Justice v. Brock

Scott, Ci-iier Justice. - The plaintiffs in error as co-partners brought this action in the corirt below as plaintiffs to recover from the defendant in error as defendant upon an alleged balance on an account for advances made by them as factor upon a consignment of wool, interest on such advances, and commission on the sale. The case was tried to a jury and a verdict returned in favor of the defendant for the sum of $2,000 upon his counter-claim for damages for an alleged failure to sell the wool at the market price and as directed by the defendant. A motion for a new trial was overruled, judgment was rendered upon the verdict, and the plaintiffs bring error'. — 289 — 1. It is assigned as error that the verdict is unsupported by the evidence and that the trial court erred for that reason in denying a motion for a new trial. The plaintiffs were commission merchants residing and doing business as such in the City of Philadelphia in the State of Pennsylvania. On September 21, 1907, the defendant consigned to them as factor 45.852 pounds of his own wool and 10,345 pounds known as the J. O. Morgareidge wool, in all 56,197 pounds. Concurrent with the consignment and shipment he drew on plaintiffs as his factor, a sight draft for advancement on the wool so consigned for the sum of $7,535-77, which, by agreement bore interest at the rate of 6 per cent per annum until paid. The following letter was received by the defendant from plaintiffs through due course of mail: “Justice;, Batsman & Co. WOOL 122 South Front Street, Philadelphia. Sept. 25th, 1907. Mr. A. L. Brock, Buffalo, Wyoming: Dear Sir:- — -We will receive and sell your wool for the commission of one and one-quarter cents per pound. Interest on advances at the rate of six per cent per annum; no other charges after arrival of wool in store. Our Commission includes Fire Insurance, premium, Storage and Labor for any period not exceeding six months after arrival of wool, and also Guarantee of Sales. While we do not guarantee insurance Companies, we make ourselves responsible to keep your wool insured in first class Foreign and Domestic Companies. Yours truly, (Signed) Justice, Bateman & Co.” On the same day the following letter was written by plaintiffs and sent to defendant by due course of mail: “Philadelphia, September 25, 1907. Mr. A. L. Brock, Buffalo, Wyoming: Dear Sir: — We have received through Mr. Charles T. Lee invoice of your 155 bags of wool, which shall have our — 290 — best attention on arrival. We note that you wish the 30 bags of the J. O. Motgareidge clip accounted for separately. The wool market is quiet at present, but we look for a better demand shortly, when we think manufacturers will find it easier to get money to finance wool purchases. Very truly yours, (Signed) Justice, Bateman & Co. Charles S. Haight.” Thereafter plaintiffs as factor sent to defendant by due course of mail the following letter: “Philadelphia, October 4, 1907. Mr: A. L. Brock, Buffalo, Johnson Co., Wyoming: Dear Sir : — We today paid your draft for $7,535-77. Very truly yours, (Signed) Justice, Bateman & Co. Childs.” The plaintiffs as factor received the wool, stored, exhibited it- for sale and sent .weekly market quotations on that market to the defendant. The market quotations furnished on' January 28 and February 4, 1908, were the same. On February-8, following, the defendant wrote plaintiffs to close out his wool so he could get his returns by April 1st following, if it could be done without making too much sacrifice. On March 5, 1908, he again wrote plaintiffs as follows': “I wrote you sometime ago in regard to my wool. I wrote you to sell my wool as I will want the money April 1, and I really fail to see any reason why the future market will be any better than it is now. One of my neighbor sheep men recently made a good sale of 25 cents. I am willing to sell on present market quotations I received from you. * * *” The wool was classified by the plaintiffs and of the amount so consigned, 47,996 pounds, was classified, graded and sold as fine and fine medium, and the price for that grade of wool, according to the market quotations furnished from time to fime between the consignment on Sept. 21, the day of shipping, until April 1, 1908, following, was not less than 19 cents per pound. The balance of the — 291 — wool was also graded and sold according to its grade. In the Account rendered only 970 pounds out of the total of 56,197 pounds consigned, was sold prior to April 4, 1908, and the balance was sold from time to time after that date until November 18, 1908, when the wool was finally closed out. The total gross amount for which plaintiffs sold the wool was $9,113.18, receiving for defendant’s share the amount of $7,426.40. It is alleged that had plaintiffs sold defendant’s wool independent of the Morgareidge lot as directed by defendant it would have brought $9,535.00 net, and defendant testified that plaintiffs would have received $9,170.40 therefor, which sum would have been sufficient to have paid the draft, interest thereon, commission and all charges for shipping and handling the wool, leaving a balance of $2,000 due defendant. The plaintiffs alleged that after receiving and making the advances on the consignment they were unable to sell the wool at the market quotations or otherwise than at the times and prices received for it, and that their lien for advances could not have been realized had they sold at a greatly reduced price, which would have been necessary. Their evidence tends to support these allegations with the exception that the market was a little firmer in the early part of October, 1907, when the wool was received, up to the time of a financial panic which occurred soon after and during that month, and thence on through the year following the wool market was dull. The defendant gave no positive instructions to sell prior to his letter of February 8, 1908, supplemented by his letter of March 5, 1908, but up to that time had left price and time of sale to the judgment of the plaintiffs. It is the general rule that a factor is not obliged to sell at a price which would be less than his lien for advances, commission and just charges at the request of his principal unless the latter pays or tenders such advances and charges. (Heffner v. Gwynne-Treadwell Cotton Co., 160 Fed. 635, 87 C. C. A. 606.) The evidence, however, tends to show that had the factor here sold as instructed at the market — 292 — quotations furnished their principal there would have been $2,000 realized from the sale over and above what was necessary to have paid such factor all advances, interest, commissions and charges. The plaintiffs were bound to exercise ordinary care, skill and diligence to obtain the market value of the wool, but could not withhold the wool from the market against the directions of the defendant if such ordinary care, skill and diligence would have resulted in a sale at a price that would have secured them in their charges, and been satisfactory to the defendant. There was nothing but a simple consignment of the wool to be sold on commission, without any instruction, direction or advice whatsoever' communicated by the defendant to plaintiffs at the time. The defendant had the right to say when the wool should be sold and at what price so long as it did not impair the factor’s right to reimbursement out of the proceeds for all his advances and charges. (19 Cyc. 126, 127, 128; Heffner v. Gwynne-Treadwell Cotton Co., supra.) Under such circumstances the lien would be paid and the factor could not dictate to his principal when the wool should be sold, or impose on him the hazard of a falling market. When we say market, we mean such a market as was available to the plaintiffs. We can not go further than that within the issues in this case for there is no allegation in defendant’s answer or counter claim that plaintiff’s failure to sell the wool at the market quotations was the result of fraud. We think the issue of failure to exercise ordinary care, skill and diligence and that as a consequence the defendant suffered the damage complained of was the only one fairly máde by the pleadings. Drum-Flato Commission Co. v. Union Meat Co., 33 Tex. Civ. App. 587, 77 S. W. 634, was a case somewhat similar on the facts to the one here. There the principal shipped cattle to its factor who, it was claimed, wrongfully sold them on a low classification. ■ The court said that at the market to which the cattle were shipped it was the invariable custom “for the factors to whom they were consigned to exhibit them in the market for sale, and sell them — 293 — at the highest price that can be obtained. The great preponderance of the evidence shows that this method of sale was adopted by the defendant, the cattle exhibited to the buyers, due care and diligence taken and good faith exercised, by the defendant, to sell them at the highest market price obtainable, and after the exercise of such care and diligence they were sold at the best price that could 'be obtained.” In the case before us the evidence shows that the method of selling the wool was to exhibit it to proposed buyers, and that this was done. There is no evidence of want of diligence in this respect. There may have been wool of the same or higher quality sold at the market quotations but that fact of itself would not be sufficient to entitle the defendant to recover if the factor was diligent and in good faith endeavoring to sell defendant’s wool. In Commission Co. v. Union Meat Co., supra, the following instruction to the jury was upheld, viz.: “If defendant’s agent exercised ordinary care, skill, and diligence to obtain the fair market value of the cattle” defendant was entitled to a verdict, “although the jury may have believed from the evidence that the cattle were sold for less than their market value.” As is said by Judge Cooley: Whoever bargains to render services for another undertakes for good faith and integrity, but he does not agree that he will commit no error. For negligence, bad faith, or dishonesty he would be liable to his employer, but if he is guilty of neither of these, the master or employer must submit to such incidental losses as may come in the course of the' employment, because there are incidents to all avocations, and no one by any implication of the law ever undertakes to protect another against them.” It was further said in that case that “Because the verdict on the question of negligence finds no support in the evidence the judgment is reversed and the cause remanded.” The plaintiffs here were bound under their contract to exercise ordinary care, skill and diligence to obtain the fair market value of the wool. We look in vain to find any evidence in this record showing, or tending to show, negligence — 294 — in that respect on the part of the plaintiffs. They were not insurers of sale or price. The record is silent as to whether they could have sold the wool prior to the panic in October, 1907, and, at the market quotations. Assuming that they could have done so, yet they were not instructed to sell at that time, and being agents for selling the wool without such instructions from their principal the latter will be presumed to have approved the action of the former in not selling at that time. In such case he took the risk of any lqss by reason of the market becoming demoralized, and could not be heard to complain of the failure to sell at that time and the resulting loss after it had occurred. At the most upon the evidence the failure to sell at that time would only be a mistake in judgment made in good faith which would not render plaintiffs liable provided always they were diligent and faithful in trying to effect a sale. (Lesesne v. Cook, 16 La. 58; Savage v. Birkhead, 20 Pick. (Mass.) 167; 19 Cyc. 119.) It is true that the market quotations purported to show the price of wool on the Philadelphia market from time to time, but the plaintiffs’ evidence is undisputed to the effect that such quotations after the said panic in October, 1907, until after the Presidential election in November, 1908, were merely nominal ánd the prices at which sellers were offering their wool, but that there were few buyers and scarce sales at such prices, and further that the manufacturers or customers owing to difficulty in getting money to finance purchases were buying such small quantities of wool as would enable them to fill their contracts and, owing to the unsettled financial condition, were not stocking up for future orders. On November 18, 1908, plaintiffs wrote defendant that there had been a better demand for wool and that they had closed out his wool at the prices appearing in the account rendered, á part of the fine and fine medium grade at 16 cents, and a part at i6)4 cents per pound, and the other grades at the prices therein stated. The market quotations theretofore furnished had written across their face, “Market quiet. Medium wool slow of — 295 — sale,” and similar notations. Defendant’s letter of February 8, 1908, hereinbefore referred to, indicates that he understood the difficulty of selling wool at the market quotations. He says in that letter: '“I would like to have you close my wool out so I can get my returns by April first if you can do so zmthout too much of a sacrifice, as I will be needing some money at that time. While I have always left the time for selling with you heretofore I would rather sell now on the market as it is than to borrow money to meet my demands on April first.” The letter of March 5th, following, from defendant to the plaintiff and heretofore quoted, may be deemed to have changed the condition contained in the former with reference to selling the wo’ol, and the two letters considered together constituted the first positive direction to sell. The plaintiffs treated these letters as a direction to sell the wool on the market quotations as of those dates. Their efforts and diligence in that respect were unavailing. In order to sell at all concessions from the quoted price had to be made and the direction to sell was at the quoted price. Plaintiffs’ undisputed evidence tends to show that they were endeavoring all the time to sell by exposing the wool to their customers, and were for the reasons stated only able to sell small quantities from time to time. Upon the pleadings their good faith is not questioned, and the question of the amount of sacrifice to be made in selling the wool as contained in defendant’s letter of February 8, 1908, until the receipt of the letter of March 5, 1908, lodged in the plaintiff a discretionary power as to when and for what price to sell. Treating the two letters as a positive instruction to sell, plaintiffs were not authorized to sell below the market quotations, nor as already said, were they required to sell at a price insufficient to reimburse and recompense them for their advances and just charges, in the absence of any tender or a satisfactory offer to pay the same by defendant. The undisputed evidence, notwithstanding the market quotations furnished, shows that they used due diligence and were unable to find a purchaser who would pay the market quo — 296 — tations for the wool or sufficient to reimburse them for their advances and charges. 2. The defendant was permitted, over objection and which is here assigned as error, to introduce evidence as to the price of wool at markets other than that to which he shipped his wool. It was within the purview of the contract that the wool should be sold upon the Philadelphia market. It was shipped to that market and it was the failure to sell upon that market of which defendant complained. He alleges in his amended answer “that the market price obtainable for said wool upon the said market at Philadelphia during the spring and summer of 1908 averaged about 20 cents per pound. That the said plaintiffs wholly neglected and failed and refused to sell the said wool at said market price above mentioned, but disposed of said wool, a part thereof, at 10 cents per pound, and other portions thereof at 16 cents per pound. Defendant alleges that if the said plaintiffs had complied with the terms of said contract and sold said wool at the best market price, or at the average price obtainable on said market in Philadelphia, that this defendant would have received $9,535.00 net.” The issue was thus squarely tendered, (1) that the wool could have been sold by the plaintiffs at the quoted or average market price at Philadelphia by the exercise of ordinary care, skill and diligence, and (2) that their failure to use such ordinary care, skill and diligence to so sell the wool upon that market resulted in damage to the defendant. If upon those issues and the evidence the plaintiffs did exercise ordinary care, skill and diligence to obtain the quoted or average market price for wool at that market, then under the rule announced in Commission Co. v. Union Meat Co., supra, they would be entitled to a verdict even though the jury may have believed from the evidence that the wool was sold for less than the quoted or average market price. The consignment was general and to a specified market and the plaintiffs were not bound to look for any other market than the one to which the wool was consigned (Kingston v. Wilson, 14 Fed. Cas. — 297 — No. 7,823, 4 Wash. C. C. 310.) The defendant selected the market upon which the wool was to be sold (Davis v. Kobe, 36 Minn. 214, 30 N. W. 662, 1 Am. St. Rep. 663) and he assumed the risk of plaintiffs being unable by the exercise of ordinary care, skill and diligence to sell it upon that market. It was held in Phillips v. Scott, 43 Mo. 86, 97 Am. Dec. 369, that under a general consignment such as here the factor had no authority to ship the goods to another market, and it was held in Phy v. Clark, 35 Ill. 377, that if he does so he is liable for loss incurred from selling at a less price than he could have obtained in the market where he had authority to sell. Applying these rules to the case here it follows that plaintiffs were not bound within the terms of the contract to sell the wool other than on the Philadelphia market. In that view evidence of the price of wool in other markets was not material or germane to the issue and the court erred in admitting it over objection, for the plaintiffs were under no obligation to sell on those markets. That evidence under some circumstances might perhaps be admissible as tending to show the market price at the place where the wool was to be sold, and the want of care or diligence of the factor in selling the wool at the best available price, but no such circumstances are disclosed in this case as would take it out of the general rule. 3. The court, over plaintiff’s objection, instructed the jury without qualifications that the plaintiffs “were under obligations to carry out any and all positive instructions of 'his (the defendant) with reference to the property consigned to them. If you find that any latitude was given to the said agents in regard to their handling of the property entrusted to them, then, I charge you, you should consider whether they acted in good faith and according to their best judgment in carrying out such instructions so as best to preserve the rights and interests of their principal.” This instruction was erroneous for two reasons; first, it disregarded plaintiff’s lien for advances made on the consignment and their right to be reimbursed out of the proceeds — 298 — of the sale; and, second, the absence of any evidence in the record upon which the good faith of plaintiffs could be challenged. Both of these questions have hereinbefore been discussed on the sufficiency of the evidence and need not be further referred to. 4. It is urged that the cotfrt erred in permitting the defendant over objection to open and close the argument to the jury. The defense was a counter claim by way of confession and avoidance and the court correctly instructed the jury that there was no dispute in the evidence as to the plaintiff’s right to recover unless the defendant had established his counter claim by a preponderance of the evidence, and that the burden in this case rested upon the defendant. That being the situation, the defendant had the right to open and close the argument to the jury. Other alleged errors have been presented, but as the judgment must be reversed for the errors hereinbefore discussed we assume that they are not likely to occur upon a new trial. The judgment will be reversed and the cause remanded for a new trial. Reversed. Potter, J., and Beard, J., concur.