Heffner v. Gwynne-Treadwell Cotton Co.

160 F. 635 | 8th Cir. | 1908

PHILIPS, District Judge

(after stating the facts as above). Counsel for the plaintiff in error in their brief question the jurisdiction of the Circuit Court over the subject-matter of the suit. Their contention is that each of the notes sued on constitutes a separate cause of action, each of which is less than $2,000, and the sum of them cannot be employed to make out the required excess over $2,000. In support of this proposition decisions of the Supreme Court of Arkansas are cited on the question of the amount in each separate cause of action to give the court jurisdiction. This is not, however, a local question, controlled by the statute of the state, or the rulings of its Supreme Court. It pertains to a subject-matter of procedure exclusively within the federal jurisdiction, in which it is well settled that in the action of assump-sit, like that of an action on several notes, bonds and the like, the requisite jurisdictional amount is the aggregate of the judgment prayed for. Edwards v. Bates County, 163 U. S. 269, 273, 16 Sup. Ct. 967, 41 L. Ed. 155; Bowden v. Burnham, 59 Fed. 752, 755, 8 C. C. A. 248; Chase v. Sheldon Roller-Mills Co. (C. C.) 56 Fed. 625; Tennent-Stribling Shoe Co. v. Roper, 94 Fed. 739, 36 C. C. A. 455; Bergman v. Inman, Poulsen & Co. (C. C.) 91 Fed. 293.

The controlling question for decision on this writ of error is: Did the plaintiff below have the right to sell the cotton on hand in April, 1906, and apply the proceeds to the indebtedness of Mrs. Heffner on open account? We do not question the general rule of law that, ordinarily, where a debtor consigns goods to his creditor to be sold, he has the right to direct the time and manner of the sale and the application of the proceeds. By his acceptance of the goods, under such instructions from the consignor, the consignee takes them subject to such conditions, and may not disregard them without subjecting himself to consequent damages to the consignor.

Without taking the space to review the authorities pertinent to the question presented by this record, the correct American doctrine may be summarized, comprehensively enough, as follows: (1) Where there is a simple consignment of goods to a factor to be sold on commission, the wishes or directions of the consignor, communicated either at the time of or subsequent to the shipment and before sale, as to when or how the goods shall be sold and the proceeds applied, must be respected b]r the consignee, who holds no other interest in the property as such. (2) If the factor advance the money for the purchase of the goods consigned, to the extent of his advancements or liabilities incurred on account of the goods, he acquires a special interest in the goods, in the nature of a lien, for his indemnity, in the absence of any special contract varying tile right. In such case neither the consignor nor any one claiming under him can maintain action against the factor to recover the property or its proceeds without tendering what is due the factor. (3) If the consignor, contemporaneously with the advancement and consignment, give to the consignee direction respecting the holding or the time and manner of disposing of the goads, which are assented to by the factor’s acceptance of them, the latter may not disregard the direction or condition in selling for his reimbursement, although he has made advancements or incurred liabilities on account of the goods, provided always, the consignor stands ready or offers to reimburse the consignee for such advancements and liabilities. (4) Where the factor has made advancements or incurred liabilities on account of the goods, and the consignment is made without any direction at the time as to the holding of the goods, or the time or manner of their disposition or of the proceeds, the intendment of law is tint the factor is vested with authority to hold and dispose of the goods in the usual, customary method of the trade; and to reimburse himself out.of the proceeds for such advancements and liabilities, as well as his commissions. And the consignor is without power or right by any subsequent direction to the factor or conditions imposed, to suspend or affect the lien of or right of sale by the factor, to the extent of his reimbursement and compensation. The Frances, 8 Cranch, 418, 419, 3 L. Ed. 609; Brown v. McGran, 14 Peters, 479, 10 L. Ed. 550; Field v. Farrington, 10 Wall. 141, 19 L. Ed. 923; Eichel v. Sawyer (C. C.) 44 Fed. 845, 850.

When the money was advanced and the Carlisle cotton was shipped to the plaintiff, it went under no special direction as to how or when it should be sold, or how the proceeds should be applied. But after the factor had become uneasy about the volume of Mrs. Heffner’s checks, disproportioned to her shipments, and she was called upon to provide for the notes matured and maturing, and advised that she must increase her shipments or draw less, and time and again called upon to make good the margins, without compliance therewith she made demand that the cotton on hand be not sold without her order, -with a further demand that if the plaintiff did sell, the proceeds should be first applied to the liquidation of the notes on which the defendant was surety. It is true that the defendant made acknowledgment of this letter, noting her request in such fashion that the law will impute to it acquiescence. Where such consent is founded upon no new consideration, the law, ever instinct with the spirit of justice, declares that it was impliedly conditioned with the understanding that “the consignor stands ready and offers to reimburse and discharge such advances and liabilities.” Brown v. McGran, supra. In other words, to hold the crediting factor to such assent, the consignor must keep up the margins and continue solvent. Hornsby v. Fielding, 10 Heisk. (Tenn.) 367; Davis v. Kobe, 36 Minn. 214, 30 N. W. 662, 1 Am. St. Rep. 663. When Mrs. Heff-ner, on her own petition, was declared bankrupt, she proclaimed to all the world that she could not redeem this cotton from her factor; and, after advising her of the purpose to do so, the plaintiff had the right to sell and reimburse itself for the moneys advanced and its commissions, subject only to the duty to her and her creditors of obtaining the best market price. Parker v. Brancker, 22 Pick. (Mass.) 40; Frothingham v. Everton, 12 N. H. 239; Commercial Nat. Bank v. Heilbronner, 108 N. Y. 439, 15 N. E. 701; Phillips v. Scott, 43 Mo. 86, 97 Am. Dec. 369; Howard v. Smith, 56 Mo. 314.

In awarding judgment in favor of the plaintiff for the sum of $1,- ■ 793.97, the Circuit Court found from the evidence that 18 bales of the cotton marked “H,” shipped from the Hickory Plains store, were not bought by drafts drawn on the plaintiff, and it was shipped to be applied to the first notes. It therefore applied the proceeds of that cotton to the notes, which, together with the amount of the dividends collected from the bankrupt estate, left the balance as adjudged by the court. This application to the open account was warranted by the fact that the balance was not greater than the advancements made on the cotton sold by the defendant.

As the plaintiff acquiesced in this, and the defendant has no legal objection thereto, the judgment of the Circuit Court must be affirmed.