Forrestier v. Bordman.

cargo, requiring a sale for cash. In every sale on credit, justified by the usage of the trade, the sale is at the risk of the owner, and not of the factor, unless the latter receives a guaranty commission, or the agreement of the parties, or the usage of the trade, makes the sale at the risk of the factor, or the risk is voluntarily taken by him.

Now, in the present case, it seems to me, that the evidence clearly shows, that a sale upon credit is justified by the usage of trade at Batavia. But that I shall leave as a matter of fact

for the jury to decide. The evidence seems also to establish, that sales on credit in this trade, like sales on credit in our home trade, is ordinarily at the risk of the owner. At least there is no determinate evidence, (as I understand it,) showing a contrary usage. But that I shall also leave for the consideration of the jury.

Then, was any restriction imposed upon the factor in this case as to selling upon credit? No express restriction is pretended. The supercargo does not pretend to have given any. All he says is, that he directed Forrestier to sell and to hold the proceeds subject to his orders, to be invested, as he should direct. He does not pretend, that he directed the sale to be for cash only. Now, certainly, if the usage at the port was to sell for cash or credit, at the discretion of the factor, and he received orders to sell generally, he might fairly presume, that he was authorized to sell either for cash or credit, as would be most for the benefit of his employer. The flour was damaged. It might bring more upon a credit than upon a cash sale; and thus a credit sale, although the proceeds were to be invested in a return cargo, might by a discount or advance pro tanto, be more for the benefit of the owner, than a cash sale. The question, therefore, for the jury to decide is, whether Forrestier did, by a sale on credit, violate his orders, or act contrary to his duty, so as to make that sale at his own risk.

Forrestier v. Bordman.

It is said, that as the supercargo was in the port at the time, Forrestier ought to have consulted him, before he sold on credit. But why should he do so, if he had no knowledge, that the supercargo wished a sale for cash, or wished to be consulted before a sale on credit? The supercargo was a very young man, utterly unacquainted with the trade; and this was his first voyage. It will be for the jury to say, under such circumstances, whether it was the duty of Forrestier to consult him before the sale on credit, or not.

There is no usage of trade shown, which requires such a consultation. Then it is said, that the form and language of the account of sales show, that Forrestier took the note of Johannis to himself, and that the whole transaction was thus closed and settled. Now, this is a matter to be judged of by the jury. Does the language of the account import on its face, that the sale was at the risk of the shipper, and that he took the note to himself, advancing cash for the amount, deducting the discount for the time the credit was to run? If the language is equivocal, it is open to construction and interpretation from the known usage of merchants. Ordinarily, in the home trade of the United States, most, if not all the witnesses (as far as I recollect) say, that the like words and statements of account would not import, that the cargo was at the risk of the factor; but that it was at the risk of the owner. However, this is a point, upon which the jury must judge for themselves.

Then come the statements of Mr. Barrell, the clerk of Forrestier, made to the supercargo, and to which the latter has testified. I admitted the evidence, but with some hesitation, and thought it proper to be submitted for the consideration of the jury. Now, as Forrestier was not present, unless Barrell had authority in this case, or in cases of this sort, to act and speak, and interpret for Forrestier, his declarations will not bind the latter. The first point, therefore, to be established

cause.

Forrestier v. Bordman.

is, whether Barrell had such authority. If the jury think he had not, then his declarations are of no importance in the If Barrell had such authority, then the jury will consider all the circumstances, and decide, what credit ought to be given to those declarations compared with the other facts and circumstances of the case. If the jury are of opinion, that Barrell was authorized to speak for Forrestier in the premises, and they believe, that there is no mistake or misrecollection of the supercargo at this distance of time, (and he has certainly testified with great candor and fairness,) then it seems to me, that the evidence does show very strongly, if not conclusively, that Forrestier took the risk to himself of the sale on credit; and the present action is not maintainable. It is most unfortunate, that when the supercargo was, as he says, surprised at the sale on credit, which did not come to his knowledge until the day before he sailed on the return voyage, that he did not speak to Forrestier on the subject. If he had, the difficulty would probably have vanished; or at least, a full explanation could have been made. The supercargo seems to have acted under a strange delusion, that Barrell was a partner in the house. This was an entire mistake.

The next point in the case, (supposing the case to be otherwise with the plaintiff,) is, whether there has been any negligence on the part of Forrestier in not making a demand of Johannis at the maturity of the note, or subsequently in not collecting it from him if then unpaid. It does not appear exactly when Johannis failed. He was in good credit, when the sale was made, (in November, 1830,) and his failure must have been before September, 1831; for he then absconded, the note having become due in the preceding May. The case is left imperfect in this respect. If the note might have been paid, or secured in May, and Johannis was not then insolvent, and the money has been lost by the negligence of Forrestier

Forrestier v. Bordman.

in not demanding payment or getting security, then he is not entitled to recover. But if Johannis was then insolvent, and unable to pay the note, I do not know, that there was any absolute obligation on Forrestier to institute a suit against Johannis for the recovery of the amount of the note. He was bound to exercise a sound discretion in this respect; and ought not to sue, or put the owner to expense, unless he had some reasonable ground to believe, that a suit would be productive of benefit to the owner.

Then was Forrestier guilty of negligence in not giving earlier notice of his claim to the defendant, and of the insolvency of Johannis? Undoubtedly the notice ought to be given within a reasonable time. And if the defendant has suffered any damage or loss by its not being given within a reasonable time, the plaintiff must bear such loss or damage, to be deducted pro tanto from his claim. The letter containing the notice was not sent until the 22d of December, 1832, and it reached Boston about May, 1833. Was there any change of circumstances of Johannis between May, 1831, and December, 1832, from which the defendant has suffered any injury or loss by the delay? The jury must decide this point upon the whole evidence.

Upon the whole, the case is submitted to the jury upon all these points; and they will apply the facts accordingly. Verdict for plaintiff.

CIRCUIT COURT OF THE UNITED STATES.

Fall Circuit.

RHODE ISLAND, NOVEMBER TERM, 1839, AT PROVIDENCE.

BEFORE {Hon. JOHN PITMAN, District Judge.

Hon. JOSEPH STORY, Associate Justice of the Supreme Court.

JEREMIAH CARPENTER

v.

THE AMERICAN INSURANCE COMPANY.

A misrepresentation of a material fact, whether it be made through mistake or design, avoids a policy of insurance underwritten on the faith thereof. The knowledge and consent of the principal is not necessary to make such a misrepresentation by an agent fatal to the policy.

THIS was an action of assumpsit on a policy of insurance upon the Glenco Factory and machinery, underwritten by the American Insurance Company at Providence, on the faith of certain representations contained in letters written by Samuel G. Wheeler to the Insurance Company. At the time that the policy was underwritten, he and his brother Henry M. Wheeler were proprietors of the factory and machinery under the copartnership name of Henry M. Wheeler & Co. The policy bore date on the 12th of December, 1836, and was as follows :