Fletcher v. Fischer

BENSON, J. The first assignment of error to which our attention is directed is to the denial of defendants’ motion for a nonsuit. This motion is directed to the sufficiency of the evidence to sustain the allegations of the complaint, and also to defendants’ contention that the evidence conclusively establishes a breach of the contract upon the part of the plaintiff, himself, which must preclude him from recovering for any alleged breach by the defendants. "We shall consider the problems thus presented in inverse order.. The violations of the contract which are charged against the plaintiff are, that he collected moneys from purchasers of cereals, contrary to the terms of the written agreement, and failed to turn such moneys over to his principal. It is conceded that from the stock of goods kept in Portland, according to the terms of the contract,' plaintiff filled orders to customers, billing the goods in his own name, and collecting the money therefor, and that at the time when defendants refused to fill any further orders for plaintiff, the latter then had in his possession the sum of $5,500 so collected, which he notified defendants he was holding as a partial reimbursement for the injuries which he had sustained by reason of their breach of the agreement. There is also evidence to the effect that practically from the beginning of the transactions involved herein, it was the custom of plaintiff to sell from the Portland stock in his own name, reporting and remitting to his principal therefor, by the twentieth day of the succeeding month, and — 276 — that this course of business was acquiesced in hy the defendants. It is also in evidence that defendants at times, shipped goods to plaintiff’s customers direct from the mill at Silverton and lulled the same to plaintiff personally. To determine whether or not such evidence precludes the trial court from making a finding of fact “that the plaintiff faithfully performed his contract and was not in default,” we must construe the contract under which the parties were acting. The plaintiff contends that the language of the instrument makes him a factor, who after making sales of his principal’s goods, has the right to make collections, and that when he has done so, the money so received is his own, and that his relation to his principal, in this regard, is that of a debtor, whose delay in paying the debt is in no sense a breach of the contract. The defendants, upon the other hand, insist that the instrument creates no more than a simple sales agency, and that under the contract he is not authorized to make collections in any case, and that such action is a distinct breach of the compact. It will be noted that the contract contemplates two classes of transactions: the sale and shipment of goods from a warehouse in Portland, under the control of the plaintiff, and a like shipment from the mills at Silverton. It is also stipulated that the agent shall guarantee payment of all debts arising through his agency. The instrument is silent as to who shall make collection, except for whatever implication may be found in paragraphs XI and XII thereof, which read thus: “XI. That the party of the second part is to guarantee the payment of all accounts, and any bills which are uncollectible are to be charged to the commission account of the party of the second part. Copies of all statements of accounts mailed each month are to he forwarded to the party of the second part. — 277 — “XU. A full account of all commissions earned is to be sent to the party of the second part each month by the party of the first part with a check to cover the same.” . In 2 Mechem on Agency (2 ed.), Section 2497, we find this clear distinction between a factor and a broker: “A factor is one whose business it is to receive and sell goods for a commission. He differs from a broker in that he is intrusted with the possession of the goods to be sold, and usually sells in his own name. He is invested by law with a special property in the goods to be sold and a general lien upon them, and their proceeds, for his advances; and, unless there be an agreement or usage to the contrary, he may sell upon a reasonable credit. “One may be both a factor and a broker, and he may serve his employers in both of these capacities. When he acts as a broker his liabilities will be governed by the law applicable thereto; and the same is true when he acts as a factor. His rights and liabilities are not governed by the fact that he acts oftener in one capacity than the other, but rather in the capacity in which he acts in the particular transaction.” 1-4. We therefore conclude that as to the stock of goods kept in Portland, from which sales were made, the plaintiff was a factor, and as to the shipments made from Silverton, he was a broker, and as to both classes of transactions, he was an agent selling upon a del credere commission, since he was required to guarantee the payment of all accounts. The weight of authority appears to be that a broker selling goods upon a del credere commission stands in the relation, to his principal, of an original debtor: Lewis Bros. & Co. v. Brehme, 33 Md. 412 (3 Am. Rep. 190). There is evidence in the record to the effect that the $5,500 — 278 — was all received from sales billed out by the plaintiff from Portland, in his own name. As to whether or not the plaintiff had a right to do this, under his contract, is a doubtful question. The language of the instrument is vague and uncertain. It might reasonably be deduced that the provision to the effect that “a full account of all commissions earned is to be sent to the party of the second part each month by the party of the first part, with a check to cover the same,” referred only to shipments made directly from Silverton to the customers, and the court properly admitted evidence of the practical construction of the contract by the parties, as indicated by their conduct. The court made a finding to the effect that prior, to the date, when the money in the hands of the plaintiff, in accordance with the practice of the parties, should have been remitted, the defendants had violated the terms of the agreement by refusing to fill plaintiff’s orders for cereals, and that the defendants had not discontinued the business of manufacturing cereals for sale in the territory covered by the agreement, and had not withdrawn from the cereal business in that territory, and there is evidence to support such findings. The contract is silent as to when remittances shall be made, and therefore the plaintiff could not be put in default by a failure to remit until after a reasonable time had elapsed and a demand made: 2 Meehem on Agency (2 ed.), § 2544. 5. It is further urged that plaintiff has admitted his own prior default in his reply to, the answer, and that such reply constitutes a departure from the cause of action set forth in the complaint. This contention is based upon the allegations of defendants’ affirmative answer, to the effect that, in violation of the terms of the agreement, plaintiff had sold cereals to various — 279 — customers, billing the same in bis own name as the seller, and failing, in many instances, to notify defendants of the names of the purchasers, and collecting the moneys therefor, and neglecting to transmit the same to defendants. In reply thereto, the plaintiff makes the following allegation: “That upon numerous and divers times and occasions, all well known to the defendants, through the said defendants’ agents August William Fischer and Louis Henry Fischer, the plaintiff ordered from the said defendants, through their Fischer’s Flouring Mills and Corvallis Flouring Mills, in his, the plaintiff’s, own name, various quantities of cereals mentioned in the second amended complaint in exhibits ‘A’ and ‘B’ thereto attached, and the said defendants filled the plaintiff’s said orders for cereals well and fully knowing and understanding that the plaintiff was ordering the same in his own name, and accepted the plaintiff’s money therefor, when the plaintiff transmitted same to the defendants at the regular times and when the plaintiff remitted to defendants for various other quantities of cereals, and in the same manner and under the same circumstances as the plaintiff remitted to defendants for other quantities of cereals sent to customers upon requisitions made in the name of the customers; that the above methods of dealing in said cereals were well and fully known to the said defendants, and were acquiesced in by the defendants, and that said defendants never at any time prior to the filing of their answer herein objected to the same; and, therefore, the plaintiff alleges that the said defendants are at this time estopped to object thereto and use the same as a justification for their breach of the contracts mentioned in the second amended complaint, copies' of which are thereto attached and marked exhibits ‘A’ and ‘B’.” We are unable to discover wherein this averment admits any violation of the terms of the compact. It recites acts which, if true, disclose a course of conduct — 280 — indicating a practical interpretation of the contract, and contends that it is now too late for defendants to repudiate such interpretation. 6, 7. Finally it is nrged that there' is no legal evidence in the record upon which the court conld base an estimate of the amount of plaintiff’s recovery. There is evidence to the effect that plaintiff, prior to, and at the time when he began operations under the contract in question, was a jobber in certain specified lines of groceries; that he maintained an office in Portland, had office help, employed traveling salesmen, etc.,- that the increase in business required enlarged quarters, more help and increased expenses. This is followed by exact figures as to his gross commissions from the sale of cereals during the years while the contract was in force, the net commissions for each year after deducting discounts, expenses and losses. The expenses of this business, as carried on in connection with the other business of plaintiff, was computed by comparison of the volume of business in each line, and the expense naturally connected with each. There was a comparison- of the business of the first year with that of the second, and an estimate of the comparative increase of sales, owing to advertising, improved quality of the goods and an increased acquaintance therewith by a steadily increasing list of customers, and an estimate of the probable increase in the volume of business during the remaining years of the contract. This kind of evidence, we think, is clearly competent, and sufficient foundation for a verdict or judgment, under the authority of the rulings of this court in a number of cases, including Bredemeier v. Pacifie Supply Co., 64 Or. 576 (131 Pac. 312), and McGinnis v. — 281 — Studebaker, 75 Or. 519 (146 Pac. 825, 147 Pac. 525, Ann. Cas. 1917B, 1190, L. R. A. 1916B, 868). The judgment is affirmed. AFFIRMED. EEHEARING DENIED. McBride, C. J., and BurNett and Harris, JJ., concur.