Stanton v. Bell, 9 N.C. 145, 2 Hawks 145 (1822)

Dec. 1822 · Supreme Court of North Carolina

9 N.C. 145, 2 Hawks 145

Stanton & Little v. Bell & Joiner.

From Edgecombe.

Where a bailee undertakes to perform a gratuitous act from which the bailor alone receives benefit, there the bailee is liable only for ¿-ros* neglect. Otherwise, where the profession of the bailee implies skill. for then want of skill is imputable as gross neglect.

X mere mandulory who receives no reward is only liable for fraud or qross neglect.

The declaration In this case contained two counts. The first was in trover, to recover damages for the conversion of sixteen bales of cotton; and the second in case, for tortiously omitting and neglecting to perform and transact certain duties relative to the said cotton, which the Defendants had undertaken to perform. The facts of the case were these. The Plaintiffs were indebted to the Defendants, and having a quantity of cotton ready for market, on the 14th of February 1820, they were informed by a letier of the Defendants, that they were willing to take the cotton, ship it to Ncw-York to a house tbfit might be relied on, and to credit the Defendants for the net proceeds of its sale; they declined becoming themselves the purchasers of the. article, and urged upon the Plaintiffs the necessity of sending the cotton innne-diately, adding that the interests of the Plaintiffs would be more advanced by the proposed arrangement, than they would be, should Defendants purchase the cotton. In March, 1820, forty-five bales of cotton were accordingly delivered by Plaintiffs to the Defendants, with power to ship it to any market which they thought best. On the first of April 1820, the Defendants shipped twenty-nine bales of the cotton to a house in New-York, and sixteen bales, together with a quantity of their own, to the house of Sweeting & Sterret, in Baltimore, informing them that sixteen bales of the consignment were the property of Stanton & Little, and directing them to keep separate accounts of the sales. At the time of the shipment, the firm of Sweeting & Sterret was in good credit, and no doubts of its solvency were entertained until the winter of 1820. In January 1821, one of the firm of Bell & Joiner proceeded as far as Norfolk, on his way to Baltimore, but was there prevented by ice from prosecuting his journey. It appeared that in the spring of 1821, one of the Defendants attempted to borrow .S600 from a witness, Gray Little, and said they had funds in the hands of Sweeting & Sterret of Baltimore, but did not wish to draw for them ; and the other Defendant, some short time after, said they had drawn for §600, and the bill had been honoured by Sweeting & Sterret. In June, 1821, one of the Defendants did go to Baltmorc, and commenced suit against the surviving partner of Sweeting & Sterret, but in consequence of the insolvency of that firm, obtained nothing. The proceeds of the. shipment to New-York had been received and applied to the payment of the Plaintiffs’ bond which the Defendants held.

The Judge in the Court below instructed the J ury that the Defendants were not liable, unless they were guilty of negligence in not drawing the proceeds out of the hands of Sweeting & Sterret, by which the same were lost, and what was negligence was for the Jury to determine. All the Court could say was, that the, Defendants were bound to use that rare and diligence which a prudent and discreet man would use relative to bis affairs ; and whether they did so was the proper subject of enquiry for the Jury. The J ury returned a verdict for the Plaintiffs, and the Defendants moved for a new trial, because the verdict was against evidence, and for a misdirection of the Court in matter of law. The motion having been disallowed and judgment rendered for tiie Plaintiffs, the Defendants appealed to this Court.

Seawell and the Attorney-General, for the Defendants,

contended that as this was a gratuitous undertaking on their part, they were bailees receiving no compensation for their services, and consequently were only liable when they did not act bona fide, or were guilty of gross negligence. That the Court did not call the attention of the Jury to the proper point of enquiry. The proper point was whether Defendants acted bom fide, and were they guilty of gross negligence; and cited 1 //. Black-slone 158 — Cowp. 480 — t Johns. Hep. 364 — 7 Mass. Rep. 3 6-M/frnes on Bailment 10.

Gaston for Plaintiffs.

The verdict conforms to the justice of the case, — the charge of the Court is not contrary to law. The general rule is, that every bailee is bound to use the diligence of a prudent man. To this rule there are exceptions $ some erases require more than this, others less j but this case does not come within any exception. Defendants are liable because they sought the undertaking, and spontaneously offered to do the business — (Jones on Bail. 9, 14, 15, 0,7, 170.) .Besides» they do not act gratuitously, but for a benefit to them-se^ves ’ nor *s ^ necessary that compensation should be in money. They are mandatories, and as such bound to ordinary diligence and answerable for slight neglect— (Jones 32, 73, 81, 85, 137, 169.) Again: these Defendants undertook to act in the line of their profession, and are therefore liable — (Jones 139 — 2 Ld. Ray. 918' — 1 H. Bl. 161.) Pawnees are bound to use ordinary diligence, and this was in the nature of a pawn, and at all events, it was a bailment mutually beneficial — (Jones 69, 104, . 165.)

Hall, Judge.

From the facts stated in this case, particularly those disclosed by the. testimony of Gray Little, I think the Jury were at liberty to find a verdict for the Plaintiffs.

When-, one of the Defendants, wished to borrow money of the witness in Tarborough, rather than draw for it on the house of “, Sweeting & Sterret,” to which the cotton had been cons'gned, in Baltimore, it no doubt was because he considered the money would be more useful to him in Baltimore than it would be in Tarbo-rough. By electing to keep it there, he exercised an act of ownership over it; and by doing so he made it his own, and this he had a right to do, for it was stipulated between the Plaintiffs and the Defendants that the proceeds of the cotton, when sold, should be credited^ the debt due from the Plaintiffs to the Defendants. Amd if at that time the amount of sales had been known, and the Plaintiffs and the Defendants had come to a settlement of their accounts, the Plaintiffs would have had a credit (as they ought to have had) for the amount of those sales; and if the house of “ Sweeting & Sterret” were solvent at that time, but failed afterwards, the Defendants must have borne the loss.

But it does not appear whether the Jui’y, in finding a verdict for the Plaintiffs, took this view of the case — -or whether, laying tiie testimony of Litlle out of the qucstion, they were influenced, in finding their verdict, by the charge of the Court. If Iheir verdict was found upon the testimony of Lillie, 1 think it ought not to be disturbed. ¡f laying the testimony of Lillie out of the case, it was so found in consequence of the charge of the Court, it will be proper next to consider, Whether in that case it ought to be set aside. The Court in its charge to the Jury has said, “ that the Defendants were bound to use that care and diligence which a prudent and discreet man would use relative to his affairs. That the circumstance of the Defendants’ losing Iheir cotton was not the rule to govern them, hut they must enquire whether he acted as a prudent and discreet man ‘ in the business.” Viewing the case as I have before done, connected with the testimony of Litlle, no want of diligence is imputable to the Defendants. They in apt time, elected to consider the money iheir own in Baltimore, and chose to leave it there, rather than have it at home. But laying that testimony aside, the case assumes a different aspect.

It does not otherwise appear, but that the house of “ Sweeting k Sterret” merited their confidence when the Defendants made a consignment of the cotton to it. That they thought so, is proved from the fact that they made a consignment to it of their own produce, and some of the neighbouring merchants did the same thing. The Plainti^were not ignorant of the fact, that such con-sigument was made of their cotton, for when they applied to the Defendants for intelligence respecting it, they were informed that no account of sales had come to hand. It does not appear that in this the Defendants were incorrect. It seems that the Defendants had made other consignments before that time to the same house — that they had drawn bills upon it which had been accepted and paid — from the spring 1820 until the winter 1820-1821, there was no distrust of the solvency of the house — the first intelligence of it, was also intelligence that diligence y/as useless — what time the house failed does not appeal, so ^iat ^ ('oes n°t appear whether any diligence would have prevented a loss. The Plaintiffs themselves, if they had apprehended danger, might have made enquiry, for it must be kept in view that the Defendants were mere mandatories, they acted without a reward.

Under this latter view of the case, I think the principle of decision will not steer clear of the circumstance that the property of the Defendants shared the same fate with that of the Plaintiffs j although it will not make it the standard of decision, nor will it altogether overlook the circumstance that others of the same neighborhood with the Defeftdants were sufferers in the same way. These and other circumstances which make up the case, make it necessary to enquire whether the Defendants were guilty either of fraud or gross negligence, and if referring the Jury to that standard in making a decision, they had found a verdict for the Plaintiffs, I should willingly acquiesce, even without the aid of Gray Little’s testimony. There is a material difference between a bailee who acts for a reward; and one who acts gratuitously. In. the case of Shiells v. Blackburne, (1 H. Bl. 158,) it is laid down by the Court, and declared by Ld. Loughborough, that he agrees with Sir Wm. Jones in that respect, that where a bailee undertakes to perform a gratuitous act, from which the bailor alone is to receive benefit, there the bailee is only liable for gn^| negligence, but it is otherwise where the profession of the bailee implies skill, for in that case a want of skill is imputable as gross neglect. — (See also Cow. Rep. 480, to the same effect.) Sir Wm. Jones, in his law of bail-ments, (page 15,) says, that if the bailor only receives benefit, the bailee is only liable for gross neglect.-— Therefore, if the Jury had been instructed that the Defendants were only liable for fraud or gross neglect, whether they had found a verdict for the Plaintiffs on the testimony of Little, or under that charge of the Court ; Í should be of opinion (be verdict ought! to stand, bat as the Jury have been referred to another rule to go by— one that 3 think governs ¡.be case of a mandatory who acts for a commission, or a reward ; i think a new tr5al should be granted, and for that reason only.

JIejtdkrsoN, Judge, concurred with Ham,.

Taylor, Chief-Justice,

contra. — it is to be collected from the letter of one of the Defendants, read in evidence, that the first proposition made by the Plaintiffs, was, that the Defendants should become purchasers of the cotton ; and that the inducements presented by the Defendants, occasioned the consignment to them, for the purpose of having a sale effected in Baltimore, for the .Plaintiff’s benefit. To say nothing oí the advantage derived to the Defendants from storage at Washington and Tarbovough, and the freight from one place to the other, it cannot be denied, that it was profitable to the Defendants to have their funds in Baltimore, whence they could draw them by a premium on their biils, rather than in Tarborougli: and that they were reluctant to forego this advantage, appears from their having endeavoured to borrow money from the witness Lillie, rather than remove their funds from Baltimore. Up to the time of i,be sale in Baltimore, the interests of both Plaintiffs and Defendants were the same in relation to the cotton 5 11 was important to both parties that a sale should be made, as soon as it could be advanlageously effected. Bui after the sale, the interests of the parties took different directions. The money of Bell & Joiner was deposited where they' most wished it to be, in the hands of the consignees, to serve as a fund on which they could draw as profit presented itself; but the money of the Plaintiffs would have been most usefully employed in being applied to the payment of their debt, and stopping the interest on their bond, .As soon as the, money came into the hands of Sweeting & Sterret, the Defendants should *iave drawn f°r it> or given credit to the amount on the Plaintiff’s bond. The sale must have taken place early in the spring of 1820, and the Plaintiffs had a right to expect from the common course of business, and the usage of that trade, that within a reasonable time after the sale, they should receive the amount in some shape or other, or be apprized that they might draw for it on Baltimore. It is said by a respectable writer, that if the factor have not given notice to his principal of the bargain in convenient time, and the vendee becomes insolvent, the factor is responsible. — Malyn.

The excuse alleged for not giving this .notice, is, that the Defendants could get no account of sales from Sweet-ing & Sterret, and could not therefore tell when tiie sale took place, or what amount they should give credit for. But does it appear from any part of the evidence, that a single effort was made to procure these accounts of sales, until the time when Bell attempted to go to Baltimore, at which period Sweeting & Sterritt were in failing circumstances ? It is not credible, that a house in Baltimore, receiving consignments from Tarborough, should suffer a period of six or seven months to elapse, without apprising their consignor that a sale had taken place $ and as to the other produce shipped by the Defendants to the same house, they knew what sale had been effected, and how much they could draw for. But what seems almost conclusive on this point, is the testimony of Sweeting taken by the Defendants, and in his presence. His silence on the two heads of a sale, and transmitting an account of sales, is to me most expressive. If he had proved that either no sale had been effected, until so short a period before the failure, as to render notice unavailing ; or that though a sale was promptly made, his firm had neglected to send an account of sales to Bell & Joiner, although frequently urged to it, it would have acquitted the Defendants of the main strength of the charge of negligence. Batas he was not interrogated oa points with which he must have been perfectly well acquainted, and which it was so important for the Defendants to maintain, the Jury may probably have inferred from that very circumstance, that the sale was soon made after the arrival of the cotton, and that an account of sales was transmitted to Bell & Joiner in reasonable time. Assuming this to be so from the finding of the J ury upon the evidence exhibited, it appears to be a case of gross negligence on the part of the Defendants, in no degree extenuated by their own loss ; for though they might risque their own funds in Baltimore for the sake of profit and convenience, they had no right so to act in relation to those of the Plaintiffs»

The law has imposed certain obligations on an agent, which are not founded solely upon the reward paid for fus labour, but in part by the confidence inspired by his acceptance of the charge ; and although it is admitted, that the responsibility of a voluntary or gratuitous agent is much inferior to that of a hired agent, yet it is nevertheless tine, that Use former is bound to bring to the] performance of the duty such a degree of care and diligence as may reasonably satisfy the trust reposed in him. This principle is fully recognized in the great case of Caggs and Bernard ; there was no consideration paid for the carriage of the goods, and no action could have been sustained for not carrying them, but because the Defendant undertook to carry them, and they were spoiled by his neglect, ho was made liable ; and Lord Holt says, if a man acts by commission gratis, and in the executing his commission behaves himself negligently he is answerable, This undertaking obliges the undertaker to a diligent management. And so a bare being trusted with another man’s goods, must be taken to be a sufficient consideration, if the bailee once enter upon the trust, and - i.ake ’.he goods into his possession.

The case cited by the Defendants from 1 lien. Black. ^'dainly proves that even in misfeasance in the actual performance of the ns;:!.•s'tolrng, the responsibility of a voluntary agent ir; inferior in degree to that of a hired agent. The latter is bound to possess such a degree of skill as would, in general, bo adequate to the service : a gratuitous agent is not bound to possess such skill, but is only chargeable by proof of gross negligence. Hence the merchant who undertook w ithout any compensation, to enter at the custom-house a parcel of leather of" a particular kind, which being seised, together with a parcel of his own, by reason of the erroneous entry, it was he!*! that he was not answerable for the loss, having acted bona Jide, and to the best of his knowledge. It was said by the Court on that occasion, that if a man he in a situation or profession to imply ;,!* ill, an omission of that skill is imputable to bins as gross negligence. Apply that rule to the case, before «a, and let it bo admitted for the sake ^pf the application, that the Defendants were voluntary ¡•agents, w hat will uetlse result ? That the Defendants uu-fdertook a task for which their situation and profession did imply skill, and therefore the omission to exert it may be considered as gross negligence. A more simple operation scarcely belongs to the duty of a mandatory, than that of transmitting an account of sales, and drawing money out oí the hands of consignees, in lull credit, 'for months after the consignment.

The ease cannot be distinguished in principle from the recent one. of Wilkhmr.i. v. Coverdale, decided in accordance with Coggs v. Bernard. it was there held, that case will lie where a parly undertakes to get a policy done for-another without any consideration, if the party so undertaking takgs any steps for that purpose, but does if, so negligently, that the person has no benefit from it,- — (1 Bsp. C. 75.) in whatever light I can see this case, wheihrr of justice or law, the verdict of the Jury appears lo.be correct, and ought to he supported.