George v. M'Neill

Martin, J.,

delivered the opinion of the court.

The sole question which this case presents, is whether a commission merchant, who has sold cotton below the limited price, is bound in every case to account for it, at that price. Livermore, in his valuable treatise on agency, is said to have laid down the broad principle, that a factor who sells below the limited price, is chargeable with the difference between the price he sold at, and that limited by the owner. Livermore on Agency, Baltimore edition, 1 vol. 380, 384.* A copy *128of this edition of that work, is not within our reach at tpjg place, and the passage cited, has been looked for in vain in the Boston edition, which is the only copy to which we have been able to have access. That this rule is the proper one in most cases, we have no hesitation to admit, but we are equally ready to say, that in some cases, the owner of the goods may justly contend, that this rule affords him but an inadequate satisfaction, while we allow the factor may insist, that it mulcts him in excessive damages, and consequently condemns him to pay damages, when the owner is not entitled to any.

A has a plantation, which is the ' ancient family seat, and which he estimates at a price, much above the sum that he may reasonably accept. It is the price of affection. At his departure, he directs his agent to sell it, but not below that price, which is the only one that affords him a sufficient inducement, to part with the property, the sale of which, necessity and the situation of his affairs does not. demand. The agent is induced, by the desire of obtaining his commissions, or the use of the money, to sell at a good price, but below the limit imposed by the principal. This is perhaps a case, to which the rule invoked from Livermore is applicable, in which the measure of damages, is the difference between the two prices.

*129During the invasion of this state by the enemy, iii the winter of 1814-15, cotton fell to six cents. After the peace, it gradually rose to thirty. If during the seige of New-Orleans, a factor had received cotton, with directions not to sell under six cents, and after peace was proclaimed, had sold it for five cents, while fifteen or twenty cents peUpound might have been obtained, the owner of the cotton might have well contended, that his case was one in which Livermore’s rule afforded but an inadequate measure of damages: As the object of the limitation, was to fix a minimum price, not to absolve the factor from the obligation of consulting his principal’s interest, by selling for the highest price he could obtain.

In the case of a factor, who had sold below the limited price, but who could show that this price was so extravagant, that neither at the time of the sale, or at any period since, it could be obtained: As if after sales at thirty cents, in 1815, a planter in 1816, had sent his crop to market, with directions not to sell under that price, and the factor having sold for twenty cents, it appearing that this was the highest price, that could be obtained at the time of the sale, or at any period between that and the time of instituting suit, the factor *130might well contend, that the difference of the price of sale, an(j t|le prjce obtainable since, afforded the just measure of damages, while Livermore’s rule subjected him to . _ excessive damages.

A mandatory ia not considered to have exceeded his authority, when he has fulfilled the trust confided to him in a manner more advantageous to his principal than that expressed in his appointment. The circumstance of the factor being a creditor of the consignor or owner, and the necessity of his advances being covered, will not, of itself, justify a sale below the limited price. baieí'of Mttm were consigned and limited to be sold for nine and morcan™with-, out further structions, the factor or agenjt efghtaaned anhai^

If in the preceding case, the factor had been drawn on, and accepted drafts for the full-amount of the value of the cotton, and showed that the additional cents on the price, were not to be obtained, for even a year after he made the sale; that the protest of the drafts, the interest on money obtained from brokers to redeem them, the storage of the cotton, and its protection from the danger of fire, would all amount to a considerable sum, and render a sale advantageous, although below the limited price, and show that it was beneficial rather than detrimental to the interests of the principal; it is clear the rule invoked would subject the agent to damages, in a case where he was not liable to any.

The counsel for the plaintiff and appellee, has referred us to the articles 1928, 2978 and 2980 of the Louisiana Code, in support of the rule for which he contends. The first of these articles does not appear to this court, to have any bearing on the question under consideration. The next declares, that the attorney who exceeds his authority, is personally liable, and bound by the contract; and the last consecrates the principle which we think ought to govern this case. It provides, that the mandatory is not considered to have exceeded his authority, when he has fulfilled the trust confided to him, in a manner more advantageous to the principal than that expressed in his appointment.

We have also been referred to authorities found in 1 Mass. Reports, 57, 254 and 288, and to Pothier on Obligations, 93 and 98. These authorities, as far as we have been able to examine them, do not in the opinion of this court, support the principle, in favor of which they are invoked, and to the .. extent contended for by the appellee.

The appellants’ counsel has presented, as a ground of in behalf of a sale made below the limited price, * , . ... * 9 the circumstance of their being creditors of their principal, and the necessity of their advances being covered. But this justi*131fication cannot,- in our opinion, be admitted.' The record shows the defendants and appellants have proved, that a higher price than that at which they sold the plaintiff’s cotton, could not have been obtained. It does not appear, that at any time between the sale of the cotton, and the inception of this suit, that cotton sold higher.

cents per pound, thatU a8 higher Pt which the cot-ton was sold tained; and ’Sis 'ras the highest market pnce ob-tamable at any time between, the sale and the tjjgepti“jc°fsui^ whichPthe cotton aiMhe^princlpai °™'™er oan re"

We therefore conclude, that on the evidence before them, the jury erred in applying the rule contended for by the plamtitf s counsel m this case. Hut we think justice requires that the plaintiff should have an opportunity of showing, that he was really injured by the sale, being unwilling to . ® pronounce against him, m direct opposition to tne verdict.

It is, therefore, ordered, adjudged and decreed, that the judgment of the District Court, be annulled, avoided and reversed ; that the verdict be set aside, and the cause remanded for a new trial; the plaintiff and appellee paying costs in this court.

Under the head of “the form of action, which the principal may maintain against his agent, for nonfeasance, misfeasance,. or malfeasance, ’’ Mr. Livermore, in his Treatise on Agency, Baltimore edition, at page 384’ says :

“ As to the general question, I should suppose, that where the factor is positively ordered not to sell the goods under a certain price, his selling *128them for less, is as much a tortious conversion, as if he had given them away; for though the principal has given him an authority, which, as far as third persons are concerned, will not be affected, by his private instructions; yet as between the principal and factor, it is the same as if he had given no authority, when the limits of the authority have been exceeded, and no discretion was left with the factor. If, as Mr. Justice Lawrence seems to think, an action for money had and received, be the principal’s only remedy, there certainly would be no use in limiting the factor as to price ; since in this action the plaintiff would affirm the sale, and the money actually produced by the sale of the goods, would be all that he could recover. Even if the factor has sold the goods for less than the market price, the principal must submit to the loss, unless he can maintain some other action more favorable to him than this. Nor is the action of trover such as to afford him complete satisfaction. When the price at which goods are to be sold is limited by the instructions given to the factor, these instructions have reference to a certain state of the market. They are not intended to guard *129against a sale for less than the current market price, at the time of making the sale; for this is an event not contemplated by the principal, nor is it of frequent occurrence. The object of the principal is to hold the goods, until a favorable state of the market renders it expedient to dispose of them. Of this he is competent to judge ; and it is the duty of the factor to conform to his directions ; and he is answerable for violating them. But if the principal has directed the factor not to sell the article for less than five dollars, and' the factor sells it for four dollars, which is the current market price at the time ; an action of trover will not afford satisfaction ; for in trover the rule is, that the plaintiff is entitled to damages equal to the value of the article converted, at the time of the conversion. This value is not to be estimated according to the notion the plaintiff may have of it, nor with reference to the state of the market at another time ; but must be calculated according to the actual state of the market, at the time of sale. A special action on the case, alleging the gravamen, either as a breach of promise, or a breach of duty, would therefore be advisable; and in this action I apprehend the plaintiff would be entitled to recover, not only the amount for which the goods sold, but also the difference between that amount and the price limited.” Reporter.