Brown v. Bankers & Brokers' Telegraph Co.

| Md. | Jan 12, 1869

NelsoN, J.,

delivered the opinion of the Court.

This is an action of indebitatus assumpsit for work and labor done and materials furnished. The material facts are, that the plaintiff was employed by H. H. Wainwright, the superintendent and engineer of the defendant, having authority to make such contract, to supply materials, and do the carpenter’s work in and about the offices of the defendant. Whilst the work was in progress, the agent of the plaintiff called on Wainwright for an advance of money on account; Wainwright handed said agent his check on the Banking house of Thomas & Co., in the city of Baltimore, for $200, and took from said agent his receipt; that check was promptly paid upon presentation. Afterwards, and when the work was completed, or nearly so, the agent of the plaintiff again called on Wainwright for money on account;, this call was pn the 3d day of July, 1865, Wainwright gave him his own check upon the same banking house for $700, post dated the 8th of July, 1865, for which, the agent of plaintiff gave to him the following receipt:

Office General Superintendent of the BANKERS AND BROKERS’ TELEGRAPH Co.

. Baltimore, July 3d, 1865.

Received from IT. H. Wainwright, Sup’t, seven hundred dollars an account of carpenter’s work, painting, &c., at office No. 132 Baltimore street.

Received,

Elias Brown,

per G. C. B.

At the time the cheek was handed to the plaintiff’s agent, Wainwright informed him there was not at that time money in the bank to pay it, but that the treasurer of the defendant would be in Baltimore in a few days, and would furnish him, Wainwright, with funds to meet it. The agent testifies, that he accepted the check and gave his receipt for it on the faith of this statement.

It is further in proofj by the witness Henry Janes, that in July and August, 1865, he was the treasurer of the defendant, and the receipt given by the plaintiff to Wainwright for $700 came in to him as a voucher in the defendant’s account, on the 20th day of July, 1865; that the course of dealing with Wainwright by defendant was, the treasurer of the defendant charged Wainwright with the money paid him, and credited him with the vouchers for its disbursement as they were brought in by Wainwright. On the 14th day of July, 1865, Wainwright drew on the treasurer of the defendant in favor of Thomas & Co., Bankers, for $3,000, but he being at that time largely in the defendant’s debt, it withheld payment of the draft until Wainwright, on the 20th of July, 1865, brought in a number of vouchers, including the receipt of the plaintiff for the $700, when the draft to Thomas & Co. was paid, but said draft would not have been paid but for Wainwright’s bringing in a satisfactory amount of vouchers.

When Wainwright left the service of the defendant he was largely in its debt, and so continued until the l'2th day of October, 1865, when his account with the defendant was finally closed on the defendant’s books, by crediting him with vouchers brought in on that day; no money was received from him.

On these facts the defendant contends the plaintiff is not entitled to recover.

The principle of law applicable to this class of cases, is very clearly laid down by Judge Story, in his Commentaries on the Law of Agency. In section 433, he says: “ if a creditor of the principal settles with the agent, and takes a note or other security from the latter, for the amount due by the principal, although, as between the parties, it is intended only as a conditional payment; yet, if the creditor gives a receipt, as if the money were received, or the security were an absolute payment, so that the agent is thereby enabled to settle, and does settle with the principal, as if the debt had been actually discharged, and the principal would otherwise be prejudiced, the 'debt will be deemed, as to the latter, ‘ absolutely discharged.” So the law has been adjudged to be, by Lord ElleNBOROUGH, in Wyatt vs. The Marquis of Hertford, in 3 East’s Reports, 147, where his Lordship says: “ if it had appeared that the defendant had in the interval inspected the steward’s accounts, and had in any manner dealt differently with him on the supposition that this demand had been satisfied as the receipt imported, no doubt the defendant' would have been discharged.” The following authorities fully sustain the principle. Muldon vs. Whitlock, 1 Cowen, 290; Heald and others vs. Kenworthy, 10 Exchequer, 739; Macfarlane vs. Giannacopulo, 3 Hurl. & Norm., 859.

The question is, has the defendant by this proof brought its case within the principle? The proof shows, that the plaintiff did settle with the agent of the defendant, and did give him a receipt as if the money were actually received by him, and did thereby enable the agent to settle with the defendant, and the agent did settle with the defendant, as if the debt had been actually discharged, and the defendant was induced by the agent’s production of the plaintiff’s receipt with other vouchers, to pay a draft of its agent to Thomas & Co., which he would not have paid but for the production of said receipt with other vouchers, Squaring this proof with the requirements of the law as given by the authorities referred to, we think the defendant has clearly shown that its case is within the principle. It is contended, however, on the part of the plaintiff, that he is entitled to recover, because he acted in good faith and with due diligence. That the plaintiff may have acted with good faith, we have no right to question; but that he acted with diligence, we are not prepared to admit. It is true he presented the check at the bank on the day it fell due, and was told that Wainwright had no funds there to pay it. He presented it a second time, and received the same answer; this was enough to arouse his diligence and his suspicions of Wainwright’s integrity, and he should have sought until he found the proper officer of the defendant and made known to him the facts; but he contents himself with calling, not long afterwards, at Janes’ counting-room, and being informed by a clerk that Mr. Janes was out of town, he left without saying one word or making any inquiry.

He called a second time at Janes’ counting-room, and was again informed that Mr. Janes was out of town; on this occasion he was asked by the clerk, whether he wished to see Mr. Janes particularly, to which he answered, yes, about business of the Telegraph Company, and said nothing more. The clerk’s question had given him an opportunity for en-quiry, and we make no doubt, if he had mentioned the circumstances of his case to the clerk, he would have been referred to Mr. Hyde, the then Acting Treasurer of the defendant, and his money would have been secured. He then goes to the office of the defendant, No. 132 Baltimore street, where he had been in the habit of seeing and dealing with "Wainwright, and leaves a message for Wainwright, with an employee of Wainwright, telling him that he had not been able to get the money for his check, and thus he leaves the-matter, until after the 20th of July, 1865, and after Wainwright had obtained a credit from the defendant for $700, on his receipt. We think the plaintiff has acted carelessly, and that there is nothing he has done, from which it can be inferred, that the defendant had notice at, or before the settlement with Wainwright. Again, it is argued, that the defendant r'had actual notice, because notice to Wainwright was notice to the defendant,. and he, Wainwright, had actual knowledge of the whole transaction. He was the agent to make the contracts and payments, and was therefore the agent to receive notice.

(Decided 12th January, 1869.)

To this proposition we cannot assent. To negative the proposition, it might be sufficient to say, that not one of the Judges in the cases referred to above, even referred to such a proposition; nor does Judge Story, in his very full statement of the rule governing such cases, intimate it. Indeed if such were the law, no such case could ever have arisen, for in every case' the improper dealings with the agents, was the gist of enquiry, and in every case the agent .improperly dealt with, must have been, as Wainwright was, cognizant of all the facts. Such a doctrine might lead to the utter destruction of corporate bodies, whp act, as they must act, through agents, and would be extending constructive notice beyond all reasonable bounds to say, that the defendant must be held cognizant of facts, which circumstances show to have been intentionally concealed from it, by a fraudulent agent. We think the knowledge of Wainwright, under the circumstances in this case, was no notice, either actual or constructive to the defendant. The authorities referred to, we think sustain. proposition. From the views we have expressed, i^ ,'^qííosvs that there was no error in the rulings of the Court '<#Common Pleas upon the prayers, and the judgment will therefore be affirmed.

Judgment affirmed.