Court Opinion

ID: 6353636
Source: CourtListenerOpinion
Date Created: 2022-06-24 17:38:39.605544+00
Date Added: 2024-06-11T15:49:36.949190
License: Public Domain

The opinion of the Court was delivered by
King, President. —
The plaintiff rests his claim to recover in the present cause upon three grounds. First, that the defendants had sold the goods consigned at a less price than that expressly limited. Second, that, admitting no express limitation of price is established by the proof, still the goods were sold at less than the market value. And, third, that the defendants had refused to furnish accounts of sales, and deliver to him the remainder of the goods unsold; making themselves by this act chargeable as purchasers of the goods so unsold and detained.
To sustain the first proposition, the plaintiff relies chiefly on the fact, that in all the invoices which accompanied the goods, the prices were carried out, and that upon the aggregate sum of those invoices, the defendants had agreed to advance, and did advance him fifty per cent. Hence it is contended, that, when goods are consigned by a manufacturer to a commission merchant on a stipulation that the latter should make agreed advances on the invoice value of the goods, this wTas equivalent to instructions given by the manufacturer and received by the commission merchant, that the goods should not be sold at less than the invoice prices. But I think it cannot be shown that this construction wTas ever given to such a contract by a Court of justice ; nor has it been established by the known usages of trade; which, when fixed and universal in the place where a contract is made, form a part of it.
The rule seems to be this, that an invoice of merchandise consigned, in which the prices are carried out, is only to be regarded as instructions to the consignee, of the estimated value of the pro*364perty by the consignor; but does not interdict him from selling at tbe ordinary and usual market rates, although these should he less than the invoice prices. If the consignor, desires to limit the price at -which his goods are to be sold, he should say so in express terms, and if he omits to do so, the consignee has the right to consider the sale of the goods as referred to his sound discretion; and if that is fairly and honestly exercised, the consignor has no reclamation against the consignee, because the goods were forwarded to a market in which the invoice prices could not be obtained. And this rule specially, applies in a case like the present, when advances to the amount of fifty per cent, of the value of the consigned goods have been made; for reason 'and justice indicate that the consignee should have the right to reimburse himself, by selling at the prices which the market would command, unless he binds himself by an express stipulation to keep the goods on hand, and lock up his own advanced capital until there should be a change so favourable in the market as to enable him to make sale at the invoice prices. In the present case, there exists a cogent reason why the prices were carried out in the invoice, without supposing it to have been intended as a limitation. Unless the goods came accompanied with an estimated value, there was no means of ascertaining the advances which were to be made by the agreement, being fifty per cent, of the value of the goods consigned.
There is no doubt but that such a course of dealing may exist between consignor and consignee as would restrain the latter from selling at less than the invoice prices without further advice; but all such cases must depend on their own special circumstances, such as the mutual course of previous dealings between the parties, the usages of the particular business, &c. All we intend to decide in the present case is, That where a manufacturer consigns goods to a commission merchant, who makes advances in anticipation of sales, accompanying the invoice of such a consignment with a statement of the prices, this does not of itself establish such prices as the limit beneath which the consignee should not sell. The consignment of goods on which advances are asked and received involve the right in the consignee to sell the goods in the usual and accustomed manner, and at the regular market rates, in order to the closing of the transaction, and for the reimbursement of his advances. And where the consignor does not desire to subject himself to such liabilities, he should make special arrangements to meet his own views in relation thereto.
*365In the present ease, there is no sufficient proof of any special contract not to sell at less than the invoice prices.
But it is further alleged that, after the consignment of the goods, instructions were given by the consignor to the defendants, limiting the prices at which the goods should he sold. This the consignor could not legally do after consigning his goods and receiving advances thereon; for his authority over them in this respect terminated. He could impose no new terms on his consignee under such circumstances, who, from the fact of having made such advances, must he regarded as a quasi purchaser; and such advancing consignee is hound no further to the consignor than to use all due and proper diligence, skill, and attention in selling the goods thus consigned, at the best rate the market affords, and in the manner required by the established customs and usages of trade.
In reference to the second proposition contended for by the plaintiff’s counsel, that, admitting the defendants not to have been limited as to price in making sale of the consigned goods, yet they had sacrificed them for prices beneath the market rates, there appear to be two facts which, even on this ground, are decisive of the case against the plaintiff. For it seems that the defendants, on the 18th of October, 1847, rendered their account of sales to the plaintiff, in which he was distinctly apprised of the prices at which the goods were sold; the same which he now complains were sacrificed. This account he held until the 26th of November following, not only without objection, but having in the mean time made new consignments, and received new advances thereon from the defendants.
It is a well settled rule in the law of Principal and Factor, that when the latter renders his accounts of sales to the former, the principal should, with all reasonable diligence, signify in what particulars he considers them exceptionable. But if he retains the accounts any unreasonable length of time, he is concluded from objecting that the goods were sold at insufficient prices. But when, in addition to such unreasonable delay, the principal continues to deal with the factor on the previous footing, giving him new consignments, and receiving new advances, the rule becomes imperative, and he must be held as having absolutely adopted the account. In such cases, however, it must always be understood that the account truly and honestly represents the actings of the factor.
In a case like the present, where the parties lived in the same city, and were in the habits of almost daily intercourse, the deten*366tion of the account for upwards of five weeks without objection, coupled with the fact of the plaintiff’s dealing with the defendants upon the old footing, estops him from going into the question whether the sales had or had not been made at an inadequate price.
As to the third ground on which the plaintiff claims to charge the defendants, to wit, that they had on the 26th day of November, 1847, refused to furnish him with a further account and to deliver up the unsold goods, it seems to the Court to be without foundation. It is true that on that day the plaintiff demanded such account, and professed his readiness to satisfy any balance due the defendants; but it is equally true that at that time a part of the goods were on sale in Boston, where they had been shipped with his consent;. this was assigned as a reason for the defendants not being able to render an account of sales subsequent to the 18th of October, but an assurance was given that the account should be furnished the 1st January, 1848. Nor did it appear in proof on what footing the plaintiff was ready to settle with the defendants; whether on the basis of the invoice value of the goods, or upon the basis of the prices for which they had been sold, and of which sales an account had been rendered to him on the 18th of the previous October. If the former, the demand was null, because coupled with a condition to which by law the defendants were not bound to conform.
And even if the demand was made accompanied with an offer to settle on the footing of the actual sales made by the defendants, yet the plaintiff could not withdraw his goods from the defendants without a payment, or' an offer to pay not only their advances, but the commissions the defendants would have been entitled to receive on the sales. For the rule of law is this: If a principal consign goods to a factor for sale at a given rate of commission, on which he receives cash advances, in anticipation of sales, he cannot, at his mere pleasure, withdraw the sale of his goods from the factor, on the repayment of advances and interest.
The factor has an interest in making the sales and earning his commissions, which in general forms the effective consideration of his advances; and it does not rest in the power of the principal to deprive him of this advantage, without showing some substantial reason for so doing. And nothing, probably, would be deemed such a substantial reason, except such a state of facts as would have enabled the plaintiff to have sustained an action of trover or reple-vin against the defendants for the goods. There has been shown no such state of facts in the cause, as places the defendants in the *367position that the detention of the goods for the security of their unsatisfied balance of account was so far unlawful as authorized the Master in charging them with the goods on hand and unsold, as if they had actually sold them, or become themselves the purchasers, which is the principle on which the account has been stated.
Decree that the report of the Master be set aside, ana plaintiff’s bill dismissed.