58 Miss. 445 | Miss. | 1880
Lead Opinion
delivered the opinion of the court.
On the 26th of February, 1877, Drew Whitly and nine others executed a deed in trust to secure one Langsfield for supplies to the amount of $1,200, and at the same time executed their note to said Langsfield for that sum, due September 1, 1877. On the same day Bohlen Lucas and six others executed another deed in trust to the same party to secure the sum of $500 in supplies, for which they also gave their note, due on the 1st of September, 1877. All these grantors were colored,- and were tenants of the appellant, A. J. Paxton. The deeds in trust are exactly alike except as to the amount intended to be covered, and conveyed to a trustee all the crops of corn and cotton to be grown by the grantors on the plantation of said Paxton in the year 1877. There being an alleged failure on the part of Langsfield to furnish the necessary supplies, Paxton made advances, and when the crop was gathered, shipped and sold the cotton and applied the proceeds to the payment of his advances, including those which he had made after notice of the trust-deeds was given to him. The cotton was insufficient to pay Paxton, and he declined to pay any of the proceeds to Meyer, Weis & Co., who had become the assignees of the deeds in trust. Thereupon Meyer, Weis & Co.
The chancellor held that the grantors in the trust-deeds were not bound by the contract price of the goods furnished under these deeds, and referred it to a master to ascertain the proper price to be charged. The master was directed to state the account “ at such rates for the articles charged as shall appear to have been customary, fair, and reasonable in the kind of credit business and with the class of people with which and by whom said accounts were contracted in 1877,” and to allow two and one-half per cent commissions on the advances, and interest at ten per cent from the 1st of January, 1878.
The master heard testimony to show that a higher price was charged to persons buying on the credit of such mortgages than to solvent customers, and, acting on the idea that such higher charges were proper, after making some small deductions, reported as proper charges allowing a profit of about ninety to one hundred per cent, besides the two and one-half per cent commissions, and interest. From this decree Paxton appealed.
One of the deeds in trust contained this stipulation : .“That the party of the second part (Langsfield) has agreed to advance to the parties of the first part (the grantors), from time to time, as they may need the same during the present yeaf, in plantation supplies and other articles, to an amount not exceeding twelve hundred dollars, which last-named amount is evidenced by the joint and several promissory notes of the grantors of even date herewith, and bearing interest at the rate of ten per cent per annum from date, and payable on September 1, 1877.” The deed contained also a stipulation to pay two and one-half per cent commissions on the advances. The other deed was like this, mutatis mutandis.
The first inquiry is to ascertain the meaning of the deed in trust as to the terms on which the goods were to be sold.
In Hoadley v. McLaine, 10 Bing. 482, it was said : “ It is clear that the contract for the sale of a commodity in which the price is left uncertain is, in law, a contract for what the goods shall be reasonably worth.” And in Acebal v. Levy, 10 Bing. 376, it was said: “As no price is stated to have been agreed on, the law presumes the agreement to have been, or assumes as a condition of the contract, that the price was to be a reasonable one ; ” that is, “ such a price as the jury, upon the trial, shall, under all the circumstances, decide to be reasonable.” This rule, thus expressed, meets the approbation of the most approved text-writers. Benj. on Sales, sects. 85, 86 ; Story on Sales, sect. 221.
The rule by which the reasonable value of goods is to be determined is, ordinarily, their market value at the time and place of the sale. In transactions between regular dealers in staple articles of general commerce, and where no extraordinary circumstances exist to derange temporarily the market price, that would be a safe standard by which to measure the value of goods. This market price is what the goods would readily sell for in the regular course of business, and it is fixed by competition among the buyers and sellers. When this competition is free and unimpeded, it fixes on articles of general commerce a single price in the market at the same time and place, and this price is quotable in a price-current. But even in respect to such articles, and in that kind of dealing, the market price on any particular day is not the absolute standard of the value of the goods.
In Acebal v. Levy, 10 Bing. 376, it was said: “ The current price of the day may be highly unreasonable, from accidental circumstances, or on account of the commodity having
The market price may be unnaturally inflated, as by a speculation called. “ a corner” (see Kountz v. Kirkpatrick, 72 Pa. St. 398) ; and so it maybe disturbed “ by illegitimate combinations for temporary, special, and selfish objects, independent cf the objects.of lawful commerce, and a forced and violent perversion of the laws of trade, not within the contemplation cf the regular dealer, and therefore not deserving to be regarded as a proper basis upon which to determine value, when that fact becomes material in the administration of justice.” Smith v. Griffith, 3 Hill, 337. This is true with reference to transactions between regular dealers by the wholesale, and in relation to commodities having a quotable market price, and when the dealings are on a cash basis or its equivalent. With ■reference to retail trading in the ordinary articles kept by shopkeepers, a market price is more difficult to fix, and it becomes still less potent as a measure of reasonable value. Mr. Mill, in his work on political economy, justly remarks that in the retail business there is no regular or standard market price; that “there are cheap shops and dear shops, .and in the same shops goods are sold at different prices to different customers.” And it is a matter of common observation that the competition in the trade, the ignorance and sometimes the indolence of purchasers, the difference in the quality of the articles and the adulteration of some of them, not discernible except by skilled dealers, the connection in business or otherwise between the dealer and the customer prevent the fixing of a regular market price. This incertitude in the retail price is shown by the evidence in the case before us, it appearing that there is a difference among the merchants in the same .neighborhood of from fifteen to twenty-five per cent in the ■price of several staple articles, even when sold on liens on ■crops.
It is evident, therefore, that in determining the reasonable
Yet it must be borne in mind that the factum probandum, the real point of inquiry, is not the market or usual price of the goods, but their reasonable value. The price ma}7 be-
Applying these principles to the case before us, the directions of the decree, which were literally followed by the master in the examination of the witnesses, are erroneous. The direction was to ascertain what the class of persons to which the purchasers in the case belonged should be charged. It was, in effect, stated that higher rates were justifiable as against them than against other and more solvent purchasers. There is no justification for such a ruling in reason or authority. The merchant bound himself in the deed in trust to furnish the goods, as needed, at what they were reasonably worth. For this obligation he received a valuable consideration— the deed in trust on the crops of the purchasers. He carved out his own security, and must be deemed to have considered it sufficient, and he cannot now be heard to say, so as to relieve himself from his obligation to sell at a reasonable price, that his debt was insecure.
The chancellor’s duty was to interpret and enforce a contract which had been made by the parties, not to make a contract for them, nor to fix the proper elements for such a contract. As we have seen, the law assumed, as a condition of the contract, that the price should be the reasonable value of the goods. The law takes no notice of the nature of the security. If the seller be satisfied with it, no one else can interfere, and his satisfaction with and acceptance of it bind him to the bargain he has made. The proper inquiry of the master was not as to the price of the goods when sold to insolvent persons giving only a precarious security, but as to their reasonable value, to be determined, in a large measure, as we have seen, by the usual and customary price as fixed by sales to solvent purchasers on a credit. The inflated price charged bv merchants in the vicinity to insolvent purchasers was accidental and abnormal, and resulted from a perversion of the laws of trade. It grew out of a commerce which is illegitimate so far as it is based on the insolvency of the purchaser.
It was shown that the prices charged were those agreed on at the time each delivery of the goods was made. We think the •chancellor rightly declined to hold the purchaser’s bound by these prices. Proof of them was competent, and if nothing more had been shown in evidence, such proof would have warranted a decree for the amount thus agreed on. But as soon as proof was made, as it was in this case, that the prices charged and assented to by the customers were exorbitant, largely more than the reasonable value of the goods, and having for their justification only the alleged insecurity of the debt, then the agreed price ceased to be a proper standard in determining the controversy. Ordinarily, in the absence of fraud or imposition, the price agreed on is binding on the parties. But when the price is so exorbitant that, in the language of
We do not think that Paxton had the right to furnish supplies in derogation of Langsfield’s right under the deed of trust, after he had notice of it. Langsfield was not requested by Paxton to furnish the supplies necessary to raise and gather the crop, nor notified that Paxton would furnish them in case he failed to do so.
The decree is reversed and cause remanded, with instructions to restate the account according to the principles announced in this opinion.
Concurrence Opinion
concurring.
The great practical importance of the questions involved, and the fact that this court is not unanimous, induce mo to state the reasons for my concurrence in the principal opinion.
The chancellor, having rejected the contract price as the standard of value for the goods delivered,- referred the accounts to a commissioner for the purpose of ascertaining their reasonble value at the date of delivery upon a quantum valebat. He directed the commissioner to ascertain and report their “ customary, fair, and reasonable value in the kind of credit business and with the class of people in which and by whom such accounts were contracted.” This direction was correct so far as it directed an ascertainment of their customary, fair, and reasonable value. It was made incorrect by the addition of the words, “in the kind of credit business and with the class of people in which and by whom such accounts were contracted.” There was nothing peculiar in the kind of business in which the parties were engaged. It was simply the buying and selling of food and clothing by a retail merchant to the consumer of such articles, and this ever has been and ever must be the most universal of all mercantile transactions. That the goods were sold upon the security of a mortgage of present or future acquired property, rather
If the chancellor meant to draw such a distinction, it was of course unwarranted; and if this was not what he meant, he must have intended indigent or insolvent persons, in contradistinction to wealthy or solvent ones. Such a line of demarcation would in this case be as unwarranted as the other. A vendor may, in selling property to an insolvent person upon a credit, charge by special agreement such per cent ,as he pleases for the added risk by reason of the insolvency ; but where he has entered, as here, into a written contract to furnish goods, without specification as to the price, and that price is to be fixed by the courts upon a quantum valebat, the pecuniary condition of the buyer cannot enter into the question of price. By his contract to furnish the goods on a credit, the seller declares the buyer to be worthy of credit, and where a court or jury are called upon to fix the price of the articles sold, they cannot enhance that price by any estimate of whether the customer was solvent or insolvent. I recognize the customary rates charged for goods by dealers generally and paid by consumers generally as, ordinarily, the most satisfactory of all methods of arriving at their reasonable worth, but I repudiate the idea that any universality of custom can ever sanction the charging of poor men more than rich ones, or can ever compel the courts to accept it as a custom so fixed as to be binding upon them in determining the quantum valebat of the articles sold. It must not be said that we have repudiated customary rates in the ascertainment of value. On the contrary, we recognize the force of custom to the fullest extent, but it must be a custom applied to all persons alike. What we do
Dissenting Opinion
dissenting.
I differ with my brethren as to the views expressed and the conclusion reached by them in this case. I think the only question for our decision is as to the rule by which the value of the goods sold is to be arrived at. Whether the chancellor did right to disregard the price agreed on at each delivery of goods is not before us, because the seller of the goods, who alone could complain of this action, did not appeal. He acquiesced in it, and that is an end of it. I agree that Langsfield was bound by his contract to furnish the goods stipulated for at reasonable rates, but insist that the criterion by which to determine what is reasonable is the customary rates at which goods were sold under similar circumstances. What is reasonable is a question of fact, to be resolved from evidence, and the most pertinent and satisfactory evidence is what is customary in similar circumstances; in other words, what those engaged in such business have regarded as proper. I know no other practical, and therefore legal, test of value than the transactions of men, and opinions based on such facts. The law does not deal in speculative theories as to value, but regards it as a practical question, to be settled by the trans
My interpretation of the decree for an account, and of the result attained by the commissioner and approved by the chancellor, is that the goods furnished by Langsfield were valued at such rates as the evidence shows to have been customary, fair, and reasonable in the kind of credit business which this was, in 1877. The qualifying words, “fair and reasonable,” might have been properly omitted ; but they were unfavorable to Langsfield, if to either party, and he does not complain. I do not understand the mention by the decree of “the class of people” contracted with as having any reference to race, color, or previous condition of servitude, but only as descriptive of a distinctive class of persons, parties to the kind of “ credit business ” of which this is an instance ; and, thus understood, I find no fault with the direction, for I regard it as the equivalent of a direction to ascertain the customary rates in the kind of credit business which this was, and that I consider the proper direction in such cases. Customary rates are to prevail as to the value of goods in such sales, just as customary rates establish the value of the rent of land, or professional services, or anything else which has to be ascertained from evidence. I accept the doctrine announced in the opinion of Judge George as sustained by authority, viz. : that a reasonable price is such as the jury (-or chancellor) upon the trial shall, under all the circumstances, decide to be reasonable ; but as the jury or chancellor should be guided to-
The leading feature of the kind of business of which the transaction involved in this case is an instance is the mortgaging of a crop to be grown, as the basis of credit for the means to secure its production, which I regard as a most pernicious system, which has produced wide-spread evil, but which must be dealt with as it is, and not as I wish it was. It has been fostered by legislation, and it would be affectation of judicial ignorance of a prevalent system to ignore its existence. In this business the hazards taken by the party advancing are considered so great as to justify a profit which in other circumstances might be regarded as shockingly exorbitant. Practically, he who advances to make a crop, and has the future crop as security, is dependent on the success of the venture for his pay. He puts all, cost and profit, at hazard. The success of the venture and the realization of precarious security is dependent on so many contingencies as to make the hazard great. -Each successive crop being sold in advance of its being made, as a pledge for the “supplies” by which to make it, the only hope of payment for such supplies is in the success of the operations of the year. This element of uncertainty, among other circumstances, has exerted an important influence in determining the scale of prices for goods advanced under this system, and establishing the prevalent custom, shown by the evidence in this case to have governed both the shopkeeper and the planter in selling goods in this kind of business.
There being a prevalent custom to sell goods at high prices in such business, it may be assumed to have been in the contemplation of the parties to this contract, which is silent as to the
In response to a suggestion of error in the foregoing opinion of the court, by the counsel for the appellant, the following addendum thereto was announced : —
Per Curiam. — It is insisted, in a suggestion of error, that the effect of the decree below was to subject to the lien of Langsfield the interest of some who were not parties to the mortgages. The position of some of these parties is not exactly clear. We direct that on the remanding of the case the chancellor restrict the recovery of Meyer, Weis & Co. against Paxton to the interest, whatever it may be, of the mortgageors in the cotton which Paxton has received. Whatever interest the moi'tgageors had in the cotton, and also whatever interest each of the others may have induced Langsfield to believe the mortgageors, or any of them, had in the crop, will be bound.