King v. Farmers Grain Co.

Stevens, C. J. The plaintiff alleged in his petition that, on or about June 15, 1920, he entered into an oral contract with the defendant for the sale of 6,500 bushels of corn, and that, some time later, the defendant’s agent paid him $100 on the contract. The defendant, after admitting that it is a corporation, denied the allegations of plaintiff is petition, and averred that the contract sued upon is within the statute of frauds and void, and set up other and further defenses, which, in view of the conclusion reached upon the.other questions, it is unnecessary to state. At the time the alleged oral contract was entered into, plaintiff owned 2,400 bushels of corn, John Shoemaker, his landlord, a like amount, and Chester King, his brother, about 2,000 bushels of corn. Plaintiff claims, and the evidence shows, that he was authorized by Shoemaker and by his brother to sell their corn to appellant for them. The sale was made in the name of appellee, without disclosing the fact that he was acting as agent for Shoemaker and his brother, and that a portion of — 981 — the corn belonged to them. Appellee does not claim to have purchased the corn of either principal, nor that he contemplated doing so. The sale, although made in his name, was for the separate benefit of himself, Shoemaker, and his brother. No part of the purchase price was paid at the time the contract was entered into, but about a month later, appellant paid appellee $100 by check on the Dawson Savings Bank. Some claim is made by counsel for appellant that no valid contract of sale was entered into, and that the evidence fails to show that the payment of $100 was intended to apply, on the contract. These questions were properly submitted to the jury, which found in favor of plaintiff. The court instructed the jury that, if plaintiff was entitled to recover at all, the measure of his recovery was the difference between the contract price of $1.75 per bushel for 6,500 bushels of corn and the market price at which he could have sold same-with reasonable effort, after he was notified by defendant that it would not accept the delivery of the corn. Proper timely exception was taken to this instruction. Plaintiff, in the transaction in question, acted in a dual capacity: that is, for himself, and as agent for Shoemaker and his brother separately. The corn of plaintiff and Shoemaker was on the farm occupied by the former, while that owned .by Chester was on another farm, about one-half mile distant. The corn was owned,- in the quantity stated, separately by the plaintiff and his principals. They had no joint interest therein. Plaintiff did not intend to engage in speculation, at the time he sold the corn, nor does he claim to have had 6,500 bushels of his own for sale. Both Shoemaker and Chester King were examined as witnesses on behalf of plaintiff, and testified that they authorized plaintiff to sell their corn, and that they were ready and willing to deliver' the same to appellant, in fulfillment of the contract entered into by plaintiff on their behalf. It is obvious, therefore, that plaintiff did not, by any transaction with either Shoemaker or King, become the owner of the corn in their possession, nor did he engage to deliver the same for them to appellant, or in any way bind them to make' such delivery. His agency, under the testimony, was limited strictly to the sale of the corn. Plaintiff was not in a position to compel — 982 — either Shoemaker or his brother to deliver their corn to appellant upon the contract made by him. The market price of corn greatly declined, and, as would be quite natural, Shoemaker and King were willing to deliver their part of the corn. Subject to certain exceptions not present in-this case, the agent who sells the property of his principal in his own name may maintain an action upon the contract for the benefit of his principals. Brown v. Sharkey, 93 Iowa 157; Gooden v. Rayl, 85 Iowa 592; Knott v. Dubuque & S. C. R. Co., 84 Iowa 462; Moorehead v. Hyde & Braden, 38 Iowa 382; Wells v. Western Union Tel. Co., 144 Iowa 605; Smith & Son v. Bloom, 159 Iowa 592; Code Section 3459. Likewise, it is ordinarily true, and under the facts of this case is true, that, notwithstanding the fact that the contract may have been entered into on behalf of the principal in the name of the agent, an action may be brought thereon, or 1‘or a breach thereof by the principal in his own name. Shields v. Coyne, 148 Iowa 313; Wells v. Western Union Tel. Co., supra. Whether, however, the action be prosecuted in the name of the agent for the benefit of the principal, or by the principal in his own name, there can be no recovery in favor of either, if the contract is not enforcible because within the statute of frauds. It is conceded that no part of the corn ivas delivered or .actually received by appellant; that no note or memorandum in writing was signed by the party to be charged, or by the agent thereof; and that no part of the purchase price was paid for a month after the terms of the contract were agreed upon. Subdivision 1 of Section 4625 of the Code was repealed by Chapter 396 of the Acts of the Thirty-eighth General Assembly, commonly known as the Uniform Sales Act, and Section 4, Subdivisions (1) and (2), of said chapter was enacted in lieu thereof. Said subdivisions are as follows: “Section 4. (1) A contract to sell or a sale of any goods or dioses in action shall not be enforcible by action unless the buyer shall accept part of the goods or dioses in action so contracted to be sold or sold and actually receive the same or give something in earnest to bind the contract, or in part payment, or unless some note or memorandum in writing of the contract or sale be signed by the party to be charged or his agent in that behalf. — 983 — “(2) The provisions of this section apply to every such contract or sale, notwithstanding that the goods may be intended to be delivered at some future time or may not at the time of such contract or sale be actually made, procured, or provided, or fit or ready for delivery, or some act may be requisite for the making’ or completing thereof, or rendering the same fit for delivery; but if the goods'are to be manufactured by the seller especially for the buyer and are not suitable for sale to others in the ordinary course of the seller’s business, the provisions of this section shall not apply.” Concerning the $100 payment which was made by cheek payable to plaintiff, upon the Dawson Savings Bank, the evidence on behalf of plaintiff showed that he, in company with his brother, went to the office of 'appellant and requested an advance payment on the contract.' Appellant’s agent at first declined this request. Plaintiff thereupon informed the agent that he was hard up; that he had some men working for him who wanted their wages paid; and that he needed some money. He asked for a payment of $100. Appellant’s agent then gave him the check for $100. This payment is the sole reliance of ap-pellee to take the case out of the statute of frauds. Plaintiff did not, at the time of making the contract, disclose that he was acting as the agent of Shoemaker and King in the sale of the larger part of the quantity agreed upon, nor was this fact known to appellant’s agent at the time of the $100 payment. No claim is made by anyone that any part of the $100 payment was intended either by appellant or plaintiff for the benefit of Shoemaker or Chester King. W. E. Chinn, appellant’s agent, did not know that plaintiff was the agent of his landlord and of his brother, and the statements made by plaintiff show conclusively that he intended and treated the payment as an advancement upon the purchase price of his own corn, and applied it to his own use. This took the contract out of the statute, so far as he was personally concerned. The corn was owned in severalty, and sold at the agreed price of $1.75 per bushel. The contract was, therefore, separable, and, unless unenforcible because within the statute, an independent action against appellant for damages could have been maintained by each of the parties. The statute of frauds quoted, supra, provides that, where no — 984 — part of the property is delivered or purchase price paid, a contract for the sale of personal property is unenforcible, unless a note or memorandum in writing is signed by the party to be charged, or by his agent in his behalf. Had Shoemaker or Chester King commenced separate actions against appellant, to recover damages for the refusal of the latter to accept their corn, would a plea of the statute of 'frauds have been a good defense thereto? It certainly would, unless the payment made to* ap-pellee operated to take the entire transaction out of the statute. We have found no case squarely in point. The Supreme Court of Michigan, in Burhans v. Corey, 17 Mich. 282, is somewhat 'in point. In that case, the defendant purchased a quantity of wool owned jointly by three parties. The buyer paid $30 to one of the owners, without directing that it be divided Or prorated among the owners. The buyer refused to accept the wool, and pleaded the statute of frauds as a defense to an action brought by the sellers for damages for the breach of the contract. The court held that the payment belonged ratably to the sellers, and sustained the contract. It will be observed that, in the Michigan case, the buyer knew that the wool was owned by three different parties, and the transaction was, in effect, carried on directly by him with the several parties. In the case before us, as already stated,- appellant could not have intended that the payment should be applied pro rata among plaintiff and his principals, for the reason that plaintiff’s agency had not been disclosed to him. Plaintiff clearly intended that the payment should apply upon the purchase price of his own corn. The law could not imply a contrary intention. It seems to us that, under these circumstances, the statute of frauds would have been a complete bar to the recovery of damages by either Shoemaker or Chester King in separate actions brought in their own names for that purpose. If so, it is a complete bar to the action brought in the name of their agent for their benefit. Nothing was paid upon the contract entered into by plaintiff as agent for and on behalf of his principals. His contract, when entered into, was apparently entire and indivisible; but it was, in fact, separable. He did not disclose his agency or the name of his principals. In so far as he contemplated the sale of his own corn, he acted as a principal and in so far as the contract — 985 — was made for the benefit of Shoemaker and Chester, it contemplated the sale and delivery of the com owned separately by them. So far as the transaction related to their corn, plaintiff acted in a purely representative capacity. Plaintiff neither owned, sold, nor intended to deliver 6,500 bushels of corn to appellant for himself. He expected, without any binding arrangement or contract with them to that effect, that Shoemaker and his brother would deliver the balance of the 6,500 bushéls upon the contract. It would be a harsh rule that would allow plaintiff to recover damages upon the theory that he had sold 6,500 bushels of corn, when practically two thirds of it he did not own, nor contemplate nor intend himself to deliver, but for the delivery of which he relied entirely upon third parties, who were not legally bound to make such delivery either to him or to the appellant. It is our conclusion that the court erred in instructing the jury that plaintiff was entitled to recover damages from appellant on account of the refusal to accept the corn offered in excess of 2,400 bushels. The judgment of the court below is— Reversed. Weaver, EvaNS, Arthur, Faville, and De G-raef, JJ., concur.