49 Tex. 143 | Tex. | 1878
On the 4th day of November, 1872, appellees, Neill Bros. & Co., through their brokers, Richards & Hawkins, entered into an executory contract with A. Sessums, Powell & Co., cotton factors in the city of Galveston, for the purchase of four hundred and fifty bales of cotton, “ on a basis ” of 15J cents per pound for good ordinary cotton. No specific cotton, however, was designated or identified as the subject of this sale; and it was not shown
That the cotton sued for belonged to appellant prior to its alleged purchase by appellees, and was in the possession of said A. Sessums, Powell & Co., as his factors, on said 19th of November, 1872, was not controverted on the trial of the case, and, indeed, did not admit of dispute. The mooted question between the parties, was whether the appellees, by the executory contract of November 4, 1872, and the delivery order, including this particular cotton, given fifteen days
The correct determination of this proposition, counsel seem to suppose, must turn, in the mam, upon the fact whether the transaction between appellees and said factors was, in legal effect, an hypothecation of the cotton by the factors as security for the money which they got from appellees when the delivery order was given for the cotton, or whether it was a sale of the cotton on a basis; and if the latter, whether factors are authorized by law, or the custom and usage of business in Galveston, to sell the cotton of their consignors on a “ basis.”
Evidently, if the testimony of the witnesses for appellees is entitled to credit, the parties did not suppose that the cotton was merely hypothecated with appellees to secure the repayment of the money which the factors received on the delivery order. If such is the .real character or legal effect of the transaction, it evidently results from its intrinsic facts, and not from the intention of the parties. But we see no good reason to say that the transaction was in fact a mere hypothecation of the cotton, or should be so regarded in law. Whether the delivery order was given to secure money borrowed by the factors from appellees on an hypothecation of the cotton, was fairly submitted to the jury; and no good reason has been shown us for dissatisfaction, in this particular, with their verdict. But although the cotton may not have been hypothecated, the transaction regarding it may not have been a sale on a basis; or if so, such sales, especially when made and consummated as in this instance, may be illegal or contrary to general custom for the sale of cotton, by factors, in the Galveston market.
Let us, then, inquire whether a factor may, without special authority, sell the cotton of his consignor on a “ basis ”; and if so, was this the character of this transaction, and was it so far consummated as to vest title to the cotton in appellees ? To answer these questions, it is necessary for us to under
All the witnesses who profess to know anything of this character of sale, who were examined upon the subject, say, in effect, that a sale on a basis is made by the parties agreeing, the one to sell and the other to buy a given number of bales of cotton at an agreed price per pound for “ good ordinary cotton,” that being the usual grade mentioned in quotations, and to which all others referred. Cotton delivered on such a sale, going above or below “ good ordinary,” is paid for ratably at a higher or lower price, according to the grade. As soon as possible” the factor designates the cotton sold by marks and numbers of bales; and this is usually done first in the weighing order or classing order. The cotton is then classed according to the standard classification of the market, the grade of each bale being ascertained in this process. As soon as the weights and classification are ascertained, the factor makes out an invoice, in which the aggregate weight of all the hales, comprising each grade of cotton in the lot, is multiplied by the price per pound of that grade; the whole amount is footed up, and the invoice, with a delivery order for the cotton, is given to the buyer, who pays the amount of the invoice, and the transaction is closed. Sometimes, however, as also in sales by samples, the factor needs money before the sale can be completed in this way; and in such case, either by express stipulation when making the sale, or
Now, if sales of this kind are sanctioned by the general usage of the trade, and we are to understand that the specific cotton thus sold is in possession of the factor, or under his control, and is identified at the time the bargain is made, or as soon as this may be reasonably done, in view of the nature of such transactions and the time required to consummate them, and when, from all the facts and circumstances of the case, and the general usage in making and concluding such bargains, it should, from its inception by the agreement to sell and buy to its final completion, or such stage of consummation as to transfer the title to the particular cotton sold to the purchaser, should be justly regarded as oñe entire transaction, I can see no inherent objection to such character of sales, or any reason why they might not be made by a factor just as well as sales by sample, if sanctioned by the usage of the trade where made. The ascertainment of the amount to be paid for cotton sold on a basis by its classification, is, in effect, just what the factor does after its sale by, sample, by his report of sales to each consignor whose cotton is included in the same sale.
The effect of a payment on.a delivery order before the weighing and classification of the cotton, whether the sale is made by sample or on a basis, must depend on the custom and usage in making such sale; and though sanctioned by the usage of trade, if the purchaser knew that such was'the fact, or if he should be charged with knowledge that such payment
In the absence of express authority, the power of a factor is unquestionably governed and regulated, in a great degree, by usage of the trade where the business is transacted ; and unless warranted by usage, a factor cannot sell upon a credit. Evidently, he is also controlled by the same rules in making and consummating his sales. Purchasers from factors are charged with knowledge of such usage, and are, equally with factors, bound by them. ■
It certainly cannot be denied that the weight of evidence, as exhibited by the record, preponderates against the proposition, that, by the general custom and usage of trade in the market of Galveston, factors are authorized to sell cotton on a basis. But as the evidence is conflicting, if this cotton had been sold strictly on a basis, and there had been no departure from general usage of the market, or inherent vice in making and concluding the sale, the verdict of the jury would be conclusive, and should not be disturbed.
But it seems to be clear, from the evidence, that the time usually allowed for the consummation of the sales of cotton by factors in Galveston is limited to ten days. Certainly it cannot be claimed that the usage of trade is such as to warrant so great a delay in concluding a sale as from the 4th of November to the 81st of the ensuing January. But concede, as appellees insist, that the alleged sale was so far consummated by payment for the cotton on the delivery order given on the 19th of November as to vest the property in them,
But there is another view of this transaction, which is of more essential importance in respect to the powers and functions of factors, and which conclusively nullifies appellees’ claim to this cotton. . It is not pretended that factors have authority to bind consignors by any other character of contract concerning cotton in their charge, except by a sale on a basis or by sample. It is not shown, or even attempted to be shown, that they are authorized to bind their consignors by executory contracts. It certainly cannot be inferred that the factor has authority to do so, because he has unlimited authority to make an absolute and immediate sale. Evidently the sale-note of the 4th of November imports merely an ex-ecutory agreement for a sale of four hundred and fifty bales i of cotton by A. Sessums, Powell & Co. to appellees. It is not,. indeed, even an executory contract for the sale of appellant’s
But has it been shown that factors are authorized to bind their consignors by executing contracts, or by fulfilling contracts into which they have entered, which did not relate to the business of their consignors, and when made were not binding on them ? Though a factor may sell the cotton, it does not follow that he can deliver it in satisfaction of a contract made fifteen days previous thereto. Suppose it had been stipulated in this agreement, instead of being left to the option of the parties when the cotton agreed to be sold should be delivered, that the sellers would deliver to the purchasers, fifteen days from the date of the sale-note, the specified number of bales, can it be pretended that consignors would have been bound by such an agreement, or that such a transaction could properly be called a sale on basis ? In what essential particular would such a transaction differ from a sale of “futures” ?
To constitute a sale, there must not only be parties competent to contract, mutual consent, and a price, but also a subject of sale. Now, when this agreement was made, as no particular cotton was designated, it cannot be said that there was a subject of sale. Certainly, no one will say that this particular cotton was its subject. A factor, unlike a broker, may buy and sell in his own name; but, unlike the broker, he can only sell property in his possession or under his control. (Story on Sales, sec. 91.)
If á factor may legally carry out and bind Ms consignors
The verdict of the jury is neither warranted by the charge of the court, nor supported by the evidence, but is in palpable conflict with both.
The judgment is reversed and the cause remanded.
Reversed and remanded.