4 Rawle 195 | Pa. | 1833
This was an action of assumpsit to recover the proceeds of certain goods, which were sold by the defendants, who were commission merchants in St. Jago de Cuba, on account of the plaintitf.
The plaintiff, through Thomas Sp Martin commission merchants, made a shipment with others, in (he schooner Sally and Polly, which they consigned to C. Hollinshead, the supercargo, with a letter of instructions to sell the goods to the best advantage, as soon as the market would admit, and remit the proceeds in good bills, specie, or coffee; to sell for cash or a short credit. He then adds, that if the goods could not be sold during his stay, he should put them in the
C. Hollinshead arrived in Si. Jago de Cuba, the port of destination, in May, 1823, and left there for the United States, about the 5th of July, 1823; and being unable to sell the goods, according to his instructions, he left them, as he was directed, in the hands of the defendants.
Wright and Shelton, the defendants, by order of C. Hollinshead, on the 19th of June, 1823, shipped on board the brig Union, on account of whom it might concern, property, consisting of sugar, coffee and molasses, amounting to fourteen thousand eight hundred and eleven dollars and seventy-three cents.
A copy of an account-current, was also exhibited in evidence, dated the 4th of July, 1823, shewing a balance against C. Hollinshead, of six thousand and sixty-two dollars and seventy-three cents.
The defendants allege, that the shipment on board the brig Union, was received as an advance on the goods placed in their hands for sale, and that they are entitled to be reimbursed the balance above stated, from the sale of the goods.
The plaintiff denied the fact, that the advance was taken on the goods belonging to the plaintiff, and the other shippers.
He also contended, that if the supercargo did take such an advance, he had no authority to do so: That the defendants knew the goods were his, and that after they knew this, they delivered goods, and made payments to other shippers, when if the advance was made on the goods, it should have been borne rateably by all.
The first it will be perceived, was a material point in the cause. It is obvious that if the money was not advanced on the credit of the goods, the defendants have not a pretence for saying, that they are entitled to reimbursement from that fund, for a debt due from the supercargo himself. In order to show that this was a transaction between C. Hollinshead and the defendants, without any relation to the goods placed in deposit, various documents were given in evidence, which have been fully examined by the counsel, in the course of the argument. They have also contended, that if there was any agreement, about an advance, which they denied, it was in reference to the shipment made and owned by Hollinshead himself. As the court thinks this cause requires a rehearing, it is not my intention to express any opinion on the weight of the evidence. I will barely observe, that it is by no means clear, that any advance was ever made on the credit of the goods owned by the shippers, other than those of C. Hollinshead himself, and for the repayment of which, the goods were deposited for sale in the hands of the defendants. Although this fact is proved by one witness, the documents would seem to speak a different language. This material fact, the plaintiff complains, was withdrawn from the jury. I have examined the charge with great care, and I cannot consider it othérwise than as a binding direction
As to a general mercantile usage and course of trade, no evidence whatever was given ; it is not pretended that there was; the court refer in the charge to the usage peculiar to St. Jago de Cuba, which was proved by two of the witnesses. If we are to credit them, it is the usage at that place, to make an advance on merchandize, deposited by supercargoes with commission merchants for sale; and to treat the supercargo as the owner of the goods. If so, according to the usage there, a factor, contrary to the general mercantile usage and course of trade, has a right to pledge the goods of his principal for his own debt, and in short, to do any other act which a principal might lawfully do, in the disposition of his own goods. It is perfectly immaterial whether the fiduciary character of the supercargo, be known to the commission merchants or not, or what may be the nature and extent of his instructions, or whether those instructions be known to them or not. They treat him in all respects as the owner of the goods. This then, is the usage which the court has thought proper to leave to the jury, with directions that if the jury believed such a usage did exist, they should find for the defendants. This usage, (although very convenient doubtless to the commission merchants of St. Jago de Cuba) in its utmost latitude, is not contrary to the law of this state, but; it is admitted, that it is in opposition to the law of every mercantile country; for notwithstanding the elaborate arguments of the defendants’ counsel, I am not permitted to doubt, that it is the well established law of this state, of our sister states, and of England, that though a factor may sell and bind his principal, he cannot pledge the goods, as a security for his own debt. The principal may recover the goods of the pawnee; and his ignorance that the factor held the goods in the character of factor is no excuse. The principal is not even obliged to tender to the pawnee the balance due from the principal to the factor, for the lien which the factor might have had for such balance is personal, and cannot be transferred by his tortious act, in pledging the goods for his own debt. The rights of principal and factor depend on the law merchant, which has been adopted by the common law. A factor is but the attornev of his principal, and he is bound to pursue the powers delegated to him. If the pawnee will call for the letter of advice, or make due inquiry, as to the source from whence the goods came, he can discover that
When this usage commenced we have not been informed. It is not proved to have been ancient, or sufficiently so to be generally known. It was made by eight men to suit their own convenience, and has been proved by two of them. That it is unknown to the mercantile community in this state is very certain. That it was known to the shippers is not pretended. It does not possess a single requisite to constitute a custom. The shippers relied on the lato merchant, in which it is clear that a supercargo is bound by his instructions. They authorized him in a certain event, to employ a commission merchant, whom they must also have supposed would be bound by their instructions. A factor may lawfully do whatever the usage and course of trade requires; and indeed, unless his orders restrict him, he is bound to conform to the course of trade. Evans v. Potter. 2 Gall. 13. But this is not a usage and course of trade. It is a local custom, peculiar to that place, made for the convenience of eight persons, in opposition to the laws, as it is knowm, in all commercial countries. It is not for them to prescribe rules to regulate commerce, except as among themselves. They must conform to the general commercial code. So far from this case turning on the usage of St. Jago de Cuba, we are of the opinion it should be thrown entirely
It is an attempt to set up a custom in opposition to a general principle of law, which cannot be permitted.
It has been further contended, that this case is similar in principle to Laussatt v. Lippincott, 6 Serg. & Rawle, 386, and the learned judge seems to have been of this opinion. I am so unfortunate as not to be able to discover the resemblance. In Laussatt v. Lippincott it was decided, that if a merchandize broker to whom goods are delivered by his principal, with power to sell, deliver and receive .payment, deposit them in the usual course of business, with a commission merchant, connected in business with a licensed auctioneer, who advances his notes thereon, the deposit binds the principal, who cannot recover' the value of the goods in an action of trover. ■ The court considered this as an advance in anticipation of a sale, and justified by the uniform course of trade. Business to an immense amount, say the court, has been transacted in this manner, and the usage being established, it follows that when the plaintiff authorized his broker to sell, he authorized him to sell according to the usage, and when the defendants dealt with the broker, if they had known the coffee was not his own, they had a right to consider him as invested with power to deal according to the usage. In Laussatt v. Lippincott, both parties were acquainted with the usage, or were presumed to be so. But supposing the usage to exist, it is not pretended that Mr. Neicbold knew of it; he cannot, therefore, with any propriety be said to have authorized the supercargo to deal according to. the usage. In this the analogy fails. It is acknowledged to be of the first impression, for there is no case, as the Chief Justice says, exactly like it in the books. Without intending to cast the least doubt on the case, I do not feel disposed to extend the principle much further. If this had been clearly shown to be an advance in anticipation of a sale, on the plaintiff’s goods alone, and the interest of the diderent shippers had been kept entirely distinct, there would have been some show of reason in likening it to Laussatt v. Lippincott. I am prepared to say, which is in analogy to the case, I would not proteclra foreign broker or commission merchant in an advance so made. But w-hat authority had the supercargo or sub-agent (for Wright Sp Shelton, can be regarded in no other light), what authority had they to intermix the interest of the shippers, by a general deposit of their goods in the hands of the defendants, to secure a general advance, even if it were made in anticipation of a sale. The case of Laussatt v. Lippincott does not sanction this, nor has any case been produced which does. It is in fact, making one man’s goods liable for another man’s debts, the justice and policy of which I have yet to perceive. This is beyond the power of a supercargo, or any other factor or agent. In Shipley et al, v. Thymer et al, 1 Maul. & Selwyn, 484, it is said to be contrary to the duty of a factor to complicate the property of one with that of
This case presents a singular feature. The defendants say, that they made a general advance, on a general deposit of goods owned by different shippers, and yet after they were aware of the fact of the ownership (as the plaintiff says), they paid the full amount of the proceeds of sale to several shippers, and now wish to be reimbursed for their general balance from the goods of the plaintiff alone. This would mete out a hard measure of justice to the plaintiff. If his goods are liable, they can only be rateably so. The goods of the other shippers were also liable, and it was the duly of the defendants to retain their proportion out of the proceeds of sale, it will be perceived, that I have considered the supercargo as a factor, and so far as regards this case, I cannot understand how he can be viewed in any other light. He is as much bound by his instructions as any other factor. He can justify himself in deviating from them, only in cases of necessity, some of which have been cited by the defendants’ counsel. The defendants also it must be observed, are sub-agents, and not purchasers.
It has been also urged, that the plaintiff cannot sustain this suit. As he was the undoubted owner of the goods, and the money has not been paid over, I can perceive no difficulty in the way.
After the fullest consideration, I have not been able to concur in the opinion of the majority of the court, either in the view taken of the facts, or the law of this case ; and after repeatedly reading every word of the testimony in this voluminous record, I have concluded that the one half of the facts must be lost sight of, before the questions argued before us can arise. 1 am aware that each party selects and argues on what he supposes are in his favour. I have endeavoured to make up my mind on the whole of the case.
In April, 1823, Thomas Sf Martin, commission merchants in this city, having goods of the plaintiff’s, put them on board of the schooner Sally consigned to C. Hollinshead, supercargo, viz. six bales of blue Moreas, containing nine hundred and sixty pieces, the value including the charges, two thousand seven hundred and nine dollars and twenty-four cents. Their letter of instructions directed Hollinshead to sell to the best advantage, as soon as the market would permit, and to remit in good bills, specie or coffee; to sell for cash, or on short credit, and adds, if the goods could not be sold during his stay, to put them
300 barrels of flour at $17 ^ 3 bales Madrass hkfs., 100 pieces each bale, 300 ) 2700 pieces at 9 - - - • y 1 bale Ventepolam hkfs. 100 at 4 50 450 17 rolls floor matting at 12 204 $5100
3354
S. Archer.
2 trunks Madrass hkfs. 50 pieces each 100 at 9 900
1 bale do. - - 100 900
- 1800
Charles Bispham. 10,254
1 trunk Madrass hkfs. 61 pieces at 9 549
1 bale Meesulapotam 100 pieces at 4 400 - 949
Marmaduke Burroug/i.
760 pieces Succatoons at 2i Thomas Sp Martin. 1900 $13,103
From the names written under certain parcels it was inferred that notice was given to Wright Sp Shelton, who were the owners of the several parcels of merchandize; and from the direction to them to retain for him two and a half per cent, commission, there was also notice that C. Hollinshead was supercargo and not owner. The first conclusion is denied, and Brooks swears it was not so considered or understood, and might be a mark of whom he got the goods from ; but as he sent home a cargo sufficient to pay them all, they could not know to whom he would or would not deliver the return cargo, and were not bound to know. The defendants admit they knew he was a supercargo, but say, as the owners had trusted him to bring and to make returns, they were not bound to make any inquiries, or to know how the matter was settled on Hollinshead’s return. The oath of Brooks is positive, that the advance was on the whole goods left, and not so much on each parcel. Hollinshead returned immediately after the 4th of July, and was here early in August. How the return cargo was disposed of docs not appear. The defendants sold the flour as appears by their accounts for less than seventeen dollars; some for sixteen per barrel, it produced about
$4786 50
deduct charges 259 26
$4527 24
They also sold part of the other goods (not Thomas Sp Martin’s) as appears by the several accounts among the evidence; and by comparing the articles sold with the above list of articles, it will appear they sold part of those above the name S. Archer, part of those above C. Bispham, and part of those above the name M. Burrough, none of whom, so far as we know, ever objected, and all of whom got the proceeds of the remainder on the order of Hollinshead, and none of whom asked for any thing from the defendants until they severally had Hollinshead’s order.
Several exceptions are taken to the charge, but which in fact amount to only two. In the first place, it is apparent the charge has not been treated fairly. What is sent here is the abstract or notes from which to charge the jury, containing to be sure the points of law stated to the jury, but not all the evidence nor the half of the words
The legal position, and in truth the only matter in contest here, was, that under the circumstances of this case Hollinshead had a right to deliver these goods to the defendants, commission merchants, to be sold, and account for the price, and had a right to receive a cargo from them on the credit of the outward cargo so left with them; and on the fullest consideration I think this opinion right on authority and on principle.
Before I come to that matter I shall consider a previous point or two. The law as to the power of a factor to pledge, arose on a question whether he could pledge the goods of his principal for his own previous debt, or for money then advanced far his own use. That was the case of Patterson v. Tash, and that was the matter decided in most of the cases, perhaps in all, before 1776; and it is not contested here. The fact whether this return cargo was for the use of the owners of the outward cargo, or of Hollinshead, is a fact for the jury, and was so left by the court; but he intimated an opinion on the facts. It has often been decided that he may do so. Iam not sure he might not have gone further, and told them it was a conclusion of law from the facts proved, which might be rebutted by proof of collusion and fraud between the defendants and the supercargo. Let us look at the matter. Several men send goods in a vessel and appoint a supercargo ; and we have evidence that the plaintiff and one other, directed him if he could not sell, to give the goods to a commission house and procure in advance a return cargo in coffee and sugar. We have no evidence of what the other shippers directed ; but there is no dispute except with the plaintiff The plaintiff and the other shippers had confidence in the supercargo, which continued for more than a year. He sold above six thousand dollars worth of their goods through the defendants ; he paid freight and duties, &c. to above four thousand dollars through the defendants; during all this time the defendants do not know who was the shipper of the goods sold, or of those unsold. .It is avowed, and was to the plaintiff expressly told by Hollinshead. (see' their last letter) that he had sold
It has not yet been said, that a factor cannot pledge his principal’s goods to raise money for his principal, where he has the express direction of the principal to do so; and I shall assume it that it cannot be so said. Here, then, we have the express direction of Thomas Sp Martin, if their goods cannot be immediately sold, “ to put them into the hands of a house of respectability, and obtain an advance of one-half or two-thirds in coffee.” Hollinshead sold two hundred pieces to pay freight and duties on the whole cargo, and told them so. The.defendants are not answerable for this; in fact no objection.is
The course of business is. constantly changing, and the names change. What were once called factors are now commission merchants. This alone would not change the rights of parties, but the duties have changed, and the powers have changed. A great part of the commerce of the world goes through their hands. It will not be attempted to define all their duties or authority, but whatever power they constantly exercise, and every body knows they exercise, is part of their contract with those who employ them, and may be lawfully confided in by those who deal with them. A custom of old, affected real property as often or more so than personal property, and could not exist without certain requisites. It is an entirely different matter from what is called the usage of trade, or usage of a particular trade, which may be good though the trade itself is not thirty years old. The usage of a trade is spoken of in every law book, and recognized as binding on those engaged in it, in every country, and where not contrary to some positive law, or to the general law and policy of a nation, and not malum in se, forms a part of and is considered in deciding on all cases in that trade. In short, it is equal to an express authority to do what all others in that trade do, and .legalizes all acts done according to it. Whether such a usage exists, is to be decided by a jury; if found that it exists, the court are to say whether it is within any of the reasons which make it bad. Laussatt v. Lippincott.
If it is the usage that a commission house shall take goods in advance on an outward cargo, and pay itself out of the amount of sales, this must be presumed to be known to all who engage in the trade; and particularly is this the case, if, when informed of it, the principal does not object. The authorities on this subject'go far ther ; a principal knows that his factor is and has been in the habit of buy
This case has been put by the plaintiff on the authority of English decisions; and I admit the authority of Patterson v. Tush; but it, and all the cases which say a broker cannot pawn goods, express or imply that they are pawned for the broker’s debt. To pledge for a debt of the principal is another matter. The factor himself may advance money to his principal on the goods, and has a lien on them for his own repayment; he may then pledge them to himself. A factor may employ a sub-factor; may not he also advance to the principal and retain till paid? 1 have found no case where the factor took up money for his principal on a deposit of the principal’s goods, except to pay duties, and that is binding, not I apprehend because it was to pay duties, but because it went to the principal’s use. Rut the goods here were not pawned; a pawn cannot be sold by the pawnee, unless, by modern decisions, after great delay. Now the defendants had authority to sell thesegoods the minute they received them; they were put into their hands to be sold; or, to speak more properly, were sold to the defendants, but the price to depend on what cou[d be got for them by the defendants; at least it partook more of a sale to the defendants than a pawn. The course of the business here was unknown when Patterson v. Tash was decided; and the case is to be decided on principles applicable to the course of trade, that is to the intention and understanding of the parties. Let us now look to the authorities. 1 Maulé Selwyn, 140, has been cited to prove a broker cannot pawn, and it proves he cannot pawn the goods of his principal for his own debt. Lord Ellenborough, however, says “ the defendants having authority to sell the goods, if they advanced money for any purposes connected with the sale, and for which brokers in the ordinary course of disposing of. goods are accustomed to advance it, would have had a lien" in respect of such advance.” This case then recognizes the effect of usage and that under it goods may be left for sale by a broker, and an advance made, and a lien for such advance, or in other words the defendants could retain for their advances out of the proceeds of their sales. Le Blanc, Justice, says if advances were made to take up the bill of the consignor, and were appropriated to that purpose, there would be no mischief, and that might be considered in furtherance of the aulhority given by the principal; and Bailey, J. says, cases may perhaps exist where a principal would be bound by a pledge by his factor. I apprehend however if money was advanced to a supercargo to take up a bill of his principal, it would not be necessary that
'1 he case of Laussatt v. Lippincott, 6 Serg. & Rawle, 386, however decides every point in this case; it admits Patterson v. Tush to be law ; it decides that an usage of trade may be proved-; that the very usage proved in this case is not in violation of any principle of law ; that a man may authorize another to pledge his goods; that this authority may be express or implied from the usage of trade. The plaintiff lived in this city and employed a broker here to sell his coffee, not under twenty-seven-cents per lb. The broker took it to the defendants, auctioneers, and in four separate parcels receiving each time the defendants’ note, in all near five thousand dollars. The broker only paid six or seven hundred to the plaintiff The defendants never asked the broker whose coffee it was, because he and other brokers dealt in that way. It decides that leaving goods to be sold and receiving part of the price in advance, is not a pledge, but more like a sale; that the defendants if they knew the broker was not the owner might deal with him according to the usage, and the defendants had a power to sell irrevocable to repay themselves; and decides that it is wholly immaterial whether the advance made to the broker came to the hands of his principal or not.
'I his case was decided twelve years ago and was supposed to have settled the law. It was never complained of. The law of England is now by act of parliament made the same as this decision. So is the law' of New York by a late statute. But what is more to the purpose, all the mercantile transactions of the community have been based on it. To overule it would unsettle all the transactions under it. The law as there settled meets the universal idea of justice, and conforms to the usage of the whole meicantile world at this time. If other authority w'ere wanting, it is found in the opinion of Justice Story, in Evans v. Potter, 2 Gullison, 13, according entirely with Laussatt v. Lippincott. The usage was acted on and fully proved by the plaintiff’s witnesses Jacob Thomas and James Martin, who sw’ore they had advanced money to the plaintiff on these goods, had a right to send them by Hollinshead, and were not answ'erable to the plaintiff This proves that goods left with a commission merchant, on an advance of money by him, are nearer being sold to him than pledged. And it proves they knew of and acted according to the usage at St. Jago in directing Hollinshead to leave the goods for sale, and take an advance on them. Now the usage proved, could justify them in this: nothing else. Again, every owner knew of the terms on which Hollinshead left the goods, and not one complained. It will be found that although Bispham and Burroughs and Archer each got back some of the goods left, yet that more or less of the goods of each of had been sold by the defendants and passed to the credit of the advance to Hollinshead, and not one of them complained. If Hollinshead, though a bare consignee, had a right to employ the defendants to sell these goods and to account to himself, and to him they must account,
1 have omitted the authority of Chancellor Kent, 2 Com. 489, of the first edition, and 626 of the second edition, because Í will use it al.-o for another purpose. He adopts the law as laid down in Laussatt v. Lippincott in the body of his work and the distinction there taken between a pawn strictly, and an advance from a commission merchant who receives to sell. In a note to page 491, he informs us, the law had been changed hy statute in England, and since in New York, and says, 626, “ a great deal may be said against the principle of the rule, and with the exception of England, it is contrary to the policy of all the commercial nations of Europe. On the continent of Europe possession constitutes title to moveable propeity, so far as to secure bona fide purchasers, and persons making advances of money, or credit on the pledge of property by the lawful possessor.” Now this proves, to my satisfaction at least, the law of St. Jago independently of the testimony given in this cause, and accounts for the statement of the witnesses, that they knew of no judicial decisions on the point. Courts never decide where no one disputes. The law is so well settled that the lex loci contractius governs m the construction and validity of a contract, though it is to he enforced by the laws of the country where suit is brought, that I shall not cite authority to support it. I cannot see then, how we can avoid saying, the plaintiff is bound by this contract, which is valid where it is made, and valid here too, if made here, unless we overrule Laussatt v. Lip-pin cotí.
Judgment reversed, and venire de novo awarded.
