Case ID: ad_123/html/0298-01.html
Source: Caselaw Access Project
Author: {"author": "Clarke, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles G. Conn, Respondent, v. William Paris Chambers, Appellant.
    First Department,
    January 10, 1908.
    Principal and agent — consignment of goods for sale — contract construed — when proceeds of sale not held in fiduciary capacity.
    
      A complaint-against an alleged agent for conversion in failing to' turn over inon.eys collected On the sale of goods and alleged to "be held by him in a fiduciary capacity, should be dismissed when the agreement between the parties as proved at trial provided that the plaintiff appointed the defendant his exclusive selling agent in a certain district, that the plaintiff should consign to the defendant for sale sufficient of its goods to equip the agency, the defendant to keep up the stock by reordering as fast as the goods were sold, and pay to the plaintiff certain percentages of the advertised prices of all goods furnished by the plaintiff, making monthly settlements of accounts, etc. This, because the contract did not put the parties in a fiduciary relation, nor impose upon the defendant an obligation to transmit the actual moneys received from the sale of the goods, ñor make him bailee thereof, but on the contrary constituted a sale to the defendant upon monthly credits.-
    Patteiison, P. J., and Scott, J., dissented.
    Appeal by the defendant, William Paris Chambers, from a judgment of' the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 10th day of July, 1907, upon the verdict of a jury rendered by direction of the court after a trial at the New York Trial Term, and also from an order entered in said clerk’s office on the 9th day of August, 1907, denying the defendant’s motion for a new trial made upon the minutes.
    
      Nelson L. Keach of counsel [Louis Steckler, attorney], for the appellant.
    
      Henry J. McCormick, for the respondent.
   Clarke, J.:

The complaint alleges- that the defendant was the agent of the plaintiff for the sale at the city of New York of divers' musical instruments, accessories and sheet music consigned and delivered to him by the plaintiff for sale and as such agent acted in a fiduciary capacity and had and received the money proceeds of said property; that between certain dates the plaintiff consigned and delivered to the defendant as his certain agent and bailee for sale, divers goods which it was the duty of said agent to sell at agreed prices, and after deducting his certain commissions on such sales to pay over to the plaintiff the proceeds thereof; that the defendant, as the agent and bailee of the plaintiff, did sell to fdivers persons said goods and. did receive therefor moneys, the property of the plaintiff, and after deducting all commissions had in his possession $2,865.09 money and property of the plaintiff, which it was the defendant’s duty to pay over to him; that the plaintiff has frequently demanded said sum, but the said defendant, contrary to his ''duty, ías ágéiithtid bailéé; lYas négió'cted hiiti réfh'séd strch" demands i ánd! wrongfully,, unlawfully áñd fraudulently converted -and upproy priated t.O his own use -the money and property of! this -plaintiff, no «part -of .wMete lias, been-paid-.- ■ -

',T'he anSWer'-"ádiYnttéd that'tile defendant ’sold 'divers ‘inü'sical sQm 'i'tistfitmerits,’’áccessoriés 'arid sheet inúsíc "for and on’behalf' of the plaintiff and that the defendant received:, of the plaintiff "divers goods, but denies the allegations of. the ¡complaint alleging that-Ire acted in a fiduciary capacity, and that-it-was his du,ty5 after .deducting his certain. commissions on such sales,, to pay .over to the. .plaintiff, the' proceeds thereof, <?r that, lie -had received, any sums (bf ^money for .the sale of goods as the .propertyof the-plaintiff or that lie had fraudulently converted and appropriated any mo.ney .or • property of,the plaintiff. . At the time of. the commencement .pf " ,the action an order of arrest was issued, the .defendant was arrested and held in bail. • .....

The defendant executed a paper which was as follows: “ I 'hereby ''aiclch'ówlMge -'my- indebtedness''to/Chárlés AL Obtíñ' of Elkhart, Indiana, in the sum of. $2,865.09 in payment of' tilffsical instruments, musical merchandise.-.and,-.intisie consigned to- me on sale, and the amount above is now due from me to Charles ' . r .. . » .»• „ G. Conn, and I promise to pay to the, said Charles G. 'Cóñii '$50 'on the- TOth '-of 'February, 1902, and' $'501 on 'the iotlldf '¿¡acli.'and -every month"'tlléreáf íef until tlie ambunt is’pal'd in full, ftnh'ih tile eVéht'bf’my-failure to 'makeaiiy 'payiherit ’as''stipulatedithe"said "Charles'G. 'Coiin'Shall have tlie fight'tó'mstitüt'e'légal' procéédings Agáms't'mepás' m'e'ciréum'st'aricés rimy Wárfánt.’’

'"‘The-"cóurt"denied a 'motion "to" dismiss 'the' c'otiiplaint, deniéd'a -m'btión forgo "to the’jury-upon the ’question whether ’ór'iíbt fhé c'onf - qilaint' andthe. evidence presented wfere sufficient tb 'say'Whether'br 'not iher'e’wus B'c'bnversión,' and lipón motion df tlié pl’áiiitiff directed <á verdict‘for’ $3',-'522.26. Frbih'tlré 'judgment tlierébn etitéréd áhd The order denying a-motion for a'new trial-'tlii's appeal is taken'.' ’

'-' The question siihmitted'is whether the- catise' of hctioh'stated iii. the complaint, ’conversion, was' sustained.' The éoniplaint' alleges, ’and The réspondént'maintaiií's,tliat the goods were sent'hy th'é’pláinfi'ff tb the defendant and received’By him as the' ageht of Thbpíáihtiff to éé'll for ■'the -plaintiff; tlie proceeds thereof tb be fbrxV'ard'ed ‘to tjhe.plaintiff after ,tb,e. deductiqn'of the defendant's, commissions, and. t}iat„ thps.a, fiduciary,relation wag., established hetwqen.,the.plaintiff', and the defendant, and-thaf by .liis failure to pay,over,the amount^ r,e,eeiy,ed;hy liimf for,the goods, sp ,receiyqd and sold- lie converted spiff amonqts to his, own use and that the judgment was proper, ,„Tbe determination .of -this.questiqn is not- to be settled by the allega,t-iopg ,of tl^e complaint,, but by the pro.of of the, relatipns .between th,e, parties- as set, forth in the .written contract .in evidence .in the. cpsef TJiis .agreement,began, by its terms, on the., 1,5th- of Decem-. bpiy 19,0.0-,, and. was for a period, of, five years*. The, plaintiff agreed tq .appoint the defendant the exclusive agent .in Greatei^lffqw, TJqrlc fpr;the. sale of, the,musical, instrnmqnts .manufactured, and, mpsic. published, by .the, plaintiff, and agreed tq advance to the. defendant, if so .required, by, hipi, the necessary funds fo„ pay, the. r.ep,t,fpy, tbe apartment occupied,hy .said agency during the first six, ipqnfhs pf.the peripff describe^, in, the, agreement, said a,mount advanced .to be paid back within three months frpip.the date of theadvapce, and.agreed to consign on sale to the defendant- a stock of. sample musical instrument^.. and , music. of su eli.. an, extppt,a.s the, plaintiff - might, dqem necessary, to properly establish .and. equip sai$ agency; The..defendant.,agreed: to rent at his own expense a. suitable apartment adequate to the needs, of .said agency and-to, employ, at. hjs ¡pwp,expense, .such assistance as. he, might ffeem .nqcessapy for thes,ucee,ssful,conduct of,the agency and to. devote his- time and,best .efforts fqr,its; success ¡and. to the sale of said musical instruments manufactured, apd music published by plaintiff, . The contract, further provided : “And the. said Chambers agrees to pay to, said.Oopnvat.. his. office, in IJlkhart,.Indiana, for all musical,instruments .supplied by said Conn, 75$ of the advertised pripe and fpr, the band and.orchestra and solo mugip 4p$ of the'advertised, price, and. for the vocal and. piano music 25$. of the advertised price. The said, Ohambqrp further agrees that monthly s,ettlpments pf :all, appoupt's ,with,the, said,Conn ip accordance with .the agreement slrallj he; mg-de.and.pgy qients promptly.remitted for, ají. balances due, the. said (ponn in such a manner, as, the said, Qonn muy, hereinafter dh’ept. , And. the,said,Chambers .agrees .to- keep- the .-aforesaid, .stock of musical instruments gnd music consigned by the said Conn to the. saitfjChurnhqns. qp sale., complet-e by re,-or,d,ering asTpst. ag gpldj-or disposed of and to pay monthly for such instruments and music so re-ordered and for'all other instruments and music at the rate of discount from advertised prices as aforesaid.”

This paper does not support the interpretation put upon it by the allegations of the complaint. The relation created by it between the plaintiff and the defendant was not fiduciary. Mo obligation was.placed upon the defendant to transmit the moneys received by'. him for the sale of musical instruments which he received from the plaintiff, and ño trust for the plaintiff’s benefit was impressed upon such moneys in the defendant’s hands. It will be noted-that there is no provision in this contract' for the payments of any commissions to the defendant, or the deduction by him of any commissions from the amounts so received by him. There are no provisions in any way controlling the prices at which he is to sell the goods consigned to him. He may sell them at any price he pleases, either in advance of the price listed or in advance of the percentage thereon which he has agreed to pay to the. plaintiff, or at a price below said amount. There is no provision for the retention or the transmissal of any of the proceeds of the sale of said goods.

It seems to me clear that what was intended to be and'was created by this paper was an exclusive right in the defendant to sell the plaintiff’s goods in the territory of Greater Mew York, but that he did not receive said goods as the bailee of the plaintiff; but that the plaintiff sold them to him upon a monthly credit. The defendant agreed to' pay, by the language of the contract, to the plaintiff for the goods supplied hy the plaintiff at certain agreed upon percentages of the advertised price of certain lines of goods, and agreed to make monthly settlements and promptly remit payments for all balances due. What.was he to remit? The moneys received by him upon the sale of these goods to his customers, after deducting a commission therefrom? If so, the fiduciary relation would be established and the complaint sustained. It is not so provided. He was to remit payments of the amount due, to wit, due from him to the plaintiff of fixed percentages of the list price of the goods which he bought from him, and these goods could be sold by him at any price he pleased, and no deductions were provided for by way of commissions.

The next clause throws an especially strong light upon the purpose and the intent of this contract. Inasmuch as the plaintiff had agreed to give the defendant the exclusive right to sell its products in the designated territory, it was important to the plaintiff that the stock of goods should be kept up. And so the contract provided: “And the said Chambers agrees to keep the aforesaid stock * * * complete by re-ordering as fast as sold or disposed of and to pay monthly for such instruments and music so re-ordered' and for all other instruments and music at the rate of. discount from advertised prices as aforesaid.” That is, he was to pay monthly for the instruments and music ordered, whether’sold by him or not.

It is impossible to interpret that paragraph other than as an agreement of purchase and sale upon a monthly credit. The facts support; an action to recover for a debt due for goods sold and delivered, and notan action in conversion. Ror does the written acknowledgment of indebtedness affect this conclusion, for that is all that the paper quoted supra is.

It follows, therefore, that the cause of action alleged not having been proved, the complaint should have been dismissed. Tlie judg-. ment and order appealed from should .be reversed and a new trial ordered, with costs to the appellant to abide the event.

Ingraham and Laughlin, JJ., concurred; Patterson, P. J., and Scott, J., dissented.

Judgment and order réversed, new trial ordered, costs to appellant to abide event.