Court Opinion

ID: 7193322
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:59:34.886402+00
Date Added: 2024-06-11T16:16:14.971231
License: Public Domain

DisseNting Opinion.
Fenner, J.
I do not controvert the correctness of the general principles announced in the majority opinion, but I think their application, under the facts of this case, is dominated by superior principles of tin law of mandate.
*736The bills of lading for the twenty-one bales of cotton, here in controversy, were enclosed to the consignees in letters signed in the firm name of Galloway & Burns, and giving the instructions to hold the cotton for account of W. H. Galloway to reimburse margins advanced or to be advanced upon certain future delivery cotton contracts which had been entered into for him.
These letters, with the enclosed bills of lading, constituted the indivisible mandate under which the consignees received and hold the cotton. They had the right to accept and act upon it as a whole. Until otherwise notified, they were not subjected to the duty of inquiring into the authority, but had the clear right to assume that the authority to ship the cotton included authority to direct the disposition of the proceeds. A different rule would impose upon factors responsibility which the law has never contemplated.
If the instructions were unauthorized, and if the firm or its creditors’ had asserted claims upon the cotton before the consignees had acted upon the instructions in such manner as to alter their position, then such claims might be enforced. But if acting in good faith upon the instructions the consignees had made advances for Galloway’s account or otherwise incurred liabilities for him, before advised of the want of authority, they are entitled to protection.
The case cannot be distinguished, in principle, from that of Bullitt vs. Walker, 12 Ann. 276. There, the bill of lading was in the name of John S. Mitchell “for account of William Walker,” and was accompanied by a letter of instructions from Mitchell in these words: “I ship you to-day, per express, corn, which please sell for the best price you can and credit my account with the proceeds. Make account sales for account of Win. WaHcer.”
It thus presents the clear case of an avowed agent shipping for account of a named principal and directing the proceeds to be applied to Ms own credit. Certainly it will not be denied that the power of a partner, acting in the name of his firm to direct the application of firm assets to his individual credit, is at least as great as that of any other mandatary to make similar application of his principal’s property. Hence, the case fully applies. Now, in the case referred to, the consignees, acting on the instructions, paid drafts of Mitchell beyond the value of the corn. Creditors of Walker then proceeded against the consignees by garnishment.
The Court held that, having paid Mitchell’s drafts upon the faith of tlje instructions accompanying the shipment, before advised of any *737want of authority, tlie consignees were entitled to protection, saying that although “ the mention of Walker’s name in the hill of lading and letter of advice conveyed to the consignees knowledge of his interest,” yet “the consignees had no mission to protect Walker from a misappropriation of his funds by his agent, Mitchell.”
In the same case, however, other garnishees who had received corn under like instructions but who had not sold it at date of garnishment, and who were not shown to have made advances on the faith of the shipment but sought to apply the corn to a former account, were held liable, to the true owner’s creditors under the garnishment: though, from this part of the decision, two of the ablest justices, Slidell and Lea, dissented.
• The question in the case, therefore, is whether or not, after the consignment and upon the faith of the instructions, the consignees, Kirkpatrick & Co., had made advances or incurred liabilities for W. H. Galloway before the garnishment? If so, to that extent they should be protected.
Owing to the omission from the transcript, by consent, of the account of W. H. Galloway offered in evidence, we could not determine the dates of the advances made for his account, but I think the case should be remanded for the purpose of settling that point.
For these reasons, I dissent from the opinion and decree.
Mr. Justice Todd concurs in this opinion.