Imperial Valley Long Staple Cotton Growers Ass'n v. Davidson

California Court of Appeal Jul 18, 1922 No. Civ. No. 3532.Published

Before: Craig

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Holding. The court held that a factor who pledges or commingles a principal's goods without authorization, or delegates authority to independent brokers, commits conversion. Consequently, the factor is not entitled to recover advances made after the conversion occurred.

Issues

Whether a factor has the authority to pledge a principal's goods.
Whether a factor may commingle a principal's goods with those of others.
Whether a factor may delegate authority to independent brokers.
Whether the trial court erred in failing to make findings regarding alleged conversion.

Disposition. reversed

Quotations verified verbatim against the opinion

“The language of section 2368 of the Civil Code is not only unambiguous, but is clearly prohibitive against the factor pledging his principal’s property.”

“It appears also that plaintiff mixed or confused defendant’s cotton with that of others and pledged it in a mass along with such other cotton. The general rule is that a factor has no right to do this.”

“We conclude, therefore, that the plaintiff converted the property of the defendant.”

CRAIG, J.

The defendant, Davidson, delivered to the plaintiff as a factor 145 bales of cotton. As a part of the transaction the plaintiff advanced the sum of $18,406 to defendant. The trial court found that after receiving the cotton “the plaintiff Imperial Valley Long Staple Cotton Growers Association commingled and mixed the said 145 bales of cotton belonging to the defendant with other cot

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ton, not being the property of the defendant, P. J. Davidson, but being the property of other persons,” and that "prior to the shipment of said cotton by plaintiff for and on behalf of the said defendant, the said plaintiff hypothecated, mortgaged and pledged the same, to various and divers persons, for various and divers sums and amounts.” Thereafter the plaintiff shipped the cotton confused with that of other persons to other independent factors in Galveston, Texas, and New Orleans, Louisiana, who sold it for a total sum of $18,634.31. It appears that the plaintiff also paid out for freight, storage, insurance, and handling the cotton an amount found by the court to have been $9,078.94, which finding was probably intended to be for $978.94. Interest on the advances accrued in the sum of $381.19. October 10, 1918, plaintiff demanded payment from Davidson of $1,654.82, which was refused. This action was then instituted. The complaint states a cause of action for money advanced by plaintiff as a factor. The court rendered judgment for the plaintiff for $1,654.82, together with interest at the rate of six per cent per annum from October 10, 1918.

A factor has authority to insure (subd. 1, sec. 2368, Civ. Code), and he may collect for necessary expenses incurred in protecting or preserving the property as for storage, handling, freight, etc. (25 C. J. 382 and 389), and for interest on advancements made over cash received.

(Heins

Peine,

29 N. Y. Super. 420;

Howard

Behn and Foster,

27 Ga. 174.) But the answer alleges that the plaintiff converted the merchandise consigned to it. The common-law rule was well settled that the factor has no authority to pledge his principal’s goods

Imperial Valley Long Staple Cotton Growers Ass'n v. Davidson

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CRAIG, J.

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