By this time, Sepenuk had already received an assignment of the $ 35,010 letter of credit, upon which he ultimately collected. Unlike the circumstances of the first shipment, the shipping documents in the second instance were prepared and submitted by Intra-Mar Shipping Co., the forwarding agent, acting on the request of the Jayess defendants. The only documents prepared by Jayess were the Lusitania Export Agency invoices, and its own.
As a result of legal difficulties by reason of the Portuguese bank's refusal to honor the letter of credit, Jayess had to put it in the hands of an attorney, who did collect thereon, and paid to Jayess $ 34,575.91 (the difference between the amount received and the face amount of the letter of credit, being the cost of collection). There was due to Jayess $ 32,624.45 for the materials delivered, at the price they had quoted, but the difference was not turned over to Marques, as was done on the first order, because Jayess paid Intra-Mar Shipping Co. respective payments of $ 1,218.53 and $ 1,053.88, and also $ 685.67 for insurance.
In September of the same year, Marques went to Portugal, seeking to adjust plaintiffs' claims upon the alleged quality defects of the merchandise, and received from the plaintiffs an offer of compromise upon a reduction in cost to them of $ 4,000. This offer was communicated to the Jayess defendants by Marques, but was rejected.
While the bales of metal were being prepared for shipment, Marques watched at least part of the process, apparently to ensure that what was shipped was in conformity with what he had ordered. Many bales which went to make up the second (60 ton) order were sent directly from the suppliers of Jayess to the dock. However, the original complaint was directed to the first 15 ton shipment, all of which was baled and packed in the yard of J. Sepenuk & Sons. The export licenses for all shipments were obtained by Marques.
Plaintiffs base their asserted right to the relief which they seek against the Jayess defendants upon two alternative theories. First, they say that Marques was acting as agent during the period of negotiations for sale, for an undisclosed principal, -- namely, Jayess. Implicit in, if not the essential element of any definition of agency, is an authorization by one to another to act on his behalf. Jayess contracted with Marques at arm's length. Each dealt with the other as a principal. The record is devoid of proof of any authorization to Marques by Jayess to act on its behalf or for its account. Equally clear, from the evidence is that the plaintiffs dealt with Marques as a principal who promised to provide certain merchandise at stated prices, which fact excludes any conclusion of brokerage. A 'broker' is one whose duty is to bring parties together and he is, in effect, a go-between whose responsibility it is to effect agreement between the parties. Thomas v. Commissioner of Internal Revenue, 1958, 5 Cir., 254 F.2d 233. 'The true definition of a broker seems to be that he is an agent, employed to make bargains and contracts between other persons in matters of trade, commerce, or navigation * * *. Properly speaking, a broker is a mere negotiator between the other parties, and he never acts in his own name, but in the names of those who employ him: * * * He is strictly therefore, a middle man, or intermediate negotiator between the parties.' Story on Agency, § 28. The second aspect of plaintiffs' theory, as set forth in the pretrial order, is disclosed by their contention that Jayess was the assignee of Marques' contract with the plaintiffs. As with the first theory, this contention also must fall for lack of proof. When negotiations were first initiated between Marques and Jayess, the former told this metal supplier that there was someone overseas who might want to buy some scrap metal. Thereafter, as we have seen, Marques arrived at a contract with the plaintiffs, in his own name, and at prices which were in excess of those quoted to him by Jayess. Then Marques went back to Jayess and consummated another contract.
Upon the trial Marques testified that upon receiving the respective orders for 15 and 60 tons, and the related letters of credit, he displaced these orders to Mack Sepenuk, who agreed to 'take care of everything.' I do not find that this statement alone, bearing in mind the other evidence adduced, constitutes a legal assignment. Marques asserts without hesitation that Jayess never knew the prices at which he was selling the scrap to the plaintiffs, although, of course, Jayess could ascertain these prices from its knowledge of the amounts of the letters of credit and the quantities ordered; the inference is clear that during the period in question, Marques considered it none of Jayess' business what price he was charging to the plaintiffs. The most that can be said is that Marques delegated his duty, within the definition of that expression as set forth in Vol. 4 Corbin on Contracts, 1951, § 866, so as to give plaintiffs rights as obligee beneficiaries under the Jayess contract. But it is clear from the complaint and the nature of the action, that the suit in question is based upon the theory of warranty. Buying goods known in the trade as 'light copper' constitutes a sale by description within the definition of the Uniform Sales Act (subsequently replaced by the Uniform Commercial Code, N.J.S.A. § 12A:1-101 et seq., but not here applicable) which gives rise to an implied warranty that the goods will conform to those ordered. N.J.S.A. 46:30-20. It is well-established that in such suits it is necessary for the plaintiff to prove privity of contract with the defendant, which privity is lacking in this case. There are exceptions to the privity doctrine, notable among which is that recently established by the New Jersey Supreme Court in Henningsen v. Bloomfield Motors, Inc., 1960, 32 N.J. 358, 161 A.2d 69, 75 A.L.R.2d 1, where the Court allowed the wife of a purchaser of a Plymouth automobile to recover damages for her personal injuries, sustained while driving the car, from the automobile manufacturer, upon the doctrine of implied warranty, despite the absence of contractual privity. The ratio decidendi, at least in part, is disclosed in the Court's stated awareness of the changes in marketing techniques in today's society, where sales are no longer made face-to-face, but rather through intermediaries. Even so, the Court limited its decision to sales of commodities presenting a risk of injury to life or limb; leaving unmodified the general common law rule of contracts that only those persons who are parties to a bargain can sue for breach of it. The opinion cites numerous other cases, most of them involving food or drugs, where the general rule has been abrogated. In all of these cases the particular fact patterns presented are distinguishable from the situation in the case at bar. I do not find that any necessity has been shown justifying the abrogation of the requirement of privity as a condition precedent to the right to recover in this case. The Jayess defendants made no representations to the plaintiffs respecting the quality of or advertised their merchandise; nor, indeed, had the Jayess defendants any knowledge of the identity of the plaintiffs, other than the address which was provided for shipment of the merchandise. Accordingly, count 1 of the complaint must fall.
Counts 2 and 3 both sound in fraud; the latter also alleging a conspiracy to commit the same between Marques and the Jayess defendants. Essential elements of fraud are misrepresentation by the defendant of a material fact, made with intent to deceive and reliance thereon by the plaintiffs to their detriment. The evidence before me is totally lacking in any basis for inference that Jayess made any representations with intent to deceive the plaintiffs, or that Marques and Jayess conspired to defraud the plaintiffs. The complaint is dismissed as to the defendants Jayess Corp., Sepenuk & Sons Corp., and Mack Sepenuk, with costs.
The foregoing shall constitute my findings of fact and conclusions of law in accordance with F.R.Civ.P. 52(a). Let an order be submitted.
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