Case ID: ad_2/html/0390-01.html
Source: Caselaw Access Project
Author: {"author": "Patterson, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Theodore Haebler and Oscar Faehrmann, Respondents, v. Maximillian O. Luttgen, Appellant.
    
      Agency — agreement to sell as agent and to remit the proceeds — a demand by the principal is unnecessary—advances for freight and storage not allowed — the title to the goods is in the principal—the agent taking promissory notes is liable for the amount thereof.
    
    In an action brought by principals against an agent, it appeared that the plaintiffs, merchants in New York, on the' 4th day of June, 1891, entered' into a written contract with the defendant, who resided at Minneapolis, by the terms . of which the plaintiffs constituted the defendant a selling agent of their German cement, of which the defendant agreed to sell 4,000 barrels as a minimum, at a- price of two dollars and thirty-five cents per barrel at sixty days for a certain curbing contract, and at two dollars and thirty-seven cents per barrel for all other business at three months from the date of shipment. The merchandise was to be billed by the plaintiffs to the defendant, and he was to sell it' as agent, and to bill, deliver and remit as agent, any money which he received for the cement as soon as he obtained it. For his sei'vices he was to receive whatever he could obtain beyond the prices fixed.
    The plaintiffs shipped to the defendant 4,000 barrels, of which he sold but 500, of this latter he sold, in November, 1891, and in April, 1892, 400 barrels, and received payment for the same, and in June, 1892, 100 barrels, and received notes for the same.
    Upon the trial of the action the plaintiffs recovered.
    
      Held, that the defendant was acting solely in a fiduciary-capacity, and that he received the proceeds of the sales as agent;
    That no demand was necessary before bringing the action, as it was the duty of the defendant, under the agreement, to remit the moneys as soon as they were received;.
    That he was not entitled to retain out of the proceeds of sale advance's which he had made for freight, insurance and storage;
    That any charges of this character were to be borne by the defendant, whose entire compensation was to be derived from his profits over and above the agreed prices;
    That the defendant took the risk of selling 4,000 barrels, and that any outlays which he made were his own loss;
    That the title to the goods was at all times in the plaintiffs, and that they had a right at the end of the season to reclaim whatever amount, of the goods remained unsold;
    That' if the defendant sold goods and took the notes of the purchasers, he was still bound to remit. the proceeds of the sale at the time fixed for remittance, whether or not the notes were paid.
    
      Appeal by the defendant, Maximillian 0. Luttgen, from a judgment of the Court of Common Pleas for the city and county of New York in favor of the plaintiffs, entered in the office of the-clerk of said court on the 23d day of October, 1895, upon the verdict of a jury, and also from an order entered in said clerk’s office-on the 1st day of November, 1895, denying defendant’s motion fora new trial made upon the minutes.
    
      L. Laflvn Kellogg, for the appellant.
    
      Robert B. Honeymcm, for the respondents.
   Patterson, J.:

This is an appeal from a judgment rendered upon a verdict of a. jury in favor of the plaintiffs, in an action tried in the Court of Common Pleas, and from an order denying defendant’s motion fora hew trial.

We arenot at liberty to consider the appeal from the order. There-is no certificate or statement in the case that it contains all the evidence presented on the trial, and in consequence of this defective: condition of the record, we are remitted to the consideration of such, questions only as arise on the appeal from the judgment.

It appears that the plaintiffs, merchants in New York, on the 4th-day of June, 1891,.entered into a written contract with the defend- - ant, who resided and carried on business at Minneapolis, Minnesota,, by the terms of which the defendant was constituted a selling agent, for the plaintiffs of certain German cement of which the plaintiffs, were the importers, and he undertook to sell, on conditions to be= mentioned, 4,000 barrels during the season presumably of that year,, as a minimum quantity. The price-for this cement during the: season was to be two dollars and thirty-five cents a barrel, free on. board at New York, for cement to be used in a curbing contract, referred to, this price being fixed on the basis of sixty days from the: date of delivery in Minneapolis, or two dollars and thirty-seven: cents a barrel free on board at New York, for all other business on a basis of three months from the date of shipment. The merchandise was to be billed by the plaintiffs to the defendant, and he assumed the distinct obligation of selling the cement as the plaintiffs’' agent, and making out his bills to his customers for such cement as- . such agent, and he also agreed- to turn.over to the plaintiffs (“as whose agent he sells, bills and delivers the cement-”) all remittances he received for the cement as soon as he obtained the same. His compensation was to consist of all he received over and above the ■fixed prices. It also appears that the plaintiffs shipped to the defendant something over 4,000 barrels of cement, and they claim that in November and April, 1892, the defendant sold and received payment for 400 barrels and has not paid the value thereof, at the price fixed by ,the contract, but has retained and misappropriated the amount received in violation of his agreement and in fraud of the plaintiffs. And they further claim that the defendant sold and received payment for an additional 100 barrels in June, 1892.

The answer admits the making of the contract substantially in the terms set forth in the complaint, but avers that it was modified and changed by the consent of the plaintiffs so that the goods were to be sold at a price named by the plaintiffs, and that it was agreed the defendant should receive the usual commission for the sale of •cements, all expenses and outlays to be paid by the plaintiffs. It further avers by way of a counterclaim, presumably arising out of the alleged changed contract, that the defendant, at the express request of the plaintiffs, paid, laid out and expended a sum of money in connection with the merchandise exceeding the amount received for the 500 barrels; and also sets up a counterclaim for ■commissions on the sale of the cement, and judgment is demanded therefor.

It becomes important in the first instance to examine the record to ascertain precisely what is the state of the proof respecting the contract between the parties, and such examination fails to disclose that there was .any modification, of. the character set up in the answer, made of the contract of June, 1891, and that the allegations of -the •answer in that respect are without support-. All that was done was that the plaintiffs authorized the defendant, if it became necessary, to sell at two dollars and twenty cents or two dollars and thirty •cents, net to them, and nothing was said about commissions or who should pay charges. The relations between the parties stand upon •the written contract, and the liability of the defendant must be determined by the construction to be given to that contract, i

The first point made by the appellant is that the action cannot be maintained in the form in which it was brought, because there is nothing to establish that the defendant acted in a fiduciary capacity •or otherwise than as a factor or commission merchant entitled to the possession of the goods and to dispose of them and to retain from the proceeds his commissions and advances. But such is not the nature of this contract. Its terms specifically constitute a different relationship and make the defendant a mere selling agent with •strictly limited power respecting the merchandise and its proceeds; ■and so careful were the plaintiffs to guard themselves that the nature of this agency is referred to no less than three times in the ■contract. The proper construction of the .agreement is that this merchandise was to be shipped to the defendant free on board at Hew York at a fixed price to be returned to the plaintiffs by the -defendant at two dollars and thirty-five cents or two dollars and thirty-seven cents for each and every barrel of cement sold by the ■defendant, he to receive. for his labor and attention all that he •obtained above the before-mentionéd prices. This would seem to ■contemplate the payment by the defendant of all the charges of transportation and storage upon merchandise forwarded to him, because he stipulated that on the conditions of the contract he would sell a minimum quantity of 4,000 barrels, which confessedly he has not doné. In view of the terms of the contract and the ■obligation assumed by the defendant of remitting advances upon receipt of the proceeds of sale to the plaintiffs, it is difficult to perceive how any contention can be made that the defendant was not ■acting in a 'fiduciary capacity, and, therefore, the claim of the ■defendant that he did not receive the proceeds of the sales in • that relation cannot be upheld.

It is further claimed on the part of the appellant that, assuming the moneys were received in a fiduciary capacity, and the action being in form for damages for fraud, a nonsuit should have been granted because of the failure to allege and prove a demand for the ■' payment of moneys. The plaintiff does not allege a demand. If this were an action for conversion, the beginning of the suit would not be a sufficient demand, and there would be force in this objection. But there is in this case an unconditional promise of an agent to turn over all remittances as soon as received; an obligation, therefore, to return fixed amounts at fixed periods, and a demand, of performance is not a prerequisite to a suit. As was said in the important case of Brown v. Arnott (6 Watts & Serg. 418): “ Where the owner of the goods or the principal is advised from time to time by his agent of the sales as they are made, and, again of the receipt of the moneys as they are paid thereon, and according to the understanding that exists between them, arising either from a special agreement or a previous course of dealing between them, or the established usage or custom, if there-be any, regulating the same, the principal or late owner of the goods-is to call on his agent or factor and receive his money or to draw upon him for it, the latter may retain it until it is demanded; but. where the factor or agent is bound either by the agreement or previous course of dealing, between them, or the usage of trade in regard thereto, to forward the money to his principal or employer, it is clearly his duty to do so, as he shall receive it, though it: ■ be only a part of what he expects, by the earliest opportunity,, and. no practice to the contrary will either justify or excuse his retaining-it beyond such time, unless the sum shall be so small as not to justify the expense of forwarding it.”

It is further claimed on the part of the appellant that the defendant was entitled to retain, out of the proceeds of the sale of' the cement, the advances he made for freight, insurance and storage,, and that, it having been shown that the advances exceeded the> amount of proceeds of the cement sold, the verdict should have-been for the defendant, or, in other words, he should have-recovered on the counterclaim. This' contention proceeds upon a wrong construction of the contract. As said before, the written instrument of June 4, 1891, is the only contract between the parties, and by the terms of -that contract the plaintiffs were scrupulously careful to protect their right to an .immediate return to them of the-proceeds of sale of all the merchandise at the rates specified in the contract. There is no question at all involved in that contract: of deductions for anything, and no proof of a request that the-defendant pay any charges on the shipments. When the cement was sold it was the duty of the defendant .at once to remit two-dollars and thirty-five cents or two dollars and thirty-seven cents, as .the case might be. Those figures were not to be diminislied by any charges or costs of any kind, on any of the 4,000 barrels, but were a net price, and it'is not shown that there was any sale of the particular quantities mentioned in the complaint in this action at any other price. There was nothing ambiguous in the terms of the contract, nor does the correspondence between the parties show any construction put upon that contract concerning the liability of the defendant, other than is ' contained in the contract itself. What the defendant states he may have done is not shown to have been acquiesced in, and the defendant’s contention in this-respect has no real foundation. ,The defendant took the risk of selling 4,000 barrels; he sold only 500. He was to pay all charges and return certain prices. Ho claim is made that the plaintiffs prevented his selling all he contracted to .sell. He did not perform what he undertook to do, and his outlays are his own loss. The title to the goods was always in the plaintiffs, although the defendant was entitled to the possession of the same during the season for the purposes of sale. When the season passed and no sale had been effected, the defendant’s right to sell had ceased, and the plaintiffs had the right to resume possession of the property, and were not bound to reimburse the defendant for expenses incurred in fruitless efforts to sell.

It is also claimed that there was error in allowing a recovery on' the 100 barrels of cement disposed of in June, 1892, because the plaintiffs failed to show that the proceeds were actually received. It does appear that the defendant received notes of the purchaser for the 100 barrels referred to. It may be presumed that those notes were paid at their maturity, nothing to the contrary being set forth or proven, bnt at all events the plaintiffs were entitled to a remittance of the fixed amounts within- sixty or ninety days, no matter in what form the defendant received the proceeds of sale.

Many exceptions were taken at the trial, none of which we find . to be of sufficient importance -to require special reference to thenn If there was error in the admission of testimony of the payment of freight and storage by the plaintiffs upon 3,400 barrels, it was an error which in no way militated against the defendant’s rights, because his counterclaim did not repose upon any basis of proven fact; and as to the court leaving to the jury the construction of the contract as to the defendant being liable for freight or storage, while, of course, is was for the court to construe that contract and' not the jury, whether its terms were contained in the instrument of June 4, 1891> or were to be spelled out from correspondence, still the jury' having found the proper construction, there was no occasion for interference with the verdict on that score.

The judgment must be affirmed, with costs.

Van Bbunt, P. J., Williams, O’Beien and Ingbaham, JJ., concurred. ' .

Judgment affirmed, with costs.