Court Opinion

ID: 8855597
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:29:13.242258+00
Date Added: 2024-06-11T17:05:38.721549
License: Public Domain

CALDWELL, Circuit Judge,
after stating the case as above, delivered -the opinion of the court.
The contract between the Benedict Company and the Stern Auction & Commission Company (hereafter called the “Commission Company”) was not a sale, but a contract of factorage. The stipulations of the contract are not appropriate to a contract of sale. If it was a sale, and the commission company acquired the absolute title, what concern was it of the Benedict Company when they were sold? When one merchant sells goods to another, the seller never requires the buyer to enter into a covenant that he will sell the goods within a specified period. Such a requirement is inconsistent with the dominion over property which absolute ownership confers. The money to be paid by the commission company was not upon a sale of the goods to that company, but upon a sale of the goods by' that company. The commission company was never to pay for the goods as upon a purchase by it, but only to account for the proceeds of the sale of thém at prices fixed by the contract. The commission company covenanted that no part of the assignment [consignment] should “remain unsold nor unpaid by February 1st, 1895.” A failure to sell the goods, and account for the same, at the prices fixed, within the time agreed upon, would be a breach of this CQvenant on *185fbe part of the commission company, for which the Benedict Company might recover its damages, but such breach of the contract would not have the legal effect to convert the bailment into a sale. Sturm v. Boker, 150 U. S. 312, 14 Sup. Ct. 99; Hunt v. Wyman, 100 Mass. 198; Walker v. Butterick, 105 Mass. 237; Middleton v. Stone, 111 Pa. St. 589, 4 Atl. 523. The goods not sold would still remain the property of the Benedict Company. There is no provision in the contract for a change of title from the consignor to the consignee, in any event. Tested by the written agreement, the contract was clearly one of bailment. But, if its meaning was doubtful, the fact that the parties to it understood it to be a contract of bailment, and acted upon that assumption, would remove the doubt. Hamm v. City of San Francisco, 17 Fed. 119, 124; Chicago v. Sheldon, 9 Wall. 50, 54; Central Trust Co. of New York v. Wabash, St. L. & P. Ry. Co., 34 Fed. 254; Topliff v. Topliff, 122 U. S. 121, 127, 7 Sup. Ct. 1057; Steinbach v. Stewart, 11 Wall. 567, 576; Mathews v. Danahy, 26 Mo. App. 660; Jennings v. Machine Co., 138 Mass. 594; District of Columbia v. Gallaher, 124 U. S. 505, 8 Sup. Ct. 585; Knox Co. v. Ninth Nat. Bank, 147 U. S. 91, 13 Sup. Ct. 267.
Moreover, parties have the undoubted light to make their own contracts, and to put their own construction upon them, and to regulate their rights and liabilities thereunder. If the court ‘‘leaves the parties to be governed by their understanding of their own language, it, in effect, enforces the contract as actually made. That they should be so permitted to construe their own agreement accords with every principle of reason and justice.” St. Louis Gaslight Co. v. City of St. Louis, 46 Mo. 128; Mathews v. Danahy, 26 Mo. App. 660. And when both parties to a contract, acting in good faith, are agreed as to its meaning and their rights under it, a stranger having no interest in the subject-matter of the contract cannot: insist that a different interpretation shall be put upon it, or compel the parties to put that interpretation upon it which will benefit him. The law will not override the will of the parties in the construction of their own contracts, for the benefit: of a third party, whose interests are not affected thereby, or who acquired his interest with full knowledge of what the parties conceded and agreed was their contract. The bank was advised by the commission company, before the execution of the bill of sale, that the goods in controversy were held for sale on commission from the Benedict Company; and thereupon, and before the bill of sale was executed, these words were added thereto, “but this.conveyance does not transfer goods held for storage or on consignment for others;” and before the execution of the bill of sale the Benedict goods were separated from the goods of the commission company, and removed to an upper floor, and placed with other goods stored or held for sale on commission. It is true, the president of the bank, upon being told that the contract: between the Benedict Company and the commission company was in writing, said he “would submit the contract to the attorney of the bank for advice, when he should see the same.” But the parties to this contract had a right to put their own construction upon it, and act upon that construction, so long as it was done in good faith, and without prejudice *186to the rights of the bank. The bank was distinctly advised, before it acquired any pretense of right or claim to these goods, that they were held on consignment, and the consignor was named. The bank never at any time extended credit, or did any act whatever, on the faith that these goods were the property of the commission company; but, on the contrary, it took its bill of sale with notice that they were the property of the Benedict Company. The parties to the contract agreeing as to what they meant by it, and as to their respective rights under it, and desiring in good faith to execute it in accordance with that understanding, the bank, with notice of these facts, cannot demand that the contract shall be construed contrary to the understanding and agreement of the parties, and to the prejudice of one of them. This is not a case where the parties to the contract themselves differ as to its meaning and purpose. Here the parties are agreed that the contract they made was one of bailment. It is a third party who is demanding that the contract shall not have effect according to the agreement and intention of the parties. On this state of facts, the bill of sale invested the bank with the rights of the commission company only; and, as the commission company had no right to the property, the bank has none. The judgment of thp circuit court is affirmed.