Ashner v. Abenheim

MoAdam, J.

On the first trial, at the close of the plaintiff’s case, the justice then presiding disjnissed the complaint, and on appeal to the General Term, the judgment was reversed and a new trial ordered. 83 Hun, 34.

In the opinion of the General Term (hy which this trial must he controlled) is the following reference to the contract in question: “ H it was one wherein, as contended hy defendants, the plaintiff agreed to purchase so many pounds of tobacco at $1.40 a pound, then it would make no difference whether the duty was thirty-five or forty-five cents per pound. -Or, as . expressed in the trade language, if the price at which the plaintiff bought the tobacco was the ‘long price ’ (that is, inclusive of the duty), and not at the ‘ short price ’ (which is exclusive of the duty), then the plaintiff could not recover back the difference in duty paid. If this construction of the contract were to prevail, then the effort to recover the difference of ten cents could not be successful, because any representation made for the _ purpose of inducing the plaintiff to enter into such an agreement would be one relating to the value of the tobacco, or a misrepresentation as to the law — upon .neither of which grounds could the plaintiff recover for the reasons already given. And it was by confining its attention to this as the only construction to be given, to the contract, that the court was led into the error of dismissing the complaint. If, on the other hand, the contract was one by which the plaintiff agreed to purchase the tobacco at a certain sum per pound, and in addition thereto to pay whatever might be the duty, and, for the purpose of fixing in the contract what the understanding of the parties was as to the duty, it was, as the effect of a representation made by defendants, placed at forty-five cents per pound, and thereafter the defendants paid only thirty-five cents, they would not be justified in retaining the forty-five cents which they received from the plaintiff.”

Upon the present trial evidence was given by both sides, and it' is clearly established thereby, that the goods had been appraised and the duty actually fixed at thirty-five cents per pound, long before the bought-and-sold notes were made; that, the plaintiff refused to make the purchase until the broker first ascertained and put in the bought-and-sold notes the rate of "duty.; that the broker thereupon went to the defendants to ascertain the precise amount, and was referred by them to Mr. Hamburger for the information, and the latter said the duty was forty-five cents-; whereupon the broker in*285serted in the notes a statement to that effect, upon the faith of which the purchase was completed. . '

The defendants having referred the broker seeking information to Hamburger are bound by his statement. Moak v. Parke, Davis & Co., 9 Misc. Rep. 90; Benesch v. Ins. Co., 16 Daly, 394; Wehle v. Spelman, 1 Hun, 634, cited with approval in Lambert v. People, 76 N. Y. 229; Volkman v. Feldmann, 42 N. Y. Super. Ct. 44. The plaintiff by his conduct treated the rate of duty as a circumstance material to the contract, for he refused to consummate the purchase until it was not only ascertained, but made one of the terms of the contract, and of this the defendants were aware.

That the" fact was material is also shown by the manner in which Custom House appraisements are made. The law then fixed the duty upon importations of tobacco, depending upon kind and quality, at thirty-five' and seventy-five cents per pound, but the manner of appraising the merchandise was left to the Custom House officials acting under instructions from the secretary of the treasury. It appears from the evidence of the customs officials that the rate under the then existing tariff regulations was determined by taking “ ten hands ” from an average number of bales, this being found to represent the make-up of the bale as near as the human eye can detect. If, upon such examination, it appeared that the bales on the particular shipment contained less than 100 leaves to the pound, the lot was appraised at thirty-five cents per pound. If the bales contained 100 leaves or more to the pound, the rate was fixed at seventy-five cents per pound, because such' tobacco was supposed to be of the finest grade. Sometimes two grades of tobacco were contained in the same bale, in which case if 50 per cent, was of the seventy-five-cent grade, and 50 was of the thirty-five-cent grade, the duty imposed was one-half of the total of seventy-five and thirty-five; that is, fifty-five cents per pound; and in this manner the government collected the duty according to the statutory rate. The amount varied in these proportions, but in the end the legal charge only was exacted. The evidence sufficiently shows that merchants dealt with reference to this mode of appraisement, and based their estimate of value to an extent on the amount of duty imposed.

It is apparent, therefore, that the effect of calling the duty forty-five cents instead of thirty-five was to induce the belief that tobacco on which forty-five cents duty was imposed was superior to that on which a lesser sum was paid," and the purchaser was *286naturally led to act on the belief that he was getting better- tobacco than that on which a lesser rate was imposed. The plaintiff evidently so acted in making the purchase, and for that reason insisted that.the fact that forty-five cents duty had been paid must be inserted in the contract and made the basis thereof. A significant- feature is- that the books of the parties, their correspondence and writings, all evidence a sale in which the duty was separated from the price of the goods, thus furnishing the strongest kind of testimony as to the construction which they themselves had placed upon the contract.

The proofs also show that Hamburger,' the person to whom the defendants referred the broker, knew that the duty imposed was thirty-five cents, despite which he made the misrepresentation which entered into the contract. When the tobacco was exam-' ined by the -plaintiff, áfter having been taken from bond, it was discovered to be exclusively thirty-five-cent material.

The defendants, in defense, attempted to show that the purchase was made at the “ lopg ” price, and that it was, therefore, immaterial to the plaintiff what the duty was. While the evidence gives color to' the contention, the acts of the parties demonstrate that while a “ long ” price was fixed, the basis and inducing cause of the contract was the amount of duty actually imposed; so that for all practical purposes the transaction must be treated as if the-sale had been made at the “short” price.

The defendants went further, and attempted to prove a custom of the trade by which the amount of duty might be arbitrarily fixed by the vendor, as when a “ long ” price is fixed it makés no practical differencé to the buyer, except as to the amount of ready cash which he has to- pay, and this because the duty has to be paid before the goods are taken from bond. But this custom is applicable. only where a “ long ” price has been fixed, -and the buyer in the end is simply called upon to pay the sum agreed upon. It might be applied to purchases of goods .unappraised and on which the duty has not been fixed, or where the vendee is indifferent as to. the amount; in which case the parties may arbitrarily determine in advance upon an agreed rate of duty that the- contract may go through. Such a custom .might be good, for it would leave open only the question of how much of the duty the vendor must pay if the duty exceeded the rate designated. But it cannot be applied here, for the usage to be legal must be reasonable; that is,' not unreasonable nor inconsistent with- the terms of the con*287tract actually made. Walls v. Bailey, 49 N. Y. 464; Collender v. Dinsmore, 55 id. 200; Lawrence v. Maxwell, 53 id. 21; Lawson on Usages, 369; 2 Pars. on Cont. 542, 547; Silberman v. Clark, 96 N. Y. 524; Bigelow v. Legg, 102 id. 652; Hopper v. Sage, 112 id. 535; Connell v. Averill, 8 App. Div. 528; 6 Wait’s Act. & Def. 622, 624; 2 Whart. Ev., § 961; 1 Bl. Com. 76; Barnard v. Kellogg, 10 Wall. 383; Partridge v. Ins. Co., 15 id. 573.

The term “ duty ” in the sense used in the bought-and-sold notes had but one meaning, and refers unmistakably to the custom or import charges imposed by the government under the tariff upon the importation of the tobacco. The tax was thirty-five cents, and the statement that it was forty-five was known by Hamburger to be untrue. The defendants adopted the representation when their broker inserted it in their contract, and they as' a consequence are legally liable for the fraud.

When an act of Parliament has given a definite meaning to any particular word denoting quantity, it must be understood to have been used with that meaning, and no evidence of custom will be admissible1 to attribute any other to it. Smith v. Wilson, 3 B. & Ad. 731; Hockin v. Cooke, 4 T. R. 314; The Master, etc., v. DeWalden, 6 id. 338; Hinneman v. Rosenback, 39 N. Y. 98. Thus, a custom that every pound of butter sold in a particular market town shall weigh eighteen ounces is bad (Noble v. Durell, 3 T. R. 271); so a usage requiring 2,240 pounds as a ton when the statute provides that 2,000 pounds shall constitute a ton, and the contract does not otherwise provide (Evans v. Myers, 25 Penn. St. 114; Green v. Moffett, 22 Mo. 529); because they are opposed to the policy of the law, as tending to unsettle uniform rules established for the protection of the commercial world, which yield only to the terms of contracts expressly calling for a different construction.

It cannot be claimed that the misrepresentation related to a matter of law,_respecting which the plaintiff was chargeable with' knowledge, for though he may have known that the legal rate of duty was from thirty-five to seventy-five cents, he may still have known the regulation as to grading the rates, depending upon the quality of the goods, and that by reason of such grading the rate might really have been fixed at forty-five cents, the sum stated in the contract to have been paid. Besides, all the- cases which deny a remedy for mere mistake of law on one side are careful to add the *288qualification that there must be no improper conduct on the other. Haviland v. Willets, 141 N. Y. 50.

The defendants also claim that they acted only as agents for Hamburger, receiving for their services 1 per cent, commission on $6,300, the amount of the purchase, and that their principal got the benefit of the entire transaction'less their commission; therefore, the action should be against him. Hamburger testifies that he had reasons for not being known in the transaction, and on that' account employed the defendants to act for him. That they acted as principals is clear. They never disclosed that they acted for Hamburger. Indeed, the reasons he gave for employing them are substantial reasons why they should not have disclosed him as principal; and it is elementary that to relieve a party from the effect of a contract made by him he must disclose the fact that he. is acting only as agent, that the vendee may determine whether he will accept the responsibility of the principal in the transaction. Cobb v. Knapp, 71 N. Y. 348; Argersinger v. Macnaughton, 114 id. 535; Fairchild v. McMahon, 139 id. 290.; Mahoney v. Kent, 7 Misc. Rep. 726; Kahn v. Weill, 9 id. 150; Whitman v. Johnson, 10 id. 725; Forster v. Wilshusen, 14 id. 520; Trankla v. McLean, 18 id. 221. Because “ a person contracting as agent will be personally responsible, where at the time of making the contract he does not disclose the fact of his agency, but he treats with the other party as being himself the principal; for in such a case it follows, irresistibly, that credit is given to him on account of the contract.” Story on Agency, § 266. ■

It follows that the ten cents per pound wrongfully exacted from ■the plaintiff must be regarded as so much money equitably belonging to him, which ex aequo et bono he is entitled to recover. Roberts v. Ely, 113 N. Y. 128; Chapman v. Forbes, 123 id. 532.

Judgment for plaintiff for $622.Y5, being the amount claimed with interest.

Judgment for plaintiff.