverpool,at tae:mills, in the store where the cotton goods are on display, and .when they have been sold to consumers. Until paid forthel'e is no sale·ofthe ootton, say defendants, alid by withholding payment we need not insure at all, but leave. the risk with the factor or his insurance company under his
ninth-rule policy; and if burned at sea or elsewhere, not having paid him, he cannot make us pay, and must lose the cotton. Again, why draw any line at a loss by fire, or at any loss at all? The defense is just as effective were the cotton still in existence. Paton & Co. say to Dillard & Coffin, when sued for the price of the cotton, as they are here sued: "We have not yet paid you, and until it suits our pleasure to pay no title passes, and there has been no sale-only an executory agreement to sell; wherefore, your suit must fail and be dismissed." The result is they keep the cotton and never pay forit, for this is as good an answer to every suit for the price until payment . has been made in fact, (when there is no longer any need of a suit at all,) as it is here. This is little short of the case put as an illustration by Mr. Justice GRIER, where a man sued by his tailor for the price of a suit of clothes comes into court with the clothes on his back and sets up· that the goods were smuggled by the tailor. Randon v. Toby, 11 How. 480, 521. Indeed, the defense is not so good, for here there is no fault of the plaintiffs aileged,-absolutely none,-but only that the defendants themselves have not paid what they had agreed to pay. Is it not apparent that the accident of a loss by fire does not change the merits of the defense? It is equally available with or without the loss, for it in no way depends on that accidental cir(Jumstance. It is as good with the cotton in Liverpool as it is with its ashes in the Memphis cotton-shed, and no better or worse in either place. Simply stated, the broad proposition is, "This was a conditional sale, or an executory agreement to sell when I pay for the cotton; and, although I have appropriated it to my own use, so long as I do not pay thel"e is no obligation on me to pay, and no suit for the price will lie. " "Was such a thing ever heard of," asks THOMPSON, J., in the Missouri court of appeals, "as that a creditor loses his remedy against his debtor by not demanding payment on the day when the debt fell due?" (Beveridge v. Richmond, 16 Chi. Leg. N. 98;) and we may, paraphrasing the question, ask, "Was ever it heard that a buyer can refuse payment for the sole reason that he has not paid?" It must be confessed this may be a possible inference from the literalism of the rule, but it does not certainly appear that it was ever intended to have such a construction as that by the men who made it; nor does the case of Leigh v. M. « O. R. Co. 58 Ala. 165, justify such a construction of it. Nor does the case clearly fall within the third rule of Mr. Justice BLACKBURN, so much relied upon by the defendants. 1 Benj. Sales, (4th Amer. Ed.) p. 359, § 366; Id. p. 376, §§ 391-393; Id. p.396, §§ 425-436. And for the reason thatthese authorities all show that where delivery has been actually made to the buyer,· the intention to reserve the title to the seller and conseq\lent risk of loss by accident, must plainly appear from the terms of the contract. Now, this rule does not say, in terms, that the title is reserved to the seller, but, on the contrary, says that "weighing and
examining the cotton shall be a confirmation of the saJe," (whatever that may mean,) but that "delivery shall not be considered final until paid for." The oonstruotion oontended for by defendants is merely inferenoe from this language, and it is susoeptible of different and antagonistic construotions. The implioations of the parties'dealings and surroundings are not favorable to this construotion, and the nature of the trade and property is against it. It is not to be presumed that the seller assumes suoh peril in the cotton trade without an express or clearly-implied intention to do so. Ocoasional and exceptional ciroumstances might prompt a merchant to make such a contract to secure his price, but he would hardly desire it as a business usage in the cotton trade. The more reasonable construotion is that it was intended as a. se· curity of a different charaoter, for the sole benefit of the faotor against insolvent buyers, and to enable him, in a case where his interest requires, to keep the cotton in his possession, and refuse to surrender that possession until payment is made. It may be the oourts would, possibly, in favor of the faotor, extend the oonstruction to cover a oase where the purohaser was in aotual possession and refused to pay, by holding that it was a oonditional sale, and that the title remained, as between these two, with the faotor until payment aotually made,-or as between the factor and oreditors of the purchaser,-but it is hardly possible the oourts would, in favor of the buyer after he had taken absolute dominion, construe the rule to be only an exeoutory agreement to sell when payment was made. If so, as to either oonstruction, without a stipulation to the contrary, the risk of los8 by fire would, undonbtedly, remain with· the factor. These are, however, perplexities about this construction, as between the factor and those claiming against him, it is best to leave for decision when the cases arise. But as between the faotor and the buyer, no matter what the proper construction of the rule may be, the faotor may always waive this seourity in his favor, deliver the ootton unconditionally, and colleot his money. Whenever he delivers the cotton absolutely, without any manifestation of an intention to claim his security, or, rather, with an expressed or plainly implied relinquishment of it,-whatever be its legal charaoteristics,-from that moment the title pa.sses to the buyer, the risk of loss by fire is his, and he can never defend a suit for the price by refusing to perform the oondition or carry out his part of the exeoutory agreement. As to him the contract becomes exeouted whenever the seller ohooses to so deliver and he accepts. The seller may, under suoh a contract, always waive the stipulation in his favor, and he this whenever he delivers with the intention. of not claiming it. That the plaintiffs did this here is abundantly shown by the proof. .The waiver need not be express, but may be by implioation resulting from aots and o.onduct.· ,2 Benj.Sales, p. 742, § 858.. Of course, I need not say that plaintiffs here would not be permitted to exeroise their right of waiver
after a loss by fire, so as to change the risk. They did not do this, but waived their security under this rule by delivery prior to .tae fire, without insisting on payment under the rule before delivery, as they had often done before. Neither will the defendants, after accepting this waiver by taking the cotton,be permitted to change the risk by refusing a payment which they were under legal obligation to have made on Saturday, before the fhe. I do not think either the plaintiffs or defendants had any intention of making the kind of contract the defendants now pretend to have made, by distorting the language of this rule; but if they ever did intend to trade under the rule, they never carried out that intention, so far as this proof shows, and this is a waiver of it. The proposed usage of rule 9 has never become a usage at all as to these two members, and this by their own act. Judgment for the plaintiffs.
and others v.
March 12, 1B84.)
(Disftrict Court, N. D. Mississippi.
:MtsJOI1llDRR OF CAUSES OF
Where two or more defendants are sued jointly, a count in the same action against one of them al()ne upon his several liability cannot be sustained.
AND SEVERAL LIA.l31LITY.
Demurrer to Declaration. Lamar, Mayes &: Branham, for plaintiffs. O. B. Howry, for defendants. HILL, J. The questions presented for decision arise upon the demurrer of the defendant A. C. Jobes to the second count in the declaration. The declaration in the first count charges that the defendants Lee and C. B. Jobes, under the firm llame of Lee & Jobes, drew their bill of exchange upon the bank of Kosciusko, of which said Lee, C. B. Jober, and A. C. Jobes were the owners and partners, the same being a private and unincorporated banking house, payable 90 days after date, which was delivered to plaintiffs and afterwards presented to the bank for acceptance and accepted, and when due was presented for payment, which was refused, of which the drawers had due notice. The, second count charges that afterwards A. C. Jobes, for a valuable consideration, promised in writing that if plaintiffs would send the bill ,back he would pay it, which was done, but payment was refused.The letter, which is alleged c6ntains this promise, is exhibited with the declaration, and is signed "Cashier." There is no objection to joining the drawers, acceptors, and indorsers liable upon a bill of exchange in an action. This suit is properly brought against Lee and n.s. Jobes, as drawers, and the same parties, with A. C. Jobes, as