Case Name: Johnson & Duggers v. O'Hara
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1834-11
Citations: 5 Leigh 456
Docket Number: 
Parties: *Johnson & Duggers v. O’Hara.
Judges: 
Reporter: Virginia Reports
Volume: 32
Pages: 174–176

Head Matter:
*Johnson & Duggers v. O’Hara.
November, 1834,
Richmond.
Commission Merchants — Liability to Principal — Case at Bar, — The owner of ten hogsheads of tobacco put the same in the hands of commission merchants to sell on commission, but not a del credere commission ; the commission merchants have in their hands, at same time, other tobaccos of other persons to sell on like commission ; they sell all the tobaccos of all their principals in one parcel, on a credit of four months, to one person, then in undoubted credit, and take one note from him for payment of the whole price, it being the known usage of the trade, in such cases, for commission merchants so to sell tobaccos of several principals in one parcel, and so to take one note for the whole price ; the commission merchants procure the note to be discounted by another merchant, it being the usage of the trade, in such cases, for such agents so to procure such notes to be discounted, when they have occasion to make advances to their principals, but there is no proof in this case that they made, or had occasion to make, any advances to any of their principals ; before the note so taken for the tobaccos, comes to maturity the maker fails, and then the commission merchants repay the contents to the merchant who discounted it, take back the note, and use due diligence to collect it, without effect: in an action brought by the owner of tne ten hogsheads of tobacco against the commission merchants for the proceeds of sale of Ms tobacco, Himd, that they by so procuring' the note to be discounted for their own use before it came to maturity, made it their own, and are liable to plaintiff for the proceeds of sale of his tobacco.
Assumpsit by O’Hara against Johnson & Duggers in the circuit court of Petersburg. The declaration alleged, that O’Hara put ten hogsheads of tobacco in the hands of Johnson & Duggers, commission merchants of Petersburg, to be by them sold for him upon commission, for cash, or upon a credit; that they undertook to sell the same accordingly, and, after deducting their commission, to pay him the net proceeds, if the tobacco should be sold for cash, or to take and deliver to him an approved note therefor, if it should be sold on a credit; and that they, in fact, sold the tobacco on a credit of four months, for 627 dollars, and took a note for the proceeds; but they failed and refused to deliver *the note to O’Hara, and on the contrary applied the same to their own use. Plea, the general issue.
At the trial, the defendants filed a bill of exceptions to an opinion of the court, stating that the plaintiff to prove his case, adduced evidence, that in E'ebruary 1827, he put ten hogsheads of inspected tobacco, in the hands of the defendants, to be sold by them for his account, on a commission, but not a del credere commission, to be allowed and paid them by the plaintiff; that, at the same time the plaintiff so put his tobacco in the hands of the defendants to be sold by them for his account, they had also in their hands one hundred and seventeen other hogsheads of tobacco, belonging, in several parcels, to divers other persons, to be sold for account of the several owners thereof, on a like commission for such service: that the defendants sold the whole of those tobaccos, namely, the plaintiff’s ten hogsheads and the hundred and seventeen hogsheads of other persons, in all a hundred and twenty-seven hogsheads, in one parcel, to one Cleeman, on a credit of four months, and took of him a single note negotiable at bank, payable to the defendants themselves, for the aggregate price of the whole parcel; that, shortly after the defendants had received this note of Cleeman, they, without the plaintiff’s consent or knowledge, procured another merchant of Petersburg to discount the note at the legal rate of interest, and the defendants indorsed and delivered the note to the merchant who discounted it, and received the proceeds of him: and that Cleeman failed before his note came to maturity. And then the defendants adduced evidence to prove, that it is and was in E'ebruary 1827, and before and since, the usage and course of trade, in this particular, at Petersburg, well known to all merchants and dealers of the town, that when a commission merchant has in his hands divers parcels of goods or country produce belonging to divers persons, to be sold on commission, and sells all the parcels on a credit to the same person, he takes of the vendee one note payable to himself for the aggregate of the prices of all the parcels ; that it is and was also the usage and course of trade at Petersburg, that when a commission 'x'merchant, holding such a note including the prices of goods of several persons, makes advances to his principals, or any of them, on account of his sales of Iheir goods, he procures the note to be discounted, if he thinks proper or finds it convenient, and if he does not procure it to be discounted, he holds it, and sees it put in a due course of collection, when it becomes due; and that the plaintiff and the defendants are all merchants of Petersburg, and the whole transactions herein mentioned, from beginning to end, occurred in that town: that with respect to the particular note of Cleeman before mentioned, which the defendants procured to be discounted, they, upon the failure of Cleeman before it came to maturity, replaced the money to the merchant who had discounted it and to whom they had indorsed it, and thus resumed possession of the note, held it till it came to maturity, and used due diligence to collect it, without effect: and that at the time of sale made by the defendants to Cleeman, he was in good and undoubted credit, and they acted in the sale with perfect good faith. Whereupon, the court, on the motion of the plaintiff’s counsel, instructed the jury, that if the defendants discounted the note in question for their own use, without the consent or knowledge of the owners of the tobaccos sold, they thereby made themselves liable to pay the plaintiff the price for which his tobacco was sold by them, at the time it became due, deducting their commission; to which opinion of the court the defendants’ counsel excepted.
There was a verdict and judgment for the plaintiff for 612 dollars with interest &c. Prom which Johnson & Duggers appealed to this court.
Leigh, for the appellants,
said, it was quite obvious, that the loss of the proceeds of the appellee’s tobacco, was owing entirely to the failure of Cleeman, the vendee, before his note came to maturity, not to any misconduct or neglect imputable to the commission merchants; and, especially, the loss was nowise owing to their blending the price of O’Hara’s tobacco with the prices of the tobaccos of other persons, in one note for the aggregate price of all, or to their ^discounting the note: the loss would equally have occurred, if they had taken a separate note for the tobacco of each owner, and held the note for O’Hara’s tobacco till it came to maturity. And he relied on the usage and course of the trade, as well warranting the commission merchants, both in blending the price of O’Hara’s tobacco with that of the other tobaccos sold to Cleeman at the same time, and in discounting the note, as they did; and, therefore, he insisted, that they were exempt from all liability to their princix^als for the proceeds of the tobaccos.
Macfarland, for the appellee,
answered, that the dealing of the appellants with the note in question, was not at all warranted by the usage and course of trade, on which they relied for their justification; for, taking the usage as proved in its utmost extent, it would have warranted them in procuring the note to be discounted, only in case they had made advances to their principals, or to some of them; but they did not shew, or pretend, that they had made any advances to any of them. Therefore, he said, it was altogether for their own use and convenience, that they procured the note to be discounted. And he maintained, that they thereby made the note their own, and, by consequence, made themselves personally liable to their principals for its contents, which they so converted to their own use. They certainly made the note their own; for if Cleeman, the vendee, had remained solvent till the note came to maturity, and Johnson & Duggers had failed in the interval, the note would have belonged to the person to whom they had transferred it, and they would have been the debtors to their principals for its contents. O’Hara meant to give credit to any person whom Johnson & Duggers, acting in good faith, as his commission merchants, should think worthy of credit, but he did not mean to give credit to the commission merchants themselves, for the proceeds of his tobacco: he did not mean to incur the double risque of the failure of the vendee, and the failure of the commission merchants also. These considerations, he said, were conclusive.
See principal case distinguished in Townes v. Birchett, 12 Leigh 194.

Opinion:
PHR CURIAM.
Judgment affirmed.