Wynne v. Schnabaum

Battle, J. This action was brought in the Randolph Circuit Court by Wynne, Love & Company against A. Z. Schnabaum. Plaintiffs allege in their complaint that they are cotton factors and commission merchants, located in the city of Memphis, in the State of Tennessee; that the defendant was a merchant, doing business at Pocahontas, in this State, and was engaged in buying-selling and shipping cotton; that on the 18th of June, 1900, they entered into a contract with him, by which they were to advance and lend to him $2,000, and he was to ship to them 200 bales of cotton, or one bale for each $10 loaned, in default of which shipment he was to pay plaintiffs one dollar and twenty-five cents per bale for each bale he failed to ship according to the terms of the contract; that they loaned him $1,889.50, and he shipped to them only forty-two bales of cotton, and refused to ship the remainder or pay the dollar and twenty five cents as he agreed to do. They asked for judgment against him for $183.75, with interest, on account of such failure to ship. The defendant answered, and admitted the allegations in the complaint, but denied that he wrongfully failed to ship them more than forty-two bales of cotton, and for defense says that plaintiffs sold the cotton shipped to them for less than its market price, and less than they could have sold it for, and that thereby he suffered and sustained a loss of $10 on each bale of cotton shipped, and that for this reason plaintiffs forfeited their right to insist upon a performance of said contract. The issues in the case were tried by a jury. The evidence shows that the shipments of the cotton extended from October 25, 1900, to April 8, 1901,'and the sale thereof extended from November i,- 1900, to July 3, 1901. J. E. Love, of Wynne, Love & Company, testified that thirty-four bales of it were sold for more than their market price, and two bales of it were sold for less than the market price of such cotton, on account of the extreme low grade thereof and the poor demand for that class of cotton. At another time he testified that “the cotton could not have been sold for any more than plaintiffs got for it; for the market during the entire season of 1900 and 1901 was a dull dragging market, and quotations hard to realize; but quotations in Memphis market were not the market value in every instance during the season of 1900 and 1901, owing to the poor demand for cotton, and concessions had to be made to effect a sale. Some of the cotton was so low in grade, and handled so badly, that there was absolutely no demand for it. Therefore we were unable to realize any premium over quotations, and had to make concessions in order to effect a sale.” He made a statement of the grades of the cotton which shows only nine bales grade middling. Another statement, which was admitted to be correct except wherein it was 'in conflict with the testimony of Love, was admitted as evidence. It .shows that eight bales were sold at market price of middling, six for more, and twenty-eight for less. The testimony of the purchasers of the cotton, except one who did not testify, corroborates the testimony of Love. Defendant testified, in part, as follows: “During that season I handled about 1200 bales of cotton. I sold some at Pocahontas, some at Newport, and some at Memphis, and during that year other parties than the plaintiffs sold cotton for me in Memphis. My reason for not shipping more cotton to plaintiffs that year was that I was realizing more for my cotton by selling at home than they were getting for me for the same. * * * During the time the plaintiffs were handling this cotton, I made sales to other parties, and in all cases realized more for cotton than they did for me. I sold most of my cotton that year at Pocahontas, and got from % of a cent to a cent per pound more for it than plaintiffs sold for. During the time that plaintiffs were selling cotton for me at Memphis I sold cotton to other parties in'Memphis, and realized more for it than the plaintiffs allowed me for what they sold. I had shipped about 600 bales of cotton to another party, and _ sold it myself to a buyer who came here to Pocahontas.” The plaintiffs asked, and- the court refused, to instruct the jury as follows: “2. The fact, if proved, that defendant sold cotton in Pocahontas for more than he realized for the cotton shipped to and sold by plaintiffs would be no defense in this suit, nor would it be a defense that defendant sold cotton in Memphis for which he realized more than for the cotton sold by the plaintiffs. “3. Defendant by way of defense claims that the plaintiffs sold his cotton for less than the market price. Before you could find for him on this issue, he must show, by a preponderance of the evidence, either that plaintiffs failed to use care and skill in the sale of the cotton, or that they, corruptly sold it for less than its value, and the fact, if proved, that defendant sold cotton in Pocahontas, so that he realized more for it than for cotton shipped to and sold by plaintiffs, or that he sold cotton in Memphis otherwise than in the customary manner, for more than he realized for cotton sold by plaintiffs would be no defense in this action. “5. Defendant claims by way of defense in this suit that plaintiffs sold cotton shipped them for less than he realized for it here in Pocahontas, and for less than he sold cotton in Memphis. You are instructed that this of itself would be no defense to this suit.” The jury returned a verdict in favor of the defendant, and plaintiffs appealed. Wynne, Love & Company were commission merchants, located in the City of Memphis, in the State of Tennessee. Appellee consigned to them for sale forty-two bales of cotton, without instructions. They thereby became bound, and bound only, to exercise a fair and reasonable discretion, under the circumstances. By consigning cotton without instructions, the presumption is that he relied upon the sound discretion of appellants. If they exercised it fairly and in good faith, and sold the cotton within a reasonable time after they received it, they discharged their duty. But appellee complains only of the price for which they sold the cotton. The measure of their duty in that respect was to sell for the fair value or market price. They were not bound to consult the market of Pocahontas. The cotton was shipped to Memphis, to be sold there according to the market of that city. Gregory v. McDowel, 8 Wend. 435; Wemple v. Stewart, 22 Barb. 154; Durst v. Burton, 47 N. Y. 167; McCarty v. Quimby, 12 Kan. 494. Neither were they governed by one or two sales of cotton in Memphis, probably unknown to them. Proof of a single sale or two sales in a city like Memphis is not sufficient evidence to establish the market value of the cotton sold. Such evidence could not show that they failed to discharge their duty to appellee. See Mechem on Agency, § § 1016, 1018, 1019; 2 Clark & Skyles on Agency, § § 856-858, and cases cited. Appellee testified that "during the time that appellants were selling cotton for him in Memphis he sold cotton to other parties in that city and realized more for it than appellants received for what they sold.” The time during which appellants were selling cotton for him extended from November 1, 1900, to July 3, 1901, a period of eight months. He fails to show that the sales made by him in Memphis approximate any of the days on which appellants sold. This evidence does not tend to show that they failed to exercise a reasonable degree of discretion and judgment in reference to the time of selling, or that they failed, to get the fair value or market price for the cotton sold; and this was the full measure of their duty in that respect. The prices of cotton are too unsteady, and fluctuate too much, for this evidence to have such effect. On account of the evidence adduced the instructions asked by the appellants and refused by the court should have been given. Reverse and remand for a new trial.