Cotton v. Hiller

Simrall, C. J.,

delivered the opinion of the court.

M. Hiller & Co., against whom J. R. Cotton & Co. had obtained a pecuniary recovery at law, exhibited a bill in chancery, craving that the judgment at law might be enjoined, and that Cotton & Co. should be compelled to submit to a new trial. On final hearing on the pleadings and proofs the relief was granted. J. R. Cotton & Co. have brought the case to this court for review. It is established doctriue that a court of equity will not assist a party after a trial at law unless he can impeach the justice of the verdict by facts of which he could not avail himself, by reason of accident, mistake, or fraud in the conduct or acts of his adversary. Duncan v. Lyon, 3 John. Ch. Rep., 356 ; Insurance Co. v. Hodgson, 7 Cranch, 336 .

Two propositions are propounded to the chancellor by the complainants, both of ivhich they must make good: First, that the failure to make defense at law is attributable to-one or the other of the causes enumerated, and that no blame or negligence is to be attached to them ; and that injustice has-been done, which would be repaired on a second trial.

In one sense the chancery court tries the case on the merits, as it would have been tried at law if the defense had been made. The complainants must set forth the grounds .of their defense, and, if controverted, prove them, so that the chancellor may clearly see whether injustice has been done or not.

A fair opportunity should be afforded to defendants to present and sustain their defense. If they- do not avail of it when *12 they may, a court of equity will decline to re-open the litigation to repair a misfortune referable to their own negligence. Although no negligence can be charged to the defendants, why enjoin a just judgment and grant a second trial, if, from •all the circumstances averred and proved, it has' not been .-shown that injustice has -been done, and that a second trial would produce a different result? But, when the defense was prevented by circumstances beyond the control of the party, he must show that, if he could have made it, it would have heen good and valid. Speaking of it in McDonald v. Myers, 12 S. & M., the court say: “In such an application a complainant, seeking a new trial at law, must establish, to a high -degree of certainty, the validity and potency of his defense.” On the same question, in Lindsay v. Sellers, 26 Miss., 173 : “ It is a maxim, from which courts of equity are’studious not .to swerve, that they will never do a useless' thing. Applying this maxim, the inquiry is whether, if the judgment were set ■aside at law and a new trial granted, the complainant, on the showing made, would be entitled to a recovery.” ; See, also, Hiller & Co. v. Cotton & Co., 48 Miss., 593 .

■ Passing by the question of whether Hiller & Co. were negligent, we advance to notice the claim upon which Cotton & Co. recovered at law. 'They complained that they made sundry shipments of cotton to Iiiller & Co., factors, at New Orleans, and that these merchants received the consignments under instructions not to sell until advised, and that they accepted the cotton on these terms; but, in violation of their engagement, they sold, without instructions, when the market was depressed, by which the plaintiffs were damaged over $3,000. / Hiller & Co. admit that the consignments were usually accompanied with directions to hold until further orders, but claim that they were in reality no more than “ requests,” to which the factors might conform or not, or as long as might be convenient; but they were not obligatory, because the factors filled orders for goods and made advances on the property from time to time, so that, when sold, these *13 orders and advances fully covered, and, in truth, were a little-in excess of, its value. A factor is an agent who is commissioned by a merchant or other person to sell goods for-him and receive the proceeds. Selw. N. P., 823. The general-rule is that the agent must conform to the instructions of his-principal, or abide , the consequences of disobedience. A general consignment to a factor imports an authority to sell according to the usages of the trade, at his discretion as to-the time. But f4he consignor may, at, the time of the shipment, or afterwards, if before sale, impose terms as to time-- and price, to which the factor must conform.' But if the-factor, in consideration of such consignment, made advances- or incurred liabilities for the owner, he has no right, by sub- ■ sequent instructions, to control the factor. If the advances-, and liabilities have been incurred op account of the consignment, and before an assent to the directions of the owner in-respect of the time of sale or price, the factor has thereby - acquired a special property, and may sell so much as will reimburse or discharge the liability.

The owner of the property has undoubtedly the right to impose terms on his commission merchant as to the time of' sale or the price, or both. The restriction upon that general right is that, after he has obtained money, credit, or,goods,., from his agent, on the property, he cannot require the agent, to hold until he orders a sale unless the owner shall repay-the advances or take up the liability, for these were made or incurred on the faith of the right implied in such general-, consignments of getting the'money or meeting the liabilities by a discretionary sale.

But if at the time of the shipment, or before the consignor - notifies the factor that he must hold until further orders he orders goods, or draws against the consignment, and the factor consents to the proposition, it establishes a special relation between the parties, different from that we have just been-considering.

If Cotton & Co. gave to Hiller & Co. instructions in refer— *14 ■ enceto the cotton at the time of the shipment, and at the ;same time ordered goods and otherwise obtained advances, and Hiller & Co. agreed to'receive the cotton and grant the .accommodations, and such was the course of their business, then Hiller & Co. were under an obligation to hold the cotton, :-and it is no excuse that at the time of sale they had made large advances. It is entirely competent for the factor and •country merchant to agree that the former will make advances ■on cotton consigned and to be consigned, and that he will withhold it from the market untiTordered to sell. The factor "has a special property or lien on the cotton for his indemnity, i Such a transaction partakes of the nature of a loan on the pledge of the consignment. It is analogous to a mortgage with power of sale (Drinkwater v. Goodwin, 1 Cow., 256 ), except that the consignor«has reserved the right to say when 'the sale shall be made. ,rBut it is said that such a reservation is too indefinite, and leaves it in the power of the consignor to postpone for six months, for a year, or a longer period, the reimbursement of the factor by a sale. It is not more indefinite than the discretion of a factor as respects the time of selling a general consignment.He may wait on the market a ■reasonable time.' The shipper, where the risk is on him, may ■"instruct the factor to wait his pleasure as to the time. Nor would it be proper to sell until his shipper’s will was made ".known.

• But, as having an important bearing on this point, it ¡should be noted in this connection that these shipments were begun early in October, and were made in small lots, at short 'intervals, up to the time of the sale, in January, and that the ■shippers were constantly giving notice that the cotton must be .kept from market.

In these circumstances, and in this course of dealing between the parties, it-was incumbent on the factors, if they were disin<clined further to hold the cotton, to inform the consignors that they could not or would not hold longer, so as to give them The opportunity to pay off the advances and assume entire *15 control of the cotton. Cotton & Co. could not require Hiller *& Co. to hold beyond a reasonable time.. What would be .a reasonable time must be gathered from the dealings of the parties and the attending circumstances. It was in proof that one of the appellants, the managing partner, had an interview with one of the appellees shortly before the sale in reference to holding the cotton for a better market, and that -the appellee agreed to do so. Hiller & Co. were authorized, if they needed, money, to hypothecate the property, or that .appellant would raise the money and pay them off. We think, in view of all the circumstances, that Hiller & Co. might rightly sell the cotton, without notice to the appellants to ■come forward and pay them their advances. Brown & Co. v. McGrau, 14 Peters, 495 ; Frothingham v. Everton, 12 N. H., 239. Did Cotton & Co. ratify the sale? It is the ■duty of the principal, when informed of the unauthorized act ■of his agent, promptly to disavow it. The letter of the managing partner of the firm of Cotton & Co. promptly, after receipt of notice of sale, disapproved it and notified the appellees that he would hold them responsible. The letter is ¡subscribed by W. B. Cotton, for his firm. It is addressed to M. Hiller, for the reason, we may well suppose, that with him the business ivas chiefly conducted, and perhaps for the further reason that, shortly before the sale, a conversation was had with him about holding the cotton. The proceeds were .applied to the credit and the advances. The only fact tending to show confirmation was the payment by W. E. Cotton, in March, out of his individual cotton, of the small balance •of $392.

But it is proved that he still complained of the sale, did not waive any claim on account of it, and most reluctantly paid ■the balance out of his personal means. It is not shown that .he has abandoned the position taken in his letter, expressing dissatisfaction and asserting a claim on account of disobedience of instructions. Peters v. Ballaster, 3 Pick., 495 ; Meyor Weis & Co. v. Morgan, 51 Miss., 21 . We are not satisfied, in *16 view of all the special facts in this case, that the verdict of the-jury is ‘‘ unconscientious or unjust,” and that a different, result would be reached on a second trial.

Judgment reversed and bill dismissed.