On appeal from the Superior Court, Law Division, Atlantic County.
For affirmance -- Chief Justice Vanderbilt, and Justices Case, Heher, Oliphant, Wachenfeld, Burling and Ackerson. For reversal -- None. The opinion of the court was delivered by Vanderbilt, C.J.
From a directed verdict in favor of the defendant in the Law Division of the Superior Court for Atlantic County the plaintiff appealed to the Appellate Division and we certified the case here on our own motion.
On June 6, 1947, defendant consigned a diamond ring valued at $3,500 to Brand, Inc., a dealer in jewelry with a place of business located on the Boardwalk in Atlantic City where it sold jewelry and other merchandise to the public both at auction and private sale. The agreement of consignment provided as follows:
"The goods described and valued as below are delivered to you for examination and inspection only and remain the property of Lee Wolf and are to be returned on demand. Such merchandise, until returned and actually received, are at your risk from all hazards. No right or power is given to you to sell, pledge, hypothecate or otherwise dispose of this merchandise regardless of prior transactions. A sale of this merchandise can only be effected and title will pass only if, as and when Lee Wolf shall agree to such sale and a bill of sale rendered therefor."
On October 29, 1947, Brand, Inc., borrowed $4,000 from the plaintiff and delivered to him the ring in question together with two other pieces of jewelry as collateral security for the payment of the loan. The circumstances of the loan and the prior dealings of the parties are described by the plaintiff as follows:
"Mr. Harold Brand called me on the telephone and advised me that he was in need of some money and he would like to borrow from me four or five thousand dollars. I told Mr. Brand that I didn't feel inclined to loan him any money because I had certain other
business transactions with him on which he was not keeping his word. One of those transactions was a check of a thousand dollars that I had just received from him a few days previous and his check had been returned from the bank 'Insufficient Funds.' Mr. Brand said that he would send to me a considerable amount of jewelry if I were to loan him four or five thousand dollars, and I hold this jewelry as collateral until the loan was repaid. In addition to that he said that the check of a thousand dollars that had just been returned and had been marked 'Insufficient Funds' was a mistake and that he would send with his representative who was bringing the collateral if I would make the loan, one thousand dollars in cash, plus a few dollars protest fees, so that the obligation would have been satisfied."
Thereafter the plaintiff delivered one of the three hypothecated pieces of jewelry to a third party, Marinus, in return for a $3,000 note of Marinus; whether the transaction was one of sale and purchase or a mere loan and hypothecation is not made clear in the testimony. The plaintiff testified that he subsequently purchased the ring from Brand, Inc., in consideration of the cancellation of the $4,000 loan, but no bill of sale was ever given him for the ring nor was the transaction otherwise evidenced in writing.
Thereafter the plaintiff redelivered the ring to Brand, Inc., under a consignment agreement dated November 26, 1947, and signed by Brand, Inc., the pertinent provision of which reads as follows:
"The property described herein is received by the undersigned at the risk of the undersigned for inspection only with the understanding that title is to remain in 'John Nelson' and that the undersigned will return the said property on demand. Before any sale can take place and title pass, any selection made by the undersigned must be approved by said 'John Nelson' and a bill of sale rendered therefor. It being the understanding herein that in the event said property is damaged, lost, stolen or destroyed before such sale, that the undersigned will be responsible therefor, whether caused by the undersigned or by another over whom the undersigned has no control, and whether the undersigned or such other is negligent or not; and in the event that undersigned fails to return said property upon demand, the undersigned will pay the said stated value appearing herein, which is the agreed value, to the said 'John Nelson.'"
This document was a printed form of Brand, Inc., on which the name of the plaintiff was interlined ...