Sherwood Bros. v. Seattle Fruit & Produce Auction Co.

Ellis, J.

Plaintiff, a commission merchant of Belling-ham, Washington, brought this action against defendant, a commission merchant of Seattle, to recover a balance claimed to be due as the proceeds of the sale of certain berries and other small fruits shipped by plaintiff to defendant at Grand Forks, North Dakota, for sale on commission, There were three car loads of fruit, shipped, respectively, June 25, June 30, and July 2, 1915, by express from' Bellingham, consigned to defendant at Grand Forks. The fruit was delivered at that point to defendant’s agent, to whom the bills of lading were forwarded. Though a conversion was claimed as to the last car, at the trial the action resolved itself into one for an accounting.

We find it unnecessary to review the pleadings. Both sides claimed that the shipments were made under an express oral agreement entered into between plaintiff and defendant early in June, 1915, at Bellingham, through S. A. Sherwood, plaintiff’s president, and George Bryant, defendant’s president. There was a sharp conflict in the evidence as to the terms of this agreement. Sherwood testified, in substance, that it was agreed that defendant would handle the berries for a commission of ten cents a case and ten per cent for the other fruits, and would guarantee one dollar a case for the berries, but that nothing was said as to any commission to be charged by any broker in the Dakotas, where it was contemplated the fruit would be marketed. Bryant testified to the effect that defendant was to receive as its commission ten per cent of the net returns to Seattle, that there was no guaranty, and that it was understood that whatever commission was necessary would be charged and deducted as an item of expense at the other end. The evidence showed that the berries and other fruits were sold to the retail trade in the Dakotas by defendant through O. J. Barnes & Company, a commission house at Grand Forks, North Dakota, and that Barnes & Company received a commission of fifteen per cent. The sale statements rendered by defendant to plaintiff did not disclose the fact that any commission was deducted for marketing the fruit in the Dakotas. It fairly appears that plaintiff did not know that Barnes & Company had anything to do with the matter until late in August, 1915, some time after statements on all the sales had been rendered, and did not know that any commission, save defendant’s ten per cent, had been deducted until certain depositions were taken at Grand Forks late in December, 1915.

The trial court did not find the contract wholly in accordance with the claims of either party, but expressed the view that the agreed commission was ten per cent on the net proceeds of all of the berries and fruit; that there was a guaranty of one dollar a case only as to the first car, which guaranty was met, and that there was no agreement authorizing defendant to deduct any commission paid to the Dakota broker. Judgment was rendered for plaintiif for the sum of $1,149.75, which, it seems to be conceded, is the amount which was deducted as the commissions of Barnes & Company, and for costs. Defendant appealed.

Because the court did not find wholly with the claims of either party, appellant first contends that the court, in substance, found that there was no definite contract, in that there was no meeting of the minds of the parties, and that, therefore, appellant was entitled to a reasonable compensation for its services; hence was warranted in deducting the' commissions paid in Dakota, with the express charges and other usual marketing expense, and in retaining ten per cent of the resulting net proceeds. This position is not tenable. Both parties asserted that there was a special contract. They disagreed only as to its terms. What its terms were was the specific question for the court’s determination. The fact that the court did not find the agreement exactly as claimed by either party, but found as to one part with the appellant’s evidence and as to another part with the respondent’s evidence, was not a finding, as the appellant asserts, that the minds of the parties never met. There is no rule of law requiring the court, on any controverted question of fact, to adopt as true m toto the evidence on either side, or as an alternative, find the evidence on both sides false m toto. The purpose of trying questions of fact is to determine the truth from all of the evidence.

It is next contended that the court committed fatal error in holding that the burden of proof was upon appellant to show an agreement on respondent’s part that the commission of fifteen per cent paid to the Dakota broker should be deducted as an expense chargeable to respondent. Appellant was admittedly respondent’s agent operating under an express contract to market the fruit for a commission. In the absence of specific authority, it had no power to employ subagents at respondent’s expense. That authority cannot be implied from the mere fact of appellant’s employment. Vashon Fruit Union v. Godwin & Co., 87 Wash. 384, 151 Pac. 797; Fudge v. Seckner Contracting Co., 80 Ill. App. 35; Burke v. Frye, 44 Neb. 223, 62 N. W. 476; People’s Bank of Pratt v. Frick Co., 13 Okl. 179, 73 Pac. 949. The burden was, therefore, upon appellant to show that, by the terms of its employment, it was authorized to employ sub-agents and charge a commission for their services. The court committed no error in so holding.

Finally, it is contended that, in any event, the evidence clearly established the contract as claimed by appellant. As to whether it was understood that appellant would market the fruit through commission merchants, and would charge as an expense the commission paid to such merchants, the direct evidence, as we have noted, was in the sharpest conflict. The court was justified, therefore, in taking into consideration every circumstance tending to support either side. If in the original negotiations respondent’s president was advised that it would have to bear the commission of a broker in the middle west, it is inconceivable that he would not have asked what that commission would be and insisted upon something more definite than appellant’s version of the agreement. It is a further significant fact that the accounts of sales rendered by appellant to respondent, which are in evidence as exhibits, show that, though the transportation charges, drayage, labor and repacking charges were frankly disclosed and deducted as legitimate expenses, and, also, appellant’s ten per cent commission on the balance, no commission to the Dakota broker was shown, either as an expense or otherwise, nor on the face of the statements deducted. An examination of the statements fails utterly to disclose that any commission whatever, save appellant’s ten per cent, was paid to any one. Whatever the contract, good faith would dictate that these commissions paid at the other end should be shown if deducted, as they admittedly were. It seems only reasonable that, had respondent ever agreed to bear these commissions, as appellant claims it did, they would have been shown, just as other deductible expenses were shown. That they were not shown raises a strong inference that appellant desired to conceal the fact that they had been paid and deducted from the gross proceeds, lest respondent might obj ect.

In other relations involving agency, such a clandestine course of conduct would be considered at least questionable, and we know of no reason why it is less so where the parties are commission merchants. The rule requiring open disclosure and full accounting has its basis in considerations of common honesty, and applies to commission merchants as well as to others. Here the concealment was persistent. Throughout the correspondence, though Barnes was sometimes mentioned, he was referred to as “our representative,” never as an independent broker to whom a commission was paid. Appellant’s answer to interrogatories propounded by respondent late in November, 1915, stated, with regard to each car, that the fruit was “sold to O. J. Barnes,” not that it was consigned for sale on commission. So far as the record before us indicates, the fact that a commission was paid and in what amount did not appear until the deposition of Barnes was taken, in which it was disclosed that Barnes & Company had taken the berries on commission and had actually charged a commission of fifteen per cent for which appellant did not account. It is no answer to say that it is inequitable that appellant should refund commissions which it actually paid in sums larger than the commissions which it received and that respondent, in any event, received the full market price for its berries. Appellant, at all times, knew its own facilities for disposing of the berries better than any one else knew them. If it wanted to avoid the dispute here presented, it should have disclosed the facts when it made the contract, and then advised respondent that the added commission would be charged as expenses. That it did not do so is positively asserted by respondent and is strongly corroborated by the studied course of concealment, both of the fact and of the amount of commissions charged at the other end. Upon the whole record, we cannot say that the evidence preponderates against the court’s findings. The court having found that there was no contract authorizing the deduction of these commissions, the case falls distinctly within our decision in Vashon Fruit Union v. Godwin & Co., supra.

The judgment is affirmed.

Morris, C. J., Main, Holcomb, and Chadwick, JJ., concur.