Clement's Ex'rs v. Dickey

| U.S. Circuit Court for the District of Southern New York | Apr 15, 1825

THOMPSON, Circuit Justice.

The main question in this case relates to the authority •of Captain Allyn to draw the bills, which form the principal subject of litigation in this cause. It is objected, however, preliminarily, that Captain Allyn, who was admitted as a witness, was incompetent on the ground of interest; the bills appearing on their face to have been drawn by him on his own account, and not as agent of the defendant. This objection however is not tenable. For admitting Captain Allyn’s personal responsibility upon the bills, he was completely discharged therefrom by the release given to him previous to his examination. This release not only embraced his liability on the bills of exchange, but extended to all matters touching this suit. And besides, if he by exceeding his instructions had thrown on the defendant a loss, he would be responsible over to him. His interest was, therefore, against the party calling him; as by exonerating Dickey he would screen himself from any responsibility over to his principal.

This objection being out of the way, 1 proceed to examine the point whether Captain Allyn had authority to draw the bills in question. It has not been contended that the character of master of the ship would confer upon him such authority for the purpose for which the bills were drawn. It must, therefore, arise entirely from his letter of instructions, if it existed at all. And the opinion I entertained upon the trial, that no such authority is to be found in his instructions, is strengthened and confirmed. by farther reflection and a more attentive examination of the question. He was a special agent, and bound to pursue strictly the orders of his principal, where no latitude of discretion was left to him. We must, therefore, look to these instructions only to ascertain his authority on this subject. From their general scope and object it is fairly to be inferred that the defendant intended to provide funds to purchase a full return cargo for his ship. But he chose to point out the way in which these funds were to be procured, and his agent had no authority to depart from his instructions. Captain Allyn, on the outward voyage from New York, went consigned to Parish, Agie & Co. of Antwerp, and was to receive their instructions as to its farther prosecution; and in case it should be round the Cape of Good Hope, they were to furnish him with fifty-five or sixty thousand Spanish dollars, and an effective letter of credit to enable him to pass bills from the port of lading of the return cargo on Holland and London to the amount of five thousand pounds sterling. Parish, Agie & Co. on the arrival of the ship at Antwerp, determined to send her round the Cape, and accordingly furnished Captain Allyn with fifty-five thousand Spanish dollars, and procured for him a letter of credit from Thom"as Wilson & Co. of London, for five thousand pounds sterling. The defendant, however, to guard against a deficiency of funds, adds,in his instructions, the following clause: “Wherever you load, I wish it eventually to be a full cargo, and if the specie and credit you carry should fall short, you can take on freight, or extend your drawing; and. if needful, give security by bill of lading on so much of the shipment as your extra credit pays for.” The captain, at Batavia, where he purchased a return cargo of coffee and sugar, finding the funds with which he had been provided insufficient to purchase a full cargo, drew the bills in question on Parish, Agie & Co. And whether he had authority so to do, depends on the clause in his instructions above cited.

When these instructions were made out, it was unknown to the defendant on whom the captain would have authority to draw for the five thousand pounds expressly provided for. That was to be left to Parish, Agie & Co. who procured the engagement of Thomas Wilson & Co. of London, to accept Captain Allyn's draft for that amount. And the contingent provision for further drafts in case of necessity, has reference to the first drawing. This is not only the literal interpretation of the language made use of, but the fair construction of what was the understanding and intention of the defendant. The word “extend” is relative in its application, and refers to something already begun, and implies a continuation of the same act A power to extend or continue an act or piece of business, cannot authorize a totally distinct transaction. Can an authority to draw on A for a certain sum, with a contingent power to extend such drawing, by any possibility confer the right of drawing on B for such further sum ? Suppose the letter of instructions had expressly directed the draft for the five thousand pounds sterling to be made on Thomas Wilson & Co. of London: Can there be a doubt, but that the authority to extend the drawing would be limited to drafts on the same house? And if so, what difference can it make whether the house of Thomas Wilson & Co. was designated by the defendant himself, or by Parish, Agie & Co. by his authority? As soon as this designation was made known to Captain Allyn, it was precisely the same as if inserted in his original instructions; and his extended drawing was therefore restricted to the house of Thomas Wilson & Co. I can discover no more authority from the letter of instructions to draw on Parish, Agie & Co. of Antwerp, than on any other house in Holland or London. Captain Allyn no doubt acted in good faith, and supposed his drafts on Parish, Agie & Co. would be accepted, as the return cargo was to be consigned to that house. But it will be recollected that this house furnished the funds to purchase the return cargo; and the case discloses no evidence of the state of accounts between the defendant and Parish, Agie & Co. or the indemnity which the latter had for such large advances. And besides, they could not with propriety have accepted these bills, with a view of looking over to the defendant for reimbursement; for there can be no doubt that Captain Allyn’s instructions were made known to them, not only because he was directed by the defendant to communicate his orders to that house, but the agency they were to have in projecting the voyage, made such a communication necessary and proper. This house then knowing the authority given to Captain Allyn to extend his drawing, and knowing that the first draft for the five thousand pounds was to be upon Thomas Wilson & Co. must have known that Captain Allyn had no authority to draw on them; and, of course, that Dickey could not be made responsible for such drafts. Nor could they have reasonably calculated upon indemnity from that part of the cargo purchased with these bills; for, although by the defendant’s instructions the return cargo purchased with the funds taken out by Captain Allyn, was to come consigned to them, yet they knew from his instructions that he had authority to give security by bill of lading, on so much of the cargo as was paid for, by the extra credit. Nor could Clement have had any just grounds to suppose these bills would have been accepted. He was fully apprised of Captain Allyn’s instructions, and was bound to know their legal import, and of course on whom he had authority to draw; and the precaution he observed, by taking security on the cargo, shows that he did not place implicit reliance on the bills themselves.

The right of the plaintiffs, therefore, to recover upon these drafts, as bills of exchange, cannot, I think, be sustained. And this is conformable to the real justice of the case, as it will put at rest all claim for damages, by reason of the bills having been protested, which I should consider at least a hard case, if under any circumstances I felt myself bound to allow it. But although the action cannot be sustained upon the bills of exchange, yet I think the defendant is answerable, as for goods sold and delivered, for the whole of the cargo purchased by Captain Allyn of the plaintiff’s testator. Believing, as I think I am fully warranted in doing, that Captain Allyn acted in good faith, and with a view to promote the interest of his principal, his instructions ought to receive a liberal construction, where there is any latitude of discretion given. In a voyage so distant as the one in question, it is impossible to foresee and provide for every event, and some discretion must almost necessarily be left to the agent who is to have the management. In the present case we find in Captain Allyn’s instructions these clauses: “After leaving Antwerp, the care and management of the voyage will be 'reposed in you.” — “Wherever you load, I wish it eventually to be a full cargo, and if the specie and credit you carry should fall short, you can take on freight, or extend your drawing, and, if needful, give security by bill of lading on so much of the shipment as your extra credit pays for.” It is evident from these parts of the instructions, it was the wish and intention of the defendant that at all events the ship should return with a full cargo. And Captain Allyn had authority to purchase it, and give the security he did by bill of lading. An account must therefore be stated between the parties, as for goods sold and delivered by the plaintiff’s testator to defendant, to the full amount of the cargo; crediting the defendant with the moneys paid at Batavia, and the proceeds of seven hundred piculs of coffee, deducting therefrom the sum paid for insurance, and rejecting all the other charges in the account of Samuel Williams.

Upon the trial I thought the insurance ought not to be allowed; but, upon further reflection, I am inclined to allow it. Captain Allyn, by his instructions, was authorized to give security on the shipment paid for by his extra credit; and to make this security effectual and safe, insurance was necessary. It was actually paid on account of the plaintiff’s testator. And the case fully warrants the conclusion, that no insurance was effected by the defendant that would have covered this part of the cargo. The purchase of the cargo was entire, and laying the bills out of the question, as I have done, there is no rule or principle by which a distinction can be made as to price between that part paid for at Batavia and the other part of the cargo. The sale was undoubtedly a very advantageous one for Captain Clement. Captain Allyn was averse to taking any more than he could pay for with the funds he had, but Captain Clement insisted on his taking the whole. The bills being out of the question, we must look to what Captain Allyn did, which was authorized by his instructions. He gave security on a part of the cargo, as he had a right to do, by assigning to the order of Captain Clement seven hundred piculs of coffee, which went free of freight, and out of the proceeds of this coffee he had a right to pay himself for the balance; as this coffee was not charged with freight or insurance, there was every reason to conclude it would be amply sufficient to pay the balance due Captain Clement.

Under these circumstances, I think it would not be .iust to charge the defendant with interest before the arrival of the vessel at Antwerp. The account must therefore be made up as upon an entire purchase, crediting what was paid at Batavia; the balance payable out of the proceeds of the seven hundred piculs of coffee, which came consigned to Clement’s order. That not being sufficient, interest must be allowed on such balance from the time it was ascertained at 5 per cent.; balance payable in London, as the whole transaction, as appears evidently to have been the understanding, was to be wound up there.

The account must be stated on the principles above laid down, and judgment entered for the balance.