Hurricane Milling Co. v. Steel

• Decision Date: 27 May 1919
• Court: West Virginia Supreme Court
• Parties: Hurricane Milling Company v. Steel & Payne Company.

84 W.Va. 376

Hurricane Milling Company

v.Steel & Payne Company.

Supreme Court of Appeals of West Virginia.

Submitted May 13, 1919.

Decided May 27, 1919.

1. Brokers Negotiation of Contract Nonperformance Personal Liability.

A broker authoritatively representing a known or disclosed principal, as vendor in the sale of a commodity, not notified, at the time of the sale, of purpose of the vendee to hold him responsible for performance of the contract, nor bound by its terms in any form is not personally liable for any breach thereof. (p. 379).

2. Same.

To absolve a broker from personal liability in such case, it suffices that the vendee knew, before consummation of the contract of sale, that the person negotiating it was a broker engaged in the sale, as such, of the kind of commodity in question, and that he was then selling the vendee property belonging-to a third person. The contract need not show by express stipulation, or express warning given at the time of the sale, that the negotiator was making it as a broker and for a third party. (p. 379).

3. Same.

In such case, the relation of the parties to the transaction and knowledge thereof on the part of the vendee may be established in an action by the vendee against the broker on account of a breach of the contract, by proof of facts and circumstances warranting inference thereof by the jury; and, for such purpose, evidence of the situation of the parties and the attendant facts and circumstances is admissible. (p. 379).

4. Same Sale by Broker-Knowledge of Buyer Evidence.

Unqualified and unexplained payment by the vendee of a sight draft with bill of lading attached, for the contract price of the commodity, reception by the vendee of a written confirmation of the eale, from the broker, disclosing the name of his principal and advising that the sale was made for his account, and identity of the manner of the sale, delivery and payment with those of others of the same kind of commodity, previously effected between the same parties and by the same broker, are each conclusive proof of the vendee's knowledge of the relation of the parties to one another in the transaction. (p. 381).

5. Same Nondisclosure of Principal Burden of Proof.

If, in the case of such a sale, there is liability on the part of the broker by reason of non-disclosure of his principal, for breach of a warranty of quality, due to injury in transportation, the burden is upon the vendee to prove the injury occurred before delivery of the commodity at the place of delivery specified in the contract. (p. 381).

Error to Circuit Court, Kanawha County.

Action by the Hurricane Milling Company against the Steel & Payne Company. Judgment for plaintiff, and defendant brings error.

Reversed and remanded. Blue & McCabe and Morton & MoMer, for plaintiff in error.

poffenbarger, judge:

The judgment brought up by this writ of error was obtained against the defendant as vendor of a car-load of damaged corn. It resisted the action on two grounds: (1), that it was a mere agent or broker acting for a known or disclosed principal, in the transaction, and, therefore, not being a vendor at all, was not liable for the alleged breach of the contract; and, (2), that the injury to the corn was occasioned by negligence of the vendee, after delivery thereof. The plaintiff having declined to accept it, the carrier disposed of it and took its charges out of the proceeds and the residue, $619.76, was applied on the purchase price, leaving a difference of $395.38, which the plaintiff recovered. The assignments of error go to rulings of the court, respecting admission and exclusion of evidence, instructions and the motion for a new trial.

According to the narration of the transaction by the plaintiff's principal witness, it was as follows: Early in May, 1912, the defendant, doing business in Charleston, made the plaintiff an offer of sale of corn, by telephone, and the latter accepted the offer to the extent of two car-loads, both to be No. 2 kiln dried, one white and the other yellow. Afterwards, the plaintiff received from the defendant a letter of confirmation of the sale, saying "For account of Paul Kuhn & Company." Some days later, the corn arrived, just when the record does not clearly disclose. In one part of this testimony, the witness suggests May 11th. but, in another, he disclaims knowledge of the date and says it arrived possibly a week or more prior to May 27th., the date on which it was examined, and the yellow corn found to be badly damaged. Before it was examined, the plaintiff paid a sight draft for the contract price drawn on it by Paul Kuhn & Company, of Terre Haute, Ind., with a bill of lading attached, showing the corn had been consigned to it by Paul Kuhn & Company. Having paid that company in full and yet treating the Steel & Payne Company as the vendor and its debtor in the amount paid for the corn, the plaintiff credited it with the amount received from the carrier, on account of the proceeds of the sale of the corn. Plaintiff had bought corn of Paul Kuhn & Company on several previous occasions, through the Steel & Payne Company, the method of consumation varying from that of the one in question, the witness protests, in only one particular, namely, right of examination before payment. As to right of inspection of the car-load in question, his testimony is not clear. In one place, he says he did not sooner pay the draft and examine the car, because the consignee was not ready for it, and, in another, that he ''Never had the right to look at that corn," until after payment of the draft. He denied that plaintiff had ever bought any corn of Paul Kuhn & Company, notwithstanding the former transactions referred to in which the corn had come from that company, did not know any of the drafts paid were drawn in favor of the defendant, but thought some of them had been, because plaintiff had sometimes gotten "some truck" in Charleston, for which drafts were made by the defendant.

The trial court excluded evidence offered to prove the defendant had placed orders of the plaintiff for corn in May, 1912; that it had previously sold the defendant other cars of corn in the same way; that it was a broker handling vast quantities of corn, as such, and acting as agent for Paul Kuhn & Co.; that by custom a period of twenty-four hours was allowed for examination of corn by the consignee; that the corn in question was sold by receipt of a quotation from Paul Kuhn & Co., an...