Court Opinion

ID: 8888453
Source: CourtListenerOpinion
Date Created: 2022-11-26 22:31:22.87324+00
Date Added: 2024-06-11T17:07:03.683106
License: Public Domain

MAX ROSENN, Circuit Judge
(concurring and dissenting).
I fully agree with the majority that the district court properly granted a directed verdict on the anti-trust claim.
I would remand this case, however, for a new trial solely on the issue of whether the directors of Erie-Crawford exceeded their power as agents for the producers and by so doing caused actual loss to the plaintiff class.
I do not find that there has been any conversion, of milk or money, in this case. While I agree with the majority that a conversion is the deprivation of another’s right in property, or the unlawful interference with that property, I do not find any such improper activity amounting to a conversion of the consigned milk on the facts before us. A claim based on converting a chattel, the milk in this case, would require the pro*484dueers to show that they had consented to the cooperative’s control over the milk for one purpose which was then ignored when the milk was sold. See Restatement of Torts 2d § 228. However, a new trial could not show that the cooperative exercised any unlawful dominion over the milk that interfered with any of the producers’ rights. There seems no way plaintiff will be able to change the seemingly conceded and inescapable conclusion that the cooperative sold the milk at the prices set by the Pennsylvania Milk Control Commission, precisely as the producers wanted. Furthermore, as Comment (g) to Section 228 makes clear, there is no conversion “unless [the control exercised] amounts to such a serious violation of the other’s right of control as to justify requiring the user to pay the full value of the chattel.” The plaintiff’s own statement of damages illustrates he cannot meet that burden: he seeks only the difference between the Milk Control Commission price and the amount actually received.
However, I would agree with the majority that there was no conversion of funds because the producers did not have a right to immediate title to the proceeds. They possessed only a contractual right to a sum that reflected payments to the cooperative for its services. In addition, in Pennsylvania, it has been determined that when an agent does not exercise unlawful dominion over funds otherwise owing to his principal, he has not committed a conversion, and is at best liable to pay over the sum he has received plus any damages brought about by his negligent conduct. Allegheny By-Product Coke Co. v. J. H. Hillman & Sons Co., 275 Pa. 191,118 A. 900, 905 (1922).
In light of Pennsylvania law and the facts of this case, I would conclude that the only possible improper action was that the cooperative exceeded its authority under its contracts with the producers. Section 424 of the Restatement of Agency 2d requires an agent to act within the limits set by the principal’s directions, and Section 402 declares that the agent shall be liable for any loss incurred because he deviates substantially from his authority to transfer goods to a third person in a sale. Therefore, if an improper sale at too low a price takes place, the principal can recover his actual loss. See, Comment (g), § 424, Restatement of Agency 2d.
This action cannot include within its ambit any of the producers. They were not required to follow the duties imposed upon Erie-Crawford under the contracts between the cooperative and the plaintiff class. In addition, they are protected because the agreements they signed with the cooperative were within its implied powers and therefore bound their principals, the producers.
Further, I would conclude that because Erie-Crawford is a cooperative made up of members of the plaintiff class, it cannot be a defendant in this action. A recovery from it would merely take money out of one pocket of a producer and put it back in another pocket. While recovery would be limited to those who are actual members of the class, the class representative asserts that all of the members of the cooperative have been equally wronged. There is then certainly no justification for the non-class members to pay money to class members when they both are assertedly equally innocent and injured.
As a result, that leaves the class only an action against those directors who agreed to a policy which may have exceeded their powers under the contracts between the cooperative and the producers. While I doubt that the plaintiff class will be able to prove any damages from these actions, I agree with the majority that they should have their day in court to present their case.