Case Name: QUALITY EGG SHIPPERS, Inc. v. UNITED STATES; GROSS v. UNITED STATES
Court: United States Court of Appeals for the Eighth Circuit
Jurisdiction: United States
Decision Date: 1954-04-23
Citations: 212 F.2d 417
Docket Number: Nos. 14892, 14893
Parties: QUALITY EGG SHIPPERS, Inc. v. UNITED STATES. GROSS v. UNITED STATES.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 212
Pages: 417–422

Head Matter:
QUALITY EGG SHIPPERS, Inc. v. UNITED STATES. GROSS v. UNITED STATES.
Nos. 14892, 14893.
United States Court of Appeals, Eighth Circuit.
April 23, 1954.
Wiley E. Mayne, Sioux City, Iowa (Jesse E. Marshall, Sioux City, Iowa, Irving M. Wolff, Miami, Fla., on the brief; Shull & Marshall, Sioux City, Iowa, of counsel), for appellants.
F. E. Van Alstine, U. S. Atty., Sioux City, Iowa (Richard W. Beebe, Asst. U. S. Atty:, Sioux City, Iowa, on the brief), for appellee.
Before GARDNER, Chief Judge, and JOHNSEN and COLLET, Circuit Judges.

Opinion:
COLLET, Circuit Judge.
Quality Egg Shippers, a corporation, and Herman Gross were convicted of violating Section 491, Title 7, U.S.C.A. and appeal.
David Schiller had, for a considerable time prior to July, 1951, been selling eggs in Florida for Richard Swalve, doing business with his brother as the Swalve Produce Co., located at George, Iowa. In the latter part of July, 1951, Schiller and the defendant Gross went to George, Iowa, and made an oral agreement with Swalve, by which agreement Swalve was to ship eggs to Florida to Gross and a corporation to be formed by Gross. The corporation was created under the name of the defendant, Quality Egg Shippers, Inc. Gross was its president. The nature of that agreement is the crucial question in this case. A large number of cases of eggs were shipped to Quality Egg Shippers, Inc., at Miami, Florida, between the early part of August, 1951, and March, 1952. Swalve received payment for all eggs shipped except the last two truckloads, which were shipped February 22 and March 1, 1952. The defendants were indicted and convicted for knowingly, and with intent to defraud, failing to account to Swalve for these two truck loads. The pertinent portion of Section 491, Title 7, U.S.C.A., upon which the indictment was based is as follows:
" any person, firm, association, or corporation receiving any poultry products or any perishable farm products of any kind or character, in interstate commerce, for or on behalf of another, who without good and sufficient cause therefor, shall knowingly and with intent to defraud fail truly ánd correctly to account therefor shall be guilty of a misdemeanor
The defense was that the Quality Egg Shippers, Inc., was the purchaser of the eggs and not the agent of Swalve. If it was a purchaser, the statute does not apply. If it was an agent, the statute does apply. The trial court submitted the question of agency or purchaser to the jury. The jury found Quality Egg Shippers was the agent and convicted. Defendants contend that the evidence was undisputed on that issue and presented only a question of law which the court should have determined in their favor and directed a verdict of acquittal. In that manner the crucial question arises.
If the evidence was undisputed and established a clear and unambiguous agreement concerning the relationship the parties bore to each other, its legal construction was a question of law. But if the language used and the facts and circumstances surrounding the transaction were such that conflicting inferences could reasonably be drawn as to the intent of the parties, a question of fact arose for the jury's determination.
From several circumstances and some conclusions stated by Swalve, an inference could have been drawn that the eggs were sold to the defendant corporation. But if Swalve's testimony was believed, as it evidently was, the jury was justified in concluding that the corporate defendant and Gross were the agents of the shipper Swalve. Mr. Swalve's testimony is to the effect that the corporation and Gross were to obtain customers for the purchase of the eggs in Florida. As those customers were obtained Gross called Swalve and informed him the quantity and quality of eggs to be shipped. As soon as Swalve obtained the desired quantity it was shipped. The amount to be remitted by defendants was to be the top quotation on the New York market the day of arrival of the eggs at Miami, less 3% cents per dozen, 3 cents of which was allowed for freight and y2 cent for commission. If cheaper transportation could be obtained, defendants were to get the benefit of the difference. The definite amount to be remitted, based on the New York market, was for the purpose of enabling the shipper to know how much he was to receive. It also made it possible for the defendants to sell in advance at whatever the New York price would be on the date of arrival in Florida, to sell at a price fixed in advance of arrival, or to order a larger amount than had actually been sold and hold a portion of a shipment on the prospect of selling it at a price greater than the New York price on the date of arrival. This arrangement gave defendants the opportunity to treat a portion of a shipment as if it was purchased by defendants, to remit to Swalve upon the price formula agreed upon, and speculate on getting more upon resale than the agreed commission. This appears to have been done on some occasions. But the possibility, under the arrangement made, for the defendant corporation in effect to purchase from itself and speculate on obtaining a profit greater than its commission did not necessarily make the arrangement primarily one of purchase and sale. The evidence shows that ordinarily the truckloads were delivered to predetermined customers from the truck to the customers' places of business upon arrival in Florida. Occasionally a part of a truckload was placed in defendants' cooler and sold later. But there was no fixed arbitrary time within which remittances had to be made. This again afforded an opportunity to defendants to speculate on being able to obtain more, before a reasonable time for remittance had elapsed, than the stipulated commission, without the necessity of maintaining the capital necessary to remit for all of the shipments upon arrival. But it does not appear that Swalve knew of any such practice or was concerned about whether defendants took the risk of speculation. He testified that his concern was only in receiving the New York price less the 3% cents. It further appears that the volume of sales had declined in February, 1952, to such an extent that Swalve went to Miami to see what was wrong. He was told by Gross that competition was rather keen and a larger commission should be allowed. Swalve agreed to increasing the commission to % of a cent per dozen. The two loads now involved were shipped under that commission rate. Swalve tes tified that it was agreed that when defendants obtained regular customers to whom shipments were made direct, a commission of % cent per dozen was to be paid defendants. Schiller had one such customer before the arrangement with the corporation and Gross was made. That customer was specifically mentioned at the time of the original agreement. Defendants contended that the reason for not remitting for the two loads in question was because Swalve owed them for commission on eggs shipped direct to many customers in Florida. In an effort to obtain payment for the two loads, Swalve agreed to pay commission on direct shipments he said he did not owe defendants, but that Gross flatly refused to pay for the eggs received unless Swalve would execute a written contract under which defendants would be the exclusive outlet of Swalve's eggs in Florida and receive a commission on all eggs shipped into the State of Florida by Swalve. This Swalve would not agree to. The weight of the evidence of the witnesses was, of course, for the jury. But the very fact that defendants were claiming commission on shipments to customers, which did not pass through defendants' hands, and that the parties agreed that there was for a time one such customer, were facts which the jury could consider in determining whether the arrangement was one of agency or of direct sale to defendants. Whether the defendants' failure to remit was for the reason asserted by them or whether the failure to remit was for the purpose of compelling Swalve to execute a new contract was a question of fact to be determined by the jury. And the question of whether the agreement relating to the regular customers was, as contended by defendants, a separate and distinct contract from the agreement concerning eggs which were to be shipped direct to defendants or was merely an incident to the general agency contract between defendants and Swalve, rested upon the weight to be given the testimony of the witnesses. The question of whether defendants were agents or purchasers was also one of fact for the jury. The jury resolved these questions by finding that defendants were agents. The evidence adequately supported that finding. The judgments should therefore be and are affirmed.