Burke v. Napoleon Hill Cotton Co.

WOOD, J., (after stating the facts). It was a question for the jury under the evidence in this case to determine whether or not the appellee had exercised ordinary care to protect and preserve the peas which had been consigned to it. The appellee as factor or commission merchant was an agent of the appellant to sell on commission the goods which appellants had consigned to it. Appellee was bound to act in good faith and to use reasonable or ordinary care. (1) “The measure of care and diligence,” says Ruling Case Law, “required of a factor in conducting the business of his principal is that which a prudent business man would exercise in the management of his own affairs, and he is not liable for an error in judgment where his instructions give him discretion as to selling. ’ ’ 11 R. C. L., § 17, p. 766. Mr. Tiffany .says: “Like other agents, a factor is bound to exercise skill, care and diligence, to exercise good faith, to account, and to obey instructions of his principal. He may depart from his instructions, however, if such a course is justified by the occurrence of an unforeseen emergency, or if obedience would impair his .security for advances.” See Tiffany on Agency, § 48, p. 223; § 105, p. 403. In Maloney, Receiver, v. Jones-Wise Commission Co., 117 Ark. 180, we held (quoting syllabus): “By the common law a factor and commission merchant has a lien upon the goods of his principal in his hands, as security for all advances made to such principal in connection with the-goods consigned.” He is entitled to retain the goods in his hands “until his advances, expenses and commission are repaid.” Wharton on Agency, § 767, p. 514. (2-3) Now, applying the above principles to the facts of this record, it will be seen that the appellee started out by soliciting the consignment of peas from appellant telling him that it was prepared to store them and take good care of them, and that they were then selling at $1.50' per bushel, and as appellee believed would go higher. Later on they advised him that the market had declined so that they would not sell for more than $1.35 per bushel, but telling him that it hoped to do better. Appellant’s letter in reply informed the appellee that he would like for it to sell the peas as soon as it could get a reasonable price for them, and leaving it to the judgment of appellee to do the best it could. In answer to a letter from appellee requesting appellant to name a specific price that would satisfy him, he replied that he thought he should have about $1.30 or $1.35 per bushel, but he concluded his letter by telling the appellee “do the best with them you can and I will be satisfied with same. ’ ’ In the letter of May 12 appellee asked appellant “if it is possible for us to get $1.40 all around for the lot of peas in St. Louis shall we sell?” It notified him that the weevil season was coming ■on and that if the peas were held they would become infested, etc. The answer to that letter appellee fails to produce, its secretary stating that he was unable to find it. We judge from the letter in reply to it that the appellant answered appellee’s question in the affirmative, that he was willing to take $1.40 per bushel round for his peas, but in the absence of the letter it can not be seen what further statements or explanations appellant may have made. For aught that appears to the contrary, this letter on the 13th of May may not have contained positive instructions to appellee not to sell for less than $1.40, and not only stated that he was willing for them to sell at that price but may have contained the statement as did the former letters for appellee to do the best it ■could and he would be satisfied. At any rate since appellee had this letter in its possession and fails to produce it, unfavorable inferences .against the appellant can not be indulged as to any contents of the letter. Taking the whole correspondence, it was a question for the jury to say whether or not the appellant had given appellee positive instructions not to sel ■ the peas for less than a specific price. But, even if such had been the instructions from the appellant to the appellee, it was still the duty of the appellee, while holding the peas for the price named, to exercise ordinary care, such as a reasonably prudent business man would exercise in his own affairs, for the preservation of the peas. If an emergency arose by which the appellee could observe that "the further holding of the peas without putting the same In cold storage would entail a loss to it of the amount already advanced, and in addition thereto a loss to its principal, it was its plain duty, as shown by the above authorities, to take such precaution as any prudent business man would or should take in the conservation of his own property. In other words, it was appellee’s duty to exercise ordinary care to secure not only itself but also its principal from.loss or at least to minimize any loss as far as possible. . . • The issue as to whether or not the appellee had exercised the care and diligence required of it as factor should have been submitted to the jury under proper instructions, and the court erred in directing a verdict in favor of the appellee for full amount of its claim. The judgment is therefore reversed and cause remanded for a new trial.