Railway Express Agency v. Mackay

Decision Date09 May 1950
Docket NumberNo. 14002.,14002.
Citation19 ALR 2d 1248,181 F.2d 257
PartiesRAILWAY EXPRESS AGENCY, Inc. v. MACKAY.
CourtU.S. Court of Appeals — Eighth Circuit

David W. Raudenbush, St. Paul, Minn. (Cleon Headley, St. Paul, Minn., was with him on the brief), for appellant.

Lewis L. Drill, St. Paul, Minn. (O. A. Blanchard, St. Paul, Minn., was with him on the brief), for appellee.

Before GARDNER, Chief Judge, and JOHNSEN and RIDDICK, Circuit Judges.

GARDNER, Chief Judge.

This appeal is from a judgment in favor of W. F. Mackay in an action brought by him as plaintiff against Railway Express Agency, Incorporated, to recover damages on account of certain brokerage fees collected and retained by Railway Express Agency, Incorporated, and alleged to belong to W. F. Mackay. After entry of judgment W. F. Mackay died and William C. Mackay as special administrator of the estate of W. F. Mackay, deceased, was substituted as plaintiff. To avoid confusion we shall refer to W. F. Mackay as plaintiff.

In his complaint plaintiff alleged that between March, 1929 and July, 1944, defendant collected fees earned by him as a licensed custom-house broker at the Port of Noyes, Minnesota, and fraudulently converted them to its own use on August 1, 1944. The answer of the defendant put in issue these allegations of the complaint. Noyes is situate in northern Minnesota, near the Canadian border. On goods shipped from Canada into this country in the area under consideration, the consignee must "make entry" of them in the office of the Collector of Customs at Noyes, either in person or by an authorized agent. This necessitates declaring the contents and value of the shipment and the production of a certified invoice and a bill of lading. Goods imported from Canada can not proceed to their destination until entry is made. As importers can not usually make entries in person, the custom-house broker is employed to perform this service. The custom-house broker's functions are described in the recent opinion of the Supreme Court in Union Brokerage Co. v. Jensen, 322 U.S. 202, 64 S.Ct. 967, 88 L.Ed. 1227, 152 A.L.R. 1072. Brokerage fees are collected by the transportation company as advance charges.

Plaintiff became a custom-house broker in 1900, while in charge of the office of the Great Northern Railway Company and the Great Northern Express Company at St. Vincent, Minnesota, then a port of entry located four miles south of Noyes, and ever since that time his main business has been the custom-house brokerage business. In 1904 the Great Northern and Soo Lines built a joint station at Noyes and the United States Customs Office was then moved to Noyes. In 1905 plaintiff was employed in a supervisory capacity for the joint station of the two railroads and he continued in that capacity until June 11, 1946. Plaintiff's duties with these two railroads were supervisory in character and required only a limited portion of his time. These duties were performed by him in addition to his duties as a custom-house broker. At the same time that plaintiff became the supervisory agent of the two railroads he also became supervisory agent of the two express companies then operating, and he continued in this capacity for the two express companies until they were absorbed by the American Railway Express Company as of July 1, 1918. This company was formed as a war measure for the purpose of consolidating the seven express companies then in existence and was employed by the Director General of Railroads to conduct the express transportation business on all lines of railroad under federal control. During the period immediately following the advent of the American Railway Express Company plaintiff was the only individual custom-house broker at the Port of Noyes and he continued to conduct his custom-house brokerage business which he had built up over the preceding eighteen years and at that time he had powers of attorney for such purpose from approximately 75 per cent of the shippers and importers. In July, 1919, plaintiff took charge temporarily of the express office of the defendant's predecessor, American Railway Express Company, at Noyes, to enable the company to obtain a permanent express agent. This employment, initiated as a temporary one, however continued following the taking over of the express business by the defendant on March 1, 1929, and until July 31, 1944. When defendant took over the express business it assumed all the liabilities and obligations of its predecessor.

By Act of June 10, 1910, 36 Stat. 464, custom-house brokers were required to be licensed and plaintiff secured a license for the Noyes district and at all times since that date he continued to be a duly licensed custom-house broker for the territory or district served by the Port of Noyes. Beginning on June 1, 1930, and continuing to July 31, 1944, all express shipments from Canada were entered in plaintiff's name as the immediate consignee and during that time he had a custom-house broker's bond on file which subjected him to liability for penalties and any additional duties that might be imposed against shippers of merchandise subject to customs.

It was conceded by defendant that the brokerage fees collected by it for express clearing at Noyes between June 1, 1930 and July 31, 1944, amounted to the sum of $95,904.32. The court applied the Minnesota Statute of Limitations and limited plaintiff's right to recover broker's fees in any event to such as were collected by defendant subsequent to August 20, 1940.

It was the contention of the defendant in the trial court, and it renews that contention here, that during all the times here involved plaintiff was defendant's agent and that whatever he did as a broker he did as its agent or employee without any express or implied understanding that his compensation should be anything more than the monthly allowance which it agreed to pay him. Plaintiff, on the other hand, contended in the trial court, and here contends, that the brokerage fees involved were earned by him as an independent custom-house broker and not in his capacity as agent for the defendant. At the close of all the testimony defendant interposed a motion for a directed verdict which was denied and the case was sent to the jury on instructions to the effect that plaintiff's right to the brokerage fees earned during the period in question must rest on an express or implied understanding between him and the defendant, that the compensation paid him by defendant did not compensate for the services he rendered as a broker and that the brokerage fees earned belonged to him as an independent custom-house broker. The case has been twice tried and two juries have returned a verdict in substantially the same amount in favor of plaintiff.

In seeking reversal defendant contends (1) that the court erred in denying its motion for a directed verdict in its favor and its motion for judgment notwithstanding the verdict; (2) that the court erred in admitting in evidence plaintiff's Exhibits 214, 214-A and 214-B; (3) that the court erred in giving its supplemental charge to the jury.

The important, if not the controling, issue on this appeal is whether or not the verdict is sustained by substantial evidence. The record is very voluminous and the exhibits, consisting largely of records, correspondence between plaintiff and representatives of defendant, and various statements of account, are numerous. Counsel, both in briefs and in oral argument, have exhaustively and in great detail reviewed and analyzed the evidence but we shall not attempt such a review as the case is not before us on trial de novo but for the purpose of determining questions of law; to-wit, whether or not there was substantial evidence to go to the jury on the issue presented, or whether the evidence was such that all reasonable men must reach the same conclusion. In considering the question here the evidence must be viewed in a light most favorable to the plaintiff. The jury having found the issues in his favor, we must accept as true all facts which the evidence reasonably tended to prove and plaintiff is entitled to all favorable inferences which may reasonably be drawn from the evidence and circumstances proven. Gunning v. Cooley, 281 U.S. 90, 50 S.Ct. 231, 74 L.Ed. 720; Lumbra v. United States, 290 U.S. 551, 54 S.Ct. 272, 78 L.Ed. 492; Mattson v. Central Electric & Gas Co., 8 Cir., 174 F.2d 215; Traders & General Ins. Co. v. Powell, 8 Cir., 177 F.2d 660; Hartford Fire Ins. Co. v. Thompson, 8 Cir., 175 F. 2d 10.

During all the times material to the issues plaintiff was a duly licensed custom-house broker and he maintained an office as such independent of the express business. It stands without dispute that all the fees here in question were earned by him acting as such broker, and in the final analysis the question is whether in earning these fees he was acting as an independent broker or as agent of the defendant. The question of agency was one of fact. As said by the Supreme Court of Minnesota in Tremont v. General Motors Acceptance Corporation, 176 Minn. 294, 223 N.W. 137, 138, "The question whether the dealer in making the resale of the car, was and acted as agent for the defendant in the matter, was a vital issue in the case. An examination of the evidence leads to the conclusion that this was a question of fact for the jury, and that the evidence is sufficient to sustain the verdict on that point."

In the instant case the court instructed the jury in effect that this was the issue. Thus, the court in its charge said, "* * * He (plaintiff) must prove by the greater weight of the evidence that he was acting in his capacity as an independent broker in that regard and not acting as agent for defendant in the earning of these brokerage fees."

Two juries have held that plaintiff was acting as an independent broker. Plaintiff so testified and his testimony finds some corroboration in...

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