Ract v. Duviard-Dime — 21 N.Y. St. Rep. 736

Majority

p. 736

Jean Joseph Ract, Applt, v. Eugene Duviard-Dime, Resp’t.

(Supreme Court, General Term, First Department,

Filed January 28, 1889 )

Headnote

1. Contract—When agreement can be terminated without liability FOR DAMAGES.

Where in an action to recover for commissions on the'sale of merchandise there was no agreement between the parties which in any way bound the defendant to fill orders of the plaintiff through any specific period of time, and because of the failure of the plaintiff to fulfill his obligations, the defendant terminated their business relations. Held, that under the circumstances he might do so without becoming liable to the plaintiff for damages.

3. Account stated—How avoided.

A party to an account stated may avoid its effect by showing a mistake or misapprehension on his part as to the true amount.

3. Sales—Purchaser liable for irregular seizure of goods.

Where foreign goods áre shipped directly to a party as purchaser, and not as consignments, their liability to irregular or unfounded seizure for additional duties is at the risk of the purchaser.

■4. Evidence—Referee not concluded by testimony.

A referee is not conclusively bound by the evidence of a party to an action or proceeding Even when not contradicted, it may be rejected on account of his interest in the action.

6 Practice—Action on contract—Costs—Code Civ. Pro., § 3228, subd. 4.

" In an action on contract where the complaint demands judgment for a sum of money only the successful party is entitled to costs as a matter of course.

<6. Same—Discretion of the court as to extra allowance.

When a case is both difficult and extraordinary, it is within the discretion of the court to grant an extra allowance.

Appeal from a judgment recovered on a referee’s report.

Paul Fuller, for app’lt; Abel F. BlacTcman, for resp’t.

The plaintiff has prosecuted this action against- the defendant to recover commissions alleged to be unpaid to him on the sale of merchandise, and for various «expenditures made in and about the business which it is alleged was carried on and transacted by him for the defendant, and also for a yearly salary for his services. It «commenced in the year Í874, and continued into the end of 1879. The defendant was a manufacturer of the goods in which the dealings took place, and carried on business at .Lyons, in France. The plaintiff obtained orders in the United States and Canada for the sale of such goods by the -defendant, and also ordered and received goods which he sold and delivered to his own customers. There was no controversy in the case as to the amount of the goods which had been shipped and delivered by the defendant, or of the remittances made by the plaintiff to him. Neither was there as to the quantity of goods on hand at the time when

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the business was terminated in 1879, and which were returned by the plaintiff to the agent of the defendant. But wbat the plaintiff in part insisted upon was that he was entitled to a commission of five per cent upon all the goods received by him from the defendant, as well as those furnished by the latter to fill the orders forwarded from customers by the plaintiff. The defendant conceded the right of the plaintiff to these commissions on the goods sent, to customers obtained by the plaintiff and to whom the goods were afterwards sent, but denied the right of the plaintiff to commissions upon the other goods which were shipped to the plaintiff, either pursuant to direct orders for that purpose, or upon the assumption that they would be accepted at the prices charged, and received and sold by him in the course of his business.

The dispute between the parties, relative to these commissions, depended wholly upon the effect to be given to the evidence produced upon the trial before the referee. The plaintiff himself positively testified to a contract, or arrangement, as broad as that alleged in his behalf. But this was denied by the defendant. And his evidence, as well as that of the defendant’s agent, Avet, controverted the truth of this statement. And the accounts themselves, which were yearly rendered by the defendant to the plaintiff, and received and retained by him. without objection, were also in conflict with the plaintiff’s statement. But it has been urged because the defendant wrote letters to the plaintiff, and concerning the business relations existing between them, in which he was designated as the agent of the former, that these letters so far supported the position taken in behalf of the plaintiff, as to render it the duty of the referee to conclude that by the contract, the plaintiff was entitled to commissions upon all the goods, including those ordered by himself or sent to him for sale. But these letters are not entitled to that effect. For they in no manner describe or indicate, the extent of the agency of the plaintiff in the business, and are entirely consistent with the position taken on behalf of the defendant, that it related to and extended no farther than the orders obtained by the plaintiff from customers for goods, which were transmitted to and filled by the defendant. That was the view which was adopted and followed by the referee in the disposition of the action. And it had a decided probability beyond this evidence sustaining this conclusion. For it was arranged, according to the testimony, between the parties, that the goods sent to the plaintiff, were to be charged at a low price, and after the payment of freight and duties upon them, he was at liberty to sell .them for any price which

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he could obtain, and the advanced price in this manner' secured, was wholly for his benefit, and his property.

He was obligated to account for no part of it to the defendant. And in this state of the business, and to this extent, the assertion was not a probable one certainly that, the defendant obligated himself to pay him five per cent commissions upon the sale of these goods, after sending-them to him at fixed prices. The referee, therefore, had evidence before him fully justifying the conclusion that he-reached that the business of the agency upon which the five-per cent commissions were to be paid, included no more than the orders obtained by the plaintiff, and afterwards filled by the defendant. And to that extent commissions have been allowed him. And that was conformable to the accounts which passed between the parties, and were apparently acquiesced in in this respect by the plaintiff as to their correctness.

The plaintiff also claimed a yearly salary from the defendant for the services performed by him amounting from three to five thousand francs. And in his testimony he-stated that the defendant promised to pay this salary to him, depending in amount upon the nature and extent of the-orders obtained by him for the defendant. But in that.' respect he has been contradicted in his testimony, both by the defendant and the witness Avet. And the accounts, passing yearly between the parties fail to give any support to this demand of the plaintiff. As to that, the referee was entirely warranted in reaching the determination that he did, that the defendant was obligated to pay him no sum whatever for his services by way of salary.

He also claimed a large sum for orders which he had taken for goods during the year in which the business relations existing between himself and the defendant were terminated by the latter. But these orders do not appear to have been in any form transmitted to the defendant prior to the time when the business relations of the parties were discontinued. Neither does it appear that the defendant had placed himself under such obligations to the plaintiff as would require him either to fill these orders, or to indemnify the plaintiff by way of damages, for his failure to do so.

There was no agreement or arrangement relating to this part of the business which in any form bound the defendant to continue it through any specific period of time, or to fill any orders not in fact received by him. And when the business was terminated he had become dissatisfied with the plaintiff for his failure to remit moneys as he should, and thereby reduce the amount of his account. That the plaintiff was in default in this respect appears fully from the admissions contained in his own letters written from time to time to the defendant and his agent Avet, as well as from an acknowledgment contained in a statement made •

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■by Mm in January, 1879, admitting an indebtedness against himself exceeding that found by the referee, and amounting to $21,757.88. And it was because of this default and the large indebtedness at the time owing by the plaintiff to the defendant that the latter put an end to their business relations. This he was, under the circumstances, authorized to do without becoming liable to the plaintiff for -damages. Marston v. Gould, 69 N. Y., 220 .

During the course of the business between the plaintiff and the defendant, the latter shipped goods to the former both at Boston and at the city of New York. In three instances these goods were seized by the custom-house authorities for what was considered to be a violation of the United States revenue laws. And upon a fourth occasion increased duties were exacted from the plaintiff which he paid for the purpose of obtaining the possession of the goods. The duties paid by Mm and the expenses incurred •on account of these seizures, were relied upon as charges against which he was entitled to be indemnified by the defendant in the action.

One of these seizures was of three cases of goods, shipped by the steamer Bothnia and delivered at-the city of New York. This seizure was made on account of other goods being placed in the packages which were not mentioned in the invoices. The addition of these uninvoiced goods was not made at the instance or by the authority of the plaintiff, but it was wholly done by some person or persons in the employment of the defendant. And that was a violation of the United States revenue laws for the consequence of which the defendant was clearly responsible.

There was no fault whatever on the part of the plaintiff, but it was wholly attributable to the defendant. It was the misconduct of persons in his employment, for which he was legally responsible and accountable. These goods were afterwards released through the joint efforts of the plaintiff and the defendant. But the plaintiff was subjected to the expenditure, according to his testimony of 3,738 francs in bringing about the release of the goods. The referee allowed him of this amount one thousand francs, but rejected' the residue of his claim. This allowance proceeded upon an account stated containing this as the amount of the plaintiff’s expenditures on this transaction. But by the 17th finding of fact proposed on behalf of the plaintiff, he has found that the whole amount claimed by him for time and expenses was incurred' and expended in obtaining the discharge of the goods from this seizure. But he seems to have concluded the plaintiff in the allowance made by him, on the effect he considered the account entitled to receive. But assuming it to have been a stated account, as the referee

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treated it, the plaintiff was still entitled to avoid the effect of it by showing this item of one thousand francs to have-been the result of mistake on his part as to the amount and extent of the expenditures. Welsh v. German American Bank, 73 N. Y., 424 ; Manchester Paper Co. v. Moore, 104 id., 680; 5 N. Y. State Rep., 747; Harley v. Eleventh Ward Bank, 76 N. Y., 618 ; Samson v. Freedman, 102 id., 699 .

And the details of the evidence which was given warrant the conclusion that the plaintiff stated these expenditures at the sum of a thousand francs, under the effect of a mistake or misapprehension of the true amount of expenditures made, and time employed by him. And he should not have been concluded, as he was by the referee, and confined to this sum of one thousand francs, in the state of the case as-it was made to appear. In this respect the referee fell into an error. But as the facts have been found, the mistake can be rectified, by adding this difference of 2,738-francs to the amounts allowed in the plaintiff’s favor. And that allowance should be made with interest from the first of August, 1875, at which time the expenditures were completed.

The seizure of the goods delivered from the ship Batavia, at the city of Boston, and of the goods delivered from the steamer Scythia at the city of New York, and the exactions of advanced freights upon the delivery of other goods at the city of New York, proceeded upon an entirely different ground, and for which the defendant was neither responsible nor accountable. They each proceeded upon the assertion of an undervaluation of the goods. But it was shown by the evidence on behalf of the defendant, that the goods were not undervalued, and by that of the plaintiff himself that goods received upon other occasions before and after the unlading of these goods, were allowed to pass by the custom-house authorities on the same valuation without, objection or complaint.

There was accordingly no wrong or fault on the part of the defendant rendering him liable to the expenditures caused by these seizures and the additional duties imposed,_ so far as* they affected goods sent to and for the plaintiff himself. He was to pay the freight and the duties upon those goods. What the defendant was bound to do was to deliver them free on board in France. And that he is shown to have done. After that their liability to irregular or unfounded seizure; or claims for additional duties, was at the risk of the plaintiff, so far as the goods were not consignments, but were shipped directly to him as the purchaser. And to this extent he was the purchaser of the goods, although as between himself and the defendant it may have been understood that he could return in exoneration of his obligation for the purchase-price, such portions of the goods as in the-

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end should remain unsold. The transactions during the intermediate period were sales of the property subject to the risk of the plaintiff, and to this liberty in the end of returning goods in his own exoneration to the defendant. Marsh v. Wickham, 14 John., 167 ; Taylor v. Tillotson, 16 Wend., 494 ; Ex parte White, L. R., 6 Chy App., 397.

And it was for the plaintiff, therefore, himself to stand the consequences of the seizure of these goods so shipped to him, and the advancement of the duties upon the other goods not in fact seized by the custom-house authorities. They were in the wrong, as the facts were made to appear,, in making these seizures and advancing the duties, and, also, imposing a penalty, as that was done upon the goods, discharged from the steamer Batavia. And for that wrong, or the losses occasioned by it on the goods ordered by the plaintiff, the defendant was in no manner legally responsible to him.

The precise proportion which these goods shipped to the plaintiff in compliance with his orders bore to the entire shipment was not made to appear. But from his own testimony it was entirely fair and reasonable to assume that, no more than half the goods affected by the seizures, or the advancement of tlie duties were consignments for the benefit of the defendant himself. The evidence was ample-of the plaintiff in the course of his examination to support-this view. And the referee acted upon it in the allowances-made by him, for he charged the defendant with one-half the expenditures in this manner incurred, leaving the-plaintiff to bear and sustain the other half. He was also-sustained in making this division of the expenditures by the letter of the defendant Duviard of November 23, 1877,. replying to complaints which were made concerning these seizures and imposition of additional duties. In that letter the defendant stated “ I shall take on my account one-half of what you will have to pay, and if they tax you- thirty-eight per cent higher, which is simply ridiculous, I shall take charge of one-half of that.” No direct reply was made by the plaintiff to this letter, neither was any required. But he appears to have silently acquiesced in this measure of responsibility assumed by the defendant. And! under that as well as the other evidence, the referee was-, clearly justified in the disposition which' he made of this part of the case.

For the seizure of the goods delivered by the Scythia, an action was prosecuted by the plaintiff against the United States authorities, and a recovery was had in his favor for the value of the goods which were seized, and which was realized and collected by the plaintiff. This was a clear vindication of the conduct of the defendant as,

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well as that of the plaintiff in these shipments, and furnishes an additional reason justifying the referee in rejecting one-half of the expenditures made and not reimbursed in and about this transaction. And an action was also brought by him to recover back the additional duties paid upon the goods under protest which were not seized. That action, however, has not been tried, but has remained in a state of suspense since this suit was commenced by the plaintiff. What may be its result cannot now with certainty be predicted. But it is probable, since there was no undervaluation of the goods, but the invoices were made at the prices for which they were shipped to the plaintiff, that this amount will he recovered yet by him in the action against the United States authorities.

Some other charges were brought forward in the course of the trial, dependent wholly upon the testimony of the plaintiff for their support. But no legal' error can be held to have been made by the referee in disallowing- them, for he was not conclusively bound by the evidence of the plaintiff, even when it was not contradicted by the defendant or any other witness. But his evidence was still subject to the infirmity that it might be rejected by the referee on account of his interest as plaintiff in the action. Elwood v. Western Union Tel. Co., 45 N. Y., 549 ; Honegger v. Wettstein, 94 id., 252, 261; Gildersleeve v. Landon, 73 id., 609.

There are no exceptions deserving any consideration taken to the rulings of the referee during the course of the trial. The case was one to be disposed of, as it was, wholly upon the effect of the evidence. And in the conclusions adopted and followed by the referee, he has been supported by the testimony given upon the trial, with the single exception which has previously been mentioned. And that will either require another trial, or a modification of the judgment by adding to the items which have been allowed to the plaintiff the sum of 2,738 francs, with interest from the first of August, 1875. The judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event, unless the defendant, within twenty days after notice of this decision stipulates to make this addition. But if the stipulation be given, then the judgment as so modified, should be affirmed, without costs of the appeal.

Van Brunt, Ch. J., and Bartlett, J., concur.

The complaint in this action was for the recovery of damages for alleged breaches of contract, and it demanded judgment for a sum of money only. In this

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class of cases, by sub-division 4, of section 3228, of the Code of Civil Procedure, the plaintiff would be entitled to costs of course, upon the recovery of a judgment for the sum of fifty dollars, or more. And by the next section when the plaintiff fails to recover such a judgment, the defendant has been declared to be of course entitled to costs. The referee accordingly had no power or authority to restrict this right by the report, as he undertook to do. To that extent and in that respect the- report was ineffectual, for the law conferred upon the defendant, as the recovery was in his favor, the absolute right to costs. And in addition to that right, as the case appeared to have been both extraordinary and difficult, it was within the discretion of the court, to make the additional allowance, which it did by its order. And it was no more than the defendant was fairly entitled to, considering the amount which the plaintiff claimed to recover against him in the action. That was the sum of $33,000. He wholly failed to maintain this right, and a recovery was had against him in favor of the defendant. The order was, therefore, correctly made, and it should be affirmed, with ten dollars costs and the disbursements.

Van Brunt, Ch. J., and Bartlett, J., concur.