99 N.Y.S. 1030 | N.Y. App. Div. | 1906
Lead Opinion
The plaintiff sued upon two causes of action ; the first to recover against the defendant Helen Davies Lanpher as an undisclosed principal in a transaction of a loan of money made by the plaintiff through the agency of Charles Davies Tainter, the allegation of the complaint being that the defendant Lanpher, through her duly appointed agent, solicited from the plaintiff a loan ; that such agent did not disclose that he was then and there acting as the agent of the defendant Lanpher, or that he solicited the loan as such agent, but that, on the contrary, he applied for the loan as though the same were for himself and upon his own credit, and that the plaintiff was not aware that he was acting as an agent for his undisclosed principal, and that the plaintiff believed that he solicited the loan
At the commencement of the trial a motion was made by the defendant Lanpher to compel the plaintiff to elect between the causes of action ; the motion was overruled and an exception was taken, and it is now' urged that the court erred in denying that motion. It is unnecessary to pass upon that question in the view we take of the case. It is apparent from the evidence that the note sued upon was given at the time and as part of the transaction out of which the first cause of action arose, and the facts connected with that transaction are the following: Charles Davies Tainter, a son of the defendant Lanpher, applied to Mrs. Brown, the plaintiff, for a loan of $ 1,000. He made the application on his own behalf, and the plaintiff declined to loan him the money on his own responsibility, but agreed to do so if his mother, the defendant Lanpher, would indorse his note for the amount of the loan. Thereupon, according to his testimony, he reported that to his mother, who agreed to and did indorse a note, being the saíne note referred to in the second cause of action set forth in the complaint, and upon that note being delivered to the plaintiff she'loaned the sum of $1,000 to Charles Davies Tainter. In the negotiation
The rule respecting the liability of an undisclosed principal is very plain. Where there is in fact an agencj7, and that fact is concealed, the person dealing with the agent may, upon discovering the principal, proceed against the latter and not against the agent (Kayton v. Barnett, 116 N. Y. 625; Brown v. Reiman, 48 App. Div. 295); and the rule has been carried so far that, notwithstanding there is a written agreement by which the agent appears as a principal, the true relation may be established by parol evidence and the real principal made liable (Coleman v. First Nat. Bank of Elmira, 53 N. Y. 388); but all the cases in which the liability of an undisclosed principal has been enforced contain the feature that the person sought to be held liable was an unknown party to the transaction whose relationship to it was not discovered or disclosed until after it was completed. In the case before ns Mrs. Lanpher was not an undisclosed principal. She was an open, declared and active participant in the transaction. She came into it in the manner and form and relationship invited by the plaintiff herself; she became liable precisely as the plaintiff requested and required, and entered into direct contract relations with her. The plaintiff would not loan the money without Mrs. Lanpher becoming liable for it, and the loan 'was made directly upon the credit both of the son and the mother. Hone of the cases bearing upon the subject of an undisclosed principal has changed the relations established between parties by their direct personal contracts, of such a character as to exclude the idea of agency. In the transaction with the plaintiff Mrs. Lanpher acted for herself. The plaintiff was willing to loan the money only upon Mrs. Lanpher becoming liable to her for it. We think, therefore, the case does not present the feature of an undis
The judgment and order denying the motion for a new trial must, therefore, be reversed and a new trial ordered, with costs to appellant to abide the event.
Patterson and McLaughlin, JJ., concurred; O’Brien, P. J., and Houghton, J., dissented.
Dissenting Opinion
I do not think the plaintiff has lost her right to hold the defendant Lanpher as an unknown principal simply because she happened to name her as the party whom she wished to indorse the defendant Tainter’s note. The defendant Lanpher, by such indorsement, it is true, became identified with the transaction of the loan of the money, but only through her contingent liability as indorser. This indorsement did not disclose to the plaintiff that Lanpher was the principal and that Tainter was a mere agent concealing the name of his principal. If the defendant Lanpher was in fact the principal and the money was borrowed for her as the jury has found, notwithstanding the giving of the note, the plaintiff has a right to recover from her on her direct liability for borrowed money. If the plaintiff cannot recover on the theory that the agent borrowed for an undisclosed principal she cannot recover at all, because the note was not protested and the defendant Lanpher refused to renew it. The fact that an undisclosed principal has something to do with the transaction short of making himself absolutely liable, does not release him from liability for the acts of his agent. It was not the fact that the plaintiff knew or suspected that the-money was being borrowed for the mother that led her to ask for the mother’s indorsement.
The theory upon which one is precluded from asserting liability against an undisclosed principal who has participated in the transaction is that the undisclosed principal has made himself absolutely liable, as though his principalship had been disclosed.
The liability of an indorser is contingent upon presentation of the note and notice of dishonor. In that sense it is contingent, and in that sense it is not as absolute as a direct liability for borrowed money.
The motions were finally properly disposed of, and I think the judgment should be affirmed instead of reversed.
O’Bbien, P. J., concurred.
Judgment and order reversed, new trial ordered, costs to appellan, to abide event. Order filed.
