Mansfield v. Chicago Title & Trust Co.

199 F. 95 | 7th Cir. | 1912

KOHLSAAT, Circuit Judge

(after stating the facts as above), ["lj .Petitioner, together with McCabe, who represented and acted for him in his absence, and Emerson, who acted for the bankrupt, testify that the transaction was intended to be out of the regular course of business; that the turkeys were not billed to the bankrupt; and that it was the intention that the bankrupt should be simply a forwarding agent. This, standing by itself, would he satisfactory evidence that such was the case. When, however, we come to consider the course of business subsequent to the alleged agreement, a different situation arises. The bankrupt was practically given possession of all petitioner’s turkeys for the purpose of enabling it to carry out the transaction with De Winter & Co. It was permitted to deal with them as if they belonged to it. In its financial distress it proposes to give that grant of authority a wide construction, and tide itself over a hard place. Up to that time it had made no shipment for petitioner. It conceived the idea of withdrawing enough turkeys from petitioner’s stock in the warehouse (as to which there would be no one to question its acts) to enable it to procure a sum sufficient to relieve its immediate needs. To do that, it drew a draft for more than the turkeys were worth, attached it to the bill of lading, secured the money from it's bank on a discount thereof, and proceeded to enrich its general bank account to that extent, and sent the turkeys to a theretofore unnamed consignee, willing to take all the chances of the draft not being honored or the turkeys accepted, so long as it could obtain several days relief. This scheme may have been, and probably was, in its details unknown to petitioner; but he, through the confidence reposed in the bankrupt, made the thing possible, and not only so, but permitted the bahkrupt to act with all the powers and appearance of a factor or commission man. There is nothing in the record, except testimony of the petitioner, McCabe, and bankrupt, as to what the latter was to do in the premises to characterize the transaction as other than an ordinary commission deal with prepaid commissions. The transaction has none of the features of a forwarding agency or merchant.

[2] “Forwarding merchant” or “forwarder” are defined in the Century Dictionary as meaning:

“Specifically in ttie United States, one who ships or sends forward goods for others to their- destination by the instrumentality of third persons. * * * Neither a consignor shipping goods, nor a carrier engaged in transporting them is a forwarder. The name is applied strictly to one who undertakes to see the goods of another put in the way of transportation without himself incurring the liability of a carrier to deliver them.”

Assuming that there was a statement made that the bankrupt should act simply as a forwarding agent in the deal, can it be contended that when the parties afterwards enter into a course of dealings which clearly are those involving the relations of principal and factor, the transaction shall be interpreted by the prior conversation? Would not the acts themselves control, rather than the term by which they now are, or perhaps were, at the beginning designated?

It appears that the lot of turkeys,, of which those in suit were a part, all controlled at the beginning by the bankrupt, some 2,000,000 pounds, were supposed, and represented by the bankrupt, to be substantially all the turkeys in the country. Petitioner and McCabe each owned about 250,000 pounds. It is apparent that any one of the owners might ruin the market; so that it was important that they should all be marketed under one management. This would seem to have been Emerson’s motive in offering to take care of the “outletting.” He was evidently running the deal and handling the turkeys as his own. The fact that Emerson was to pay the proceeds of shipments to the warehouse company in satisfaction of petitioner’s indebtedness to it throws some light on the subject.

Interpreting the initial undertaking as stated by petitioner in the light of the manner in which it was carried out, it would seem that petitioner and his witnesses at the time failed to comprehend the significance of the terms alleged to have been used in the inception of the transaction. The law merchant may not be overcome by the misuse of some of its terms. It is conceded that petitioner is chargeable with whatever knowledge McCabe had of the methods used by the bankrupt in selling the turkeys. He therefore knew that the latter was dealing in its own name with consignees; that he was not known in the deal; that moneys were paid to and to be paid out by the bankrupt to the petitioner and McCabe; that it had full control of shipments and was using its own judgment in, protecting the market from a slump, and was dealing with the turkeys just as though they were its own, and also knew that its powers with regard to the same and its course of business in handling them was as full and complete, and in all respects comporting with those of any factor or commission man. Under the facts of this case, we are unable to see how any trust relation arose between petitioner and the bankrupt, other than that which attends to too free exercise of confidence in one whose integrity is implicitly relied on. Were it otherwise, however, we are unable to say from the evidence that any part of the moneys realized from the sale.of the turkeys came to the hands of the receiver or trustee in any form. The referee found that the funds received by the bankrupt on account of said turkeys have not been traced, and that no part of the same came to the hands of the receiver or trustee as such or in any substituted form. When the course of business between the bankrupt and its seven branch houses is considered, together with the latter’s methods of handling' the poultry trade, it would be straining the facts and the law to declare that any part of the estate came to the hands of either of said bankruptcy officials charged with a lien for this particular fund. The principles of law contended for by petitioner are too well settled to require citation; but the facts support the master’s report, which and of itself is very persuasive, and not to be overcome except in very clear cases.

We find no error in the judgment of the District Court, and it is therefore affirmed.