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 �1,871,
9 p. This draft was dated May 7, 1833, was accepted by plaintiffs
in error, at Liverpool, June 3, 1833, and fell due and was paid by
them on 5 August following. That by the contract between the
plaintiffs in error and the defendant in error, the cotton in
question became pledged by the defendant in error to the plaintiffs
in error to enable them to meet their acceptances and repay their
advance thereon.
After shipping the cotton and drawing against it as aforesaid,
the defendant in error became insolvent.
On June 3, 1833, plaintiffs in error sold said two hundred bales
of cotton for �2,073 4s, 6p,, cash, September 16, 1833, being a
profit of about ten percent. On the same day on which they sold
this cotton, they sold six hundred and seventy-seven bales in which
their Baltimore house was interested, and in a week previous had
sold two hundred and sixteen bales in which their Baltimore house
was also interested.
At the time of the sale of the two hundred bales of cotton, the
defendant in error was indebted to plaintiffs in error in a large
sum.
During the week in which the two hundred bales were sold, the
sales of cotton amounted to forty-seven thousand two hundred and
fifty bales, a larger amount than in any previous week for about
eight years.
On April 20, 1833, the defendant in error wrote to plaintiffs in
error: "If you have any cottons on hand when this reaches you, in
which I am interested, I wish you to hold them until you hear from
me again."
This letter was received by William and James Brown &
Company on 23 May, 1833, and on the day following, 24 May, 1833,
they wrote to Thomas McGran:
"We are in possession
Page 39 U. S. 482
of your esteemed favor of the 20th ultimo, and your wishes in
respect to the cotton we now hold on your account, are noted
accordingly."
On June 9 following, the plaintiffs in error wrote to defendant,
annexing a circular showing the extensive business done in cotton
during the week and a material improvement in prices, and informed
him that, believing this advance would probably equal the
expectations he had formed when he last wrote, and thinking it
desirable to close his cotton in their hands, as they had then been
drawn upon for the advance on it, they had taken advantage of this
brisk demand to dispose of the two hundred bales at an advance of
one-half to five-eights of a penny per pound upon its value when
first landed.
On July 30, 1833, the defendant in error replied to the last
letter, referring to his previous letter of April 20, and asked of
plaintiffs in error
"Why did you sacrifice my cottons as the draft drawn by Brown,
Brothers & Company, at sixty days, on account of these cottons,
could not have been accepted more than a day or two before?
Therefore, you had sixty days before you had any money to pay for
me."
He adds:
"I do not recognize the sale, and do not consider you authorized
to sell the cotton before the time the draft drawn on you by Brown,
Brothers & Company, against this cotton falls due. If the price
is higher on that day than the day you sold it, I will expect you
to allow me the difference, and if it is lower, I will be prepared
to pay you any balance I may owe you."
On September 4, 1833, the plaintiffs in error replied that there
had been a balance due to them from defendant; that the two hundred
bales were sold at an advance, and barely squared the accounts.
That defendant had been obliged to stop payment, that any loss
would be certain to fall on them, and profit not likely to go to
him, but to his creditors. That the cotton was not sacrificed, but
sold at a profit such as is not frequently realized on that
article; that they sold some on account of their Baltimore house,
and some immediately before, and immediately after, in which their
said Baltimore house was interested. That near fifty thousand bales
changed hands in the same week. That, situated as the defendant in
error then was, he could not reasonably have expected them to hold
the cotton without pointing out in what manner they should be
indemnified in event of loss thereby. That the fact that Brown,
Brothers & Company's draft was not due did not alter the case,
as they had become responsible some months before, by Brown,
Brothers & Company's acceptance of the draft of the
shippers.
On July 22, 1833, the defendant in error wrote to plaintiffs
that he had received their favor of 24 May and noted the contents.
That they would please to sell the two hundred bales soon after the
receipt of the letter unless they were of opinion they could do
better by holding a little longer. This letter was received by the
plaintiffs in error August 23, 1833.
Page 39 U. S. 483
The counsel for the defendant below, prayed the court to
instruct the jury, that the matters given in evidence on the part
of the defendants were sufficient, and ought to be admitted to bar
the plaintiff's action, which instruction the court refused to
give.
And the court further refused to instruct the jury:
1. That the advance by the house of Browns, in New York, was in
effect an advance by the house in Liverpool, and after advance so
made, the shipper had no right to alter the instructions which were
given at the time of such advance.
2. That the house in Liverpool having advanced so large an
amount on this cotton, having a large previous unsettled claim
against the shipper, and the said shipper having afterwards, and
before the sale of the cotton, become insolvent; the house in
Liverpool had a right to sell for their reimbursement,
notwithstanding the subsequent orders of the shipper.
And the court instructed the jury that it was their exclusive
province to decide from the evidence in the cause, whether the
defendants had advanced any money to the plaintiff on the cotton
shipped by the Mary and Harriet. Whether, when the defendants sold
said cotton, the plaintiff was indebted to them upon a previous
unsettled claim, and whether the plaintiff had become insolvent
before the sale of said cotton, and also further instructed the
jury that if they found from the evidence in the cause that the
plaintiff had given instructions to the defendants by his letter of
29 April, 1833, not to sell any cottons which the defendants might
have on hand when that letter reached them in which the plaintiff
was interested until the defendants heard from him again, and that
such instructions were received and recognized by the defendants,
by the evidence in the cause, and particularly by a letter given in
evidence as one from the defendants to the plaintiff dated 24 May,
1833, in reply to the plaintiff's letter to them of 20 April, 1833;
that then the defendants were not justifiable in law in the sale of
3 June, 1833, on account of the defendants' having on that day
accepted Brown, Brothers & Company's draft for �1,871, 9p.,
dated 7 May, 1833, at sixty days' sight.
And the court further instructed the jury that if they found
from the evidence in the cause that cottons were selling for a
higher price from 3 June, 1833, when the draft was accepted and
when the cotton was sold until the time when the said draft was
mature and payable, and if the evidence in the cause ascertains at
any time before the maturity of the draft, what such higher price
was, and that the cotton belonging to the plaintiff could have been
sold for such higher price; that then the plaintiff was entitled to
recover from the defendants the difference in price between the sum
for which the defendants sold the plaintiff's cotton, and the sum
at which it might have been sold before or at the maturity of the
draft.
The defendants in the circuit court, excepted to these
instructions.
Page 39 U. S. 489
MR. JUSTICE STORY delivered the opinion of the Court.
In the spring of 1833, McGran, a merchant in Georgia, shipped
two hundred bales of cotton consigned to the plaintiffs in error, a
house of trade in Liverpool, England, there doing business under
the firm of William and James Brown & Company, for sale on
Page 39 U. S. 490
his account. The shipment was made under an arrangement with the
house of Brown, Brothers & Company of New York, composed (as
seems admitted) either wholly or in part of the partners in the
Liverpool house, by which the New York house accepted a draft drawn
upon them by McGran for $9,000, the invoice value of the cotton
being only $9,151.77, and were to reimburse themselves by a draft
on the Liverpool house. Accordingly, the New York house, on 12
March, 1833, addressed a letter to the Liverpool house in which
they state:
"We enclose a bill of lading for two hundred bales of cotton,
shipped by McLoskey, Hagar & Company, of Mobile, per ship
Mary and Harriet, on account of Mr. Thomas McGran of
Augusta, on which you will please effect insurance. This cotton
costs, per invoice, $9,151.77. We have accepted Mr. McGran's draft
against this cotton, for $9,000, for which we shall draw on you for
our reimbursement when it matures. In handing this draft for
acceptance, Mr. McGran says he would not have drawn for so large an
advance were it not that there is a balance at his credit with you
which has accumulated within the past two years, so that if this
should not produce enough to meet the advance, it will be covered
by what is at his credit."
The existence of any such balance was utterly denied at the
trial, and the Liverpool house contended that there was a balance
the other way.
The cotton duly arrived at Liverpool on or about 9 April, 1833.
The New York house drew on the Liverpool house for their
reimbursement, a bill dated 7 May, 1833, for �1,871, 9 p., at sixty
days' sight, being the amount of the advance, and that bill was
accepted by the Liverpool house, on 3 June, 1833, and became
payable, and was paid on 5 August following. On 3 June, 1833, the
very day of the acceptance, the Liverpool house sold the two
hundred bales of cotton (the market then being on the rise) on a
credit, for the net sum of �2,073 4sh. 6p. After deducting the
charges (which amounted to nearly twenty-five percent) which became
due and payable on 16 September, 1833; and according to an account
current rendered to McGran, by the Liverpool house on 29 June,
1833, the whole transactions between the parties, including the
sale of this cotton, left a balance of �392, 15s. 8p. due to
McGran.
At the time when the shipment was made, and the advance arranged
therefor, no instructions were given by McGran, touching the sale
of the cotton. It accordingly went to the consignees, as factors
for sale, the advances having been as above mentioned without any
other contract than that implied by law as between a principal and
a factor, making advances; that is to say that the factor is to
make
Page 39 U. S. 491
sale of the goods, consigned to him, according to his own
judgment, in the exercise of a sound discretion as to the time and
mode of sale, having regard to the usages of trade at the place of
sale, and to reimburse himself out of the proceeds for his
advances, and other balance due him.
After the shipment and advance were so made,
viz., on
20 April, 1833, McGran addressed a letter to the Liverpool house in
which, after acknowledging the receipt of letters of the 4 and 5
March, from them, he added: "If you have any cottons on hand when
this reaches you, in which I am interested, I wish you to hold them
until you hear from me again." The Liverpool house, in a reply to
this letter on 24 May, 1833, used the following language: "We are
in possession of your esteemed favor of the 20th ultimo, and your
wishes in respect to the cotton we now hold on your account, are
noted accordingly." At this time by advices received from other
correspondents, the Liverpool house were in possession of
information that, at least as early as 8 April, 1833, McGran had
failed in business.
On 22 July, 1833, McGran wrote a letter to the Liverpool house,
acknowledging the receipt of their letter of 24 May, in which he
says:
"I have your favor of 31st (24th) of May, and note the contents.
You will please sell my two hundred bales of cotton soon after the
receipt of this, unless you are of opinion you can do better by
holding a little longer."
This letter was received by the Liverpool house on or about 23
of August, 1833.
On 7 June, 1833, the Liverpool house informed McGran of the sale
of the cotton, and in a letter under date of 30 July, 1833, in
reply thereto, McGran expressed his surprise at the sale, and
added:
"I beg leave to refer you to my letter of 20 April last, the
receipt of which you have acknowledged, instructing you not to sell
any cottons you had on hand, in which I am interested until you
heard from me again. Why did you sacrifice my cottons, as the draft
drawn by Brown, Brothers & Company at sixty days on account of
these cottons, could not have been accepted more than a day or two
before, as it went forward by the packet of 8 May. Therefore you
had sixty days before you had any money to pay for me."
And after some other remarks in the style of complaint, he
adds:
"You will please take notice that I do not recognize the sale,
and do not consider you authorized to sell the cotton before the
time the draft drawn on you by Brown, Brothers & Company
against this cotton falls due. If the price is higher on that day
than the day you sold it, I will expect you to allow the
difference, and if it is lower I will be prepared to pay you any
balance I may owe you."
To this letter the Liverpool house replied by a letter dated 4
September, 1833, in which they vindicated their conduct, and among
other things, said:
"We beg you to bear in mind that there was a balance due us from
you on joint transaction from Mr. Clarke; that the two hundred
Page 39 U. S. 492
bales in question were sold after the market had advanced
one-half penny per pound, and that it barely squares the account.
You had, unfortunately, been obliged to stop payment. We had the
opportunity of paying ourselves by selling your cotton in a brisk
market to a profit of ten percent, and we ask whether it was
reasonable, under such circumstances, to expect us to hold the
cotton for the chance of further profit when the loss, if any, was
certain to fall on us, and the profit not likely to go to you, but
to your creditors, as was supposed, of whom we knew nothing. This
would have been the extreme of injustice toward ourselves and our
absent partners, without being any advantage to you."
And after some other remarks vindicating their conduct, they
further said:
"We think you must admit that situated as you then were, you
could not reasonably have expected us to hold the cotton without
pointing out in what manner we should be indemnified in event of
loss thereby. That Brown, Brothers & Company's draft was not
due does not alter the case. We had become responsible some months
before by Brown, Brothers & Company's acceptance of the draft
of the shippers."
Here, the correspondence between the parties seems to have
closed. The present action was brought to recover damages against
the Liverpool house for a supposed breach of orders and of their
duty as factors. At the trial there was an account current between
the parties and other evidence before the jury; the whole evidence
in the case, however, was introduced by McGran. Among other
questions before the jury were the following: whether the advance
made by the New York house was in effect an advance by the
Liverpool house, either as agents or as partners in the latter;
whether there was any balance due to the Liverpool house upon the
former transactions; whether McGran was insolvent or not, according
to the advices received by the Liverpool house; and whether, under
the circumstances disclosed in the evidence, the Liverpool house
had a right to sell the two hundred bales of cotton for their
reimbursement, notwithstanding the wishes or orders contained in
the letter of 20 April.
The jury at the trial found a verdict for the plaintiff, McGran
for $4,978.57 under certain instructions given by the court, upon
which verdict judgment was accordingly rendered, and a bill of
exceptions having been taken by the original defendants, the cause
now comes before us for revision upon the points made and
instructions given at the trial.
The counsel for the defendants asked the court to instruct the
jury 1. that the advance by the house of Brown, in New York was in
effect an advance by the house in Liverpool, and after the advance
so made, the shipper had no right to alter the instructions which
were given at the time of such advance; 2. that the house in
Liverpool having advanced so large an amount on this cotton, having
a previous unsettled claim against the shipper, and the
Page 39 U. S. 493
shipper having afterwards and before the sale of the cotton,
become insolvent, the house in Liverpool had a right to sell for
their reimbursement, notwithstanding the subsequent orders of the
shipper.
The court refused to give these instructions, and in our
judgment with great propriety, as each of them involved matters of
fact in controversy before the jury upon which it was exclusively
their province to decide. If the defendants meant to draw from the
court an opinion in point of law upon the assumed facts, the proper
mode would have been to have asked the court to instruct the jury,
that if they found the facts to be as thus assumed, then that the
law was as these instructions stated.
The court then proceeded to instruct the jury, that if they
found from the evidence in the cause that the plaintiff had given
instructions to the defendants, by his letter of 20 April, 1833,
not to sell any cottons which the defendants might have no hand
when that letter reached them, in which the plaintiff was
interested, until the defendants heard from him again, and that
such instructions were received and recognized by the defendants,
by the evidence in the cause, and particularly by a letter given in
evidence as one from the defendants to the plaintiff, dated 24 May,
1833, in reply to the plaintiff's letter to them of 20 April, 1833;
that then the defendants were not justifiable in law in the sale of
3 June, 1833, on account of the defendants having on that day
accepted Brown, Brothers & Company's draft for �1,871, 9 p.,
dated 7 May, 1833, at sixty days' sight.
It is observable that this instruction is given in absolute
terms, without reference to any other facts in the cause which
might be found by the jury upon the evidence before them, and
therefore must be deemed to apply to every posture of the facts
which the evidence might warrant. It must therefore be deemed to
apply to the case, although the advance was originally made by the
New York house for and on account of the Liverpool house, as agents
or partners thereof, or the Liverpool house had entered into
engagements prior to the advance, to become responsible for the
reimbursement thereof to the New York house, in the manner stated
in the evidence, and although the plaintiff was, before the writing
of the letters, actually insolvent, and had failed in business, and
that fact was known to the defendants.
One objection taken to this instruction is that it leaves to the
jury the construction of the language of the letters of 20 April
and 24 May. 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,
Page 39 U. S. 494
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. The present case
sufficiently illustrates the distinction. McGran, in the letter of
20 April, says that he wishes the defendants to hold any cottons on
hand until they hear from him again. Now this language certainly
ordinarily imports only a desire, and not an order, and yet there
can be no reasonable doubt that under particular circumstances, a
wish expressed by a consignor to a factor may amount to a positive
command. So, in the reply of 24 May, the defendants say, "your
wishes in respect to the cotton we now hold on your account are
noted accordingly."
Here again, the point is open whether the language imports that
the defendants construed the wishes of the plaintiff to be simply a
strong expression of desire or opinion or a positive order, and
also whether the words "noted accordingly" import that the
defendants took notice thereof, or took notice of and assented to
obey, the wishes or order of the plaintiff. The language is
susceptible of either interpretation, according to circumstances.
If the case had been one of simple consignment, without any
interest in the consignee or any advance or liability incurred on
account thereof, the wishes might fairly be presumed to be orders,
and the noting the wishes accordingly an assent to follow them. But
very different considerations might apply where the consignment
should be, as the present is, one clothed with a special interest
and a special property founded upon advances and liabilities. We
think, therefore, that this objection is not, under the
circumstances of the case, maintainable. It would be quite another
question whether the court might not in its discretion have assumed
upon itself the right and duty of construing these letters. There
is no novelty in this doctrine. It will be found recognized in
Ekins v. Macklish, Ambler 184-185;
Lucas v.
Groning, 7 Taunt. 164; and
Rees v. Warwick, 2 Barn.
& Ald. 113-115.
But the main objection to the instruction is of a more broad and
comprehensive character. The instruction in effect decides that in
the case of a general consignment of goods to a factor for sale, in
the exercise of his own discretion, as to the time and manner of
sale, the consignor has a right, by subsequent orders, to suspend
or postpone the sale at his pleasure, notwithstanding the factor
has, in consideration of such general consignment, already made
advances or incurred liabilities for the consignor at his request,
trusting to the fund for his due reimbursement. We are of opinion
that this doctrine is not maintainable in point of law. We
understand the true doctrine on this subject to be this: wherever 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
Page 39 U. S. 495
makes advances or incurs liabilities on account of the
consignment by which he acquires a special property therein, 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 existing agreement between himself and the
consignor which controls or varies this right. Thus, for example,
if contemporaneous 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 until a fixed time, in
such a case, the consignment is presumed to be received by the
factor subject to such orders, and he is not at liberty to sell the
goods to reimburse his advances or liabilities, until after that
time has elapsed. The same rule will apply to orders not to sell
below a fixed price, unless indeed the consignor shall, after due
notice and request, refuse to provide any other means to reimburse
the factors. And 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.
On the other hand, where the consignment is made generally,
without any specific orders as to the time or mode of sale, and the
factor makes advances or incurs liabilities on the footing of such
consignment, there 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
mode as the usage of trade and his general duty require, and to
reimburse himself for his advances and 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. Of course this right of the factor to sell to
reimburse himself for his advances and liabilities applies with
stronger force to cases where the consignor is insolvent and where,
therefore, the consignment constitutes the only fund for
indemnity.
Such then being the relative rights and duties of the parties,
we are of opinion that the instruction given to the jury by the
learned judge in the circuit court is not maintainable in point of
law. The consignment was general to the Liverpool house for sale,
and advances and liabilities were contemporaneous with the
consignment; there were no contemporaneous orders limiting or
qualifying the general rights of the factors resulting from these
circumstances; the consignor subsequently either failed in business
or was believed to have failed; the wishes subsequently expressed
by the letter of 20 April, even admitting them to have the force of
orders, were unaccompanied with any other means of indemnity, or
even with any offer of reimbursement of the advances or
liabilities. Unless, then, upon the established principles of law,
the consignor had a
Page 39 U. S. 496
clear right to control the sale of the consignment by any orders
which he might in his discretion choose to give notwithstanding
such advances and liabilities, which we are of opinion he had not,
the instruction was erroneous.
We have not thought it necessary to enter upon any general
examination of the authorities which support the doctrines which
have been thus stated by us. But the opinion of Lord Chief Justice
Gibbs in
Pothonier v. Dawson, 1 Holt's 383, and the
opinions of the judges in
Graham v. Dyster, 6 Maule &
Selw. 1, 4-5, will be found fully to recognize some of the leading
principles.
Another instruction was given by the court to the jury upon the
question of damages, supposing the Liverpool house, by the sale,
had violated their proper duty. It was that if the jury found from
the evidence in the cause that cottons were selling for a higher
price from t3 June, 1833, when the draft was accepted and when the
cotton was sold until the time when the said draft was mature and
payable, and if the evidence in the cause ascertains at any time
before the maturity of the draft what such higher price was and
that the cotton belonging to the plaintiff could have been sold for
such higher price, then the plaintiff was entitled to recover from
the defendants the difference in price between the sum for which
the defendants sold the cotton and the sum at which it might have
been sold before or at the maturity of the draft. This instruction
was doubtless framed upon the ground that this was the claim of
damages which the plaintiff asserted by his letter of 30 July,
1833. But as that letter was not assented to or the claim
recognized by the defendants, this claim could in no just sense be
obligatory upon them, and as a general rule of law applicable to
damages under like circumstances, we think that it cannot be
maintained.
Supposing the sale made by the defendants on 3 June to have been
tortious and in violation of orders, the plaintiff had his election
either to claim damages for the value of the cotton on that day as
a case of tortious conversion or for the value of the cotton on 23
August following, when the letter of the plaintiff of 22 July was
received which authorized a sale. If the price of cotton was higher
on that day than at any intermediate period, he was entitled to the
benefit thereof. If, on the other hand, the price was then lower,
he could not justly be said to be damnified to any extent beyond
what he would lose by the difference of the price of cotton on 3
June and the price on 23 August.
For these reasons, we are of opinion that both the instructions
given by the circuit court to the jury were erroneous, and
therefore the judgment ought to be
Reversed and the cause remanded with instructions to that
court to award a venire facias de novo.
MR. JUSTICE WAYNE, and MR. JUSTICE CATRON dissented.
