Court Opinion

ID: 3596220
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:43:33.960253+00
Date Added: 2024-06-11T15:47:00.555290
License: Public Domain

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This seems to be a plain case. In the early part of November, 1860, the plaintiff, who was the owner of 130 bales of cotton, applied to the defendant's testator for a loan or advance thereon of $7,000, which, as the plaintiff estimated the weight of the cotton, was equal to 10 3/8 cents per pound, and according to its actual weight, 11¼ cents per pound. The advance was made upon conditions specially agreed on, and without which it is reasonable to assume it would not have been made. The plaintiff was to consign or pledge to Dehon the cotton, which was an article of fluctuating value in the market, the plaintiff agreeing to repay the advance on the 4th January following. Special authority was given to Dehon to sell the cotton "at public or private sale, or otherwise, at his option, for the most that it would bring," in two contingencies: 1st. If a decline should occur in the market value, and the plaintiff failed, whenever demanded, to deposit, in cash, sufficient to cover such decline, so that Dehon should at all times have in his hands a margin of 1¼ cents per pound; and 2d. If the plaintiff should make default in the payment of the advance, in cash, on the 4th January, 1861, less five days' interest, with one per cent commission. This was something more than a mere pledge, where *Page 369 
the pledgor would be entitled to notice to redeem, and also notice of the time and place that the pledged article would be publicly exposed to sale. Indeed, it is doubtful whether, in a legal sense, a pledge of the cotton was made at all, or that, strictly, the relation of pledgor and pledgee was created. A pledge is defined to be "delivery of goods by a debtor to his creditor, to be kept till the debt be discharged." (Jones' Bail., 117; 2 Kent's Com., 577.) Here there was a constructive delivery of the cotton before any relation of debtor or creditor existed, and not by way of bailment, but as a consignment. It was a peculiar contract between the parties, and is to be construed according to its own language and circumstances; and I apprehend that any apparent difficulty grows out of a perversion of it by a nice adhesion to rules at best only applicable to relations of strict and simple pledgor and pledgee.
It was certainly competent for the plaintiff to contract (with the view of fully securing the advance) that Dehon should hold the cotton, and if its value declined in market, he would deposit a sum in cash equal to such decline, so that the consignee or pledgee would at all times have in his hands a margin of 1¼ cents per pound; that is, a cash deposit which would increase the value of the cotton 1¼ cents per pound beyond the current market price; and it was equally competent for the plaintiff to agree that, failing to do so, whenever demanded, Dehon should have the right to dispose of the cotton "at public or private sale, or otherwise, at his option, for the most that it would bring." The plaintiff cannot legally insist that he should have notice of the time and place of sale, that he had expressly agreed might be public or private, or otherwise, as the consignee or pledgee should determine. In case of a simple pledge with a mere right of sale, the sale must be public, and notice given of the time and place. But here the right of sale is enlarged by expressly yielding the privilege of claiming a public sale, and authorizing the party to sell at private sale. The private sale spoken of in the contract, and which was within the intention of the parties, was clearly a private sale, to be made in the ordinary way, without notice *Page 370 
of time or place, and known and made public to the parties thereto alone. Under the clause allowing a sale for a fall below the margin agreed to be kept up, no prompt sale, adequate to protect the pledgee from loss, and such as was evidently contemplated, could be made, if it was necessary to serve a notice of time and place of sale on the plaintiff. The whole proceeding would be ridiculous and impracticable. It is impossible to raise from the language of this contract, as the Court below attempted to do, an implied obligation to give notice to the plaintiff of the time and place where the cotton would be sold for his default. The parties did not intend it; and, ordinarily, it would be impracticable to affect a private sale of a lot of cotton, in the way such sales are usually made, if such notice was required to be given.
With this view of the law, the only question in the case was one of fact, viz., whether the plaintiff had made default in keeping up the margin, at the time of the sale of the cotton by Dehon. If he had, then Dehon was justified in selling. If he had not, the sale was wrongful. Two things must have concurred to put the plaintiff in default — a decline in the market value of cotton below the margin stipulated in the contract, and a demand, by Dehon, that the plaintiff should make such margin good. The jury were substantially so instructed by the judge at the trial; and the findings of the jury upon these questions of fact were, in effect, against the plaintiff. After a charge, in which they were distinctly instructed that, before Dehon could sell the cotton, the price must have fallen below the amount specified in the contract, and he must also have demanded of the plaintiff that the margin should be made good by him, they found for the defendant.
The judge was requested to instruct the jury that Dehon had no right to sell the pledged property, until he had first caused a demand of payment of the margin, to be made personally of the plaintiff. If by this was meant that there should be an actual, instead of a constructive, demand and notice, the request was unobjectionable. But this was not the meaning. The loan had been negotiated through one Dougloss, *Page 371 
lass, a clerk of the plaintiff, who sometimes did out-door business for him; and the proof tended conclusively to show that he acted as the plaintiff's agent in the particular transaction. Douglass had several interviews with Dehon in the month of December, while samples were in the hands of the cotton broker, in relation to the threatened sale of the cotton. He knew of the decline, and that the margin was deficient, and in these interviews, urged that the sale should be delayed. He was told, that if the plaintiff did not pay the margin within a day or two, the cotton would be sold; that Dehon had already borne with the plaintiff for some time, and could not longer take the risk; and when requesting delay, represented that it was inconvenient, or indeed quite impossible, for the plaintiff to pay up his margins. This evidence showed that the demand was made to Douglass, and not to the plaintiff in person. Accordingly, the judge charged the jury that if they found that a demand was made on Douglass to make the margin good, it would be necessary to determine whether Douglass was authorized by the plaintiff to receive a notice of that kind, and that would depend entirely upon the question whether Douglass was the agent of the plaintiff or not. If Douglass was the agent of the plaintiff in the transaction of the business, and notice was given to him requiring that the margin should be made good within one or two days, as testified to by some of the witnesses, then such notice was sufficient to the plaintiff. It was to the proposition in the charge, that demand and notice to the agent transacting the business was sufficient notice to the principal, that the plaintiff's counsel took exception, insisting that to authorize a sale, the demand should have been made personally on the plaintiff. But, clearly, this was unnecessary to put the latter in default, if Douglass was authorized to receive the notice for him. The evidence tended to the conclusion that he had such authority.
Questions were put to the plaintiff, as a witness, with the view of showing that no demand had been made on him personally, and excluded. This exclusion had no important bearing on the rights of the parties. It was not pretended *Page 372 
that any demand had ever been made upon the plaintiff, individually; and if the law required such a demand, it was conceded that the sale was without authority. It was quite unnecessary that the plaintiff should testify to the fact, to enable his counsel to raise the question of law. I think no error was committed at the circuit, and that the order for a new trial should be reversed, and judgment rendered on the verdict for the defendant.