T.D. Downing Co. v. Shawmut Corp.

• Decision Date: 25 May 1923
• Parties: T. D. DOWNING CO. v. SHAWMUT CORPORATION.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

245 Mass. 106

139 N.E. 525

T. D. DOWNING CO.

v.SHAWMUT CORPORATION.

Supreme Judicial Court of Massachusetts, Suffolk.

May 25, 1923.

Exceptions from Superior Court, Suffolk County; John D. McLaughlin, Judge.

Action of contract by the T. D. Downing Company against the Shawmut Corporation to recover moneys paid by plaintiff as customs brokers for duties and charges on certain peanuts, and commissions earned therefor. Finding for plaintiff for $1,628.68, and defendant brings exceptions. Exceptions sustained.

It was not disputed that plaintiff made the payments and earned the commissions set forth in its declaration. The moneys were expended in payment of duties and charges on goods covered by a letter of credit issued by defendant. When plaintiff paid the duties and charges and earned the commissions, it had under its control other peanuts covered by the same and another letter of credit, which it believed belonged to the party on behalf of whom it made the payments and incurred the expenses, and because of that fact released the peanuts in connection with which the duties were paid and charges incurred, which other peanuts were subsequently claimed by defendant. Defendant's exceptions were to the refusal of requests for rulings, including a ruling that on all the evidence plaintiff could not recover on any count.

Henry W. Beal and John H. Powers, both of Boston, for plaintiff.

Gaston, Snow, Saltonstall & Hunt, of Boston (D. F. Carpenter, of Boston, of counsel), for defendant.

RUGG, C. J.

This is an action of contract by a custom house broker to recover certain duties paid by it and expenses and commissions due it. The defendant is a banking corporation engaged in financing the importation of foreign goods. An importer, C. J. Tsivoglou, Inc., applied to the defendant for credit for the purchase of nuts from the Asia Banking Corporation. Credit was given as requested and on its faith the owner of the nuts, the Asia Banking Corporation, drew a time sight draft on the defendant which it accepted and paid at maturity. The draft, when sent to the defendant for acceptance, was accompanied by the invoice, negotiable warehouse receipts and customs withdrawal entries covering the goods purchased. The defendant turned over the warehouse receipts and the customs withdrawal entries to the importer, who gave therefor a trust receipt describing and acknowledging receipt of the papers thus coming into its possession and the goods thereby represented. The trust receipt contained an agreement by the importer to hold ‘said goods in trust’ for delivery to any purchaser and to collect from the purchaser proceeds of sale and immediately deliver same to the defendant to be applied to payment of amount due on its acceptance pursuant to credit given and any other indebtedness due it, with right in the defendant at any time to cancel the trust and repossess itself of the merchandise until the same shall have been delivered to purchasers. The goods at this time were in a storage warehouse in the state of New York.

Goods imported into this country may be placed in bonded warehouses, so called, by a customs broker without the payment of duties, and withdrawn from time to time as desired only on consent of the customs broker expressed by a ‘customs withdrawal entry’ and on payment of duties. It is a custom of the business that, where a customs broker is requested by an importer to withdraw a part of merchandise in bond, he will not hesitate to pay the duties and give delivery on that part if sufficient merchandise is left in his control under customs withdrawal entries to protect him for duties already paid. The plaintiff had had large dealings with the importer in the case at bar. Relying on its credit and at its request, and influenced by the fact that it had possession of all the indicia of title, the plaintiff paid the customs duties and permitted the importer to remove a considerable part of the merchandise from the bonded warehouse, in ignorance of the defendant's relations thereto. Thereafter the defendant demanded of the plaintiff all the merchandise remaining in its possession or under its control by reason of customs withdrawal receipts, paying duties, charges and commissions on such remaining merchandise. The...