Marfield v. Goodhue.

In this case the respondent received instructions to withdraw the property from the market, which he disobeyed.

II. The general rule also is, that advances by the factor do not deprive the principal of his power to vary the time of sale by new instructions, unless the factor give reasonable notice to the principal to repay such advances, and the principal fail to repay. (22 Pick. 40; 12 N. Hamp. R. 239; 16 Martin's Lou. R. 470, 4; 6 M. & W. 670; Story on Agency, 371, 75; 1 Bell's Comm. 275, 483; 2 id. 114, 115, 116; Smart v. Saunders, 12 Lond. Jur. 751.)

III. This is a reasonable rule, because the factor is bound to consult the interest of his employer, who ought therefore, to exercise the discretion in regard to his own interest. (Evans v. Potter, 2 Gal. 13.) When the factor sells to repay his advances, he is consulting his own interest, which may come in conflict with the interest of his principal, of which, therefore, the latter should have notice, that by repaying he may take the control of his own interest. This rule is in conformity with the principle in analogous cases. The claim for advances is not due till notice to repay. (1 Taunt. R. 572; 2 Bos. & Pul. 667; 4 Wend. 534, 679; 6 Cowen, 181; 11 Pick. 482; 1 Gal. 360; 11 Metc. 174; 7 Hill, 497.) If he sell for the benefit of his employer, he should let the employer's instructions control. If he sell for his own benefit, viz. to repay advances, he should first notify his employer, and give him an opportunity to repay him. In all cases of liens on personal property, for a debt, whether it be a lien in the course of trade, a lien raised by equity, a pledge, or a mortgage, and of course accompanied with legal ownership, the creditor cannot sell the property without first giving reasonable notice to the debtor, so that the debtor may watch over his own interest, in a case where the interest of the party selling may come in conflict with his interest. (4 Kent's Com. 139, 140; Tucker v. Wilson, 1 P. Wms. 261; 1 Brown's P. C. 494, S. C.; 2 Atkins, 303; 2 John. Ca. 100; Cowp. 251, 256.) Therefore, the court erred in supposing, because the interest of the factor advancing, was in the nature of

Marfield v. Goodhue.

a mortgage, or special ownership, notice might be dispensed with.

IV. The exceptions to the above general rule are, 1st. Where the principal is so distant as to render the giving a reasonable notice to him impracticable. Great distance will excuse a departure from instructions, upon events not foreseen. (4 Binney, 361.) 2d. Where advances are made at the commencement of, and form part of, the original contract of factorage. The doctrine, in Brown v. Mc Gran, (14 Pet. 495,) was not designed to overturn the general rule, that the factor, in advance, must notify the debtor, before he can sell to repay himself, against the instructions for the time being, of his principal, but was intended to be confined to the case of advances made under the original contract of factorage. It was so understood by Justice Story, who delivered the opinion. (Story on Agency, §§ 74, 371.) The court below erred in supposing there was no difference in this respect between advances made at the time of the engagement as factor, and advances subsequent thereto. It may reasonably be supposed, that in the former case, the engagement to accept and act as factor, upon the terms then prescribed, is the consideration upon which the advance is made; and therefore, a subsequent variance of the instructions would work an alteration of the agreement, forming the consideration of the advance. In the case of a subsequent advance, the original agreement, being a past transaction, is no part of the consideration thereof. (6 Mee. §. W. 670.) In such case, there is no obligation to advance, as there is when the advance forms part of the original contract, and therefore no reciprocal obligation arises, to make the terms of sale, existing at the time of the subsequent advance, unalterable by the consignor.

V. If it be true, as the superior court supposed, that there was no just ground for distinguishing the case of Brown and McGran, from the general rule above stated, and making it an exception thereto, then the exception, and not the general rule, should give way.

VI. The court (assuming their view of the case of Brown and McGran to be correct) erred in supposing that a promise by the

Marfield v. Goodhue.

consignee to the consignor, to hold on to the property, was void for want of consideration. 1st. The effect of such a promise was, to put the consignee off his guard, so as not to take measures to repay the advances and resume his discretion over the sale of his property. 2d. It was a waiver of his right to sell against instructions, and an acquiescence in them. Such a waiver requires no consideration, any more than a waiver of a right to receive specie instead of paper, or of the time of performance of a contract. (1 Saund. 320, 329.)

F. B. Cutting & D. Lord, for respondents. I. The property in question having been consigned to the defendants for sale, and the defendants having made advances on it to nearly the value of the property, without any limitation as to the time or terms of sale, they acquired a special property therein, and had a right to sell at their discretion honestly exercised with a view to the best interest of the consignor, at least so much of the consignment as would reimburse their advances. (2 Kent's Com. 642; Story on Agency, 372, 374, n. 2d ed.; Brown v. Mc Gran, 14 Pet. 479; Pothonier v. Dawson, Holt's N. P. R. 343.)

II. The right of a commission merchant to sell for a reimbursement of his advances is not at all derived from the common law doctrine of a pledge, nor is he restricted to a naked lien on the property. (1.) In the case of a pledge or mortgage, the repayment of the loan by the borrower is the primary intention of the parties-a sale of the property is contemplated only in case default is made in the stipulated payment. But on a consignment to a commission merchant, the sale of the property is the primary object. In the absence of instructions to the contrary, it is not merely the right but the duty of the consignee to sell at once. (Evans v. Potter, 2 Gall. 13.) (2.) If the consignor desires to anticipate the proceeds of the goods by obtaining an advance on them, the very terms imply that the property is to be sold to provide such repayment. It is not, as the plaintiff contends, a loan payable on demand; the consignor's individual liability does not arise till recourse has been had to the

Marfield v. Goodhue.

property. (Corlies v. Cumming, 6 Cowen, 184.) (3.) The right of selling is manifestly an important part of the security on which he relies for reimbursement, and this right can not be subsequently controlled or postponed by the consignor, against the will of the consignee, without destroying or impairing the security on which the advance was made. (2 Kent's Com. 644; Story on Agency, § 477; Walsh v. Whitcomb, 2 Esp. N. P. 565; Hunt v. Rousmanier, 8 Wheat. 174; Gaussen v. Morton, 10 B. & C. 731.)

III. No distinction can be drawn as to the rights of the parties, whether the advance is made at the time of the consignment, or after the goods are in the hands of the consignee; provided, when made, there are no instructions or agreement to hold the property subject to the control of the consignor. The object of the consignor in obtaining the advance is precisely the same in both cases, viz. to realize the value of the property before an opportunity for a sale occurs. The necessity of the consignee to reimburse himself from the sales of the property is the same in one case as in the other. In both cases it is equally a voluntary act of the consignee to make the advance; and equally in the power of the consignor when applying for it, to stipulate for time if he desires it. If any argument be drawn from the factor being placed in a position hostile to his principal, it applies with equal force, whether the advance is cotemporaneous with the consignment, or subsequent; or even where a limitation is agreed upon, after the expiration of such time. In both cases it is equally in the power of the consignor to reinstate himself in the absolute control of his property by refunding the amount advanced.

IV. All the cases relied on by the plaintiff are where the advance was made after instructions were given, or cotemporaneously; (Bell v. Palmer, 6 Cowen, 128; Lafarge v. Kneeland, 7 id. 456; Blot v. Boiceau, Sandf. S. C. R. 111; Smart v. Sanders, 10 Lond. Jur. Oct. 1846; S. C.3 Man. G. & S. 380 ;) or else they are cases of naked liens, as Dykers v. Allen, (7 Hill, 497;) Story on Bail. 308; Bryce v. Brooks, (26 Wend. 367;) Zoit v. Millaudon, (16 Mart. Lou. R. 470, &c.)

Marfield v. Goodhue.

V. After the notice of the defendants in their letter of December 21st, that they should proceed to sell, it was incumbent on the plaintiff, if he wished to prevent the sale, to offer to reimburse the advances. The obligation of tendering the amount due was on the plaintiff, and the defendants were under no obligation to demand payment.

VI. In selling the 49 barrels of mess pork on the 12th of January, after the defendants had consented in their letter of the 9th to hold the remainder, they were influenced by a rise of $1 per barrel, which had taken place. But the letter of the 9th of January had not yet reached the plaintiff; nor was he in any way misled by it, or prevented tendering the balance due; and if the letter was regarded in the light of a promise, it was void for want of a consideration.

CADY, J. Two questions are to be determined: 1st. Did the chief justice commit any error in the charge given to the jury? 2d. Ought he to have given to the jury all or any of the instructions which he was requested to give by the plaintiff's counsel ?

To determine whether the charge was such as the law required, the facts in the case must all be taken into consideration. These parties lived so near to each other, that letters could pass from one to the other in five or six days; and they could, without any inconvenient delay, consult each other and inform each other of their intentions, views and wishes. If the defendants had believed it necessary that they should sell the plaintiff's pork to secure the repayment of their advances, it would have been a very easy matter for them to have informed the plaintiff, that unless their advances were repaid, they should sell his pork to reimburse themselves. In two weeks from the time they had mailed such notice in New-York, the plaintiff might have been in that city and paid them, or sent them a draft on a responsible house or bank. But the law as given in charge to the jury would apply to all cases indiscriminately, whether the parties lived in the same house in the same city, or on opposite sides of the globe. According to the charge, the fact that the plain