Portsmouth Cotton Oil Refining Corp. v. Madrid Cotton Oil Co.

• Decision Date: 15 November 1917
• Docket Number: 4 Div. 657
• Citation: 77 So. 8,200 Ala. 634
• Parties: PORTSMOUTH COTTON OIL REFINING CORP. v. MADRID COTTON OIL CO.
• Court: Alabama Supreme Court

77 So. 8

200 Ala. 634

PORTSMOUTH COTTON OIL REFINING CORP. v. MADRID COTTON OIL CO.

4 Div. 657

Supreme Court of Alabama

November 15, 1917

Appeal from Circuit Court, Houston County; H.A. Pearce, Judge.

Action by the Portsmouth Cotton Oil Refining Corporation against the Madrid Cotton Oil Company. From a judgment for defendant plaintiff appeals. Reversed and remanded.

E.S Thigpen, of Dothan, for appellant.

Farmer & Farmer, of Dothan, for appellee.

MAYFIELD J.

The report of this case on a former appeal--to be found in 195 Ala. 256, 71 So. 111--gives a sufficient statement of the case for the purposes of this appeal. On the former appeal it was said:

"This record shows beyond doubt that appellant did purchase, through Hewitt, and on the terms named, and that appellee declined to sell or ship on those terms, after demand by appellant; that the price of oil was higher, at the time for delivery, than it was at the time of the alleged sale by appellee to appellant; and that the latter went into the market and purchased the oil at an advanced price over the alleged contract price. There is no doubt that Hewitt was a broker merchant, and that as such he was held out by the defendant to the plaintiff as its agent to sell its oil, and that as such agent he sold the oil to plaintiff, and that defendant declined to be bound by the contract of sale made by its agent. This is shown by a telegram from defendant to Hewitt, of date October 24, 1914 which read as follows: 'Offer tank of oil for immediate shipment. [ Signed] Madrid Oil Co.' Acting on this, and other undisputed authority from defendant, the broker did sell two tanks of oil, one for immediate delivery, and one for November delivery, at 26.55 cents per gallon.

"So far as this plaintiff is concerned, in connection with the sale in question, Hewitt was the agent of defendant and as such agent sold the oil to plaintiff. The plaintiff did not engage him to buy the oil for it, but the defendant engaged Hewitt to sell the oil for it--not especially to this plaintiff, but to any one who would purchase it. It is true there is some evidence tending to show that defendant sold the oil directly to Hewitt, but there is no evidence to show that plaintiff purchased directly from Hewitt. But all the evidence shows that plaintiff only purchased through Hewitt as a broker and as defendant's agent in selling the oil. There can be no doubt that Hewitt was authorized by the defendant to sell the oil in question, and that he did sell it to the plaintiff. There is nothing in this record to show, or to even put plaintiff on notice, that Hewitt was acting in bad faith to his principal, or was even violating any instructions given him by his principal.

"We are of the opinion that the record shows conclusively that Hewitt was a commercial broker, and was so known to both the plaintiff and the defendant, and that defendant authorized him, as such broker, to sell for it the oil in question."

As we read the record, the same facts are shown on this appeal. We do not overlook that part of the record in which the witness Watford, general manager of defendant, claims that he contracted to sell the oil in question to the witness Hewitt, the broker who sold it to plaintiff, and that the defendant made no contract with the plaintiff as to the sale of the oil. Notwithstanding this claim and assertion of the witness, the undisputed evidence shows that Hewitt was a mere broker, and not a purchaser or seller of oil in his own right; and that both parties to this suit knowingly dealt with him in this transaction as such broker.

So far as this plaintiff is concerned, the defendant is estopped to claim that Hewitt was not its agent in making this sale to plaintiff.

On the former appeal we quoted the law on this subject from Mr. Mechem, as follows:

"A broker in the ordinary case is known to be an agent acting under a limited authority. He is usually authorized to buy or sell a particular thing in specified quantities and at a limited price. He is often described in the books as a special agent, and in order to bind his principal he must keep within the limits of the authority conferred upon him. Secret or private instructions, as that term has heretofore been defined, which conflict with the usual or apparent powers, will no more affect the rights of third persons who in good faith deal with the broker in ignorance of them than in the case of dealing with any other agent, though their violation may make the broker liable to his principal." Agency, vol. 2 (2d Ed.) p. 1966, § 2397.

The documentary evidence in this case estops defendant from disputing the fact that Hewitt was its agent in this matter of the sale of oil to plaintiff. On October 24, 1914, the date of the inception of this particular contract of sale, defendant wired Hewitt, the broker, who had theretofore acted as its agent in selling oil for its account, as follows:

"Madrid, Ala., Oct. 24-14" C.G. Hewitt, Montg'y. Ala.

"Offer tank of oil for immediate shipment.

"Madrid Cotton Oil Co."

This was an instruction or direction by the defendant-principal to its agent, Hewitt, to offer the oil for sale in the market, for the principal. It was no offer to sell the oil to Hewitt. The telegram, in connection with the undisputed evidence in the case, is not susceptible of the construction which the witness of defendant attempts to place upon it--that it was an offer by the defendant to sell to Hewitt. It was a request from the defendant to Hewitt, as its agent, to offer the oil for sale in the general market. Having on this date made Hewitt its agent to sell, and Hewitt having sold to plaintiff, the defendant is estopped from denying the agency.

On October 27, 1914, Hewitt, the commission merchant, wrote defendant as follows, inclosing sale contract with plaintiff, or its agent:

"Oct. 27th, 1914

"Madrid Cotton Oil Company, Madrid, Ala.--Gentlemen: I beg to confirm the sale for your account to-day to Mr. John Aspegren, New York, as per the inclosed contract. Kindly sign and return to me the four white copies, retaining the yellow copies for your files, and I will let you have the buyer's acceptance in due course of mail.

"Thanking you for this business, I am

"Yours very truly."

The defendant neither replied to this letter nor returned the contract of sale. This conclusively shows that it knew Hewitt was making the sale for defendant to plaintiff, and was not buying for himself. With this information, the defendant said nothing till November 4, 1914, when it wired Hewitt as follows:

"Madrid, Ala., Nov. 4, 1914. "C.G. Hewitt, Montgomery, Ala.

"Haven't heard from tank car so have sold elsewhere. Madrid Cotton Oil Co."

To this telegram Hewitt wired answer as follows:

"11/4/14.

"Madrid Cotton Oil Co., Madrid, Ala.

"Telegram received. Oil sold according to your instructions. You must fill contract.

"C.G. Hewitt."

On the 13th, 14th, and 16th, days of November, defendant wired plaintiff as follows:

"Campbellton. Fla., Nov. 13, 1914.

"Portsmouth Cotton Oil Refg. Corpn., Portsmouth, Va.

"We wired Hewitt not having heard from tank car sold oil elsewhere. Dates show that immediately you

billed out car. The tank has arrived and to show you that we are as fair as you will load this tank for one cent under today's market if you will have your bank wire Dothan National Bank they will pay draft for the car's net weight here if you accept to-day if not will have tank returned.

"Madrid Cotton Oil Co." "Madrid, Ala., Nov. 14, 1914.

"Portsmouth Cotton Oil Refg. Corpn., Portsmouth, Va.

"One tank of oil already gone. Accept my proposition other or will sell it today. Answer quick. Madrid Cotton Oil Co."

"Dothan, Ala., Nov. 16, 1914.

"Portsmouth Cot. Oil Ref. Corpn., Portsmouth, Va.

"My proposition must be accepted or tank goes empty. Have you any proof of purchase of oil from us? No not even a telegram.

"Madrid Cotton Oil Co."

After this, plaintiff wired defendant as follows:

"Portsmouth, Va., November 16, 1914. "Madrid Cotton Oil Company, Madrid, Ala.

"Telegram received. We reiterate our position. If you think you have any cause at all will gladly arbitrate. In meantime will hold you for any damages unless you comply with the contract which we have done."

"November 23, 1914.

"Madrid C.O. Co., Madrid, Ala.

"Portsmouth and Railroad advise you have failed to fill tank sent you to cover contract through Hewitt for prompt tank and that you refuse to do so under circumstances please be advised that we have bought in to cover for your account a tank at four sixty seven holding you for the difference.

"John Aspegren, President, "Portsmouth C.O. Refg. Corp."

"December 1, 1914.

"Madrid C.O. Co., Madrid, Ala.

"On account of your not having loaded tank number fifty six on November contract and contract time expired yesterday we have bought in to cover for your account one tank at five naught seven per hundred pounds.

"John Aspegren, Pres., "Portsmouth C.O. Refg. Corpn."

It is impossible to escape the conclusion that on the 24th day of October, 1914, defendant authorized Hewitt as its agent to offer the oil in question for sale in the market, and that as such agent, he did offer the oil, and made a sale to plaintiff in three days thereafter, notifying defendant of the fact and inclosing to defendant a bill of sale thereof, showing all the terms of the transaction; that defendant never, until the 13th day of November, communicated with plaintiff at all about the matter, either to deny the authority of Hewitt to sell for it, or to disclaim the sale or dispute the terms of sale. On this date its refusal to perform was attempted to be justified on the ground that the tank or receptacle for shipping the oil had not arrived. On the 14th,...