Henry Oelricks and Gustav Lurman, Plaintiffs In Error v. Benjamin Ford

• Decision Date: 01 December 1859
• Citation: 16 L.Ed. 534,64 U.S. 49,23 How. 49
• Parties: HENRY OELRICKS AND GUSTAV W. LURMAN, PLAINTIFFS IN ERROR, v. BENJAMIN FORD
• Court: U.S. Supreme Court

64 U.S. 49

23 How. 49

16 L.Ed. 534

HENRY OELRICKS AND GUSTAV W. LURMAN, PLAINTIFFS IN ERROR, v. BENJAMIN FORD.

December Term, 1859

THIS case was brought up by writ of error from the Circuit Court of the United States for the district of Maryland.

It was an action of assumpsit brought by Ford, a citizen of New York, against Oelricks & Lurman, merchants of Baltimore, upon a contract in writing, made by the defendants, who agreed to purchase from Bell, agent for Ford, ten thousand barrels of flour, deliverable at seller's option at the prices and upon the terms stated in the contract, which is fully set forth in the opinion of the court, and need not be repeated. Ballard was the broker who made the contract on behalf of Oelricks & Lurman.

The evidence given upon the trial by the plaintiff and defendants was very voluminous, and was both oral and written.

The points of law which arose in the case will be manifest from the prayers to the court offered by the counsel for the plaintiff, and from the instructions to the jury given by the court, which were as follows:

1. That the evidence in this case is insufficient to authorize the jury to find that there is an usage in the city of Baltimore, with regard to contracts for the sale of merchandise to be delivered at a future time, by which the defendants were authorized to annul the contract bearing date the 7th November, 1855, given in evidence, upon the failure of the plaintiff to put up a margin in money, as security for its performance, in compliance with the demand contained in the letter of the witness, Ballard, to J. W. Bell, of the 21st December, given in evidence.

2. That such an usage, if found by them to exist, is invalid, and not binding, because it is unreasonable.

3. That evidence of such an usage, if it should be established by competent evidence, and be held reasonable by the court, is inadmissible in this case, because it contradicts or waives the written contract dated the 7th November, 1855, given in evidence.

4. That if the jury find, that before the 21st day of December, 1855, J. W. Bell had left the city of Baltimore without authorizing any person to represent him in his absence, and have never since returned, the letters of the witness, Ballard, of the 21st and 24th December, 1855, left at the former place of business of said Bell, as proved by the said Ballard, did not affect the plaintiff with notice of the demand for a margin mentioned in said letters, even if, under any usage or contract, the defendants were authorized to make such demand.

5. That if the jury find that the witness, Ballard, reduced the said contract, dated the 7th November, and given in evidence to writing, at the request of the defendant, Lurman, and that said Ballard signed two copies of the same and procured the approval of the defendants, and of Bell, as agent of the plaintiff, to the same, by their signatures thereto, and delivered one of the said contracts to the defendants, and the other, which has been given in evidence by the plaintiff, to said Bell, and shall further find all this was done on the 23d November, 1855, after the interview at the Exchange between the defendant, Lurman, and the said Bell, spoken of by the witness, Ballard; and shall also find that, at said interview, the defendant, Lurman, declined to have the clause inserted in said contract having reference to putting up a margin; and if the jury find that said Bell, upon the 12th and 15th December, delivered 2,000 barrels of flour under said contract, which were received by the defendants, and paid for by them; and if the jury shall further find that the plaintiff offered to deliver, and was prepared and willing to deliver, the balance of the 8,000 barrels contracted to be delivered under said contract, at the times and at the prices testified to by the witnesses of the plaintiff, and that the defendants refused to receive the same, then the plaintiff is entitled to recover in this suit the difference between the price of flour mentioned in said contract ($9.25) and the market value of the parcels of flour tendered by the plaintiff on the days on which they were respectively tendered, with interest thereon from such periods, respectively. But the court rejected the prayers of the plaintiff, and each of them, and, in lieu of them, granted the following instructions to the jury:

1. If the jury shall find, from the evidence in this case, that the defendants entered into the written contract dated the 7th of November, 1855, which has been offered in evidence, and that the plaintiff offered to deliver to the defendants in the months of January and February, 1856, eight thousand barrels of flour, in pursuance of the stipulations of said contract, and in the mode therein pointed out; and that, when said offers were made by the said plaintiff, he had the requisite amount of flour to comply in good faith with said offers, and could have delivered the same, if the defendants had been willing to receive the same, and shall further find that the defendants wholly refused to receive and pay for said flour according to the terms of said contract, then the plaintiff is entitled to recover such damages as the jury may find from the evidence he has suffered from said refusal of defendants to execute the said contract on their part.

2. The rule of damages in this case is the difference between the contract price of the flour and the market value in the city of Baltimore of the same on the several days on which the plaintiff offered to deliver the same in accordance with the provisions of said contract, with interest on such sum in the discretion of the jury. To the granting of which instructions the defendants prayed leave to except, and upon this exception the case came up to this court.

It was argued by Mr. Frick and Mr. Benjamin for the plaintiffs in error, and by Mr. Brown, upon a brief filed by himself and Mr. Brune, for the defendant.

The reader will perceive, from the prayers and instructions, that the two principal points in the case were: 1. Whether the evidence to support an usage was sufficient to authorize the jury to infer an usage; and 2. Whether Ford could maintain the action.

The decision of the first point necessarily involved an examination of the evidence, which, as before remarked, was very voluminous, and a summary of which is given in the opinion of the court. It would require a prolonged statement to follow the counsel through this examination, but the points can be given as follows:

I. That all the evidence in the cause ought properly to have been submitted to the jury, and was sufficient, if they believed it, to establish the existence of an usage, among a certain class of flour dealers in the city of Baltimore accustomed to deal in 'time contracts,' under which, either the buyer or seller might demand security, by way of a margin to be put up by both, whenever the faithful performance of such a contract should be considered doubtful by either party. The amount of such margin to be reasonable, according to the judgment of other merchants in the same business, and the contract to be cancelled, upon a failure to put it up.

II. That there was evidence in the cause, which ought properly to have been submitted to the jury, tending to show, that both the agent of the plaintiff below, and the defendants, made all their 'time contracts' for flour, with reference and subject to such an usage; and that each party knew such to be the special custom of the other's business, when the 'time contract' in evidence was entered into; and that the contract was specially made with reference and subject to such an usage.

III. That the usage, as proved, was a reasonable and lawful usage.

IV. That the effect of the usage was not to vary and contradict the contract, but to add to it something incidental and not inconsistent with it; and that, on this ground, proof of the usage was admissible, although the contract was in writing. And further, that the agreement for a 'time' sale of flour on certain terms and for a margin, if required by either party, to secure it, being one and simultaneous, and a part only of the contract having been reduced to writing, on that ground, parol evidence of the residue was properly admissible.

V. That the agent of the plaintiff below had a right to contract in reference to the usage, so as to bind his principal; that the demand made for a margin, upon the agent, as proved, affected the principal with constructive notice of it; and that moreover there was evidence, proper for the jury, tending to show that the principal had actual notice of the demand, and in fact put his refusal to comply with it only upon the ground that there was no agreement for a 'margin' in the written contract.

VI. That not only by the rules of legal presumption, but by necessary inference from the facts, the credit in this case was given exclusively to the agent, and the principal had no right of action on the contract; and that, even if this were otherwise, the rule of damages, as applied to the case, was erroneous.

Upon the last point, the following authorities were cited:

There is still another view of the case, showing error in the instruction given by the court below. This instruction announced the whole law of the case in the court's own language, and proceeded upon the ground that all the evidence offered to incorporate the usage into the contract was inadmissible. But it had the effect of withdrawing also from the jury all the evidence showing that the credit given in the transaction was to the agent, Bell, exclusively; and if that fact had been found, the defendants could not have charged the plaintiff upon the contract, and the plaintiff had therefore no right of action against them.

The rule laid down by Story as a presumption of law is, that 'a foreign factor, buying or selling goods, is ordinarily treated, as between himself and the other party, as the sole contracting p...