37 F. 49 | U.S. Circuit Court for the District of Southern New York | 1888
The libel sets forth two causes of action for supplies purchased by one Gibson. The district court decreed in favor of the libelant upon the first cause of action, and dismissed the libel as to the other. The respondent in the court below is the appellant here, but the libelant, although he has not appealed from the part of the decree by which the libel as to the second cause of action was dismissed, cites the case of Irvine v. The Hesper, 122 U. S. 256, 7 Sup. Ct. Rep. 1177, and insists that he is entitled to urge that this court should decree in his favor as to that cause of action. The facts which appear in evidence are these: During the period in which the supplies were purchased, one Gibson, who was the owner, and was managing certain canal-boats of his own, was employed by the appellant, to manage certain canal-boats for the latter. Gibson was to obtain employment for the boats, and return the net
As to the first cause of action no question is made by the appellant that it is not of admiralty cognizance, but he insists that he is not liable as a principal for the supplies sold, to his agent by the libel-ant, under the circumstances of the case. The general rule is familiar that, when goods are bought by an agent, who does not at the time disclose that he is acting as agent, the seller, although he has relied solely upon the agent’s credit, may, upon discovering the principal, resort to the latter for payment. But the rule which allows the seller to have recourse against an undisclosed principal is subject to the qualification stated by Lord Mansfield in Railton v. Hodgson, 4 Taunt. 576, and by Tenterden, C. J., and Bayley, J., in Thomson v. Davenport, 9 Barn. & C. 78. As stated by Mr. Justice Bayley, it is “that the principal shall not be prejudiced by being made personally liable if the justice of the case is that he should not be personally liable. If the principal has paid the agent, or if the state of accounts between the agent here and the principal would make it unjust that the seller should call on the principal, the- fact of payment or such a state of accounts would be an answer to
Very different considerations govern the case in which an agent who assumes to represent an undisclosed principal buys of a seller upon credit, and one in which the agent assumes to be acting for himself, and the seller deals with him, and gives him exclusive credit, supposing him to be the only principal. In the first, if the agent has authority, express or implied, to buy upon credit for the principal, or ostensible authority to do so, upon which the seller relies, then, by the familiar rules of law, the contract is the contract of the principal, and is none the less so because the name of the principal does not happen to have been disclosed. The principal is bound by the acts of his agent within the scope of his real or apparent authority; and the seller understands that, even though he may hold the agent personally responsible, he may also resort to the undisclosed principal. But in the other, as the seller does not rely upon any ostensible authority of the one with whom he contracts to represent a third person, ho can only resort to the third person as principal, and charge him as such, when the purchase is made by one having lawful authority to bind the third person. It is immaterial, in such a case, whether the contract is made by an agent who is employed, in a continuous employment or in a single transaction, by a principal, or whether he is one who may be deemed a general, instead of a special agent. “When the agency is not held out by the principal by any acts or declarations or implications to be general in regard to the particular act or business, it must from necessity be construed according to its real nature and extent; and the other party must act at his own peril, and is bound to inquire into the nature and extent of the authority actually conferred. In such a case there is no ground to contend that the principal ought to be bound by the acts of the agent beyond what he has apparently authorized, because he has not misled the confidence of the other party who has dealt with the agent.” Story, Ag. § 133. It is therefore difficult to understand how, as an original proposition, it could be reasonably maintained that there is any liability on the' part of one who has employed another to manage his interests in a business, or series of transactions, in which, as an incident, purchases of goods are to be made, has given him instructions not to purchase on credit, and has supplied him with funds to purchase for cash, to a seller who. has sold to the person employed upon credit, and dealt with him as the only principal. Taft v. Baker, 100 Mass. 68. Of co.urse he would be liable, and the instructions not to buy on credit'Avould go for nothing, if he did not supply the agent with funds to pay for the necessary goods, because in that case the agent would have implied authority to buy them on credit. So, also, in a case which may be supposed, where a principal knows, or ought to know, that the agent is buying on credit in his own name, yet the principal takes all the income of the business without making any provision for payment to those who. have trusted the agent, the principal would
“ Where the purchase lias been made by the agent upon credit authorized by the principal, but without disclosing his name, and payment is subsequently made by the principal to the agent in good faith before the agency is disclosed to the seller, then the principal would not be liable.”
According to these authorities, if it should be conceded that the facts in the present case warrant the inference that the appellant gave Gibson authority to buy either upon his own credit or upon the credit of the appellant, the libelant cannot recover. It certainly is not material that the appellant did not pay Gibson, or make any settlement with him, on account of the libelant’s demands specifically. It is enough that he did settle with Gibson for, and allowed him to retain in liis hands sufficient moneys to pay, all outstanding liabilities contracted by him for the appellant’s benefit, including the demands of the libelant. At the time of the last settlement the appellant had paid the libelant’s demands and all outstanding liabilities contracted by Gibson as between Gibson and himself, and this was before the libelant knew any principal in the purchases other than Gibson himself.
As respects the second cause of action, the case may be briefly disposed of without considering the question whether the libelant can be heard to urge that the decree from -which he has not appealed ought to be reversed. The transaction was merely a loan from libelant to Gibson. Whether the appellant is liable as upon a loan made by his agent or not, his obligation is in no sense a maritime one, and cannot be enforced in a court oí admiralty. The libelant did not, by paying the notes to Kelly, and receiving Gibson’s notes for the amount, succeed to any rights which Kelly may have had to enforce a claim for the supplies. Tire libel is dismissed, with the costs of this court and of the district court.