*THE HONOURABLE JAMES GIBB

ROSS (PLAINTIFF). . . .

AND

NAPOLEON ARTHUR HURTEAU AND

ALCEME HURTEAU (DEFENDANTS)... APPELLANTS;

AND

JOHN HOSKIN, ADMINISTRATOR OF THE
ESTATE OF THE HONOURABLE JAMES
GIBB ROSS (PLAINTIFF).....

AND

NAPOLEON ARTHUR HURTEAU AND

ALCEME HURTEAU (DEFENDANTS)..

RESPONDENTS.

ON APPEAL FROM THE COURT OF APPEAL FOR ONTARIO.

Sale of goods-Delivery-Lien of unpaid vendor-Stoppage in transitu-Goods not separated from larger bulk-Estoppel.

H. had a large quantity of lumber in the yards of E. & Co., and sold a portion thereof to L. through an agent on six months' credit. L. gave his promissory note for the purchase money. Defendants' agent gave L. a delivery order on E. & Co., which the latter accepted. L. then pledged the lumber to R., as security for a large advance, and gave the latter a delivery order on E. & Co. which the latter accepted. Before all the lumber had been delivered, L. made default in paying his note to H. and the latter at once forbade E. & Co. making further delivery to L. or R. E. & Co. then brought an action against R. and H. in which they prayed that the latter be required to interplead regarding their respective claims to the lumber and be restrained from bringing any action against E. & Co. respecting the same. An order was made in chambers directing that an issue be tried to determine whether R. or H. was entitled to the lumber in the

*XVIII. Can. S.C.R. 713.

**PRESENT:-Sir W. J. Ritchie C.J., and Strong, Fournier, Gwynne and Patterson JJ.

1890

**June 3, 4.

**Sept. 10.

1890

Ross

บ. HURTEAU.

yards of E. & Co. At the trial the issue was found in favour
of H., the court holding that until delivery was made there was
no completed sale to L. sufficient to pass the title as against the
vendor's lien. This judgment was affirmed by the Court of Ap-
peal. On appeal to the Supreme Court of Canada,

Held, Strong and Gwynne J.J., dissenting, that the judgment below
should be affirmed and the appeal dismissed with costs.
Held, per Patterson J., that the acceptance of E. & Co. had not the
effect of making them bailees for L. or R. by attornment in re-
spect of the property in question, and that the rights of H. were
the same as those of an unpaid vendor to stop goods in transitû.
Held, per Gwynne J., that H. was estopped by his conduct in the

transaction from asserting title to the lumber which E. & Co.
had, on the faith of the authority derived from H., undertaken
to hold for R.

APPEAL from a decision of the Court of Appeal for

Ontario affirming the judgment at the trial of the Honourable Mr. Justice Ferguson in favour of the defendants.

The facts of the case were shortly these. Hurteau & Frère, of Montreal, purchased from Edwards & Co., manufacturers of lumber at Rockland, Ontario, a quantity of lumber in their mill-yard which, after the purchase, was left in the possession of Edwards & Co., subject to the orders of Hurteau & Frère. The latter employed one Lemay, a lumber broker, in Montreal, to make sales of this lumber, and after some negotiations Lemay sold a portion of the lumber to one Little, and an agreement shewing the sale was executed by both Little and Lemay and, on the same day, ratified by a letter from Hurteau & Frère addressed to Edwards & Co. On the same day Lemay wrote to Edwards & Co. notifying them of the sale to Little and enclosing a delivery order which directed Edwards & Co. to deliver the lumber in question to Little. This order was accepted by Edwards & Co. by their indorsement written on the back thereof. Subsequently Little, as security for an advance from Ross & Co. of Quebec, procured Edwards & Co. to sign an indorsement on the back of the delivery order originally given by Lemay to him as follows: "Will hold within deals

subject to order on Messrs. Ross & Co.," and, on the strength of this acceptance, Ross & Co. made their advances.

1890

Ross

v.

Subsequently, Little having made default in paying HURTEAU. Hurteau & Frère for the lumber, Edwards & Co. were forbidden by Hurteau & Frère to carry out the delivery order in favour of Little.

Ferguson, J., before whom the issue was tried, gave judgment upon the conclusion of the argument as follows:

The question to be determined here is clear. Counsel have agreed the main question to be decided is as to whether or not the sale from Hurteau to Little was completed, whether that was a completed and effectual sale so as to pass the title to Little as against his vendor. Now I am very clearly of opinion it was not such a sale and that this question must be decided in favour of the defendants. As to the contention regarding the law, that the intention of the parties must govern, I do not find that the evidence shews intention or existence of intention so as to take this case out of the authorities setting forth the general rule and cited by the defendants. I cannot say that the exception from the general rule, in this respect contended for, has been made out; nor do I think estoppel contended for has been made out. The main case relied upon in support of the contention of the plaintiff was that of Whitehouse v. Frost (a).

On appeal to the Court of Appeal this judgment was affirmed, Hagarty, C.J.O., holding that:

So long as Edwards, in whose custody the lumber was mixed with a much larger quantity, had not acted on the order by separating and delivering the required quantity from the larger bulk, or even gone the length of (without actual delivery to the purchaser), separating it and placing it apart from the rest, I can see nothing to prevent Hurteau from asserting his lien as an unpaid vendor.

And Burton, J.A., said:

The lumber sold was so far ascertained that the parties had agreed that it should be taken from a specified larger stock, but the rule is well settled that until the parties are agreed on the specific lumber the contract can be no more than a contract to supply lumber answering the particular description. The parties did not intend to transfer the property in one portion more than in another and the law which only gives effect to their intention does not transfer the property in any particular portion.

(a) 12 East 613.

33-SUP. CT. CAS.

1890

Ross

v.

The particular property might on the application of Little have been set apart or identified as the lumber on which the contract was to operate and, for which purpose, perhaps, Edwards would HURTEAU. have represented the respondents, and, having thus been made specific and the presumption in such a case being that the property was intended to pass, it would pass unless there was something to shew that it was not intended.

Here the property never became specific, and, the credit having expired, the respondents might properly refuse to part with it until the full payment of the price.

But Little subsequently pledged the property to Ross and he, perhaps deceived by the acceptance of the previous order and assuming apparently that the property had became specific, took a further order from Little on Edwards and received from him what, for the purpose of this case, may be treated as a warehouse receipt.

The question is as to the effect of that instrument. It is said that this, coupled with the payment made by Ross, operates as a complete transfer of the property to Ross and defeats the respondents' lien.

But, if there was no property of Little's on which the warehouse receipt could operate, how does this advance the plaintiffs' contention? It may or may not operate as an estoppel upon Edwards; but how can that affect the original owners who have never given anything but a delivery order which has not been fully acted upon? Ross has, no doubt, been a sufferer, but the respondents have done nothing to bring about his loss.

Osler and Maclennan, JJ.A., concurred.

Pepler, Q.C., and Nesbitt, for the appellant. By the delivery order of Lemay, defendants' agent, to Little, ratified by the defendants and accepted by Edwards & Co., the bailees, the property in and quasi possession of the lumber in question absolutely ceased to be in the defendants.

The lumber was in the possession of Edwards & Co. as agents for the vendor and, upon the acceptance by them of the delivery order from the defendants' agent, their possession of the property became the possession of the purchaser. Blackburn's Contracts of Sale (2 ed.), p. 25; Benjamin on Sales (4 ed.), p. 161.

In like manner and for the same reason, by the delivery order of Little and the subsequent attornment of the bailees to the plaintiff, confirmed by their part delivery of the lum

ber, the property and possession passed from Little to the plaintiff.

1890

Ross

v.

The defendant having expressly ratified the document of HURTEAU. title delivered by them to Little and, afterwards, transferred by Little to the plaintiff, are estopped from setting up any claims to the lumber in question to the prejudice of the plaintiff. Pickard v. Sears (b); Carr v. London & N. W. · Ry. Co. (c).

Christopher Robinson, Q.C., and Percy Galt, for the respondents. The lumber in question was never separated from the larger quantity purchased by Hurteau & Frère from Edwards & Co. but all remained piled together in the yard and Edwards & Co. never acted upon the order or separated the portion that was sold from the larger quantity and the property in the lumber never passed from Hurteau to Little.

The defendants admit that, if the lumber sold to Little had been set apart from the balance of the lumber in the yard so that it might be identified and nothing remained to be done before delivery, the property would have passed under the terms of the agreement and their lien for the purchase money would have gone upon Edward & Co., under their instructions, accepting the delivery order in favour of Little; but the question that arises in this case is not one of lien, but of ownership. The cases which go to shew that, where the property in goods has passed, the vendor will lose his lien for the purchase money where the goods are in the hands of a third party and such third party agrees to hold for the purchaser have no application whatever to the case in hand, as Hurteau & Frère were never divested of the property in the goods. The evidence shews that, before delivery, the following acts in respect of the lumber would be necessary: 1. Separation; 2. Re-measurement; 3. Re-culling; 4. Removal for delivery on the barges.

The law is well settled that in the case of a contract for

(b) 6 A. & E. 469.

(c) L.R. 10 C.P. 307.