6 La. Ann. 40 | La. | 1851
Lead Opinion
The judges being equally divided in opinion, the judgment of the lower court was affirmed.
The petition in this case alleges that the defendants, in the capacity of factors and commission merchants, received for the plaintiff’s account, at different times, various sums of money, and so became indebted to him in the gross sum of $14,554 23, as shown by an account current rendered by them. That in said account he is improperly charged with certain payments, made by the defendants without his authority or consent. The suit is brought to recover the amount of funds in the factors’ hands, exclusive of these payments.
The defendants answered by a general denial of any indebtedness to the plaintiff ; and alleged that, as his general agents and factors, they had in all respects faithfully performed their duty, and accounted to plaintiff.
The district judge gave judgment in favor of the plaintiff, and the defendants have appealed.
The following facts are presented by the evidence : The plaintiff was a sugar planter, living upon his estate in the country, and the defendants were his commission merchants at New Orleans. They were at the same time agents of Goodloe, an engine builder living at Cincinnati. In November, 1845, the defendants, acting as the agents of Nolan and of Goodloe, made a contract, which they signed for both principals, for the building and putting up of a sugar mill and engine for Nolan. The agreed price was to be paid by Nolan to Goodloe, in March, 1847. Whatever irregularity there may have been in a' contract thus made by the same agent for two principals is immaterial, as both subsequently assented' to the contract. Shaw Co. contracted no personal liability, at the time, to Goodloe, for the payment. On the 29th December, 1846, Nolan, who then had a large amount in the hands of his factors, addressed them a letter, •
It further appears by testimony offered by the defendants, and to the introduction of which the plaintiff excepted, that the machinery was constructed and erected on Nolan’s plantation by Goodloe, in a good and workmanlike manner, and in conformity with the contract, and that it worked well, except some occasional breaking, which the witness, an engineer employed by Goodloe, says was not uncommon. Some repairs and changes were made by the wjtness after the first grinding season was over (1846) without charge by Goodloe. These consisted in putting in wheels that had been broken. The witness adds, however, that Nolan was always complaining about the machinery.
It is very material to observe, in ascertaining the rights of these parties, that at the time when the order not to pay Goodloe was given by Nolan, Shaw Sf Co. had not incurred any liablity whatever to Goodloe, growing out of the contract for the machineiy. They had not guaranteed the payment to be made by Nolan, nor entered into any engagement with Goodloe, which would have given him a right of action against them. The payment, therefore, must be considered as having been made in violation of the order of their principal and of their promise to obey that order, and in furtherance of their own interests originating after the order was given. We will assume, for the purposes of the present inquiry, that the debt so paid was justly due by Nolan to Goodloe.
The question thus pi’esented is substantially one of the light of compensation. I owe you, says the defendants, the proceeds of your crops placed in my hands for sale, but you owe me a debt which was justly due by you to Goodloe, whose
The relation between factor and principal is not the ordinary relation of debtor and creditor. It is a relation of trust and confidence. It creates a contract in the nature of what is known to the civil law as the irregular1 deposit. See Bludworth v. Jacobs, 2d Ann. 28. In the absence of an agreement to the contrary, the factor is to be considered as undertaking to hold the funds confided to him by his principal, subject to his order, and to be ready to pay them over to him upon demand, deducting only his own charges and advances made in the course and within the scope of his employment. In the present case, there was superadded to the implied agreement to hold Nolan's funds subject to his order, a positive promise not to use them in paying Goodloe.
Now, according to the spirit of our code and the principles of the civil law from which it is derived, compensation does not take place against a party who has confided his funds to another under such circumstances, C. C. 2207 and 2927. Compensation must rest upon the basis of good faith. It. is not permitted where its operation would involve a deception and a disappointment of the just expectation and confidence of the party against whom it is set up. Hence, if a creditor should buy goods at the shop of his debtor in such a manner as to hold out the idea that he would pay for them in cash; and after receiving the goods should propose a set off, his conduct would be considered as not in good faith and compensation, would not be allowed. Pardes.sus, Droit Commercial, vol. 2, No. 325. So it would be with one who, under representation of a pressing exigency, and a promise of an early repayment, should borrow money of another, and refuse afterwards to pay upon the ground that the lender was his debtor. Such artifices, says Mr. Pardessus, are unworthy of the good faith of commerce. Ib. See also Merlin Rep. verbo Compensation, ss. 2.
In the examination I have made of the English commentators on commercial law, I have found no case which countenances the pretensions of the defendant.
Mr. Russell, in his Treatise on Fnctors, states it to be an incontestable principle of mercantile law, that where a party orders his agent to pay money to a third person, but afterwards, before the money is paid or passed into account, countermands such order, the agent, paying after such countermand, must be deemed to have made the payment wrongfully, and will not be entitled to charge the sum in account against his principal. Russell on Factors, 170.
In Child v. Maley, 8 Tenn. 610, cited by Mr. Paley in his Treatise on Agency, 110, it was held, that if the principal refuse payment upon a contract made by means of the agent, and the agent not being himself liable, but for the sake of his own character, which would be affected by the discredit of the principal, choose to pay the money himself, he cannot recover it; though the principal might himself have been compelled to pay it in the first instance.
It is in vain for the defendants to say, that the debt which he has paid for Nolan to Goodloe was a just debt; Nolan thought, or professed to think, it was not. He could have withdrawn his funds out of his factor’s hands, if he had chosen, for aught that appears to the contrary. He left them there and permitted them to accumulate under the express promise that they should not be used to pay Goodloe. The payment was a breach of the confidence reposed, and the defendants cannot profit by their own wrong. They must pay over to the plaintiff, upon his demand, the funds entrusted to them, and bring their separate action upon Goodloe's claim, as Goodloe would have been, obliged to do if they had not thought proper, by paying him, to take his place.
The court being equally divided in opinion, judgment of the district court stands affirmed, with costs.
Concurrence Opinion
I concur in the foregoing opinion delivered by Judge Slidell.
Concurring with Mr. Justice Shidell in his statement of the facts of this case and with his view of the law of principal and factor, there are circumstances in it which prevent my assent to his conclusion as to the rights of the respective parties. I consider the law on that subject as correctly expounded by this court in Bludworth’s case; and if I was conscious that my view in this case conflicted in the slightest degree with what was decided in that case, I should mistrust their soundness and refrain from urging them.
In my inquiry as to the legal rights of these parties I assume, for the sake of argument at the commencement, that at the time of the payment of the debt for the engine by Shaw Co. to Goodloe, it was a just and subsisting debt due by Nolan, and that, by the payment the debt has been discharged; so that Nolan owes Goodloe nothing, and Goodloe can in nocourtrecover any thing from Nolan; and unless he is bound to pay Shaw Sf Co. for the engine he gets it for nothing. A case is thus presented which is so repugnant to the most ordinary sense of justice, that the mere statement of it carries refutation with it. Shaw &f Co. then can recover back from Nolan the amount of the debt which they have thus extinguished, and ofwhich extinguishment he has had and continues to havethe benefit, and they can recover on the strictest principles of law. I do not consider that the right of Shaw Sf Co. to recover this money back is at all affected by the mode in which the paymentwas made by them. They were the general agents of Goodloe, and Goodloe was their debtor; the payment was made by giving Goodloe credit for the amount in account; Nolan has nothing to do with this mode of extinguishing the debt; Goodloe does not object to it; the debt is paid ; and between Shaw S¡• Co. and Goodloe the affair it must be conceded is strictly mercantile and correct. Shaio 4' Co. at the time were under no engagements towards Goodloe on account of the mill &c. The payment was made in direct violation of Nolan’s orders, but it is not pretended that Goodloe at the time was insolvent or in questionable credit. Pothier in commenting on the law si quis volente, code lib 2, tit xix de negotiis gestis, leg. 24th, in which the opinion of Paulus & Pomponius is confirmed, that a person acquires no right of action for indemnity against one whose business he has interfered with against his prohibition and will, states that the reason of this decision of Justinian is founded on the peculiar nature of the quasi contract, egotiorum, gestorum, that this contract cannot be pre-supposed where the principal forbids the action of the person, and consequently the action contraria negotiorum gestorum will not lie against the person whose business has been done against his directions, and he then adds. He who has transacted the business of another against his formal prohibition, not having, according to the principles we have laid down, the action contraria negotiorum gestorum to recover his expenses laid out in the business, ought he to lose them when the person whose business has been transacted has had the benefit of the expenditures? I have, for example, become security for a debt of your’s against your orders; I have not the action contraria negotiorum gestorum against you for the recovery of what I have been obliged to pay for you, because I acted in violation of your orders; but ought I to lose the sum which I have paid for your benefit, and which has procured to you the release from your debt? Pothier asks if this would not be repugnant to equity, which permits no -man to be enriched to the detri
Under the Spanish law the rule appears to be to the same effect. Any one may pay a debt for the debtor, without his authority or mandate, although he be ignorant of it or know it or forbid it, and the creditor is bound to receive it and by these means the debtor is discharged according to a text of the Partidas, and he who has made the payment may recover the amount of the debt from the debtor, provided the debt be justly due and that he was necessarily obliged to pay it, according to a text, since the payment was for his benefit, he having been released from the debt according to another text. Curia Phillipica, verbo Paga, fol. 383, § 84. The texts referred to are texts of the Roman law, which it is not necessary to examine after having the opinion of Pothier on the subject.
Our code provides that an obligation may be discharged by any person concerned in it, such as a co-obligeo or security. The obligation may even be discharged by a third person, provided that person act in the name and for the discharge of the debtor, or that if he act in his own name he be not subrogated to the rights of the creditor. Art. 2130.
This article is the 1256th article of the Napoleon Code. It is curious that the same question which divided the Roman jurisconsults has been renewed with increased vigor and zeal by the commentator on the Napoleon Code. Toullier repudiates the construction which Pothier has given to the decision of Justinian, si quis volente. This was one of the fifty decisions given by the Emperor himself on disputed questions of jurisprudence, which refuses an action to a person who has laid out money for another against his orders. This distinguished author considers the decision as conformable to justice and the principles of law, and that it ought to be followed in the jurisprudence of the code.
Troplong has since reviewed the whole controversy and has come to the conclusion that the erroron both sides consists in the too great generality of the rule which eaclr party maintains, and tbatthere are certain cases in which this action must be allowed to a party who has laid out money for the benefit of another, even against his positive orders, by which the latter has profited ; 'but the action is only allowed to the extent of the benefit really accruing to him. 11 Toullier, Droit Civil, § 55. Troplong, Mandat, § 70 to § 86.
1 assumed the justness of the debt which Shaw Co. paid for Nolan, for the sake of argument. I now state that, in my opinion, the justness of the debt is proved beyond all question, and that Nolan had no right whatever to withhold or delay the payment; and that according to the principles of law the claim of Shaw 8f Co. against Nolan for reimbursement, is as clear and unquestionable ns Nolan’s right to recover from his factors Shaw 4- Co., the balance of his .account. On looking into such authorities as are at present within my reach, I ought not omit to cite two cases which I consider as justifying the views I have taken of this case: that of Duncan v. Hampton 6. N. S. 22. and of Child v. Morley, 4. Durnford & East. 611. In the first case, Duncan had paid certain
I do not understand the case of Child v. Morley as deciding the principle stated in the treatise of Mr. Paley. I understand the Court of King’s Bench only to have decided that the party, under the circumstances stated, could not recover in the action of assumpsit. Indeed, that case appears to presentthe same question as that arising under the Roman and French jurisprudence, and to have been determined not on the principle of right but on the form of action in which the party sought his relief.
In Child v. Morley, it was determined, that a broker who contracts with others for the sale of stock at a future day by the authority of his principal, who afterwards refuses to make good the bargain, cannot, by paying the difference to such third persons, maintain an action on an implied assumpsit against his principal for the amount. This case had been tried before Lord Kenyon, who permitted a verdict to be taken for the plaintiff, and, on giving his opinion in the Court of King’s Bench on a rule taken to set aside the verdict, expressly placed his decision against the validity of the verdict on the form of action, which was that of assumpsit, in which the plaintiff had presented his case. His Lordship observed, “nothing can be more unjust than the defence which has been set up to the whole of this demand; and that consideration may, at first view of the case, have tended to warp my judgment. But I cannot perceive what benefit the defendant can propose to himself by such conduct; for the court have no doubt but that, at all events, the verdict must stand for the ¿£12 10s., the amount of the plaintiff’s commission as broker, under the count for work and labor; and, I think, that some method or other will be found for making the defendant pay the amount of the difference which the plaintiff has honorably settled on account of his principal’s not making good his engagement. But, as to that part of the demand, there is a difficulty in the form of action; and, perhaps, it would have been better framed ex delicto than ex contractu. I admit that no man can, by a voluntary payment of the debt of another, make himself that man’s creditor, and recover from him the amount of the debt so paid; but what pressed on my mind was, that the plaintiff was under some sort of compulsion to pay the differences.” In conclusion, he says, “ considering the difficulties of the case in its present shape, as to the sum recovered for the differences, I think it would be better to frame another action for this part of the demand better adapted to the nature of the case.”
Chancellor Kent, who appears thoroughly to have examined this subject, states the rule to be this: If there be any relation between the parties, a payment without authority may be binding on the person for whose use it was made, if it be under the pressure of a situation in which one party was involved by the other’s breach of faith. My opinion is, that the refusal of Nolan to pay for this engine was a breach of good faith; and that the promise of Shaw 8f Co. not to pay Goodloe, being made on the misrepresentations of Nolan to them, was not binding; and that, under the subsisting relation between all the parties, Shaw is entitled to recover the debt which he has paid, it having inured exclusively to the benefit of Nolan.
If we could determine on these cross claims, my impression is, thatwe would not allow Nolan to receive from Shaw fy Co. the whole of his debt. Frustra,
My brethren, who have come to the conclusion that Shaw 8f Co. are without remedy in the present suit, consider that the payment made by them cannot be set up as a defence or in compensation to the plaintiff’s action according to the principles of law. Even conceding, for argument sake, that opinion to be correct, I cannot concur in the conclusion that Shaw 8¡- Co. are not entitled to relief from our hands. Under this view of the subject, I assume that Shaw Co. were bound to set up their claim against Nolan for the amount paid Goodlot in a reconventional demand. They have not done so, but alleged it as a matter of defence to the plaintiff’s action; and under this allegation, evidence, establishing the justness of the debt due by Nolan, was received by the court. To the admission of the evidence a bill of exceptions was taken, but I do not think it is properly taken according to the rules of practice, by reason of its vagueness. Here we have both parties at fault, and as, from the evidence before me, I come to the conclusion in favor of the equity of Shaw 8f Co.’s claim, I think the case ought to be remanded for further proceedings, with the privilege of the defendants to file their claim in reconvention; and that the amount thereof stand for so much in satisfaction of the plaintiff’s judgment, the execution of which ought to be suspended until the said reconventional demand be adjudicated upon.
The difference between us resolves itself into a mere question of practice, apparently of little moment, but probably the cause of all this difficulty between these parlies. Nolan seeks one of the courts of Shaw Sf Co.’s domicil to exact the amount due by them as his factors ; but to their demand against him offers to them, as he did to Goodlot, the recourse against him at his domicil in the parish of West Baton Rouge. As I think the demands are connected with each other, and dependant on the relations of Shaw Sf Co., not only as Nolan’s factor, but as agents of both Nolan and Goodlot; and as the factors of the latter, I think Nolan, under our system of laws, is bound to litigate the whole matter before the tribunal which he has selected.
The claim set up by the defendants against the plaintiff being due, it appears to me that the case presents a mere question of practice.
The plaintiff resides in the parish of West Baton Rouge, and defendants in the Parish of Orleans. An act of the Legislature, amendatory of art. 375 of the Code of Practice, provides that when the parties to a suit reside in different parishes the defendant may reconvene for any cause whatever. Session Acts, 1839, p. 164.
Piad this plea been made below, it is clear that the district judge would have been bound to entertain it. The defendants pleaded compensation; and the only question which divides the court is, whether the case shall be remanded to enable the defendants to amend. I think this a proper case for the exercise of the power vested in us, to remand cases when justice requires it.
