Court Opinion

ID: 5464672
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:47:11.38794+00
Date Added: 2024-06-11T08:33:03.296893
License: Public Domain

Curia, per

Savage, Ch. J.
There is no dispute but the advance on the goods exceeded their value ; and the defendants admit their liability to refund the difference between the money loaned, and the value of the cocoa at 121 pesos. But they contend that the plaintiffs, not having taken that price when offered, and having subsequently-sold for eleven, must bear the loss. Whether the plaintiffs were bound to have taken that offer, and to have sold immediately on the arrival of the cocoa; or whether they were justified in holding it longer, to try the market, is the only question.
The judge at the trial charged the jury, that the letters of instruction were to belaid out of the question, unless there w;as an express agreement to sell immediately-. In *133this I apprehend there wa3 an error. The plain tiffs, by their representative, Darby, had refused to purchase, buti solicited the consignment of the cocoa. They received it\ as factors ; and of course under the rights and duties which S exist by law between principal and agent. The plaintiffs J having advanced money upon the goods, gave them a lien J for the mount of their advance ; but I do not find arjy.jiu- | thoxity for saying that the lien thus created alters the rights j of the parties in any respect, so far as relates to the duty i of the factor in making sale of the goods. Nor is there ; any reason why it should. The principals are liable for / the money advanced ; and the goods being at their risk, are j subject to their order and control, in every respect not in-| consistent with the lien of the factor.
The factor’s lien is upon the goods, and upon the proceeds. (Cowp. 256.) The most advantageous sale should be made ; that the balance, if in favor of the principal, may be as large as possible ; and, if against him, as small as possible. It istheduty of the factor to manage the affairs of his principal in the same manner, and with that care and diligence, which a prudent and discreet merchant would exercise in relation to his own affairs. But he must still obey his instructions ; because it is the I principal who bears the loss. The factor must, for that, reason, be liable for negligence or for departure from instructions in the same manner as in ordinary consignments.
It was said by this court, in Rundell v. Moore, (3 John. Cas. 37,) that agents or factors who disobey their instructions through mistake or design, are undoubtedly responsible. In Evans v. Potter, (2 Gall. 13,) Story, justice, says, “ a factor is bound to ordinary diligence in relation to the property confided to him. Where the orders leave the management of the property to his discretion, he is bound only to good faith and reasonable conduct.” “ If he can advantageously sell the property, and neglect so to do, he must answer in damages. But if the markets are low, or unusually crowded, if new and unexpected difficulties arise, he is not obliged to sell at all events, and under every disadvantage.” The same doctrine of *134the liability of the factor for ordinary negligence, is found ⅛ the treatises on agency, by Paley and Livermore, and cases cited by them. (See also 1 John. Cas. 178, 9.) But *he consignee must obey his instructions. If he sell under the given price, though from good motives, he is bound to make good the loss. (Guy v. Oakley, (13 John. 333, 4.)
If the principal give orders to his factor, they must be pursued, or he becomes liable. If none are given, or they are not clear and explicit, the factor is allowed to use his best discretion according to the usage of trade. (Geyer v. Decker, 1 Yeates, 487.) This ease was cited to shew that orders to sell on arrival, were complied with, if a sale was made within six months. But the time was not made a point in the cause. The breach, it was contended, consisted in selling on credit, when the orders were for cash ; the language being to sell on arrival, and remit the produce by the same vessel, or any other vessel, to Philadelphia, in bank notes. The court held that was no direction to sell for cash only. They also say, there was strong proof of icquiescenee.
The case of Dusar v. Perit, (4 Bin. 361,) maintains the proposition, that a departure from instructions, may be excused by an event not contemplated at the time the instructions were given. The supercargo, in that case, was compelled to go to the Havanna to repair his vessel, in consequence of an accident. He'sold the vessel and part of the flour, at the limited price. The residue of the flour wras sold at less than the price fixed by his instructions, in consequence of the arrival of other cargoes. The general principle, of the liability of agents in case of deviation from instructions, is not at all impugned by this case. Yeates, justice, says, “I think it a matter of great moment in commercial transactions, that agents should be strictly held to execute the orders of their principals ; but I do not think this such a case as demands the court’s interposition in order to guard that principle.”
In none of the cases cited, nor in any which 1 can find, is {he distinction taken which was relied on by the judge : *135to wit, that in cases where advances are made on goods consigned, the consignee is not bound to obey the instructions of the consignor.
The analogy between consignor and consignee, and mortgagor and mortgagee, does not strike me as very forcible, except it be that the mortgagee, in the act of foreclosing his mortgage by sale, resembles the consignee in selling goods, upon which he has made advances. In such case, should the mortgagee refuse a higher price, and afterwards take less, ought he not to account to the mortgagee for the highest price offered ?
I do not wish, however, to be understood as now expressing an opinion upon what I conceive to be the question hereafter to be tried, to wit : whether the plaintiffs were guilty of negligence by disregarding their instructions. That is a question of fact, which should have been submitted to the jury.
A new trial must be granted; the costs to abide the event.
New trial granted.