Schutz v. Jordan

• Decision Date: 17 August 1887
• Citation: 32 F. 55
• Parties: SCHUTZ and others v. JORDAN and others.
• Court: U.S. District Court — Southern District of New York

32 F. 55

SCHUTZ and others v. JORDAN and others.

United States Circuit Court, S.D. New York.

August 17, 1887

Blumenstiel & Hirsch, for plaintiffs.

Stern &amp Myers, for defendants.

WHEELER J.

This is an action for goods sold and delivered, consisting of cloaks and suits, to the amount of $32,604.99. On the trial the plaintiffs' evidence tended to show that they forwarded from their manufacturing establishment in New York, to the defendants' mercantile house in Boston, these goods to that amount, at various times between May, 1884, and August 1885, on orders received by their salesman from the superintendent of the retail cloak and suit department of the defendants, who had given like orders before; that they sent invoices of the goods directed to the defendants, by mail, at the several times when the goods were sent; that they sent statements of accounts of the goods to the defendants by mail at some times, and particularly in August and December, 1884 and that the goods had not been paid for.

The defendants' evidence tended to show that the course of business in their house was such that goods bought and delivered were received by a person whose duty it was to keep a record of the packages, and forward them to the department where they belonged; that correspondence was received by a clerk, who sent invoices of goods bought where they would be received by the superintendent of the department for which they were bought, and all correspondence relating to goods bought to the buyer, and all statements of accounts for goods bought to a book-keeper, who paid them when found to be correct; that the superintendent, when the invoices were received by him, would pass them as correct, if found to be so, and mark them as correct, and the person who received the goods would do the like, when they would go to that book-keeper, and be entered on the books and be paid for according to the invoices so passed and recieved; that the superintendent of this department was inclined to carry more goods than the firm desired, and was directed to keep down the stock; that, when the plaintiffs' salesman applied to him for orders, he told him that he was already carrying more goods than the firm allowed, but that, if he would not have any statements of accounts or dunning letters sent to the house, the goods might be sent, and the invoices might be sent by mail as usual, for they would come to him anyhow, and that he would pass the invoices as fast as he could; that the salesman said he would report this to the plaintiffs, and afterwards said that he had done so, and they approved of this proposal; that all these goods were sent under that arrangement; that the invoices when received by him were kept from the members of the firm, and others who by the usual course of business would have known about them; that the statements of accounts sent by the plaintiffs in August and December, 1884, were for goods ordered by assistants of the superintendent, and sent in the usual course; that only one other statement was received by the book-keeper, who found that it was for goods which did not appear on the books, and sent it to the superintendent for explanation, who kept it, and reminded the salesman of the plaintiffs that it should not have been sent, and nothing further was done about it; that the plaintiffs called upon the superintendent to pass the invoices from time to time, and complained that they were delayed and getting old; and he requested them to send him some invoices of the goods without date, which they did, and into some of which he put late dates, and passed them as correct, and procured the person who received goods bought to pass them by telling him they were all right, and sent them to the book-keeper to be paid, who paid them, and sent remittance sheets showing that they were paid as bills of a late date, which the plaintiffs received, but applied the payments to the charges of the amounts at the earlier dates when the goods were sent; that the goods as they were received were placed, by direction of the superintendent, among the other goods of the department for sale, and were sold, and the money received for them by the defendants, except to the amount of rom three to five thousand dollars at cost prices, before this arrangement, or the fact that any goods not coming in the usual manner and appearing on the books of the defendants, was discovered; that goods from others to the amount, with these, of $252,000, were received into this department, on similar arrangements with the superintendent, and in like manner; that he marked down prices without entering them in a book kept for that purpose, and forced sales at the reduced prices, so that this management of the department resulted in great loss, but the goods received from the plaintiffs, and sold, brought as much on an average as they were charged at; that when the discovery was made all the goods remaining on hand which had come from the plaintiffs were laid out and examined by the superintendent and others, to ascertain whether any of them were goods that had not been paid for; that it could not be determined whether they were or not, and they were put back into the stock for sale, and were all sold or on hand there; that other goods sent by the plaintiffs after the discovery were refused and returned; that the defendant firm consisted at that time of four members; that their house was divided into 52 departments, and they had upward of 2,000 persons employed in conducting their business; that one of the firm, Marsh, and the person who had charge of receiving goods bought, had died before the trial.

The book-keeper who had charge of paying for goods testified to the course of business as stated; the superintendent, to the course of business and to the concealment of these transactions from the defendants, and how it was done; and two of his assistants testified to the disposition of these goods in the stock of the department, and to the marking down of goods and the results. The senior member of the firm testified that Marsh had charge of the wholesale department; that when there he and the other two members of the firm would go through this cloak and suit department, perhaps once a week, or every day, but did not examine the stock; that on every Saturday they had a statement furnished to them of the amount of stock on hand in each department, and of the amount at the corresponding time of the year before, and also every month a statement of the amount on hand then and at the corresponding time of the year before, and that they had no other knowledge on the subject; that the figures did not excite suspicion; that he was gone on a voyage round the world from the fore part of November, 1884, to about June 20, 1885, and that he had no information at any time of the receipt of any of these goods, or of the avails of them, until after the discovery; that one of the other members of the firm was at the time of trial gone on a voyage round the world, and had been gone six months; and that he defended this suit because, in his opinion, the payment of the claims would involve a loss in that department. The testimony of the absent partner was not introduced, and the other one did not testify; and none other of the persons employed in the defendants' establishment testified in the case on the trial. The plaintiffs' evidence, in reply, tended to show that they could have determined whether the goods that remained after the discovery were of those paid for or not, if they had been called upon for that purpose; and that they were not so called upon.

The plaintiffs requested the court to charge the jury, in substance, among other things, that the burden of proof was on the defendants to establish the defense set up by them that the goods were sent upon this arrangement with the superintendent for concealment from them; that the jury would not be at liberty to find that the firm did not have knowledge of the goods sent during the absence of the senior partner, amounting to $23,386.66, upon his mere denial, without testimony from the other defendants; that if they, after the discovery, assumed ownership of any of the goods, such act would amount to a ratification sufficient to make them liable for all the goods, and especially for that part; and that the mailing of letters and other communications by the plaintiffs to them would be prima facie evidence that the letters and contents were received by them, in the absence of proof from each that they were not received.

The court directed the jury to return a verdict for the plaintiffs for the amount of one invoice of the goods received and retained after the discovery, amounting, with interest, to $117.77; and further charged the jury, in substance, that if the superintendent ordered these goods in the usual course, acting for the defendants, or gave the salesman to understand that he did, the plaintiffs were entitled to recover for the whole; that if he did, not so order them, but lent himself in his position in the defendants' establishment to the plaintiffs for the purpose of getting their goods into the establishment of the defendants among the defendants' goods, without the knowledge and against the will of the defendants, and the plaintiffs or their salesman took advantage of the faithlessness of the superintendent to get the goods of the plaintiffs into the establishment of the defendants as if they were sold, against what they understood to be the will of the defendants, and without their knowledge, to be disposed of there as if bought, the arrangement, if carried out, would not amount to a sale of the goods so as to make the defendants liable for them as for goods sold; that the fact that the superintendent deceived the defendants...