The relation between a commission agent for the sale of goods and his principal is fiduciary. The title to the goods until sold remains in the principal, and when sold, the proceeds, whether in the form of money, or notes, or other securities, belong to him, subject to the lien of the commission agent for advances and other charges. The agent holds the goods and the proceeds upon an implied trust to dispose of the goods according to the directions of the principal, and to account for, and pay over to him the proceeds from sales. The relation between the parties in respect to the proceeds of sales is not that of debtor and creditor simply. The money and securities are specifically the property of the principal, and he may follow and reclaim them, so long as their identity is not lost, subject to the rights of a bonafide purchaser for value. In case of the bankruptcy of the agent, neither the *Page 34 goods nor their proceeds, would pass to his assignees in bankruptcy for general administration, but would be subject to the paramount claim of the principal. (ChesterfieldManufacturing Co. v. Dehon, 5 Pick. 7; Merrill v. Bank ofNorfolk, 19 id. 32; Thompson v. Perkins, 3 Mason, 232;Knatchbull v. Hallett, L.R., 13 Ch. Div. 696; Duguid v.Edwards, 50 Barb. 290; Story on Ag., § 229.) The relation between a principal and a consignee for sale, is, however, subject to modification by express agreement, or by agreement implied from the course of business or dealing between them. The parties may so deal that the consignee becomes a mere debtor to the consignor for the proceeds of sales, having the right to appropriate the specific proceeds to his own use.
In the present case the bank account against which the check was drawn, represented trust moneys belonging to the principals for whom Wilson Bro. were agents. The deposits to the credit of this account were made in the name of the firm, with the word "agents" added. They were the proceeds of commission sales. Wilson Bro. became insolvent in October, 1878, and they opened the account in this form for the purpose of protecting their principals, which purpose was known to the bank at the time. The check in question was drawn on this account in settlement for a balance due to plaintiffs, upon cash sales made by the drawers as their agents. It is clear upon the facts that the fund represented by the deposit account was a trust fund, and that the bank had no right to charge against it, the individual debt of Wilson Bro. The bank having notice of the character of the fund, could not appropriate it to the debt of Wilson Bro., even with their consent to the prejudice of the cestui que trusts. The supposed difficulty in maintaining the action arising out of the fact that the money deposited was not the specific proceeds of the plaintiffs' goods, is answered by the case of Van Alen v. American Nat. Bank (52 N.Y. 1). Conceding that Wilson Bro. used the specific proceeds for their own purposes, and their identity was lost, yet when they made up the amounts so used, and deposited them in the trust account, the amounts so *Page 35 deposited were impressed with the trust in favor of the principals, and became substituted for the orignal proceeds and subject to the same equities. The objection that the deposit account represented not only the proceeds of the plaintiffs' goods but also the proceeds of goods of other persons, and that the other parties interested are not before the court, and must be brought in in order to have a complete determination of the controversy, is not well taken. The objection for defect of parties was not taken in the answer, and moreover it does not appear that there are any unsettled accounts of Wilson Bro. with any other person or persons for whom they were agents. The check operated as a setting apart of so much of the deposit account to satisfy the plaintiffs' claim. It does not appear that the plaintiffs are not equitably entitled to this amount out of the fund, or that there is any conflict of interest between them and any other person or persons for whom Wilson Bro. acted as consignees. The presumption in the absence of any contrary indication, is, that the fund was adequate to protect all interests, and that Wilson Bro. appropriated to the plaintiffs only their just share.
We are of opinion that the judgment was properly directed, and it should therefore be affirmed.
All concur.
Judgment affirmed.