McGaw v. Hanway

Cok stable, J., delivered the opinion of the Court. This appeal is from a judgment upon a demurrer to one of the counts in a declaration filed in a suit by the appellant against the appellee. The other counts of declaration were withdrawn after the ruling upon the demurrer, thus presenting only the question of the correctness of such ruling. The count in question is as follows: “And for that the plaintiffs and defendant entered into a contract in writing, which is in words and figures as follows: “ ‘Geo.

K. McGaw. Chas. T. Davis. J. B. Bamsay.

McGaw, Davis & Co., Brokerage and Commission. Canned Goods and Canners’ Supplies. Pointer Brand. Baltimore, Md., December 11th, 1907.

I have this day consigned to McGaw, Davis & Co., about three thousand cases Yo. 3 Standard Tomatoes ¹⁹⁹ of E. J; Bell’s 1907 packing 2,000 cases in Crossmore & Rittenhouses’s warehouse at Bradshaw, Md., and 775 cases in Balto. & Ohio R. R. warehouse at Bradshaw, Md. — the above goods to be loaded E. O. B. cars at Bradshaw, Md. In consideration of the above consignment McGaw, Davis & Co. agree to advance 75c. per dozen or $1.50 per case cash less 1%% on the above named (about) 3,000 cases, and furthermore when goods are sold by McGaw, Davis & Co., they to pay J. B. Hanway one-half of all over the 75c. per dozen or $1.50 per case that they may receive from the sale of these goods, after deducting all expenses — interest on advance, insurance, storage, brokerage, &c. Advance to be made after examination and counting of the goods in the above places, $1,000.00 spot cash, and balance January 15th, 1908, either in cash or a 60 days’-note, at McGaw, Davis & Co.’s option. J. B. Hanway,' McGaw, Davis & Co.” That in pursuance of the foregoing contract, the defendant delivered to the plaintiffs the tomatoes therein mentioned, and the plaintiffs advanced to the defendant the sums of money so-agreed to be advanced; and that the said tomatoes were in the year 1911 sold by the plaintiffs at the market prices, and that after deducting from the proceeds of said sale all expenses attending the same, interest on the advances so made, insurance, storage, brokerage, etc., the net proceeds of said sale did not amount to the said advances on said tomatoes by the sum of $2,287.43, and that the plaintiffs demanded from the defendant to refund to them one-half of said deficit, to wit, $3,143.71, but that the defendant has refused and still does refuse to pay the same. The question raised is whether the contract is a contract-of sale, or a consignment of goods by a principal to a factor.

If a contract of sale then, of course, the appellee is not liable for any loss sustained by the appellants on account of ²⁰⁰ the goods. If a contract between a principal and a factor, the appellant’s claim that the appellee is liable to them for any deficit arising from the salé of the goods. In other words, if the proceeds of the sale are insufficient to meet the advances, commissions and expenses, then the principal must reimburse the factor for the balance. The learned judge below, in sustaining the demurrer, held that the contract was one of sale.

Ordinarily the distinction between the relation of seller and buyer, and that of principal and factor is plain and simple. In a sale title passes to the buyer, while in a consignment by principal to a factor title remains in the principal, but the possession passes to the factor. Where goods are delivered by one party to another, to sell for the party delivering them, it creates the relation of agency, and the title remains in the principal, and the factor or agent is liable to pay, not a price, but to account for the proceeds of the 'goods when sold. If, however, it appears from the whole agreement that it is- the intention of the parties that the title to the goods is to pass to the party receiving them, for a price to be paid by him, then the transaction is a sale. 31 Oyc. 1198.

Though the distinction is usually plain and simple the authorities are full of illustrations of' how difficult the application may be, because the same contract' contains some provisions characteristic of each. To the agreement there must be applied the familiar rules of construction, all of which are subordinate to the leading principle, that the intention of the parties must prevail, unless inconsistent with some rule of -law. And this intention must be