Court Opinion

ID: 8261730
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:55:05.501198+00
Date Added: 2024-06-11T16:43:12.281227
License: Public Domain

Biggs, J.
{dissenting). — It seems to me that the discussion in the opinion of my associates is apart from the evidence in the case. We have no concern with the general rule of law as to the express or implied authority of agents. The authority of Price was fixed by custom or usage of trade. It is only for us to determine what the custom was and its legal effect. The plaintiffs’ evidence tended to prove that under a general custom which prevailed in the state of Texas, traveling, salesmen for St. Louis houses had authority to fix the price of the goods and the terms of the sale; that in the *12exercise of this authority they could fix a price for something less than the list or market price and extend the usual time of credit, but the right to reject orders was reserved to their principals when the financial standing or rating of the proposed purchaser was not satisfactory to them. The theory of the circuit court evidently was, that under this custom Price had authority only to solicit orders for the sale of goods. To this I agree. The contention of the appellants is that Price had authority to bind the defendant as to price and terms, and that the only power reserved by the defendant was to reject an order if the financial standing of the purchaser was not good. Hence it is insisted that as the refusal of the defendant to ship the goods to the appellants was put on other and different grounds, the contract became enforcible against the defendant. To this conclusion I can not agree. Some of the cases cited by the appellants decide in a general way that prima facie a commercial traveler is to be regarded by the business world as a general agent with power to bind his principal as to prices and as to the length of the credit. Under certain limitations I agree to this; that is, the price must be according to the list or market price, and the time of payment must be according to the usage of the trade; or if the custom or usage of trade allow the salesman to cut the list price, or extend the usual time of credit, then the cut must be reasonable and the extension must likewise be reasonable. Some of the cases go so far as to hold that a traveling salesman, in the absence of restrictions which are known to the customer, has authority to bind his principal absolutely, unless the transaction is shown to be fraudulent.
This question, however, is an immaterial one, as I have already stated, since all the evidence introduced by plaintiffs tended to prove that according to the usage *13of the trade in Texas the defendant had the right to repudiate the plaintiffs’ order if their financial standing was not satisfactory to it, thus definitely- and affirmatively 'fixing a limitation on Price’s authority. The question then is, how did this reserved power of the defendant affect Price’s dealings with others'? The substance of the plaintiffs’ evidence is that the defendant had the unqualified right or option to disapprove of plaintiffs’ order if the financial rating or standing of the plaintiffs was not satisfactory to it. The legal effect off this evidence is that the defendant could ■exercise this option either with or without reason. This is the only reasonable construction, for it would be unreasonable in-the extreme to hold that a wholesale merchant must, under any circumstances, justify his action in refusing to sell his goods on credit. Therefore if the defendant had an unqualified right to repudiate the transaction, how can it be said that there was a contract until it had either expressly or tacitly manifested an intention to ratify Price’s act. On principle there can be no contract as to the party who has the unqualified right to- withdraw from the negotiations so long as such right of withdrawal remains. This seems to me to be fundamental law. The fact that the defendant in the first instance put its refusal to fill the order on the grounds that the sálesman had priced the goods below the market and that he had extended the time of the usual credit, in nowise affects the merits of the question. The point is, that there was no contract until the defendant signified an intention to be bound. This it did not do, but promptly repudiated the action of its agent. The reasons assigned for its action seem to me to be immaterial. The question is, could the defendant refuse to be bound for any reason? I agree with my associates that the right or option of the defendant to reject the order must have *14been exercised promptly, for otherwise the inference might be drawn that the order had been approved. The principle, however, is not applicable here, for the evidence shows that the defendant notified the plaintiffs by return mail that it would not fill the order as made. As before stated, it is immaterial upon what grounds the defendant based its refusal to make the sale.
The practical result of the foregoing discussion is to make Price a solicitor of orders for the sale of goods, subject to the approval of the defendant. It is true that in naming prices and the time of credit he was not bound by an ironclad rule. This discretionary power could only have become material if the defendant had in any manner signified an intention to ratify plaintiffs’ order.
In such a case the defendant would have been bound, although it was not actually advised that its salesman had priced the goods below their market value and had extended the customary time of payment. It would be conclusively presumed that in making the ratification the defendant had in mind this discretionary power on the part of Price. For the foregoing reasons I must dissent from the conclusion reached by a majority of the court.