53 Ga. App. 821 | Ga. Ct. App. | 1936
Lead Opinion
1. When this case,was previously before this court, it was held: “In the absence of any contrary contractual stipulation, the general rule is that an agent employed to sell commodities upon commission for his principal, such as cotton, may recover his commissions for procuring purchasers with whom valid contracts are made, although the purchasers later are found to be financially unable to comply with the terms of their contract; subject to certain limitations regarding the good faith of the agent. The commission is earned, in such a case, when the agent finds an acceptable purchaser with whom a valid contract is made. . . Such an agent is not an insurer of the ability of the purchasers procured by him, if they are accepted as satisfactory by the principal and binding contracts of sale are made with them by the principal; but the agent is bound to act in good faith toward his principal. He can not fraudulently put off insolvent purchasers on his principal, and thus entrap the principal. Payne v. Ponder, 139 Ga. 283, 287 (77 S. E. 32).” Williamson v. Thompson, 50 Ga. App. 564 (179 S. E. 289). The plaintiff, suing a seller for commissions for obtaining purchasers and written contracts for the sale of cotton, in his petition pleaded that the defendant agreed to pay him “a commission of fifty cents per bale in negotiating said contracts;” that formal contracts were executed and confirmed by the defendant, and “defendant accepted said [named corporations] as purchasers satisfactory to defendant.” Denying the conclusions stated, the defendant filed an answer admitting the execution of the alleged contract, but pleaded two defenses. The first was that although the plaintiff at the time of entering into the contract sued on was acquainted with the financial condition of the purchasers, and that they were unable to purchase and pay for such amount of cotton, and he had every opportunity of knowing this, he “concealed this fact from this defendant,” represented the purchasers to defendant as being solvent, and “did not, as agent for this defendant in the purchase of said cotton, deal with his principal in good faith, which the law requires of such agent, and
As to the first defense, this court further held that “evidence as to the insolvency of these purchasers would not be admissible, unless the defendant could show that the plaintiff had knowledge thereof,” and, without passing on the sufficiency of the evidence as to either defense, reversed the judgment in favor of plaintiff on the ground that the court had erroneously restricted defendant’s right of cross-examination of the plaintiff on the question of rumors heard by him “as to the bad financial condition of the purchasers prior to the time they made the contracts to purchase this cotton.” In the instant trial, which resulted in a verdict in favor of plaintiff, there was no exception on account of any limitation of cross-examination, and the plaintiff appears to have been fully cross-examined. He explained that his statement at the first trial that he had heard in the early part of 1929 (before the sale contracts were executed in July, 1929), “little rumors” that the purchasers “were in bad shape,” but “did not know anything about it,” was due to a “misunderstanding of the question;” and he testified that in fact he did not hear such rumors until 1930, after the sale. There being no other evidence as to any “bad faith” by plaintiff, and upon this question a verdict for the defendant not being demanded under the plaintiff’s testimony' as stated, the grounds of exception, as to this defense, are without merit.
2. On the second defense, as to the alleged universal custom not to pay brokerage commissions until cotton was both shipped and paid for, although several witnesses’ fully sustained this plea, the plaintiff denied the existence of such a custom, and that there
3. The court did not err in excluding, on the ground of irrelevancy, testimony by the plaintiff on cross-examination that he had not sued another corporation for cotton-brokerage commissions on a contract where the purchaser therein had refused delivery. Even if, as contended, such testimony might have tended more or less to show the existence of the custom pleaded, and the plaintiff’s knowledge thereof, proof of such a mere failure to sue would have injected into the case so many collateral questions as to the motives or reasons of the plaintiff as to confuse the jury. Moreover, the defendant was allowed to introduce testimony by the vice-president of the corporation in question, that the plaintiff had never brought any suit for the commissions.
4. The exclusion of testimony by a witness that “in the spring of 1930” the purchasers in the brokerage contracts here involved “were bankrupt” was not prejudicial to the defendant, since, although the objections and the exclusion were based on different grounds, this evidence would have been irrelevant on the issue whether or not the purchasers were insolvent in July, 1929, at the time of the contracts, and whether the plaintiff then knew or ought to have known of the insolvency. See Smith v. Page, 72 Ga. 539, 544; Barksdale v. Security Investment Co., 120 Ga. 388 (4), 395 (47 S. E. 943); Gordon v. Spellman, 148 Ga. 394, 400 (5) (90 S. E. 1006); Lamon v. Perry, 33 Ga. App. 248 (b); 251 (125 S. E. 907).
5. A witness, who in his interrogatories had previously testified that he had worked as bookkeeper for the purchaser mills until January 15, 1929, and whose testimony showed that his knowledge of their financial condition was derived from their books and records, was asked to “state whether or not, from your knowledge of the financial condition of said mills, they were in position to
6. Exception is taken to the exclusion of testimony by the vice-president and treasurer of the defendant company, that the president and owner of the stock in both purchasing mills “at first tried to conceal the matter that he did not want delivery of the cotton, and when he found we were not delaying the cotton he admitted that he could not take it,” on the ground that the state
7. Testimony by the witness last mentioned, that when he went to North Carolina in January, 1929, one of the purchasing mills “had not operated for six or eight months,” even if not properly excluded on the grounds of objection stated that “the witness did not show the source of his information,” and that “it was a conclusion of the witness,” was not sufficiently relevant to the question of solvency of the purchaser at the time of the contract in July, 1929, to have prejudiced the defendant by its exclusion; the testimony showing that cotton mills frequently shut down temporarily in periods of inactivity; and the excluded testimony, even if admissible, showing that the representative of the defendant, equally with or to a greater extent than the plaintiff:, had knowledge of the closing in January, 1929, and such a fact having no relevancy on the question of the good faith of the plaintiff in not disclosing to the defendant facts affecting solvency, which the answer charges that the plaintiff but not the defendant knew.
8. The instructions relating to the universality and generalness of the custom in the cotton trade, as alleged by the defendant, that brokers were not entitled to commissions until the cotton was both shipped by the seller and paid for by the purchaser, were substantially in accord with the Code, § 20-704(3) and decisions relating thereto, and were not erroneous as improperly defining such a custom or as argumentative.
9. Exception was taken to repeated instructions that while the plaintiff had the burden of proving the allegations of his petition as to a sale of the cotton to acceptable buyers, under the alleged
(a) “The burden of proof generally lies upon the party asserting or affirming a fact and to the existence of whose case or defense the proof of such fact is essential. If a negation or negative affirmation be so essential, the proof of such negative lies on the party affirming it.” Code, § 38-103. Where a plea or answer merely elaborates a general denial of the averments of a petition, and is in effect only a detailed plea of the general issue, or is evidential or argumentative in character as to matters unstricken on special demurrer, there is no such affirmative defense as will place the burden on the defendant to prove such matters. But if the plea or answer admit essential facts of the petition, which show a right of recovery, but set up other facts in justification or avoidance, or other special matters not merely elaborating or explaining a general denial, there is an affirmative defense, the burden of proving which by a preponderance of the evidence will rest on the defendant. Trammell v. Atlanta Coach Co., 51 Ga. App. 705, 713 (181 S. E. 315); McCrackin v. McKinney, 52 Ga. App. 519 (183 S. E. 831); and cit.
(b) The general presumption of good faith accompanying all contracts and contractual relations, and the petition not setting up the good faith of the plaintiff as a part of his alleged right of recovery, the allegations in the answer as to bad faith, to defeat the claim, constituted an affirmative defense, the burden of proving which was on the defendant.
(c) “The custom of any business or trade shall be binding
10. The court instructed the jury as follows: “The agent,, however, must act in good faith, and he can not recover if he has fraudulently put off insolvent parties on his principal. If the agent knew of the insolvency of the mills, or either of them, if they were insolvent at the time the contracts were made, and he submitted them to his principal, then the agent can not recover his commissions.” Exception is taken to this charge on the ground that it made actual knowledge of the insolvency of the purchasers the test of the plaintiff agent’s good faith and right to recover; '“whereas it is the law that if the agent by the exercise of ordinary care and diligence could have known of the insolvency of the mills, or had reasonable grounds of knowing of the insolvency of the mills, then he would be chargeable with knowledge thereof, and his rights would be the same as if he had knowledge thereof, and he could not recover in this case;” and “furthermore, if said agent had reasonable grounds to suspect that said mills were insolvent, he could not in good faith proceed to consummate said contracts in behalf of the defendant and recover in this case, and the law would consider that he had acted in bad faith.” Elsewhere the court charged that the burden was on the defendant to prove all of its defenses, and that the plaintiff would be entitled to recover, unless the defendant showed that “the agent acted in bad faith, or that one or more of the mills was insolvent, and that the agent knew about it, or that there was a general custom as to payment of commission as claimed by the defendant.” The amended answer pleaded not only actual knowledge by the plaintiff of the insolvency and inability of the purchasers to meet the obligations of their contracts, but that he had every opportunity of knowing this, yet represented them to the defendant as solvent, and consummated the contracts with them as solvent purchasers. It set forth that the actions and silence of the plaintiff constituted such an absence of good faith by the plaintiff as precluded a recovery. This pleading, if supported by evidence, would thus present the issue, not only as to whether the plaintiff had actual knowledge of the purchaser’s insolvency, but whether his knowledge of material facts, such as rumors of insolvency, constituted bad faith which would debar a recovery.
While it is true, as contended by the plaintiff in his testimony, that the ultimate responsibility of granting the credit rested upon the defendant, it is also true that' the plaintiff acted in the capacity of the'defendant’s broker and agent; and it is a well-recognized
Judgment reversed.
Dissenting Opinion
I dissent, because I am of the opinion .that the charge of the court sufficiently covered the case, and that the error on which the judgment is reversed is not sufficient to require a reversal.