Case v. Simonds — 26 N.Y. St. Rep. 832

Majority

p. 832

Orestes Case, Resp’t, v. Frederick W. Simonds et al., App’lts.

(Supreme Court, General Term, Fifth Department,

Filed October 19, 1889.)

Headnote

Executoby sale — Refusal to accept goods — Diligence beqtjibed of vendos on be-sale.

Where, upon an executory sale of merchandise, a part is refused as unmerchantable and the vendor elects to resell and hold the vendee for the difference, the relation of principal and agent is established between the vendor and the first vendee and the rules of that relation govern. The vendor may not delay the resale upon a falling market; he -cannot make-contracts with another to take the goods unless within a certain time the first vendee agrees to receive them at a discount; he must use reasonable efforts to obtain a good price, must make the resale publicly, and should show that the price obtained was fair in the market.

Appeal from a judgment entered on ¿he verdict of a jury at the Ontario circuit, and from an order denying the defendant’s motion for a new trial on the niinutes.

F. H. Hamlin, for app’lts; E. Hicks, for resp’t.

The action was by vendor against vendee in an executory contract for the sale of twenty-five bales of hops at seventeen cents a pound. The vendee accepted nine and refused sixteen bales, on the ground that the latter were slack dried and unmerchantable. The vendor afterwards resold the sixteen bales at eight cents a pound to one Smith, and claimed to recover the difference between the latter and the contract price from the defendants. -

The two questions submitted to the jury were, 1st, whether the • hops refused were merchantable or not; 2d, whether the plaintiff gave the defendants the requisite notice of his intention to resell.

There was a good deal of evidence which opposed the plaintiff’s contention in respect to the condition of the hops at the time of the tender of delivery; but it was evidence which was properly submitted to the jury, and the verdict, in that respect, must stand, even though the court might have come to a different conclusion.

Upon the other question the way is not clear for sustaining the verdict. In the first place we think the evidence did not warrant the jury in finding that the plaintiff gave any notice to the defendants or their agent of his intention to resell for their account before the resale was atcually made. It is not necessary to recapitulate the evidence. It is enough to say that the plaintiff had testified at length in his own behalf; had been cross-examined, re-examined, recross-examined, and again re-examined; had had his attention called repeatedly to the subject of communications with, and notice to the defendants and to their- agent, and not only did not testify that he had given any such notice, but had substantially negatived the proposition that any such notice had been given. After the plaintiff’s case had been rested, and a motion for a non-suit had been made on the ground of the want of evidence of such notice, and a recess of the court had been taken, pending the decision of that motion, he attempted to supply the defect in proof, but, we think, not with complete success. He then testified that he did give Hamlin, the defendant’s agent,

p. 833

notice of his intention to resell the hops, but his evidence leaves it quite' uncertain when such notice was given, with a clear balance of probabilities in favor of the theory that it was not before he had made the conditional resale to Smith. That sale was conditional only to the extent that if it should turn out that the defendants would take the hops at fifteen cents, Smith should give up his bargain, and his money should bo refunded to him. The ptrice was fixed, and the money was paid, and it only remained to deliver the hops, unless the defendants should consent to take them at fifteen cents. It was a complete sale so far as to defeat all the purposes of a notice to the first vendee.

The effect of such notice is to create the relation of principal and agent between the first vendee and the vendor and to bind the former by the act of the latter in making a re-sale of the property; and one purpose of the notice is to enable the first vendee to give directions to his newly constituted agent in respect to the time and place and price at which the property shall be resold. The purpose was, of course, defeated when the terms of the re-sale were fixed before the notice was given.

But there are other objections to the plaintiff’s case in the respect now under consideration. The relation of principal and agent thus constituted between the first vendee and his vendor, though thrust upon the former without his choice, calls for the exercise of the same good faith and reasonable diligence on the part of the agent towards the principal as if the relation were constituted by the appointment of the latter. The agent must give the requisite notice promptly, especially if the market is a falling one; he must not delay an election of the remedy he will adopt, in order to secure to himself the benefit of a rising, while imposing upon the first vendee the risk of a falling market.

In this case the hops were rejected by the vendee on the 7th of November. The re-sale was negotiated December 26th, and if notice was given at all before such re-sale, it was only very shortly before, and after not less than seven weeks from the time of the refusal of' the hops by the defendants. Moreover, there is no evidence of any diligence on the part of the plaintiff to sell the hops for the best price. He testifies that he did not try to sell them to anybody, except Smith; they were sold at private and not at public sale, and there is no evidence that the price obtained was a fair price as the market then stood.

The re-sale, as exhibited by the record, was not, we think, made under such circumstances as to fix a legal measru’e of the damages to be recovered by the plaintiff.

For the reasons indicated, the judgment and order appealed from should be reversed and. a new trial granted

Judgment and order reversed and new trial granted, with costs to the appellants to abide the event.

Barker, P. J., and Macomber, J., concur.