Gindre v. Kean

Pursuant to Gindre & Co.’s proposition of April 24, 1889, and accepted by Benjamin on May 7th following, the former were to consign the silks of their manufacture for sale, the latter to receive a commission of :six per cent, upon the sales for guarantee, storage, insurance and all other expenses. That this constituted the parties principal and factor respectively is clear and conceded. Gindre & Co.’s right, therefore, to repossess themselves of the goods consigned and remaining unsold at the time of Benjamin’s assignment, and to insist upon payment to themselves of all moneys remaining at the time unpaid from the purchasers upon all sales effected by

Benjamin’s del credere liability was wholly independent of any duty which devolved upon him as factor. As factor merely it was his duty upon receipt of moneys for his principals’ account to remit the specific moneys paid him, and, until remittance, to keep the moneys distinct and separate and apart from his own. Before payment to him his principals could at any time elect to revoke his agency, and insist upon payment from the purchasers to themselves. That he was answerable for the purchase price under his del credere agreement in the event of the purchaser’s default in payment did not operate to deprive his principals of the right to insist upon performance of his duty as factor. Notwithstanding the del credere agreement the purchaser continued to be the principals’ primary debtor, the factor’s liability under such an agreement being that of a surety only. The principals could, therefore, pursue their remedies against the purchaser while the purchase price remained unpaid to the factor, or against the factor for the moneys -paid him for their' account, and were not confined to the del credere agreement, if remittance of the purchase price was omitted

It is contended for defendant that the course of dealing between Gindre & Co. and Benjamin had so far altered their original agreement that upon a sale of the consigned goods by Benjamin he became liable to his principals at once for payment at fixed times and at fixed prices without regard to the credits upon which or the prices at which the sales were made, and that under this arrangement Benjamin was constituted the primary debtor. Upon the evidence, however, I am unable to agree with the learned counsel for the defendant that Benjamin was accountable to Gindre & Co., upon a sale by him, at prices other than those at which the consigned goods were sold. It was claimed for defendant that one Molson, an employee of Benjamin, was authorized by Gindre & Co., whenever a sale was about to be effected, to determine the prices to be returned and accounted for by Benjamin to Gindre & Co., and that the prices1 so determined in many instances differed from the prices at which Benjamin had actually sold, sometimes being greater and at other times less ; and testimony was adduced which tends to show that Molson had assumed to act as stated. The evidence is, however, insufficient to show that Gindre & Co. had invested Molson with such authority, or that they knew of any difference in the prices obtained and returned by Benjamin, and so that Gindre & Co. had ratified Molson’s acts or acquiesced in his exercise of authority. The acts and declarations of an assumed agent alone are incompetent to bind the alleged principal, and in the absence of proper evidence I cannot assume that in the course of his business dealings with Gindre & Co. Benjamin, either with or without the knowledge or sanction of his principals, acted repugnantly to the duty which is ordinarily devolved upon a factor or other agent, namely : to account to his principals for the money actu

It now remains to consider whether Benjamin was accountable to Gindre & Co. for the purchase price of the goods sold in advance of actual payment by the purchaser to him or before expiration of the credit allowed upon the sale. It appears that in the course of their business, Benjamin kept and from time to time rendered to Gindre & Co. both an account sales and an account current. The account sales was rendered at least once in every month, and as often as Benjamin thought the aggregate amount of the sales made warranted it. This account sales matured thirty days after the expiration of the particular month in which the several sales were made. Upon maturity of the account sales Benjamin remitted to Gindre & Co. the moneys actually received by him upon sales made by him and such for which his liability had become definitive under his del credere agreement upon the purchaser’s default, less the amount of his commissions, and for some time also he remitted for such of the sales in which the credits allowed to purchasers had not yet expired and the purchase prices had not yet been paid, deducting for these, besides his commissions, a discount for the advances. The remittances were debited by Benjamin to Gindre & Co. in the account current, and they were credited therein for the purchase prices paid to Benjamin and for such moneys as accrued from him under his del credere agreement for the purchase prices remaining unpaid at the expiration of the credits allowed. Because of the anticipatory remittances, it is urged the

The inquiry now is pertinent: Was it Benjamin’s duty to remit before payment of the purchase price to him, or before the credits allowed upon sales effected by him had expired and the purchasers were in default? Turning to Gindre & Co.’s proposition of April 24, 1889, they say to Benjamin : “ You will charge us with the customary discount of the market, which varies from five to six per ■cent., according to the values given, and count that you will only charge us the exact value given.” I do not regard it as by any means clear that Gindre & Co. thereby intended, or that Benjamin thereby understood, or was justified in understanding, that it was obligatory upon him, even if so required by Gindre & Co., to discount the account sales and remit accordingly. But, however that may be, it is indisputable that the agency created by the proposition and acceptance was revocable at the pleasure -of Gindre & Co. They could, therefore, at any time, with Benjamin’s approval, alter the terms of the agency, and, as altered, continue it. On January 22, 1892, Gindre ■& Co. wrote to Benjamin : “ In future we do not wish to pay you any interest. In consequence, please do not make any remittances to us except at maturity of account of sales, only for the sum that you find, due us at the time. We will refuse all remittances made under other •conditions,” to which Benjamin replied, on February 5, following : I understand you to say that you only want a remittance when there is that amount to your credit,

The principles which should control the decision of the case at bar, and which are to be deduced from the adjudged cases, are that whenever the agreement of the-alleged principal and factor, whatever they may style themselves or their relation, and whether the agreement be express or only inferable from the course of business, clearly manifests an intention that the alleged factor shall become definitively and primarily liable upon a sale for the purchase price of the goods consigned, it is in legal effect a sale by the alleged principal to the alleged factor,, out of which arises the ordinary relation of creditor and debtor. The liability of the alleged factor under such an agreement is repugnant to that of a mere agent whose duty to remit is commensurate only with the amount of the money which he has actually received upon a sale for his principals account.

Ex parte White, Re Nevill (L. R. 6 Ch. App. 397; aff’d

Ex parte White (Re Nevill) was followed and approved in Nutter v. Wheeler (2 Lowell, Mass. U. S. Cir. Ct.

Plaintiffs are entitled to judgment for the relief demanded, with costs.