Kirkpatrick v. Stainer

22 Wend. 244 | Court for the Trial of Impeachments and Correction of Errors | 1839

Lead Opinion

After advisement, the following opinions were delivered :

By the Chancellor.

There is no question as to the general rule of law, where an agent or factor, who is duly authorised to contract, for his principal discloses the fact of his agency, and'-the name of the person for whom he is acting, that he is not personally liable if he makes the eon_ tract in such form as to be binding upon his principal, un less it satisfactorily appear that he also- intended to bind himself personally. The general rule on this subject is not questioned by the counsel-for the plaintiff in error : but he insists, in the first place, that the fact that Dutilh, Ticky & Co. were foreigners, residing at Trieste, in the Austrian German territories, takes the-case out of the general rule, and renders- the agent personally liable ; and secondly, that the form of the contract was not such as to make it binding upon the defendant’s foreign correspondents—or, at least, that it appears from the contract itself, that it was the understanding of the parties' that the defendant was to be personally liable for the performance thereof. / These two qnestions I-shall therefore proceed to consider r- for we have nothing to-do with the question of- fact, which has been decided by the referees;, whether an insurance ever was effect^ed at Trieste on the property in question.-

. If the referees w.ere wrong in supposing ,that the Italian, .certificates were not evidence of the fact, or that-1 they were mere fictions; as to which I express no opinion, the .supreme court had the power to send the case back- to the referees to review the decision, in the nature of a new trial but it could not authorize even that court to givq a judgment for the defendant in opposition to the- express finding of the-referees; and this court is not authorized to grant a new trial, .on the ground that the verdict or report is against evidence, although we may be of the opinion that the jury or the referees have come to a wrong conclusion upon a matter of fact—as the court upon a writ of error only reviews the decision of the court below upon questions of law, even upon a report of referees. The question before us is merely as to the personal liability of the defendant for the $832,50 loss which the plaintiff sustained in consequence of the non-fulfillment of the contract to insure his half of the cargo and the 10 percent profits, beyond the amount received by him through the house of Brown, Brothers & Co.

The chief justice was evidently -under a mistake in supposing that there was no distinction to be found in any books of authority between the liability of an agent who contracts for a foreign house, and one who contracts for a person residing in the same country where the contract is made, and where such agent is domiciled ; and he certainly would not, notwithstanding the multiplicity of cases which are brought before him for examination and decision, have fallen into that error or have overlooked the authorities on that point, if the cause bad been as fully argued in the court below as it has been here. The first case I have been able to iind on this subject, is that of Gonzales v. Sladen, referred to by Mr. Justice Buller, as decided at Guildhall in Trinity term, in the first year of Queen Anne, from sergeant Salkeld’s manuscript. Bull. N. P. 130. I refer to this case particularly as It was long before the revolution, and therefore possesses the same binding authority here as it did in the courts of England at the time of our separation from the mother country. The principle is also found in a book of high authority from the fact that it had the sanction of two distinguished English judges, and had passed to a third edition in 1775.; the edition of judge Buller, 1772, being but a republication of the original anonymous work of Mr. Justice Bathurst, afterwards Lord Chancellor Apsley, in 1767. See Bridg. Legal Bibliog. 230. Preface to Selw. N. P. 7. Lond ed. and Clark’s Bibliog. Legum, 292. The law as ¿here stated, and I presume in .the language of Judge Bathurst himself as this case of Gonzales v. Sladen is cited in support of it in the first edition by Judge Buller in 1772, is that where a factor to one beyond sea buys or sells goods for the person to whom he is a factor, an action will lie against or for him in his own name, for the credit will be presumed to be given to him in the first case; and in the last the promise will be presumed to be made to> him; and the rather so as it is so much for the benefit of trade. In the case of DeGaillon v. L’Aigle, 1 Bos. & Pul. 368, where the court upon demurrer had decided that the wife of an absentee was liable to be sued as a feme sole, and the sheriff upon the execution of the writ of inquiry against her had permitted the jury to find nominal damages only, upon proof that the defendant acted as the agent of her husband who resided abroad, in- the purchase of the goods, .the court of common pleas madé a rule absolute to set aside the inquisition, and Eyre, C. J. added, “ I am not aware that I have ever concurred in any decision in which it has been held, that if a person describing himself as an agent for another re? siding .abroad, enters into a contract here, he is not personal? ly liable on that contract.” In the case of Thomson v. Davenport, 9 Barn. & Cress. 87, which came before the court of king’s bench in England in 1829, the same principle is dis? tinctly stated and recognized as settled -law. Lord Tenter? den, C. J. in delivering his opinion in that Case in reference to the liability of an agent who had purchased goods for another, says, “There may be another case; and that is where a British merchant is buying goods for a foreigner. According to the universal understanding of merchants and of all persons in trade, the credit is then given to the Brit? ish buyer and not to the foreigner.” In a recent case in Scotland, the commercial law of which is substantially the same as that of England, and of this country, where the de? fendant insisted that the goods had been sold to him as the agent of a foreign house, Lord Pitmilly said, that inde? pendent of the defendants’ failure to prove the facts alleged, he as agent ordering goods for a person abroad necessarily rendered himself personally liable for the price. Burgess v. Buck & Co. 7 Shaw & Dunl. Sess. Ca. 824. Mr. Bell, the learned professor of law in the university of Edinburgh, in his illustrations of the principles of the law of Scotland from adjudged cases, refers to this case, and to the cqse of DeGaillon v. L’Aigle, decided by the court of common pleas jn England, as settling the principle that an agent ordering goods for a person abroad is personally liable, although he describes himself as agent. 1 Bell’s Illust. 153. This principle ,of charging the agent personally where he contracts for the benefit of a foreigner, although he would not have been liable if the contract had been made for a constituent residing.in the same country, is distinctly recognized by all the writers on -the law of agency both in -this country and in England to,whose works I -have had access. Smith says, “ It will seem also to be a rule that whenever the agent is an English, and the principal a foreign, merchant, the seller will be considered as having given credit to the ¡Englishman, and that he and not the foreigner is liable.” Smith’s Merc. Law, 2 Lond. ed. 104. And he considers the .same rule as applicable to other cases where there is no responsible employer against whom an available actiorf can -be brought, .except in the special case of a public officer .contracting .in his public capacity for the government. Id. 120. Paley, after stating that the agent is held to be personally liable where, there is no responsible person who ,can be sued as principal, or where the principal is unknown, says, “ Factors resident abroad are for the same reason .generally liable'in their own persons, for the credit is presumed to be given to them.” Paley on Agency, Exeter ed. 294. Livermore, our .countryman, in his learned work on the same subject, says, v There is a sound distinction between the case of a principal residing in -the country where the contract is made, and that of a principal residing abroad. 5n the latter case the factor may be sued because he is on -the spot, and his principal being abroad cannot be reached.” He refers to the two cases of Gonzales v. Sladen, and De Gaillon v. L’Aigle, as sustaining that distinction. 2 Liver. on Agency, 249. In addition to these authorities we have the opinion of Mr. Justice Story, in his recent valuable treatise on the law of agency, to which we were referred on the argument; and, as I have before had occasion to say, his opinion is of itself of very high authority upon a question of commercial law. Indeed I think I may say, without injustice to any one, that his judicial opinion upon a question of this kind would be entitled to more weight than that of any single judge who at the present time occupies a seat upon the bench either in this country or in Great Britain. After stating the reasons why the agent is held personally liable where he discloses the fact that he is purchasing as an agent, but without disclosing the name of his principal at the time of the purchase, this learned jurist says : “ It is partly upon this ground, and. partly upon the ground of general convenience and the usage of trade, .that the general rule obtains that agents or factors acting for merchants resident in a foreign country, are held personally liable upon all contracts made by them for their employers:; and this without any distinction whether they describe themselves in the contract as agents or not. In such cases the ordinary presumption not only is that credit -is given to the agents, but that it is exclusively given to them, to the exoneration of their employers. Still, however, this presumption is liable to be rebutted by proofs that credit was given to both principal and agent or to the principal only.” Story on Agency, 265, § 268.

Upon "a careful examination of the law on this subject, I have therefore arrived at the conclusion that there is-a well settled distinction between the personal liability of an agent who contracts for the benefit of a domestic principal, and one who contracts for a" principal who is domiciled in a foreign country. I do not think that by our commercial usage it is applicable to the case of a principal who is domiciled in another state of the union; as the interests of trade do not seem to require it. Besides, it does not appear to have been applied in England to the case of a principal residing in Scotland; although in the ease of Thomson v. Davenport, before referred to, Lord Ten» terden supposed it might have been a proper subject of in» jquiry for the jury, whether there was not a usage of trade at Liverpool to give the credit to the agent, where the principal resided in Scotland. So far as the -law is settled on the subject, however, if only applies to a- principal domiciled in a foreign country ; or, in the language of the common law, “ beyond the seas.” Dutilh, Ticky & Co. residing upon the borders of the Adriatic, the present case is'clearly within the rule as settled. In reference to the rrmnuscr'rot ca«e "r Hay v. Tucker and others, decided in the superior court of the city of New-York, it may be proper,to say, that if the distinction referred to by Judge Story, éxists, that case was wrongly decided ; as the agents in that case say “ we have stipulated in behalf of Robert Butler,” &c.

I see no difficulty in the form of the contract,- in this case, to bind the principals and to relieve the agent from personal liability, if they had not been domiciled abroad. It is well1 settled, that in a commercial contract, not under seal, no particular form of words is necessary to bind the principal. Where the principal is known to the other party,- and the contract is formally drawn up and signed by the parties, it should probably appear in some part of the' contract that the agent is acting for some person other than himselfas he wil} be personally.liable if he expressly contracts in his own name, without any reference to his character as agent,, either in his signature or in the body of the contract, although he was duly authorized to contract on behalf of his principal. The true rule upon the subject,. I apprehend to be this, that where it appears from a contract made by the agent for a domestic principal', that he was such agent, the presumption is that he meant to bind his principal only ; unless there is something in the contract from which it can be legally inferred, that he meant to bind himself solely, or both himself and his principal, for the performance of the contract. Ón the contrary, if the contract is made in behalf of his foreign correspondent, who is domiciled abroad, the legal presumption is, that the agent meant to hold himself personally liable for the performance of the contract, unless from the terms of the contract it appears that he meant to contract upon the credit of his foreign principal exclusively, for the agent in such a case may be personally liable on the contract, although the principal is also bound.

In .the case under consideration the contract is not drawn" up in due form and signed by both parties. It is drawn up in the form of a letter and an answer thereto, which is a very common mode of making contracts between merchants ; and as is frequently the case in making’ such bargains, where each party uses his own language to express his meaning, their letters,, if taken separately, might bear a different construction from what both would", if taken together. The only proper way in such a case, in giving a legal construction to the contract, is to take both letters together, without placing any particular reliance on either of them separately. It appears from the letters in this case that a verbal contract' had been made between the parties, and that the object .of this correspondence was to put it in writing. The plaintiff ’s letter is directed to Mr. E. Stainer, (the defendant,)-without describing him as agent. Apd no one from the' reading of that letter, would hesitate a moment in saying it was the intention of the plaintiff to give credit to Stainer alone. He says-: “The whole quantity is to be shipped on joint account. For the dne half which you take on your account, you are to' pay me cash; are to advance me five-sixths of the value at the price of five and three-quarter cents per pound', (that is on the other half.) On this you are to charge me interest at the rate of six per cent", per annum from the time the funds are remitted from Trieste to meet the draft's on London for the same; also, " the customary charge for the negotiation of drafts here; say one per cent, and .the brokerage in London. The coffee must be shipped a» soqn as possible for* Trieste, to the care of your friends, -Messrs. Dutilh, Ticky & Co., with orders" for immediate sales and prompt remittances,” &c. And in relation to the insurance, which is> the only subject of controversy here, he says : “ You will1 also take care that insurance be effected, either here or in/ Europe, on the "invoice amount,-with ten per cent, additional, for probable gains.” In the answer of the defendant,, written three days after, and signed with his own name “Ed. Stainer” only, he says: “In reply to your esteemed lines of the 27th, I consent to the different points respecting the projected shipment to my friends, Messrs. Dutilh,. Ticky & Co., in Trieste, of your 1499 bags of Rio coffee,” &c. And although he, in the next paragraph of the letter, shows that "it is to be shipped on the joint account of the plaintiff and Dutilh, Ticky & Co., he speaks in the first person throughout in reference to the payment of the money for fheir half of the advance of the five-sixths of the plaintiff’s share, without the least intimation that he does not mean to hold himself responsible for the fulfilment of the contract. And in relation to the insurance, he says: “ The insurance will be covered after your desire, with ten per cent, imaginary gain on the invoice cost, either here or in Europe, as I shall judge most convenient.” Taking both these letters together, therefore, and applying to this agreement the principle,- that the credit is presumed to be given to the agent who contracts for the benefit of a foreign merchant, instead of the merchant himself, unless there is something in the terms of the agreement to show that was not the understanding of the parties, I think- the defendant in error was personally liable for the fulfilment of his- contract with the plaintiff.

The receiving of the amount which was placed to the plaintiff’s credit with Brown, Brother & Go. was- not an election by the plaintiff to relinquish his claim upon the defendant, and to look to the persons by whom that remittance was made, as it was a part of the defendant’s original agreement that the money belonging to the plaintiff should be thus remitted to London for his use. And I have not been able to find any thing in the facts, as found by the referees, from which it could be inferred that the plaintiff had elected to look to Dutilh, Ticky & Co. as his debtors, or to relinquish his claim upon the party with whom the original contract was made.

For these reasons, I think the judgment of the supreme court should be reversed, and a judgment entered for the plaintiff, upon the report, for the balance as found due by the referees.

---

Concurrence Opinion

By Senator Yerplanck.

I concur with the supreme court in their understanding of this negotiation. Taking together the two letters of the parties on which the bargain was concluded, the defendant appears to have acted merely as the known agent of the house at Trieste, for and on account of whom he had made the advances, and to whom the goods were consigned. He contracted for the foreign house and in their name, but made no undertaking for himself. This evidence of the correspondence is supported and confirmed by collateral proof of the general belief and understanding among New-York merchants, that the defendant was in business only as the agent of the foreign house. In such dealings, it is settled that the principals are alone responsible, unless there be some special circumstance to fix the responsibility upon the agent personally. I do not think that there is any such circumstance in this case; although the fact of the defendant being an agent of a house abroad, added- to the authority of Judge Story, the reasons he assigns, and the unqualified language he uses as to the liabilities of factors purchasing for foreign merchants, occasioned at first some doubt in my mind. In his late valuable work on agency, Judge Story says, “ On the ground of general convenience and the usage of tráde, the general rule obtains, that agents or factors, acting for merchants resident in foreign countries, are held personally liable upon all contracts made by them for their employers; and this, without any distinction whether they describe themselves in the contract as agents or not. In such cases it is presumed not only that credit is given to such agents, but that it is exclusively given to them to the exoneration of their employers. Still the presumption is liable to be rebutted by proof, that the credit was tgiven to both principal and agent or to the principal alone.” Story on Agency, § 268. See also the reasons assigned in the preceding section, and in § 290. To the same effect a respectable recent English elementary writer speaks thus: “It seems that when a British agent contracts for a foreign principal, the agent is liable.. Smith on Mercantile Law, p. 78. Now, if this be also the doctrine of our own commercial law, it may well be doubted whether the language of the correspondence, though showing Stainer “ to describe himself in the contract as an agent,” is yet sufficient, even with the collateral evidence, (conclusive as the whole would be in the case of agent for a domestic principal,) to rebut such a positive legal presumption, and to prove that credit was given only to the Trieste house, so as to authorize the court to pronounce on the facts submitted to them by the referees, “ that the defendant was not personally liable upon the agreement.” But upon examining the several cases cited in support of this rule, I am satisfied that Judge Story lias stated the doctrine in too strong and unqualified terms, as if this presumption were a universal inference of law, applicable every where. I think, on the contrary, that this is a presumption founded altogether upon usage anil the particular course of trade, and arises only, when and where that usage is known or proved to exist; of course, then, that it is not an unvarying legal presumption, to be applied to any contract, mads any where, by a factor or agent representing a person or commercial house in some foreign country.

Doubtless there may be such a local usage or understanding controlling all contracts of this sort amongst us, as there is certainly in London, and probably all over England. But unless it be so firmly settled and generally known that it may be assumed without proof, like any other mercantile mode of business of common and public notoriety, such a usage must be shown before the consequent presumption of the agent’s liability and the principal’s exoneration can arise. I can find no judicial authority for considering this as a rule of general commercial law, independent of a particular course of trade, unless it be a very cautiously expressed dictum of Chief Justice Eyre, giving his own individual opinion on the point, after the case in which it had been raised had been decided by the court upon a very different ground. He then added : “1 am not aware that Í have ever concurred in any decision in which it has been held that if a person describing himself as an agent for another residing abroad, enters into a contract here, he is not personally liable on that contract.” DeGaillon v. L’Angle, 1 Bos. & Pull. 368. In the other cited cases the rule is placed on the ground I have stated. Thus, in Patterson v. Gundasequi, 15 East, 70, Judge Bailey says ; 66 There may be a particular course of dealing with respect to trade, in favor a foreign principal, that he shall not be liable in cases where a home principal would be liable—that would be a question for the jury.” So again, some years after, in Thomson v. Davenport, 9 Barn. & Cress. 78, Lord Tenderden argues thus: “ Where a British merchant is buying for a foreigner, according to the usual understanding of all per? sons in trade, the credit is given to the British buyer, not to the foreigner. In this case the buyers lived at Dumfries, and a question might have been raised for the consideration of the jury, whether in consequence of their living at Dum? fries, it may not have been understood among all persons at Liverpool, that the plaintiff had given credit to the agent alone, and not to persons living in a country not amenable to the jurisdiction of our courts.” Now, if this presumption rested not upon the known approved course of trade in the place, but upon a general principle of mercantile law', it is manifest that -there would be no propriety in leaving it to the jury to .consider whether it extended to principals living in Scotland or not; or what was the understanding amongst all .persons living at Liverpool.” Above all, Lord Tenterden decidedly recognizes “ the usual understanding of all persons in trade,” as in effect, the reason and author? ity for the presumption of credit being given to the British buyer, and not to the foreigner. The language of Judge Bayley, in the same case, is equally marked •: There may be a course of trade by which the seller will be confined to the agent who is buying. Generally speaking, that is the case where an agent here buys for a house abroad. There may also have been .evidence of a course of trade applica? ble to an agent acting for a firm resident in Scotland.” Here as late as 1829, this able and very experienced judge speaks of the usage on which the presumption is founded as a “ course of trade which may exist.” He considers that course of trade alone as “ confining the seller to the agent.” He does not say that this course .of trade holds universally with this effect: but “ that generally speaking, it is the case and he suggests that there may have been evidence before the jury of “ such a course of trade applicable to dealings with Scotland.” The language and reasoning of this case admit, I think, no other inference than that both these eminent judges (of the highest authority in all com? mercial law,) considered the legal presumption of liability of the agent of a foreign principal, as resting entirely upon the actual custom and understanding of trade ; that it does not apply universally as a matter of course, but arises only upon known and admitted usage, or upon the positive proof of some particular course of trade.

To these judicial opinions I add the authority of a late English legal writer, frequently quoted with high approbation by Judge Story, jLloyd, in his notes on Paley on ,Agency, thus mentions the rule, evidently with some doubt, -as to its extent, and referring it wholly to the usage of trade : •<e It seems, that by the usage of trade, if the principal be a foreigner, the credit is considered as having been given to the English broker, and that he -only,, and not the foreign buyer, will be liable. That question is, however, for a jury.” I therefore infer that the presumption is not one raised by legal reason, to be taken notice of, as of course, and applied to such contracts wherever made, but one of special usage, or of local understanding, entering into and thus controlling -all contracts unless excluded by express stipulation. If, however, the course of trade and of credit is now so fixed -and so universally recognized in England, as to have become a rule of presumptive evidence —a legal inference from known public usage, to be applied without special proof of its existence; still I cannot regard it as being necessarily a part of our own commercial law. It forms no part of the old common law of England, nor is it deduced from any settled doctrine or principle of that law, otherwise than as a rule of presumptive evidence of intention, growing out of positive and unvarying local commercial usage. The oldest trace of it before our revolution, which I have been able to find, -is in the first edition of Buller’s Nisi Prius, the work of a then young though learned lawyer, who there refers only to an older manuscript nisi prius case, tried in 'London, where the evidence of such a course of trade might probably have gone to the jury, or where, it may have been •admitted as a matter of notorious custom in London. I find no judicial notice of-it in the reports until 1797, when Chief Justice Eyre expressed his opinion on the point, as having never concurred in any previous decisions contradictory to this rule .; and that such contradictory decisions had been made, I think his -language intimates. The other cases are later, and from all of them I infer that this presumption, (if at length it has become a strict legal presumption, of which I am not satisfied,) has grown up in modern times from the peculiar character of the foreign trade of England. If this presumption be now the law of the English courts, without requiring evidence of usage in every case, it is founded upon admitted general custom and understanding ; but it is now law deduced from the doctrines of the old common law, or resting upon reasons of natural equity or universal public policy, extrinsic to the local usage of trade, and applicable alike at London and in New-York. If such were the .case, I should respect the decision of the able and learned men who adorn the English courts;' because their decisions carry with them the authority of learning and wisdom, arguing from principles and usages common to their country and our own. If-the judges of England have established this as the law of their tribunals, within the last few years, they have done so for reasons and upon former repeated evidence peculiar to the course of trade in England, and not of necessity applicable elsewhere. They have found a usage or course of business so universal, so familiar, as to form a part of every contract on foreign account without being expressed in words. On this, a legal presumption may have been at length raised, as of course. But if here, we have no such universal unvarying usage, nor any evidence in any particular case of a similar special course of trade, it follows that the legal presumption must fall to the ground.

Such a mercantile usage may naturally grow up here, either in the general course of trade, or in any particular branch of distant commerce ; and, whenever it becomes so known, or wherever it is proved to exist, it should certainly raise.the same presumption with us as in England. But it would be of the greatest public inconvenience to assume a general rule applicable to and exonerating every principal residing in another state, and so, (according to Lord Tenterden’s idea,) “ not amenable to the jurisdiction of our courts,” or even to principals not resident within the Uuited States. In the present state of business in our commercial metropolis, the rule is in fact contradictory to the understanding on which a vast number of such contracts are made. Besides, I cannot but think that as a mere rule of commercial policy, it would be hazardous to establish any general strong presumption that credit on sales or consignments is not given to well known foreign houses, or to merchants of Boston or New-Orleans, but merely to the transient and often irresponsible agent,, temporarily resident in this state. This would exonerate the foreign trader not only here, but, by the application of the doctrine of the lex loci contractus, it might also do so in the courts of his own domicil ; unless it could be expressly shewn' that the foreign principal was alone trusted, which it would commonly be difficult to do, in the face of a strong legal presumption to the contrary. Such a usage and the consequent presumption, might grow up in New-York with great public convenience as to trade with China or South America, and yet be absurd and injurious in respect to London pr Liverpool. It might even become general in the city of New-York, as to foreign trade, and yet be wholly inappropriate to the business of Buffalo of Oswego with other states of the Canadas. Until commercial convenience gives evidence to the contrary by express, universal and notorious usage, or unless where such usage can be specially proved to exist in some particular branch of business, it is safer and wiser to adhere to the general and ordinary law of agency, keeping the known principal responsible where the agent discloses his name and acts avowedly in his behalf; and leaving it to the discretion of the American trader to obtain the additional security of the factor or agent, or to give credit to him only, when he judges that to be the most for his own interest.

Ho usage or course of business analogous to that prevalent in England, being notorious or well established by former evidence as existing here, and no proof having been offered to the referees of any special or local usage, or common understanding, charging the agent alone, and not his foreign principal, for purchases or contracts made avowedly for such known principal, the case must be governed by the general law as to the contracts of a private agent, clothed with full authority and acting' openly in' behalf of his principal.

The judgment of the supreme court should, therefore, be affirmed.

On the question being- put, Shall' this'judgment be reversed? the members of the court divided as follows:

In the affirmative: The Chancellor and Senators Hull, H. A. Livingston, Paige, Spraker, Van Dyck—-6.

In the negative: The President" of the Senate, and Senators' Beardsley, Fox, Furman, HawRins, Hunt, Huntington, Jones, Maynard, Moseley, Nicholas, Peck, Powers; Skinner, Sterling, Verplanck, Wager, Works —18.

Whereupon the judgment" of the supreme court was ae-firmeb.