United States v. Farr & Company, No. 129
| Court | United States Courts of Appeals. United States Court of Appeals (2nd Circuit) |
| Writing for the Court | LUMBARD, , and HAYS and MARSHALL, Circuit |
| Citation | 342 F.2d 383 |
| Parties | UNITED STATES of America, Plaintiff, v. FARR & COMPANY, a Partnership, F. Shelton Farr, William F. Prescott, Lawrence H. Dixon, John Farr, Emmet Whitlock, John C. Buys, Helen G. Downs, Partners, Defendants and Third-Party Plaintiffs-Appellants, Superintendence Co., Inc., Defendants, v. BINGHAM & CO., Inc., Third-Party Defendant-Appellee. |
| Docket Number | Docket 29085.,No. 129 |
| Decision Date | 25 February 1965 |
342 F.2d 383 (1965)
UNITED STATES of America, Plaintiff,
v.
FARR & COMPANY, a Partnership, F. Shelton Farr, William F. Prescott, Lawrence H. Dixon, John Farr, Emmet Whitlock, John C. Buys, Helen G. Downs, Partners, Defendants and Third-Party Plaintiffs-Appellants,
Superintendence Co., Inc., Defendants,
v.
BINGHAM & CO., Inc., Third-Party Defendant-Appellee.
No. 129, Docket 29085.
United States Court of Appeals Second Circuit.
Argued October 29, 1964.
Decided February 25, 1965.
C. Dickerman Williams, New York City (Baker, Nelson, Williams & Mitchell, New York City, on the brief; Harold d'O. Baker, Robert M. Makla, New York City, of counsel), for Farr & Co., etc., defendants and third-party plaintiffs-appellants.
Roger Hinds, New York City (Frank C. Mebane, Jr., New York City, on the brief), for Bingham & Co., Inc., third-party defendant-appellee.
Before LUMBARD, Chief Judge, and HAYS and MARSHALL, Circuit Judges.
MARSHALL, Circuit Judge:
Suit was commenced by the United States on behalf of the Commodity Credit Corporation CCC in the Southern District of New York, jurisdiction being based on 15 U.S.C. § 714b(c), against Farr and Superintendence Co., Inc. The gist of CCC's claim against Farr, the only claim that need concern us here, is that sugar sold by Farr to Societe Generale de Compensation of Paris, France, who then sold it to CCC, contained foreign matter and was unfit for human consumption without further processing. This, it was claimed, constituted a breach of Farr's promise, made to CCC, to "hold the CCC free of any loss or damage due to our failure to deliver 10,000 short tons 10% more or less FAS Santos/Rio of Brazilian white crystals under the conditions of this announcement inviting tenders of sugar." Farr answered, primarily insisting that the sugar met the specified standards.
Farr filed, by leave of court and pursuant to Rule 14, Federal Rules of Civil Procedure, a third-party complaint, later to be amended, against Bingham, seeking indemnity for any judgment CCC might obtain.1 Bingham moved for summary judgment, pursuant to Rule 56, Federal Rules of Civil Procedure, the motion was granted and a judgment dismissing the amended third-party complaint was entered. The main action is still pending and the only issue before us on this appeal is whether the District Court erred in granting Bingham's motion. We hold that it did.
The theory underlying Farr's claim for indemnification seems to be, in substance, that, on the basis of Bingham's solicitation, Farr employed Bingham as its agent to secure 10,000 tons of Brazilian white sugar; Bingham agreed to and undertook to secure this sugar; and, if Farr is held liable to CCC for supplying defective sugar, Bingham must
The parties seem to agree that Bingham acted as Farr's agent, and there is little disagreement with the elementary proposition of law that an "agent is subject to liability for loss caused to the principal by any breach of duty," Restatement, Second, Agency, § 401. The principal controversy instead concerns the extent of Bingham's duty.
At one level the dispute centers on whether Bingham's duty was to obtain Brazilian white sugar for Farr, or whether its duty was to obtain an executory contract for the sale of that sugar to Farr. If it were the latter, then Bingham claims that its duty was fully and faithfully discharged: it obtained the promised executory contract for sale of the Brazilian white sugar from the Instituto do Acucar e do Alcool IAA, the Brazilian public corporation having a monopoly on the sale of sugar grown on the plantations of Brazil, and if improper sugar was supplied to Farr and ultimately to CCC, this would be a breach by IAA in the execution of its contract, not a default by Bingham. Farr sharply controverted Bingham's limited view of its duty and states in an opposing affidavit: "What we wanted, what we expected Bingham to get and what we thought Bingham did get, was sugar of specified characteristics and not an executory contract." The issue is drawn; but this aspect of the controversy over the content of Bingham's duty involves genuine and material factual issues that must be tried, not disposed of on a motion for summary judgment. Boro Hall Corp. v. General Motors Corp., 164 F.2d 770 (2 Cir.1947). Specific facts have been set forth to show that there is a "genuine issue for trial," Rule 556(e), Federal Rules of Civil Procedure as amended in 1963. The solicitations of Bingham, the letters and cables between Farr and Bingham, see Detsch and Co. v. American Products Co., 152 F.2d 473, 475 (9 Cir.1946), and the custom and usage of the international sugar trade are likely to shed some light on the question whether Bingham's duty was to procure the sugar or an executory contract; and the presentation and exploration of these items should not be confined to an exchange of affidavits, see Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, 628-629, 64 S.Ct. 724, 88 L.Ed. 967 (1944).
At another level, the dispute concerning the extent of Bingham's duty involves the question, assuming arguendo that Bingham's objective was to procure Brazilian white sugar rather than merely to procure an executory contract for sale of that sugar, whether his duty was merely to use due care and skill, or whether he had a duty pure and simple to obtain the Brazilian white sugar, to fulfill his task. In some situations, for example, when the agent realizes that he is undertaking an extremely risky enterprise and warns the principal that at most an exercise of due care and skill, rather than success, could be expected, this question may turn on the facts. However, the District Court treated the question as one that was not resolved by trade custom or agreement between the parties, one that did not depend on the development of the facts and one that could easily be reached by a motion for summary judgment. The Court took the position that the limits of an agent's duty was to use due care and skill, and that he could not be held responsible for the mere...
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Oneida Indian Nation of New York State v. Oneida County, s. 545
...of the same core of facts, the court's jurisdiction is "ancillary to its jurisdiction over the main action," United States v. Farr & Co., 342 F.2d 383, 384 n. 1 (2d Cir.1965), and no independent basis for jurisdiction is necessary. See Fed.R.Civ.P. 14(a); Agrashell, Inc. v. Bernard Sirotta ......
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Hercules, Inc. v. Stevens Shipping Co., Inc., s. 78-1505
...ed.1982) (footnotes omitted). See United States Lines, Inc. v. United States, 470 F.2d 487 (5th Cir.1972); United States v. Farr & Co., 342 F.2d 383 (2d Cir.1965); States Steamship Co. v. American Smelting & Refining Co., 339 F.2d 66 (9th Cir.1964), cert. denied, 380 U.S. 964, 85 S.Ct. 1109......
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Xerox Corporation v. Dennison Manufacturing Company, 67 Civ. 3302.
...Mfgrs. Mut. Ins. Co. v. American Broadcasting-Paramount Theatres Inc., 388 F.2d 272, 278-280 (2d Cir. 1967); United States v. Farr & Co., 342 F.2d 383, 385 (2d Cir. 1965); Cross v. United States, 336 F.2d 431 (2d Cir. 1964); Applegate v. Top Associates Inc., 300 F. Supp. 51 (S.D.N.Y.1969). ......
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Morrissette v. Sears, Roebuck & Co., 6675
...cannot possibly start to run on an indemnity claim until the party seeking indemnification suffers a loss.' United States v. Farr & Co., 342 F.2d 383, 387 (2d Cir. 1965); Wolverine Ins. Co. v. Tower Iron Works, Inc., 370 F.2d 700 (1st Cir. 1966); Annot., 20 A.L.R.2d 925, 927 (1951); 3 L. Fr......
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Oneida Indian Nation of New York State v. Oneida County, s. 545
...of the same core of facts, the court's jurisdiction is "ancillary to its jurisdiction over the main action," United States v. Farr & Co., 342 F.2d 383, 384 n. 1 (2d Cir.1965), and no independent basis for jurisdiction is necessary. See Fed.R.Civ.P. 14(a); Agrashell, Inc. v. Bernard Sirotta ......
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Hercules, Inc. v. Stevens Shipping Co., Inc., s. 78-1505
...ed.1982) (footnotes omitted). See United States Lines, Inc. v. United States, 470 F.2d 487 (5th Cir.1972); United States v. Farr & Co., 342 F.2d 383 (2d Cir.1965); States Steamship Co. v. American Smelting & Refining Co., 339 F.2d 66 (9th Cir.1964), cert. denied, 380 U.S. 964, 85 S.Ct. 1109......
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Xerox Corporation v. Dennison Manufacturing Company, 67 Civ. 3302.
...Mfgrs. Mut. Ins. Co. v. American Broadcasting-Paramount Theatres Inc., 388 F.2d 272, 278-280 (2d Cir. 1967); United States v. Farr & Co., 342 F.2d 383, 385 (2d Cir. 1965); Cross v. United States, 336 F.2d 431 (2d Cir. 1964); Applegate v. Top Associates Inc., 300 F. Supp. 51 (S.D.N.Y.1969). ......
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Morrissette v. Sears, Roebuck & Co., 6675
...cannot possibly start to run on an indemnity claim until the party seeking indemnification suffers a loss.' United States v. Farr & Co., 342 F.2d 383, 387 (2d Cir. 1965); Wolverine Ins. Co. v. Tower Iron Works, Inc., 370 F.2d 700 (1st Cir. 1966); Annot., 20 A.L.R.2d 925, 927 (1951); 3 L. Fr......