Opinion
No. 33455.
January 2, 1939.
1. CONTRACTS. Sales.
Where contract is to be performed to satisfaction of party for whose benefit services are rendered, or to whom goods are delivered, an objection to or disapproval of manner of performance must rest on some reasonable and just basis, unless transaction involves a matter of peculiar fancy, taste or sensibility.
2. BROKERS.
Although contract provided that defendants' cotton buyer should receive no commission on cotton purchased for them on a higher classification than theirs, the defendants could not avoid liability for commission on ground that buyer's classification was too high where it was found from testimony of buyer and his witnesses that his classification was proper, and no testimony was offered by defendants concerning correctness of their classifications except proof concerning experience of the classers.
3. BROKERS.
The purchase of cotton by defendants' cotton buyer from partner firms of which he was a member did not preclude buyer from recovering commission on purchase of the cotton, where defendants, with knowledge that buyer was purchasing cotton from partnership firms, had acquiesced therein, and buyer had offered to take over cotton and resell it at profit to defendants.
4. PRINCIPAL AND AGENT.
The right to repudiate transaction where agent acts in a dual capacity is one existing for principal's protection, and he may waive it at his option.
APPEAL from the chancery court of Bolivar county; HON. R.E. JACKSON, Chancellor.
Robert N. Somerville, of Cleveland, for appellants.
The contention of the appellant is that the conduct of Mr. Ray was such that this suit should not be entertained. Instead of representing the best interest of the appellant he placed himself in a position to sell to appellant and get all of the profit for his partnerships with Minor and Norwood at the expense of the appellant, and, therefore, forfeited all claim to any commissions.
The contention of appellant is further that even if his case is to be considered that still the written contract should govern and appellant should have the cause reversed and appellee should not be given credit for a commission on the cotton where it was without the limits prescribed. The contract stated very plainly that no commission was to be allowed where the limit was exceeded. There were two hundred sixty-six (266) bales sent in which were inside the limits, one hundred seventy-nine (179) where special authority was allowed and one hundred thirty-two (132) resold by Ray, or a total of five hundred eighty-one (581) bales where he would be entitled to commissions if the court holds that he is in a position to recover anything. But we claim that the court below allowed commissions on one thousand forty-two (1042) bales where same is not justified by the record and the facts.
This court has often enunciated this legal principle, namely that an agent to buy cannot make a profit above his commission.
Hays v. Ryker, 118 So. 199, 151 Miss. 382; Stokes v. Terrell, 23 So. 371; Boswell v. Cunningham, 13 So. 354; Trice v. Comstock, 121 Fed. Rep. 120.
Since this agent bought most of his cotton from the partnerships of Ray and Minor, and Ray and Norwood, and since he made a profit as a member of the partnership, we say that this was a breach of fidelity on his part sufficient to forfeit all claim to any commissions.
Trice v. Comstock, 121 Fed. Rep. 120.
Both parties embodied their agreement in writing and the contract required the appellee to safeguard the interests of appellant, which we submit was not done.
Contract provided that appellee should abide by the classification made by appellant and appellant should not pay commissions when instructions were violated.
A.B. Sparkman, of Cleveland, for appellee.
The text books and cases are almost unanimous in holding that the agent of one of the parties to a sale or exchange of property may legally make a contract for compensation with the other party to the transaction, with the knowledge or consent of his principal.
14 A.L.R. 465, 475, note.
There are numerous cases in Mississippi which decide states of facts between principal and agent and hold that an agent cannot deal with his principal and at the same time represent a person whose interests conflict with the interests of his principal, but all of them are based upon facts which show that the facts were not disclosed to his principal in the transaction or that the principal has not agreed or acquiesced in the double agency.
21 R.C.L., sec. 11.
The appellee contends that he complied with all the terms and conditions of his contract with the appellants. That sometime between August 30, 1937, and September 17, 1937, this being the interval during which appellee did not buy any cotton for appellants, he and appellants modified and changed and made a new agreement, by reason of which appellee was to have the right to re-sell any cotton which appellants classed as being too high, and that he tried to get the appellants to allow him to take back several lits of cotton which they complained of, and which they did not allow him to do. The court below found this fact in favor of the appellee, that is, that he had a right to take back and sell cotton classed too high and sell it to whom he chose. That this modification of a written contract can be made after its execution by parol agreement is well settled.
6 R.C.L., sections 299, 333.
The following cases hold that there must be reasonable ground for dissatisfaction; that where promisor ought to be satisfied, he must be; and that he should be satisfied with that degree of performance which would satisfy a reasonable person; except that as to portraits, etc., where taste, fancy, etc., enter into the contract, the promisor must be satisfied absolutely:
Duplex Safety Boiler Co. v. Garden, 101 N.Y. 387, 4 N.E. 749, 54 Am. Rep. 709; Pennington v. Howland, 21 R.I. 65, 41 A. 891, 79 Am. St. Rep. 774, 17 L.R.A. 210, note; Hawkins v. Graham, 149 Mass. 284, 21 N.E. 312, 14 A.S.R. 422; Handy v. Bliss, 204 Mass. 373, 90 N.E. 864, 134 A.S.R. 673; Porman v. Walsh, 97 Wis. 356, 72 N.W. 881, 65 A.S.R. 125, Ann. Cas. 1913d 629; Higgins v. Pearson, 40 So. 579.
It is an elementary principle of law that acceptance under a contract is a waiver of any defects; and where work is accepted with a knowledge that it has not been done according to contract, or under such circumstances that knowledge of its imperfect performance may be imputed, the acceptance will be deemed a waiver of defective performance.
6 R.C.L., sec. 360.
This is a suit by attachment in the chancery court of Bolivar County, wherein appellee recovered a personal decree for commissions on the purchase of cotton, against the appellants, as non residents entering their appearance, and also subjecting the attached property to sale.
On appeal the appellants, as members of the partnership firm of McFadden Oates, of Memphis, Tennessee, cotton buyers, seek a reversal on two grounds: (1) that appellee as agent in the purchase of the 1623 bales of cotton on which he recovered a commission of 50 cents per bale violated the terms of his written contract as to the limits and instructions given him as to grade and staple, thereby forfeiting the commission thereon; (2) that appellee bought some of the cotton from local partnership firms of which he was a member in violation of his relationship as agent of appellants.
On the first proposition, the chancellor found from the evidence that subsequent to the execution of the written contract of employment an oral agreement was entered into between the parties whereby the appellee had the right to take over and resell any cotton that did not come within the limits and instructions given by appellants as to grade and staple and in effect held that he offered to do so, but that appellants retained the cotton, and thereby waived any objections to the classifications given the same by appellee, an experienced and competent cotton classer. We are unable to say that the chancellor's finding in this regard was not supported by the testimony; and at least we are unable to say that such finding was manifestly wrong.
It is urged however that since the contract as originally made in writing bound the appellee to accept the classifications given the cotton by appellants, and provided that he should receive no commissions on any that he bought for them on a higher classification than theirs, he would not be entitled to the commission on 1042 bales of the cotton sued for; and also that it was not permissible to show that appellee's classifications were correct. Responding to this contention it is sufficient to say that whenever it is contemplated by the terms of a contract that it shall be performed to the satisfaction of the party for whose benefit services are rendered, or to whom goods are delivered, the rule is that an objection to, or a disapproval of, the manner of performance must rest on some reasonable and just basis, unless the transaction involves a matter of peculiar fancy, taste or sensibility.
It was shown that a legitimate margin of difference in the classification as to grades and staples of cotton when made by competent and experienced classers does not justify the marked contrast between the respective classifications here in controversy. From the facts disclosed it could have been reasonably inferred that either the classifications made by appellee or those made by the classers employed by appellants were carelessly made, or were arbitrary. The chancellor found from the testimony of appellee and his witnesses, some of whom graded and classified a good portion of the cotton in question, that he had properly graded and classified the same. Moreover, no testimony was offered by appellants as to the correctness of the classifications made by them — introduced in evidence by appellee for the purpose of showing their incorrectness — except the proof as to how long each of the classers in the employ of appellants had been engaged in such work.
On the second proposition urged for reversal, the testimony was insufficient to show what portion of the cotton was purchased by appellee from the partnerships of Ray Minor and Ray Norwood, respectively, except in regard to 20 or 25 bales, bought 50 points cheap, and 250 bales bought at 10 points under what a representative of another Memphis cotton firm had offered the partnership of Ray Norwood for it, and which 250 bales appellee offered to take over and resell at a profit to appellants when he was notified that his classification thereon was high as compared with that given this lot by the appellants. The contention that appellee violated his duty under his relationship of agent to appellants in buying this cotton from a partnership of which he was a member would ordinarily be well taken. However, the proof in this case disclosed, and the chancellor found, that appellants knew all the while that appellee had Minor and Norwood buying cotton for him under some sort of an arrangement, and acquiesced therein. It was further shown on behalf of the appellee that as agent of appellants he did not hesitate to reject any and all cotton offered him by these partnerships in which he was a member unless it complied with the limits and instructions furnished by his said principal, although the cotton purchased by his partners was purchased with the individual funds of appellee. The right to repudiate the transaction where an agent acts in a dual capacity is one existing for the principal's protection, and he may waive it at his option. We are of the opinion that, under all the circumstances, no unfair advantage was taken of appellants; and that when appellee offered to take over and resell this cotton pursuant to his alleged subsequent oral agreement with appellants he became entitled to collect his commissions thereon.
The decree of the court below should therefore be affirmed.
Affirmed.