Corlies v. Cumming

[184] Curia, per Woodworth, J. The defendant deposited a quantity of cheese with the plaintiffs, as factors, upon which they made an advance of $900. Whether the plaintiffs can sustain an action to recover back the advance, before any attempt is made to reimburse themselves by a sale, it is not material to decide. If it be admitted they can, the question arises, have they made themselves liable for the cheese sold ? If they have, it becomes a subject of set off, which more than satisfies their claim. As to the law on this point, I entirely concur in the principle laid down by Mr. Justice Story, in Burrill v. Phillips, (1 Gall. 360;) that the mere relation of principal and factor does not confine the rights of the latter to recover for advances, to the mere fund deposited; but that such advances are made on the joint credit of the fund and the person ; to which I would add this qualification, that from the nature of the contract, resort must first be had to the fund, if it can be made available, before the principal is liable. There does not appear to be any sufficient ground, from the evidence, for charging the plaintiffs with negligence, or the want of reasonable care and prudence in making the sale to Kellogg. The cause was fairly submitted to the jury ; who, by their verdict, have, in this respect, approved the plaintiff’s conduct. [185] The judge, in his charge, submitted to the jury a ques-lion of fact, upon which he expressed an opinion, that if the plaintiffs did, in the first instance, include the amount of the defendant’s cheese, with that of another person, in the same note, they ought to find for the defendant. They found for the defendant; and stated the ground of their verdict tobe, that the plaintiff’s took from Kellogg, one note, for the amount of the defendant’s and Brown's cheese. On this statement two questions arise ; 1. Whether the verdict is against the weight of evidence ; 2. If it is not, whether the law was correctly laid down by the judge. Before I consider these questions, I will dispose of that part of the case, in which it appears that, a considerable time after the sale to Kellogg, the plaintiff, for reasons not stated, changed the notes originally taken, and accepted in their stead, notes drawn by Dickson and endorsed by Kellogg ; and one note drawn by the latter. These notes were all payable a few days before the expiration of the 90 days, the credit originally given to the purchaser. It is probable the exchange was made to improve the security. It might have been beneficial, but could not be prejudicial. Whether drawrer or endorser, Kellogg wras still holden. The time of payment was not extended ; and the securities were equally available to the defendant, with that taken in the first instance. The plaintiffs did not, by this act, therefore, make themselves liable for the loss. As to the question of fact, Meade testified, in answer to the sixth interrogatory, that the plaintiff sold to Kellogg a quantity of cheese belonging to one Brown, the amount of which was included in the same note with the defendant's ; and that the plaintiffs guaranteed to Brown his share of the note. This witness was a clerk of the plaintiffs, at the time of sale ; and so continued until 1823. He did not know7 what became of the note ; nor did he recollect the date or amount; but he believed it had 90 daj7s to run. As to this witness, it may be observed, that from his situation, correct information as to the manner of tak [186] ing the note was to be expected. Kellogg, the purchaser, swears that he gave his note to the plaintiffs for a quantity of cheese, the amount a few cents short of $800; that about the same time, and a little before, he purchased another parcel to upwards of $800 ; and gave his note to the plaintiffs. That after the notes became due, and in the summer following, he made an exchange, by giving Dickson’s note and his own note for a part, payable to a clerk of the plaintiffs, on demand. This evidence is certainly contradictory to Meade’s. The jury have passed on their relative credibility. There is ground to question the accuracy of Kellogg’s recollection. I think it evident he was mistaken in supposing he gave a note, on the exchange, to the plaintiffs’ clerk, or that it was payable on demand. The notes exhibited to Meade, on his examination, were Dickson’s notes to Kellogg, and Kellogg’s note to the plaintiffs, each at 90 days. They correspond in amount with the sales, and are presumed to be the notes referred to. It is therefore apparent, that perfect reliance cannot be placed on Kellogg’s recollection. The jury reposed more confidence in Meade’s testimony. It was within their province. I cannot say that the verdict was not warranted by the evidence. As to the next question, I am inclined to think the plaintiffs are not liable by reason of including the two demands in one note. A factor is not obliged to disclose to his purchaser the name of his principal, or that he sells as factor. He may, or may not take an instrument in writing as evidence of the debt. He may maintain an action in his own name for the price of the goods, and give a valid discharge. (Cowp. 255.) It is equally certain that the principal may come forward at any time before payment to the factor, and arrest his right. An action may be supported against the vendee in his, (the principal’s) name, (id.) The factor has authority to sell on credit, for the period usual in the market, unless prohibited by his instructions; (6 John. 69;) and will not be responsible, if he appear to have acted with reasonable care and pru187 clence ; and has not been guilty of breach of orders, negligence, or fraud. Now, then, can the fact, that a note was taken for two demands, be material, unless the principal has been injured by this ? If the factor had omitted to take any note, he would not, for that omission, be responsible. The sale in that case would have been charged in his books ; the principal might sustain an action on if in his own name, or gire information to the purchaser, and forbid payment to the factor. All these rights remained after the note was given. It is well settled, that giving a promissory note for goods sold, is not a payment or extinguishment of the demand, unless such was the agreement of the parties. (5 John. Rep. 68.) The defendant, then, had, notwithstanding the note, a remedy against Kellogg by action. Why should the taking of a note which the factor might justifiably have omitted, be considered an act absolutely charging the factor ? All the remedy the principal had a right to claim, still remained. If it had appeared that the principal had demanded the note taken for his goods, and the factor had refused to assign it, or to allow the principal the benefit of it, that would present a different question. Then, indeed, the imprudence of having taken but one note for several demands, would be manifest, inasmuch as the factor thus put it out of his power to assign to each of his principals. By pursuing such a course, he incurred the risque of not being able to perform what his principals had a right to demand. Although not required to take a note in the first instance, yet having taken it, the principal would be entitled to the security, so as to enable him to pursue the course deemed advisable. But that case never occurred. Kellogg became insolvent. He was unable to pay any thing. Whether prosecuted on the note, or for goods sold, the result would be the same. The defendant never requested an assignment. The note was of no value. From the evidence, it is clear that the defendant has not sustained, nor was it possible that he could sustain, any injury by this act of the factor. He has never demanded the note or intimated a desire to obtain an assign [188] ment. He has not put the factor in default by a refusal. His claim rests singly on this ; that the amount of the defend-* ant’s sales was included in one note with Brown’s demand. 1 apprehend the principle contended for by the counsel for the defendant, cannot be supported, either on the ground of expediency, policy or justice. I am not aware that in a case like the present, it has ever been recognized. In the ease of Goodenow v. Tyler, (7 Mass. Rep. 36,) the factor took a note payable to himself. By the laws of Massachusetts, where a negotiable note is taken to secure the payment of money due by simple contract, it is merged in the note. Yet it was held that the factor was not answerable to his principal for the value of the goods ; that although the remedy against the purchaser was changed, yet the relation between principal and factor, was not affected. My opinion is, that, independent of usage, the plaintiffs did not, by taking the note, make themselves liable. A new trial must be granted, with costs to abide the event. New trial granted.