Gadsden County Tobacco Co. v. Corry
| Decision Date | 21 October 1931 |
| Citation | 137 So. 255,103 Fla. 217 |
| Parties | GADSDEN COUNTY TOBACCO CO. v. CORRY. |
| Court | Florida Supreme Court |
Suit by Arthur Corry against the Gadsden County Tobacco Company. From an adverse decree, defendant appeals.
Modified and affirmed.
Decree for complainant in suit involving accounting is presumed correct, and burden is on defendant to clearly establish that rulings rejecting credits are erroneous.
Law gives factor special property in goods to be sold and general lien on them and their proceeds for advances.
Syllabus by the Court.
Where after a full hearing the chancellor enters his decree in favor of the complainant in a suit involving an accounting this ruling of the chancellor who tried the cause is presumed to be correct, and the burden is upon the appellant to make it clearly to appear that the rulings of the chancellor, in rejecting credits claimed in the course of the accounting are erroneous, or the decree will be affirmed.
A factor is one whose business is to receive and sell goods for a commission. He differs from a broker, in that he is intrusted with the possession of the goods to be sold, and usually sells in his own name. He is invested by law with a special property in the goods to be sold, and a general lien upon them and their proceeds for his advances; and, unless there be an agreement or usage to the contrary, he may sell upon a reasonable credit.
A factor, like other agents, possesses that implied and incidental authority which is reasonably necessary and proper for the execution of his undertaking, and which is usually exercised by factors under like circumstances, and is not forbidden. As in the case of brokers, the law regulating the transactions of factors is largely the outgrowth of commercial usage, and such usage is constantly appealed to in interpreting or defining their authority.
It was formerly considered that a factor had no implied authority to sell upon credit, but the rule is now well settled that, in the absence of instructions or usage to the contrary, the factor, if he exercises reasonable care and prudence in the selection of a responsible purchaser, may sell the goods upon a reasonable term of credit. Where, however, he is instructed to sell for cash only, or where the custom is not to grant credit, a factor has no implied authority to sell upon credit.
A factor who has completed a sale for his principal has thereafter ordinarily no implied authority to rescind the sale or discharge the purchaser from its liability; but where the principal consigns goods to the factor for sale where the custom exists to allow cancellation under certain circumstances, such customer cannot hold the factor responsible for acting in accordance with the custom, there being no instructions to the contrary.
A factor having sold goods upon a credit, his undertaking is executed, and he has ordinarily no implied authority to extend the time for payment, nor has the factor implied authority to receive in payment anything but money, nor has the factor implied authority to bind the principal by making accepting or indorsing negotiable paper.
Express authority given a factor to extend credit and make adjustments will not be construed as warranting the factor in taking a promissory note to cover the customer's account included with several others, where it appears that the note was taken, not only for the purpose of adjusting and settling the account, but for the purpose of enabling the customer who gave the note to the factor to re-establish itself and continue in business, thereby promoting the personal interests of the factor in preserving a useful customer with whom the factor wished to continue to do business in the future, it appearing that the note was taken payable in installments covering or extending over a long period of time to enable the customer giving the note to the factor to avoid the consequence of an insolvency proceeding instituted against it by the customer's creditors, it further appearing that there was no ratification or approval of the taking of such note by the factor under the circumstances. Appeal from Circuit Court, Gadsden County; J. B. Johnson, judge.
Watson & Taylor, of Quincy, for appellant.
O. J. Clayton and J. Baxter Campbell, both of Quincy, and Waller & Pepper, of Tallahassee, for appellee.
This cause originated in the circuit court of Gadsden county, Fla., by the filing of the bill of complaint by Arthur Corry against the Gadsden County Tobacco Company, a corporation, praying for the foreclosure of a chattel mortgage originally given to the Quincy State Bank and subsequently assigned to Corry.
On final hearing, the trial court entered its decree in favor of the complainant and against the defendant decreeing the foreclosure of the mortgage in question for a balance of $3,763.07, as principal and interest to the 15th day of February, 1929, awarding solicitor's fees to the complainat, and providing for the sale of the mortgaged property. From this decree, the defendant has appealed.
A detailed discussion of the particular facts of this case would serve no useful purpose. It is sufficient to say that the principal contention between the parties is whether or not the mortgage in question has been discharged. The record shows that the mortgagee Corry acted for the mortgagor, the Gadsden County Tobacco Company, as agent, for the sale of a certain crop of tobacco. Sales of tobacco were made from time to time by Corry, and it is the contention of the Gadsden County Tobacco Company that, if these sales had been properly credited, the proceeds realized by Corry, which should have been realized by him during the course of his dealings with tobacco he had in hand, were more than enough to have completely discharged the mortgage by payment under the respective duties and obligations which existed between the Gadsden County Tobacco Company and Corry, by reason of the nature of their mutual relationship and transactions which occurred thereunder.
After a full hearing, the chancellor entered his decree in favor of the complainant. This ruling of the chancellor who tried the cause is presumed to be correct, and the burden is upon the appellant to make it clearly to appear that the rulings of the chancellor are erroneous, or the decree will be affirmed. Smith v. Hollingsworth, 85 Fla. 431, 96 So. 394, and cases cited.
In the accounting which was taken between the mortgagor and mortgagee, it appears that the chancellor disallowed the mortgagor credit for a sale of tobacco made by Corry to Hernshein Tobacco Company aggregating $2,300, of which $1,415.20 was tobacco of the mortgagor defendant. It appears from the record that after this sale of tobacco was made to Hernshein Tobacco Company, said company went into the hands of federal court receivers for the purpose of being reorganized and refinanced. In order to promote this reorganization and refinancing, a meeting of the creditors of Hernshein Tobacco Company was called. Corry, without consulting the Gadsden County Tobacco Company, went to this creditors' meeting and agreed to take a series of notes payable to himself for the purchase price of tobacco owned by the Gadsden County Tobacco Company, by another producer, any by himself, all treated as one account. These notes were without interest, and were to become due over a long period of years. Corry never turned these notes,...
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