Brown & Company v. McGran
39 U.S. 479 (1840)

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U.S. Supreme Court

Brown & Company v. McGran, 39 U.S. 14 Pet. 479 479 (1840)

Brown & Company v. McGran

39 U.S. (14 Pet.) 479

Syllabus

An action was instituted against the consignees of two hundred bales of cotton, shipped by the direction of the owner to Liverpool, on which the owner had received an advance by an acceptance of his bills on New York, which acceptance was paid out by bills drawn on the consignees of the cotton in Liverpool. Sometime after the shipment of the cotton, the owner wrote to the consignees in Liverpool, expressing his "wishes" that the cotton should not be sold until they should hear further from him. In answer to this letter, the consignees said "Your wishes in respect to the cotton are noted accordingly." No other provision than from the sale of the cotton for the payment of the advance was made by the consignor when the same was shipped, and no instructions for its reservation from sale were given when the shipment was made.

Immediately after the acceptance of the bill drawn against the cotton on the consignees in Liverpool, they sold the same for a profit of about ten percent on the shipment. Cotton rose in price in Liverpool to more than fifty percent profit on the invoice between the acceptance of the bill

of exchange and the arrival of the same at maturity. The shipper instituted an action against the consignees for the recovery of the difference between the actual sales and the sum the same would have brought had it been sold at the subsequent high prices at Liverpool.

It is certainly true as a general rule that the interpretation of written instruments properly belongs to the court, and not to the jury. But there certainly are cases in which, from the different senses of the words used or their obscure and indeterminate reference to unexplained circumstances, the true interpretation of the language may be left to the consideration of the jury for the purpose of carrying into effect the real intention of the parties. This is especially applicable to cases of commercial correspondence, where the real objects and intentions and agreements of the parties are often to be arrived at only by allusions to circumstances which are but imperfectly developed.

There can be no reasonable doubt that in particular circumstances, a wish expressed by a consignor to a factor may amount to a positive command.

In the case of a simple consignment of goods without any interest in the consignee or any advance or liability incurred on account thereof, the wishes of the consignor may fairly be presumed to be orders, and the "noting the wishes accordingly" by the consignees an assent to follow them. But very different considerations might apply where the consignee should be one clothed with a special interest and a special property founded upon advances and liabilities.

Whenever a consignment is made to a factor for sale, the consignor has a right, generally, to control the sale thereof according to his own pleasure from time to time if no advances have been made or liabilities incurred on account thereof, and the factor is bound to obey his orders. This arises from the ordinary relation of principal and agent. If, however, the factor makes advances or incurs liabilities on account of the consignment by which he acquires a special property in the goods, then the factor has a right to sell so much of the consignment as may be necessary to reimburse such advances or meet such liabilities, unless there is some agreement between himself and the consignor which contracts or varies this right.

If, cotemporaneous with the consignment and advances or liabilities, there are orders given by the consignor, which are assented to by the factor, that the goods shall not be sold before a fixed time, in such a case the consignment is presumed to be received subject to such order, and the factor is not at liberty to sell the goods to reimburse his advances until after that time has elapsed. So when orders are given not to sell below a fixed price unless the consignor shall, after due notice and request, refuse to provide other means to

reimburse the factor. In no case will the factor be at liberty to sell the consignment contrary to the orders of the consignor, although he has made advances or incurred liabilities thereon, if the consignor stands ready and offers to reimburse and discharge such advances and liabilities.

When the consignment is made generally, without any specific orders as to the time and mode of sales, and the factor makes advances or incurs liabilities on the footing of such

Page 39 U. S. 480

consignment, the legal presumption is that the factor is intended to be clothed with the ordinary rights of factors to sell, in the exercise of a sound discretion, at such time and in such manner as the usage of trade and his general duty require, and to reimburse himself for his liabilities out of the proceeds of the sale, and the consignor has no right, by any subsequent orders, given after advances have been made or liabilities incurred by the factor, to suspend or control this right of sale except so far as respects the surplus of the consignment not necessary for the reimbursement of such advances or liabilities.

If a sale of cotton in Liverpool by a factor has been made on a particular day tortiously and against the orders of the owner, the owner has a right to claim damages for the value of the cotton on the day the sale was made, as for a tortious conversion. If the sale of the cotton by the factor was authorized on a subsequent day, and the cotton had been sold against orders before that day, the damages to which the owner would be entitled would be regulated by the price of cotton on that day. But the rate of damages should not be obtained from the prices of cotton at any time between the day when the cotton was sold against the orders of the owner and the day on which the sale was authorized by him.

In the Inferior Court of Richmond County in the State of Georgia, Thomas McGran, the defendant, instituted a suit by attachment against the plaintiffs in error to recover damages for the sale of two hundred bales of cotton shipped by him to the plaintiffs in error as his factors, the cotton having been sold for a less price than the same would have produced had the sales been made according to the instructions of the shipper.

The declaration contained three counts, all upon the shipment of the two hundred bales of cotton by Thomas McGran to William and James Brown & Company, at Liverpool, as the factors of the shipper.

The first count alleges that while the cotton remained in the hands of the consignees, the shipper ordered him to hold the cotton until they should hear from him again, but the same was sold in violation of the order and to the damage of the shipper.

The second count charges the consignees with not having exercised reasonable diligence in keeping and selling the cotton, but that they dealt with the same so negligently and carelessly, so that it was sold at a loss to the shipper.

The third count alleges that the consignees did not sell the cotton to the best interests of the shipper, nor did they obey his instructions, but on the contrary managed the same carelessly and negligently and sold the same contrary to orders, with a reasonable prospect of rise of the article, for $3,000 less than the value of the cotton at the time the same was sold.

The case was removed under the provisions of the Judiciary Act of 1789 to the Circuit Court of the United States for the District of Georgia, the defendants below not being citizens of the State of Georgia and not residing in that state.

The defendants pleaded the general issue, and the cause having been tried in the circuit court, the jury gave a verdict for the plaintiff, Thomas McGran, under the directions of the court, for $4,975.57.

Page 39 U. S. 481

The defendants excepted to the ruling of the circuit court on questions submitted during the trial of this cause, and they prosecuted this writ of error.

On the trial it was given in evidence that two hundred bales of cotton were shipped by defendant in error from Mobile to the plaintiffs in error, at Liverpool, as his factors, to be sold by them under a del credere commission. That this cotton was received by them about 9 April, 1833, and cost, per invoice, $9,151.77. That the plaintiffs in error, through Brown, Brothers & Company, their house in New York, accepted, early in March, 1833, a draft of defendant in error, for $9,000, drawn against said cotton upon their said house in New York; that when this draft arrived at maturity, the said house in New York paid the same, and in order to reimburse themselves, and in pursuance of an arrangement between plaintiffs in error and defendant in error, drew upon the plaintiffs in error, at Liverpool at sixty days' sight, for

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