Opinion
January 10, 1908.
Arthur W. Weil [ Benjamin G. Paskus with him on the brief], for the appellant.
Sydney W. Stern, for the respondent.
This is an action for goods sold and delivered by the plaintiff to the defendant. The plaintiff had the judgment, and the defendant appeals. The defendant claims that the plaintiff is not entitled to recover in any event or under any circumstances, because his conduct leading up to the delivery of the goods was dishonest, fraudulent and against public policy. The facts are somewhat unusual, and reflect one phase of an unfortunate condition which is all too prevalent in the business world, namely, the bribing by wholesale dealers of purchasing agents of prospective customers. The material facts are that the plaintiff had shirts to sell and the defendant was a large department store. McGuinness was buyer and purchasing agent for the defendant, and on December 8, 1906, received a letter from the plaintiff calling his attention to the fact that he had been unable to do business with the defendant through his regular salesman, and offering to pay him five per cent if he would place the defendant's orders with the plaintiff; he stated that if he had any compunction about doing so he would allow the five per cent to the defendant in the form of an extra trade discount. McGuinness took the letter at once to Goldman, the secretary of the defendant, "who was authorized to act on behalf of the defendant in connection with the matters involved in this suit," and Goldman told McGuinness to "go down and see these people, and make some purchases, and see what they will do. We want to make a test case of this." McGuinness called on the plaintiff, bought a bill of goods amounting to a little over a thousand dollars, and was allowed six per cent instead of five per cent by the plaintiff. The extra one per cent was figured in this way: McGuinness agreed to buy on terms of two per cent off in ten days instead of 2-10-60, it being agreed that the waiver by the defendant of the extra sixty days' credit was equivalent to one per cent. After the talk between McGuinness and the plaintiff, McGuinness told Goldman, the defendant's secretary, what had occurred between him and the plaintiff. Thereafter the defendant ordered its goods, and the plaintiff paid McGuinness sixty-one dollars and fifty cents, being equal to six per cent of the face of the order. Subsequently the plaintiff was arrested for violation of section 384r of the Penal Code which prohibits bribing purchasing agents, plead guilty, and was fined fifty dollars, which he paid. The defendant has never paid anything on account of the purchase price of the goods sold and delivered to it, and has kept the goods and not offered to return them.
The appellant submits a very strong brief, in which the court is asked to hold that one who resorts to such means as were employed by the plaintiff in this action should be denied the right of recovering the fair value of the goods sold and delivered, even where the goods are retained by the defendant and used or consumed. This would be very drastic; but yet, on the other hand, the condition is such that the courts should go as far as the body of the law will permit toward stamping out this practice. A careful examination of the authorities reveals that much can be said for the appellant's contention. This is the principal fault with it, however: It claims that the plaintiff's conduct is against public policy; that may or may not be so, as a matter of law; certain it is that such conduct is unprincipled, bad in morals and in ethics, and downright dishonest, but the contract itself, which is merely a contract for the sale of goods, wares and merchandise at a given price, is not and cannot be against public policy, for the merchandise was shirts. The plaintiff sought to perpetrate a fraud, using the term fraud in its looser sense, but in general cases of this sort do not accomplish a legal fraud against the purchaser, for the purchaser would pay the same price whether its purchasing agent received a commission or not.
However, we do not think that the record before us discloses a proper case for the decision of this question of law; for in this case the defendant was not defrauded in any way; it was not misled, nor was it in ignorance of the plan which the plaintiff proposed to adopt. On the other hand, it was advised of plaintiff's proposition before McGuinness had accepted it, and upon the defendant's suggestion and solicitation the agreement between the plaintiff and McGuinness was made. Then again, the result of the talk between the plaintiff and McGuinness and the private arrangements which had been made between them were fully revealed to the defendant before the order for the goods was given to the plaintiff; and hence there was nothing concealed from it. Under the circumstances there was, of course, nothing of legal fraud in the contract, and the defendant was not only consenting that its purchasing agent receive a commission from the plaintiff, but was even urging him to procure it if he could. Under these circumstances, it seems too plain for argument that the defendant must pay for the shirts it bought.
Our conclusion is that inasmuch as the defendant knew of the plaintiff's proposition to its purchasing agent, directed him to buy goods of the plaintiff and see what the plaintiff would do, and afterwards made a purchase with full and complete knowledge of the plaintiff's offer to pay the purchasing agent a commission, the defendant must be held to have assented to the agreement between the plaintiff and its purchasing agent and to have bought the bill of goods and impliedly agreed to pay for them, even though its purchasing agent was to receive a commission or gratuity from the plaintiff.
The judgment should be modified by striking out the provision for an extra allowance, and as so modified affirmed, without costs.
WOODWARD, JENKS, GAYNOR and MILLER, JJ., concurred.
Judgment modified by striking out the provision for extra allowance, and as so modified affirmed, without costs.