Court Opinion

ID: 8871263
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:28:38.449402+00
Date Added: 2024-06-11T17:06:11.074688
License: Public Domain

LUMBARD, Chief Judge
(concurring).
I agree with Judge Marshall’s opinion except as to the applicable legal principles regarding the circumstances in which Bingham may be held liable absent a finding of negligence.1 In my view, Bingham may be held liable for Farr’s loss, apart from negligence, if and only if it be found that Bingham promised Farr that it would assume such liability if it failed to secure Brazilian white sugar. I feel that Judge Marshall errs in listing as requirements for the imposition of liability without fault elements which are not relevant to such an inquiry, and also in placing the burden of proof regarding this issue on Bing-ham rather than on Farr.
As footnote 4 of Judge Marshall’s opinion indicates, the parties have not referred us to the law of one particular jurisdiction as controlling. I proceed to the merits on the likely assumption (subject to correction by the parties at trial) that the basic principles of the law merchant applicable here are in accordance with the laws in all relevant jurisdictions.
The governing legal principles are set forth in the Restatement of Agency 2d. “Under ordinary circumstances, the promise to act as an agent is interpreted as being a promise only to make reasonable efforts to accomplish the directed result.” 2 Restatement, Agency § 377 comment b. If the agent holds himself out as having special skills, he is held to the standard of care he sets for himself— but the relevant inquiry is still one of due care. Id. at §§ 376, 379 & comments a & c. But the parties may provide specifically that the agent warrants the performance of his assumed task regardless of fault. “The agent may warrant that his undertakings will be successful.” Id. at § 379 comment a. Thus there is a presumption in favor of a requirement of due care, subject to a showing that another arrangement has been made by the parties.
This is not a new or novel doctrine. On the contrary, it has been so often expressed by the courts that it is strange that it is a matter of contention here. See, e. g., Meecham, Agency §§ 524, 525 (1952) and cases cited therein; Rianda v. San Benito Title Guarantee Co., 35 Cal.2d 170, 217 P.2d 25 (1950); Ander*388son v. Badger, 84 Cal.App.2d 736, 191 P.2d 768 (1948); Kingsford v. Bennion, 68 Idaho 501, 199 P.2d 625 (1948); Carmichael v. Lavengood, 112 Ind.App. 144, 44 N.E.2d 177 (1942).2
However, Judge Marshall sets forth a combination of four factors which, it is claimed, is sufficient to impose liability upon an agent regardless of the applicable standard of care: “(1) the agent is to be paid for his services, (2) there is no understanding between the parties limiting the agent’s duty to use due care rather than to achieve the agreed-upon objective, (3) the agent’s failure to achieve the agreed-upon objective is due to reasons not beyond his control, and (4) the principal is not informed of the agent’s failure and is thereby unable to take appropriate self-protective steps.”
The second factor, the nonexistence of an agreement limiting the agent’s duty to one of due care, presumes that if nothing is stated, the agent’s promise to act will be interpreted as a warranty of his success, and thus the burden of overcoming this presumption would fall upon the agent, according to Judge Marshall. The seemingly unanimous view of the authorities cited above is that the agency contract is to be construed as one requiring due care of the agent, absent any statement to the contrary. Thus, the burden should be upon Farr, the principal, to show that Bingham promised to guarantee the success of its efforts to secure Brazilian white sugar, without regard to the normal due care limitation.
The remaining three factors listed by the majority bear only upon the issue of due care — that is, they are relevant only if it is found that Bingham did not warrant the success of its efforts. The existence and amount of compensation paid to Bingham (point one) is a factor in establishing the standard of care required of the agent. 2 Restatement, Agency 2d § 379. The third and fourth factors, that the loss was occasioned by circumstances not beyond Bingham’s control and that Bingham failed to notify Farr of its failure to perform, appear to bear solely on the issue of whether Bing-ham performed with the requisite due care.
With these qualifications, I concur in the disposition made by Judge Marshall.

. This of course assumes, arguendo, as does Judge Marshall’s opinion at this point, that the contract is one for the delivery of sugar rather than for the production of an executory contract,

. Bank of British North America v. Cooper, 137 U.S. 473, 11 S.Ct. 160, 34 L.Ed. 759 (1890), relied upon by the majority, does not contradict the principles stated here. In that case, the agent had requested and was given specific, detailed instructions from his principal, and then proceeded to disregard them. It is clear that disregard of reasonable directions constitutes a breach of duty on the part of the agent. 2 Restatement, Agency § 385 (1). In the instant ease, there is no allegation of such intentional disregard of instructions.