Acme Commission Company, Inc., a Corp. v. Mandan Creamery & Produce Company, a Corp.

• Decision Date: 18 March 1936
• Docket Number: 6394
• Citation: Acme Commission Company, Inc., a Corp. v. Mandan Creamery & Produce Company, a Corp., 266 N.W. 112, 66 N.D. 409 (N.D. 1936)
• Court: North Dakota Supreme Court

266 N.W. 112

66 N.D. 409

ACME COMMISSION COMPANY, Inc., a Corporation, Respondent, v. MANDAN CREAMERY & PRODUCE COMPANY, a Corporation, Appellant

No. 6394

Supreme Court of North Dakota

March 18, 1936

Appeal from District Court, Burleigh County; R. G. McFarland, Judge.

Action by the Acme Commission Company, Incorporated, against the Mandan Creamery & Produce Company, wherein defendant filed a counterclaim. From an adverse judgment, defendant appeals.

Affirmed.

Syllabus by the Court.

The evidence in the instant case is examined, and for reasons stated in the opinion, it is held that the defendant's charge of fraud on the part of the plaintiff is not proven, and that the findings of fact and conclusions of law of the trial judge are sustained by the evidence.

Sullivan Fleck & Sullivan, for appellant.

Shippers of wool to particular markets which file daily quotations can testify respecting market value on certain days. Carlton v. Adams, 54 S.W.2d 1073.

Any person who knows the custom of commission houses or factors in handling class of goods in his possession is a competent witness to testify to such custom. Alley, Greene & Pipe Co. v. Thornton Creamery Co. 201 Iowa 621, 207 N.W. 767.

A broker is a middleman or intermediate negotiator between the parties. Story, Agency, § 28; Meecham, Sales; Turner v. Crumpton & Crumpton, 21 N.D. 294, 130 N.W. 937.

It is the duty of a factor in all transactions affecting the subject matter of his agency to act with good faith and loyalty for the protection and advancement of the interests of his principal. 25 C.J. 357.

Where defendant consigned goods to a firm of factors for sale, in the absence of instructions otherwise, it was the duty of the factor to sell the same for the current market price, and if they sold them for less, they are liable for the difference between the amounts received and the market price. Davis v. Bessemer City Cotton Mills, 178 F. 784.

Where goods are consigned without any instructions as to price, it is the factor's duty to use reasonable skill and diligence to sell at the highest price obtainable in the market. 25 C.J. 367; Uscorne v. Stevenson, 48 L.R.A 432.

Ordinarily if the consignor of goods alleges negligence and misconduct of a factor the burden lies upon the consignor to prove it; but when a prima facie case is established the burden is on the latter to show facts relieving him from liability. Brown v. Funck Estate, 132 P. 202; Foster v. Walter, 175 Ill. 464; Cohland v. Weber, 118 P. 369; Coyne Bros. v. Leslie, 199 S.W. 379; Rice Mill. Co. v. Baron, 268 S.W. 1.

A factor must act with good faith and loyalty for the protection and advantage of his principal's interests, and any violation of that duty is regarded as fraudulent upon the confidence bestowed upon him. W.L. Moody Cotton Co. v. Curtiss, 275 S.W. 216; Goesling v. Gross, K. & Co. 113 P. 608; Rhee v. Small Co. 256 P. 839.

Dullam & Young, for respondent.

It is the duty of a factor to exercise a reasonable degree of care, skill and diligence in his employment, that is the same degree of care and diligence which a prudent business man would exercise in his own business. 25 C.J. 357; Given v. Lemoine, 35 Mo. 110; Cleveland & Sons v. Jamison (Tex.) 182 S.W. 1175; Boules Livestock & Commission Co. v. Midland Nat. Bank, 74 Mont. 467, 23 P.2d 967.

Burke, Ch. J. Christianson, Morris, Nuessle and Burr, JJ., concur.

OPINION

BURKE

The defendant, the Mandan Creamery and Produce Company, is a corporation engaged in the business of buying poultry, butter, cream, and other farm products for resale. The plaintiff, Acme Commission Company, is a commission firm, in the city of New York, engaged in the business of selling poultry on commission.

The complaint alleges that on the 13th day of October, 1932 the defendant shipped to the plaintiff a carload of poultry to be sold by plaintiff on commission, drawing on the plaintiff at said time for the sum of $ 1,725 as an advancement on the proceeds of the sale; that plaintiff received the said car of poultry, sold the same on the market at and for the best price then obtainable, and paid for and on behalf of the defendant for the freight, coops, cartage, unloading, advances to man in charge, feed, and commission to plaintiff the sum of $ 972.22, which together with the draft amounted to $ 2,697.22 and was in excess of the amount received by the plaintiff for the poultry in the sum of $ 543.01, for which the plaintiff claims judgment.

The defendant, answering, admits the shipment of the poultry to the plaintiff, the receipt of the money in payment of the sight draft, and the costs and expenses in connection with the shipment and sale of poultry in New York, including the commission, but alleges that the defendant was induced to ship the poultry to the plaintiff on the belief that the plaintiff was engaged in the sole and exclusive business of handling poultry solely upon a commission basis and as a factor, and agreed with the defendant herein that if defendant would ship said car to the plaintiff that the plaintiff would receive this car and promptly and forthwith sell the car of poultry at the best possible available price upon receipt thereof by the plaintiff; that the poultry shipped to plaintiff was western range poultry, exceptionally vigorous and healthy and in very good marketable condition; that as a special inducement to this defendant to consign its poultry to this plaintiff, the plaintiff agreed to give to this car of poultry special and preferred attention, and care, and to forthwith sell the said poultry at the best possible available price promptly upon arrival in New York; that the said plaintiff advised the defendant, before the consignment of the said car to the plaintiff, that the plaintiff could handle said car to the best advantage the 18 or 19 of October, 1932; that said car of poultry reached the said plaintiff on the 18 of October, 1932, and at that time, without the knowledge of this defendant, the plaintiff had purchased for its own account, and for sale, many cars of poultry in which the said plaintiff had the entire ownership, and many cars of poultry in which the plaintiff had investments equal to or in excess of the value thereof and instead of carrying out its contract with the defendant, and in breach of its obligations, and fraudulently and negligently, and with intent and purpose of preferring its own property and the property in which it had an interest and investment in excess of the value thereof, and to protect its own interest as against the interest of this defendant, and in direct violation of all of its obligations to this defendant, the plaintiff failed, neglected, and refused to sell the car belonging to the defendant upon arrival, but on the contrary held the car of defendant from the 18 of October, 1932 to the 22 of October, 1932, at which time the plaintiff sold the contents of the car, as alleged in the complaint; that had said property been sold on the 19 of October, 1932 plaintiff would have realized on the market then in force a sum in excess of $ 2,700; that if it had been sold for the highest price available on the 20 of October the plaintiff would have realized $ 2,567.55, and defendant is entitled to an accounting from the plaintiff upon the basis of the highest price of poultry on a date not later than October 20. The alleged fraud and wrongdoing of the plaintiff, in the handling of said car of poultry, is also alleged as a counterclaim and defendant demands, as damages against the plaintiff, the sum of $ 946.54.

By stipulation there was a trial to the court without a jury, who made findings of fact and conclusions of law favorable to the plaintiff, but allowed the defendant $ 151.75 damages for negligence in handling the poultry on the market. From a judgment duly entered the defendant appeals.

On October 11, 1932, the plaintiff wired the defendant at Mandan, North Dakota "Eighty one cars unloaded four...