Court Opinion

ID: 8837344
Source: CourtListenerOpinion
Date Created: 2022-11-26 16:29:13.50624+00
Date Added: 2024-06-11T17:05:06.543904
License: Public Domain

Mr. Justice Taylor, dissenting: If A, an owner of horses, delivers them to B, a commission merchant at the Union stockyards, to sell for him, and B sells them but fails to account for $10,160 of the proceeds of those horses, B is liable to that extent to A. That is the formula of this case. There is no evidence that the claimant by any act sanctioned Cooper’s conduct in selling horses for more than the posted price and appropriating the difference. He did know something about the prices that were posted, also, that Cooper along with Chappell sold some of his horses as war horses. He knew the method of inspection and what it was for. There is no evidence, however, that he knew that the John S. Cooper Company was to allow his horses to be handled by the John S. Cooper Company in such a way that Cooper and Chappell were to have them inspected, and as soon as successfully inspected and branded, the title was to pass, not from him to the war contractor, but from him through the John S. Cooper Company acting as his agent, to Cooper and Chappell and then from Cooper and Chappell to the war contractors. Counsel for the estate argue that the evidence shows that a new custom of some kind arose, apparently meaning that the method of posting prices and having an inspection and sale to war contractors created a new order of doing business in regard to selling horses in the yards by commission merchants, and that as a result the claimant was bound by the prices posted on the bulletin board. There is no doubt but that the claimant in his dealings with the John S. Cooper Company would be bound by whatever the new custom was, if it were established by proof satisfactory to a jury. In Bailey v. Bensley, 87 Ill. 556, the court said, where a question arose as to the usage and customs of commission men doing business on the Board of Trade of Chicago: “A person who deals in a particular market must be taken to deal according to the known, general and uniform custom or usage of that market; and he who employs another to act for him at a particular place or market, must be taken as intending that the business to be done will b'e done according to the usage and custom of that place or market, whether the principal in fact knew of the usage or custom or not.” In the instant case, however, there is no evidence that a new custom was established by which it was a recognized rule that commission merchants might deal in their consignors’ horses and only account for the prices which were posted, even though the commission merchants sold the horses for higher prices. If there were evidence that the claimant knew not only the posted prices, but assented in some overt way, such a way that would bind or estop him; and evidence that he overtly sanctioned John S. Cooper— who in reality was the John S. Cooper Company — selling his horses at higher prices than were posted and appropriating not only the customary $3 per head commission, but all above the posted price which was paid by the war contractors, and not only such evidence, but sufficient, in the eye of the law, to justify the trial judge in concluding that he was bound or estopped and not entitled to more than the posted price, then the jury were properly instructed. But such is not the record. The most indulgent construction of the testimony of Chappell and the other witnesses does not lead to that conclusion. Nowhere does the evidence show that the claimant understood or was informed that if his horses, which he shipped into the Union stockyards consigned to the John S. Cooper Company, were sold by John S. Cooper or Cooper and Chappell for more than the posted price that he would not be entitled to the extra amount, less appropriate necessary expenses. Counsel for the estate argue that as W. L. Elder, the brother of the claimant, was the manager of the sales department of the John S. Cooper Company during the period in question; as the claimant, himself, from time to time, frequently during the three years of war sales, was at the Union stockyards in the matter of horses shipped in to the John S. Cooper Company and talked with his brother; as the claimant was in constant communication with him by mail; as the claimant shipped horses which were sold through inspections made by other commission merchants at the Union stockyards, namely, Ellsworth & McNeil and Newgass & Company, as Chappell testified that on one occasion — the time is not given — he told claimant that John S. Cooper was interested “with him in the purchase of his horses; and that he, Cooper and Chappell, had formed a partnership in the matter of the sale and furnishing of horses to various Allied Government contractors”; as certain letters and a telegram written by the claimant suggest or show that the claimant knew that some of the horses that he shipped in would be sold as war horses, it necessarily shows that the claimant knew of the existence of a so-called “war time custom and usage prevailing in the Union stockyards during the years from 1915 to 1918, both inclusive, and that his shipments were included in the Union stockyards under such usage and custom.” Quite obviously, whether that argument is sound depends upon a careful consideration and analysis of considerable and voluminous evidence. The deduction, which counsel for the estate makes from the evidence concerning the so-called new custom and the claimant’s knowledge of it does not appear to be in any way justified, and in such a case, under the law, the evidence should have been submitted to the jury. It is by no means a case where there is no evidence in support of the claimant’s charge. The evidence of Hunter, the bookkeeper, who produced a statement purporting to show all of the claimant’s horses that were shipped the John S. Cooper Company and which passed the inspection and were accepted by government contractors, is that Cooper and Chappell received at least $10,160 on the sale of 1,563 of the claimant’s horses in excess of the amount which the claimant was credited with by the John S. Cooper Company. Counsel for the estate argue that the evidence of Hunter, elicited on cross-examination, is to the effect that his figures do not tell whether there was any profit to Cooper and Chappell from the sale of the claimant’s horses; that, considering all the claimant’s horses that were shipped in, 4,234 of which failed to pass inspection, Cooper and Chappell may not ultimately have made any profit at all. The claimant, however, made out a prima facie case, assuming he had not bound himself by the prices that were posted on the bulletin board, when he showed that on 1,563 of the horses which he shipped in he did not receive or was not credited with the actual prices at which they were sold. The John S. Cooper Company acted as a factor or-commission merchant, those terms being usually considered practically synonymous. The former title is usually the legal one and the latter the popular one. “A. factor is, one whose business it is to receive and sell goods for a commission. He differs from a broker in that he is entrusted with the possession of the goods to be sold and usually sells in his own name.” Mecham on Agency (2nd Ed.), sec. 2497. The John S. Cooper Company, therefore, occupied a fiduciary relation to the claimant and as such was bound to observe the utmost good faith in its dealings with him. In Hafner v. Herron, 165 Ill. 242, the court said: “There is a want of good faith on the part of the agent towards his principal, when he acts adversely to Ms principal’s interest, or where, representing the seller, he conceals from him an arrangement intended for the advantage of the buyer.” Citing Story on Agency, sec. 334. In the same case the court quotes with approval from Young v. Hughes, 32 N. J. Eq. 372, the following language: “It matters not, that there was no fraud meant, and no injury done, the rule is not intended to be remedial of actual wrong, but preventing of the possibility of it. It is the law that where an agent is employed to make and consummate a sale and in doing so is guilty of bad faith to his principal he forfeits his commissions or compensations/’ In the instant case not only was the John S. Cooper Company bound in good faith to endeavor to obtain the highest prices for the claimant’s horses and bound to account for all that was received as the result of the sale of the claimant’s horses less certain expenses and the commission, it was also bound to act solely and fully as the agent of the claimant ‘in selling Ms horses and not as agent for Cooper and Chappell in the purchase of the claimant’s horses. Considering John S. Cooper, as we do, the same as the John S. Cooper Company, he could not on the one hand be entitled to sell the claimant’s horses at the price posted and then as a member of the firm of the John S. Cooper Company buy them at the price posted and also as a member of the firm of Cooper and Chappell sell them to the war contractors at some other price. John S. Cooper’s duty, as the John S. Cooper Company, to the claimant was inconsistent with his duty as a member of the firm of Cooper and Chappell. It was improper for John S. Cooper to accept money through Cooper and Chappell growing out of the sale of the claimant’s horses while he was acting in the name of the John S. Cooper Company. While being the agent or consignee of the claimant, the very formation of the copartnership between Cooper and Chappell was inimical to the interests of the regular customers or consignors of John S. Cooper Company. It may be that Cooper did not intend to obtain an unlawful profit; but that is immaterial here, the only pertinent question being, is there evidence that he got and retained money which belonged to his principal? Cooper had no more right to malee an extra profit out of the sale of claimant’s horses than the receiver had in Ravlin v. Chicago, A. & DeK. R. Co., 297 Ill. 130, out of the sales of securities of the railroad company while he was acting as its receiver. In that case the court said: “Having concluded from an examination of the contracts .and from the evidence that plaintiff in error made a profit out of the sale of the securities of the railroad company while he was acting as its receiver, but one result can .be reached. When a person accepts an appointment as receiver he must not permit his personal interests to in anywise conflict with his duty in that respect. It is well settled that a receiver can make no profit out of his trust other than the compensation which the court may allow him under the law. He cannot deal with the property involved for himself while he is receiver, and if he does, the benefit must inure to the trust estate. It makes no difference if the company for which he is receiver was not a loser in the transaction nor however free from fraud the transaction may be.” What Cooper held out of the proceeds from any of Elder’s horses belonged to Elder as part of the price gotten by his agent for his horses. Neither Cooper nor Cooper & Chappell could buy Elder’s horses when they both knew that they were Elder’s property delivered to Cooper that he might act in Elder’s stead and get the most money for them. Cooper’s duty as - a commission merchant was towards his principal and not himself. No commission merchant to whom horses are sent to be sold and turned into money can sell the horses to himself upon the one hand at what he may be pleased to call the highest price and then on the other hand sell them to a third person for more and retain the difference. Cooper could not act at the same moment as both agent and principal in regard to the claimant’s property. Of course there was no such thing as a custom established which could in any way change the duties and obligations of a commission merchant to his principal. A mere method of inspection of horses, a little more elaborate than was usual, which had not existed before, and a posting of prices on bulletin boards, in no way altered the obligation of Cooper to his principal. If Cooper sold Elder’s horses at the price posted to a third person, such as a war contractor, and in doing so was getting for Elder all that could reasonably be obtained in the market for those horses, then Cooper would only have to account for what he received which would be the same as the price that was posted, but if he got more, and Hunter, his own bookkeeper says he got $10,160 more, he was liable for that amount, and the proof so shows in this case. There is not a word of evidence that Elder knew Cooper was mailing a rake-off, an extra profit, on his, Elder’s horses. And there is no evidence that by any overt act of any kind he sanctioned such conduct on the part of his agent, Cooper. It is admitted in the majority opinion that Cooper shared equally with Chappell in an extra profit made out of Elder’s horses. What legal right did Cooper have, as a commission merchant, not having title to the horses, being employed, as he was, to get all he could for his principal, to take part of the money received for horses that were not his, and not account to his principal? It was a flagrant breach of trust, a source of “graft,” that the law has always condemned. No blame attaches to Chappell, save as he may have connived at it. That Cooper was old is no excuse. That the conventional horse business was poor, and that it was advisable that Elder’s horses should be submitted to war subcontractors, so they might have a better chance of being sold, in an otherwise dull market, did not change Cooper’s status as a commission merchant, or entitle him to make an extra profit, or entitle him to deal with Elder’s horses as though he were a principal. He could not, at the same time, be an agent and principal. If a commission merchant were allowed with impunity to deal in the commodity sent him by his principal and secretly pocket an extra profit, it would at once put an end to that confidence which the principal, under the law, is now entitled to repose in his agent, and would destroy one of the most beneficial commercial relations in the whole business world. Instead of the law tending to bring about less confidence it ought, in the interests of commerce and morals as well, to inspire it. Considering what the evidence in this case affirmatively shows, and without contradiction, it follows, in my opinion, as a matter of law, that the evidence not only merely tended but proved the justice of Elder’s claim, and, that being so, the evidence - should have been submitted to the jury. As the uncontradicted evidence of Hunter, Cooper’s bookkeeper, is that Cooper received for the sale of Elder’s horses, $10,160 more than he accounted for or credited to Elder, quite obviously Elder made out a prima facie case.