Senor v. Bangor Mills, 11104.
Decision Date | 18 March 1954 |
Docket Number | No. 11104.,11104. |
Citation | 211 F.2d 685 |
Parties | SENOR v. BANGOR MILLS, Inc. |
Court | U.S. Court of Appeals — Third Circuit |
Marshall H. Morgan, Philadelphia, Pa., for appellant.
Morris Wolf, Philadelphia, Pa., New York City (Isidor J. Kresel, Harold I. Meyerson, New York City, Kresel & Meyerson, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, on the brief), for appellee.
Before KALODNER, STALEY and HASTIE, Circuit Judges.
This is a diversity case presenting a Pennsylvania controversy between a seller of certain goods and a purchaser of the same goods who did not deal with each other, but rather with a third person as a result of whose improper conduct and financial irresponsibility one of the present parties must bear a loss. The district court found that the defendant buyer was not liable to the plaintiff seller either for goods bought and sold or on a check given to the seller by the wrongdoer. The plaintiff has appealed.
These are the facts. At the time in question the demand for nylon yarn exceeded the supply which the sole producer of such yarn allocated among the members of the trade. This shortage had led to the development of a so-called "secondary" market in which some of those who purchased from the manufacturer resold yarn at a profit rather than using it themselves. Plaintiff Senor was such a seller. Defendant Bangor Mills, a very large user of nylon yarn in the manufacture of tricot, was able to maintain its production level only by frequent substantial purchases in the "secondary" market. But its known needs and economic position were such that it was asked to pay prices that were very high even for that market. Accordingly, it sought to get yarn cheaper through an intermediary.
Beginning in January 1951, Bangor utilized William Shetzline as such an intermediary. The district court found that Shetzline "was, among other things, a hosiery jobber * * * in practical control * * * of two manufacturing concerns, River Lane and H & S, * * * He also had or was supposed to have contacts with various other manufacturers, which put him in a position to obtain their surplus yarn". However, Shetzline had no substantial credit of his own and thus had to make most of his purchases in the "secondary" market for cash. To enable him to proceed in this way in its interest Bangor established an account in the Peoples Bank of Langhorne, Pennsylvania in both its name and Shetzline's, upon which Shetzline could draw without using Bangor's name. As to the actual purchase of yarn, the district court found that the agreement between Bangor and Shetzline was as follows:
The record further shows, and it is not disputed, that under this arrangement at the time of the transactions here in dispute Bangor had stipulated that Shetzline was not to buy yarn for Bangor at a price exceeding $10 per pound and that his purchases for its account should not exceed the unobligated balance in the bank account which Bangor had placed at his disposal. At the same time, again in the language of the district court, . The record also shows that when Shetzline did supply yarn to Bangor he was not required to reveal the source.
With the foregoing arrangement in effect, Shetzline purchased yarn from many persons, paying for it out of the above described account and forwarding the yarn, after he received it, to Bangor. As to the particular transaction in suit the district court found:
On all the facts one of the district court's conclusions was that "The result of the arrangement between Shetzline and Bangor was that a separate agency was created each time Shetzline bought yarn with Bangor's money". As we see it, this conclusion is both correct and in the present circumstances decisive against plaintiff on its claim against Bangor for goods sold and delivered.
It is axiomatic that the existence of an agency relationship and, in large measure, the area it covers are determined by whatever agreement the parties have made as to the circumstances under which the agent may and will act for the principal. In this case the district court quite properly found that Shetzline had not undertaken to buy any yarn at all for Bangor. He was free to buy for others or for himself and to disregard Bangor's needs entirely. He did not go into the market subject to an agent's fundamental undertaking and fiduciary obligation to act primarily in the interest of his principal. It was not until Shetzline actually made a particular purchase such as Bangor had agreed to accept and, by using...
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...16 T.C. 23, 27 (1951). An agency relationship is established by the mutual agreement of the principal and the agent. Senor v. Bangor Mills, Inc., 211 F.2d 685 (3d Cir. 1954). Based on the uncontroverted evidence contained in the record, we conclude that Adler was, in fact, representing peti......
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