| Md. | Jun 1, 1864
Lead Opinion
delivered the opinion of this Court:
This action was brought by the appellee to recover damages, for an alleged violation by the appellants of their contract to purchase two thousand barrels of flour. The contract is in writing made by the appellants with one John W. Bell. The appellee claims the right to sue, on the ground that ho was principal, and that Bell, in making the contract, acted as his agent.
The right of a principal to maintain an action on a written contract made by his agent in his own name, without disclosing the name of the principal, although formerly sometimes questioned, is now well settled. See Ford vs. Williams, 21 How., 287. Hubbert vs. Borden, 6 Wharton, 79. In this case this question was very fully considered "by the Supreme Court of Pennsylvania, in an able opinion delivered by Judge Kennedy.
It is also well settled, that to prove the agency in such case, parol evidence is admissible; such proof does not vary or contradict the writing, but merely establishes a separate collateral fact, namely the relation existing between the party contracting for bim, and for whose benefit the contract is made; or in other words, the authority under which the agent acts, out of which grow the rights and obligations of the principal under the contract.
In this case the first exception was taken by the defendants below to the evidence offered, for the purpose of proving that in making the contraes sued on, Bell acted as the agent of the plaintiff. This evidence consisted of the cor
The contract was made on the 31st of October 1855, for 1000 barrels Ohio super flour, and 1000 barrels Howard street flour, at f 9 per barrel, to be delivered at the option of the seller, from the 10th to the 20th of January following:
On the same day the following entry was made in Bell’s day-book by his clerk:
Sold O. & Lurman for B. Ford.
1000 Hd. St. ? in+ on t ’ m 1000 Ohio. \ 10 t0 20 Jan y» ^9-
On- the same day Bell wrote to the plaintiff the following letter:
Balto., Oct. 31, 1855.
Mr. Benj. Ford, D. Sir: — Your favor of yesterday covering acc. sales 352 bbls. flour. Our market not active as yesterday, moderate sales at $>9-.
I sold for you this morning and telegraphed you:
1000 Ohio, ) Sellers option at $9, 1000 How. st. J 10th to 20th Jan’y.
2000 How. st. at $9, all February.
4000
I could not sell for all January, but came as near it as I could. These are good sales you may depend. Your average is now a good one; should prices advance further, sell more at á higher price. This plan can’t fail to come out right. Eesp’y Jn. W. Bell.
The following letter was also offered in evidence:
New York, Nov. 1, 1855.
John W. Bell, Esq., Dr. Sir: — Yours of 31st ulto. at hand, and I see you have sold 2000 bbls. flour for Jan’y to 20th, and 2000 bbls. flour for Feby. Things are very quiet here to-day, all waiting for steamer; considerable selling at 12-|- on 8.87, and some on 9, for the steamer now due.
It is very hard to say how flour will work, receipts are
In addition to the above evidence the plaintiff proved, that he was a flour merchant in the City of New York, and that Bell was then extensively engaged in Baltimore as a flour merchant, and bought and sold flour both on his own account and on commission.
In the opinion of a majority of this Court the correspondence was competent and admissible evidence to prove that the contract was made by Bell for and on behalf of the plaintiff as his agent. There can be little doubt that the sale referred to in Bell’s letter of the 31st of October, is the same evidenced by the contract; although the defendants’ names are not mentioned, in the letter, the date, quantity, price and terms are the same. Nor can there be any doubt that the letter of the plaintiff is evidence not only of his ratification of the contract, but of Bell’s pre-existing authority and power to make it as his agent. ¡Supposing this correspondence to be in good faith, of which the jury was to judge, it would seem to be difficult to conceive oí stronger proof of agency. The objection that the defendants were no parties to that transaction, and ought not. to be bound, by it, has no force. Their rights and obligations under the contract, are in no manner changed or affected thereby„ The questions of agency, and the authority of the agent necessarily depend upon the agreement between, the agent and the principal, and may be evidenced by parol, or by writings entered into between them, and such proof it seems to'us is free from, all objection. It is true the agency may be proved by tbe agent himself, bo is a competent witness ex necessitate, or upon grounds of public policy; but it is not necessary to call him to the stand if the agency can bo proved aliunde.
The objection taken at the trial, and embraced in this exception, going to the whole evidence offered, it follows from the established rule of this Court that there was no error in overruling the objection, if a part of the evidence was admissible, although a portion of it may have been inadmissible. This rule would entitle the appellee to an affirmance on this exception, even if the entry from the day-book were held to be illegal testimony. With reference to that, however, a majority of the Court are of opinion that it was properly admitted in evidence as á part of the res gestee. 1 Greenleaf’s Ev., sec. 115. Of course the honesty and good faith of that entry, as well as of the correspondence, if they were denied, were proper questions for the jury.
Second exception. The questions presented by this exception were argued with great ingenuity and ability by the appellants' counsel, and are certainly not free from difficulty; but after the best consideration we have been able to give them, a majority of the Court are of opinion the ruling of the Superior Court was correct and ought to bo affirmed.
This exception was taken to the rejection of a mass of evidence offered by the defendants, a brief statement of which is necessary in order to show the questions involved in its decision. The plaintiff having proved that on the 19th of December 1855, Bell disappeared from his place of
The plaintiff then proved that, on the 16th of January 1856, in pursuance of the contract, he tendered to the defendants 1000 barrels of Ohio Super flour, and 1000 barrels of Howard street Super flour; but the defendants refused to receive it. The market price of flour on that day was $8 per barrel. The defendants then proved that on the 31st of December 1855, they purchased from Mr. Hincks 6000 barrels of the same kind of flour mentioned in the contract, deliverable in the ensuing January and February at $8.15 per barrel.
The defendants then proceeded to offer evidence, to the rejection of which this exception was taken, substantially as follows;
That the defendants wore shipping merchants largely engaged in purchasing flour for exportation to Europe to fill orders to them from abroad. That the existence of the Crimean war at that time had produced an extraordinary demand for American bread stuffs, which rendered it necessary to make contracts in many instances for flour to be
By the well established law of agency, the principal may maintain a suit upon a contract made for him by his agent, as well where he is not named or known to the other contracting party, as where the principal is disclosed by the contract. The effects of an agent’s contracting in his own name without disclosing the principal, are first, that he thereby makes himself personally answerable for the fulfillment of the contract; and secondly, that the principal cannot interpose and claim the benefit of the contract, without, giving to the other party, who has dealt with the agent as if he were the principal, the benefit of all set-offs and other equities existing against the agent. Story on Agency, sec. 420. “But subject to these rights and those of the agent,” says the learned author, in the section referred to, “the principal may generally sue upon such a contract, in the same manner, as if he had personally made it.”
This brings us to the inquiry, what were the rights of the defendants under their contract with. Bell — assuming as wo must do for the purposes oí’this exception, that they gave credit to him exclusively in making the contract ? The appellants’ counsel has argued, that when he proved insolvent and absconded, there was a virtual abandonment of the contract on his part; his performance of it being thereby rendered impossible, which authorized the vendees to treat it as rescinded. We have found no case going so far as to sustain this proposition, and we think the error of the learned counsel grows out of a misapprehension of the nature of the contract. The inability of a party to perform his contract by reason of insolvency, amounts to an abandonment or rescission of it, only when that inability exists at the time when the other party is entitled to cIct mand its performance. It is true that a vendor who has sold goods on time, giving credit to the vendee, may refuse to deliver them, if the vendee becomes insolvent before
A great many authorities were cited by the appellants’ counsel, to support his views on this part of the case; they have been examined, and without referring to them here particularly, we think the principles above stated are sound and not inconsistent with the authorities cited: and we conclude that the evidence offered by the defendants, and contained in this exception, was properly rejected, as irrelevant and incompetent testimony for either of the purposes mentioned.
Third Exception. In this exception, the defendants, in addition to the evidence contained in the second exception, offered to prove a usage among flour dealers in Baltimore,
If one party fail to do a- collateral act, which the other has a right to demand, it will not follow as a legal consequence that the contract is for that reason void, or may bo wholly rescinded. That would be the effect of a failure to comply with the contract itself, which in this case was to deliver 2000 barrels of flour at a future day. Now the usage offered to be shown is, “that in the mean time either party has a right to demand a margin to be put up, rea-’ sonably sufficient to secure tbe performance of ibe contract,” but is altogether silent as to the consequences of a failure to comply with such demand. Under such usage, the Court cannot say the defendants had a right to rescind the contract for that reason, when the usage, as set out in the offer, is silent on that subject.
But this question is more speculative than material in this case, because in our opinion the usage as described in tbe
The fourth exception was taken- to the instruction given by the Court to the jury. But it is conceded by the appellants’ counsel to be free from objection, unless there was some error in the ruling of the Court upon the other bills of exception. It is in the language sanctioned by the Supreme Court, in the case before referred to, in 23 Howard.
Dissenting Opinion
dissented, and delivered the following opinion:
These cases, dépending in a great measure upon the same leading facts, and the same general principles, have been argued, and will be considered together. They present questions of great interest to the commercial community.
The first exception in each, is to the admission of certain letters and telegrams to and from a supposed agent, Mr. Bell, to the plaintiffs, and entries of a deceased clerk of Bell, to show that the contract sued upon, which was made in the name of Bell with the defendants, was made by- him
Tlie second exception in Ford’s case, and third in Artz’, are to the refusal of testimony offered by the defendants, tending to show they gar-e exclusive credit to the supposed agent, Bell, who dealt “suo jure,” and did not disclose his principals; such evidence being offered to show the plaintiff had no right of action.
The third exception in Ford’s case, and fourth in Artz’, are to the rejection of testimony offered by the defendants, of a special usage, existing between a certain class of merchants, and particularly between the appellants and the supposed agent, Boll, which annexed incidents to the contract and governed and controlled it.
The fourth exception in Ford’s, and fifth in Artz’ second case, arise on an instruction given by the Court at the instance of the plaintiff, presenting the same propositions covered by the preceding exceptions. The second and sixth exceptions in Artz’, caso, are peculiar to that, relating to the admissibility of certain witnesses, which will he considered separately.
The contracts declared upon are memoranda in writing, dated “Baltimore, 31st October 1855, and 24th November 1855, respectively,” in the following form, varying only in date and sums:
“For and in consideration of the sum of one dollar, the receipt whereof Is hereby acknowledged, we have this day purchased from John W. Bell and agreed to receive from him, from the 10th to the 20th days of January next, at his option, 1000 barrels of Ohio Super flour, and 1000 barrels Howard- Street Super flour, we paying for the same at the rate of §>9 per barrel, on the day said flour is ready for delivery.” Signed by the defendants, “Oelriehs & Lurman.” To prove those contracts were made by Bell, therein named as agent of the plaintiff's, (the appellees,) they offered in evidence certain letters from the plaintiffs to Bell, and from Bell to the plaintiffs, dated Baltimore 81st Octo*512 ber 1855, and the other from the plaintiffs to Bell, dated New York, Nov. 1, 1855, and certain entries on the day book of Bell, in the hand writing of a deceased clerk of said Bell: To the admissibility of which, as proper and competent testimony for the purpose for which they were offered, (it not having been shown that Bell’s testimony could not be procured,) the defendants objected, but the Court overruled the same and permitted it to go to the jury, to which the defendant excepted.
The memorandum or contract being in the name of a third person, not a parly to the suit, the first link in the chain of proof, was evidence of the agency of the person, with whom the contract purported to be made, before the-act of that person could confer a right of action on the plaintiff. The letters and entry excepted.to, are only admissible as declarations or admissions in writing, of a party to the contract, or as part of the “res gestee,” or transaction which was-the subject in controversy. .
Whether the testimony excepted to were declarations or admissions, or “res gestee” of a party to the contract, depended upon the fact of the existence of the relation of principal and agent, between the. plaintiff and Bell. “ Where the acts of the. agent will hind the principal, there his representations, declarations and admissions, respecting the subject matter, will also bind him, if made at the same time, and constituting part of the “res gestee.” They are of the nature of original evidence, and not of hearsay; the representation or statement of the agent in such cases, being the ultimate fact to be proved, and not an admission of some other fact. 1 Greenleaf’s Ev., sec. 113. Story on Agency, secs. 134, 137.
The exception to the evidence is, that it is not proper and competent for the purpose of proving that Bell was the agent of the plaintiff, it not being shown that Bell’s testimony could not be procured. Written and verbal declarations of an agent, when admitted as “res gestee,” are regarded in the nature of original evidence and not hear
Where the evidence is offered as a mere fact, which is connected with the matter in dispute, and not to affect the party otherwise than as the actual existence of the facts affects the nature of the transaction itself, then, although it was a transaction between others, yet, as a mere fact and part of the res gestae, it is evidence. 1 Stark. Ev., 52. Kolb vs. Whitely, 3 G. & J., 198.
The ultimate fact to be proved in tbis instance, was not whether such letters were written or such entries made, but wbetber a contract made in the name of Bell, referred to in those letters, or entries, was made on behalf of the plaintiff. The term hearsay is used with reference to that which is written, as well as to that which is spoken, and in its legal sense denotes the kind of evidence which does not derive its value solely from the credit to he "given to the witness, (or writing,) hut rests also on the veracity and competency of some other person. 1 Phil. Ev., 185. 1 Greenleaf’s Ev., 99. “It is uniformly held incompetent to establish any specific fact, which, in its nature, is susceptible of being proved by witnesses who can speak from their own knowledge.” These letters and entries still rested on the veracity of another or other persons who were not sworn. “That this species of testimony supposes something hotter which might he adduced in the particular case, is not the sole ground of its exclusion Its intrinsic weakness, its in
The application of these principles is forcibly illustrated in a series of decisions in this State. Among the first of these, is the case of the City Bank of Baltimore vs. Bateman, 7 H. & J., 104, it was proposed to prove what.the president of the bank, an acknowledged agent of the defendant for some purposes) said to a sub-officer of the bank as to a particular bag of dollars. The.general rule is explicitly, although incidentally, declared to be, “that where an agency is sufficiently established, the acts and declarations of the agent, within the scope of his authority, are to be considered as the acts and declarations of the principal, of which evidence may be given.” .
In Buckmyer vs. Whiteford, 1 Gill, 127, the plaintiff sought to prove his legal interest in the cause of action (a dishonored draft) by proving a letter written by himself to the cashier of the bank, through which it had passed for collection. .It was net proved that the letter was written on the day it bore date. Waiving this objection, the Court said: “We cannot distinguish between the statements reduced to writing in this letter, and the same statements by the same persons at the same time and under similar circumstances, made verbally.” * * * “If the person, to whom the letter was addressed, had been called to prove the appellee (the plaintiff below) had made to him the same declarations verbally, it would have been in direct violation of that admitted rule of evidence, which prohibits a party from testifying in his own case; and in this case the facts show, that it was made evidence in despite of another principle, which requires the best evidence the nature of the fact affords.” Id., 149.
In Harker vs. Dement, 9 Gill, 16, an action of trover for the conversion of certain slaves, it was proposed to prove that
Washington, Justice, in Blight vs. Ashley, 1 Peters Cir. Ct. Rep., 21, said: “There are certainly some cases where the declarations, or letters of an agent, are proper evidence, and others where he must he examined, and his letters are not evidence if he be alive. The distinction rests upon the principle’, that the best evidence must be produced. If the object is to prove a fact, the agent is the proper person to prove it, and Ms evidence is better than his declarations. If Ms letter contains an acknowledgment of a fact, it is not as good evidence of the fact as proof given by himself. But if the object Is to prove what were the motives or inducements for a man to contract with the agent, what were the statements .made by him, his letters or conversation are proper evidence, not of the facts -stated in them, but that such inducements and statements were made.
The earliest English decisions are in accordance with those of our own Biale.
In Masters vs. Abraham, 1 Esp. Rep., 375, the question was, which party was to find bags for the carriage of hark sold on delivery. To prove the defendant had agreed to furnish the bags, the plaintiff proved the bark had been sold by one Eyre a broker, and produced the letter from Eyre, who was at that time in the box as a witness. It was insisted on the one hand, that Eyre should he questioned as to the facts, and the letter should not be produced; on the other, that Eyre was employed by the defendant who was therefore bound by Ms acts, and his letter was evi
The case of Langhorn vs. Allnutt, 4 Taunton, 516, Lord Mansfield, upon the question of the admissibility of the letters of the plaintiffs’ agents,-held: “It is impossible to find any principle upon which they can be received.” * * * “If the circumstances had arisen at Exeter or London, there would have been no question; no one would have thought of offering letters of a person written at Exeter as receivable in evidence here, and if that is the rule with respect to transactions which take place in England, how can we differ it with relation to the distance at which the transaction takes place. There is no known principle, of law according to which the circumstance of an agent, residing abroad, makes it practicable to give a letter in evidence, which could not be received if the agent lived in England. There is a mode of examining witnesses abroad by commission, though it is tedious and expensive, but notwithstanding those inconveniences, we cannot substitute this for it to the same effect.” Vide Kahl vs. Jansen, 4 Taunt., 571.
Chief Justice Tindall, commenting on this species of evidence, says: “It is dangerous to open the door to declarations of agents, beyond what the cases have already done.' The declaration itself is evidence against the principal, though not given on oath. It is made in his absence, when he has no opportunity to dispute or correct it by any observation or by any question put to the agent, and it is frequently before the Court and jury after a long interval of time. Evidence of such a nature ought always to be kept within the strictest rules to which the cases have confined it.” Garth vs. Howard, 8 Bing., 453.
There is much force in the distinction urged by the appellants’ counsel, between the proof of agency against a principal, and proof of agency by the principal. In the former instance, the evidence, must consist mainly of acts,
'Where the correspondence is confined to a single transaction, which is tbe subject of suit, limited to one letter on eacb side, and the agent is not shown to be beyond the reach of tho tribunal in which the suit is pending, such letters of themselves have nono of the moral tests of truth, and to admit them would, in tho language of this Court, before cited, “violate two cardinal rules of evidence, that no man should be a witness in bis own cause, and that tbe best evidence in tbe nature of the case should be produced.” Tbe preponderance of authorities, especially in this State, we think sustains these views. The entry in the day-book of Boll, being cotcmporaneous with the supposed sale, made by a deceased clerk, in the ordinary course of business, would he evidence either for, or against Bell, as the entry of his deceased employee, as between bimself and defendants, but to make them evidence against the defendants at the suit of Ford, it must ho shown they dealt with him as an agent of the plaintiff, and not “suo jure.”
These entries are admitted upon the same theory as the declarations above considered, (the identity of the agent and principal,) when used as a part of the res gestee. The relation of agent and principal must first he assumed, before any connection can he established between such entries and the supposed sale. If Bell’s written or verbal admissions were not evidence, because he was not shown to, he
The appellants’ second exception in Ford’s case, and third in Artz’, involves the liability of the appellant to the plaintiff, if in dealing with Bell, they dealt with him as principal or as agent, giving exclusive credit to him as such. The.rule is well established that, when from attendant circumstances, it -is clearly manifest that an exclusive credit is given to the agent, and it is intended by both parties that no resort shall in any event be had to any others, than those named in the contract, no other can sue. Story on Agency, sec. 160, a. 268, 400, 423. This results from the right every agent has, on the one hand, to deal in his individual right, or as factor, and the correlative right of others, to deal with the agent in either capacity. The'liberty of the individual to contract, is not restrained by his becoming a commission merchant, factor or broker.
Such being the law, it is incumbent on us to inquire whether there was in the testimony offered sufficient basis for such a defence. When the evidence excepted to was offered, the Court required the defendants to state the purpose for ‘which they offered it, and the defendants stated, “that they did not offer it as touching the question whether Bell was, in fact, the agent of the plaintiff, but as affecting the plaintiffs’ right of action on the contract, and also, as' touching the amount of damages, to which plaintiff was entitled, if he had a right to recover. The Court refused to admit the evidence for either of these purposes. This is an indirect way of raising the question of the effect of giving exclusive credit to the agent, but it seems tó be neces
The objection seems to have proceeded from, the Court, and if the testimony was admissible in bar of the action, upon the ground that it tended lo show that the defendants, in dealing with Bell, gave him exclusive credit, it appears to us it should have been admitted. It is like the case of an instruction offered by the Court “mero moiu,” in which it is held that it must cover all the aspects of the case. “The plaintiffs’ right of action on the contract,” assuming the agency of Bell, could only be disputed on the ground that the defendants gave exclusive credit to the agent Bell.
The testimony tending to show this was, that Bell, at the time of entering into the contract, was a general flour merchant in Baltimore, selling on Ids own account, as well as on commission, and was in excellent standing and credit; that after the absconding of Bell, the defendants demanded, at his store, security for the performance of the contract, and failing to receive it, they at once bought flour to replace that which he had agreed to furnish at §8.75. That the price of flour, in the opinion of the best informed merchants, would riso to §12 per barrel. That the plaintiffs were unknown to the defendants at the time of the contract, and when they disclosed themselves were insolvent merchants, without any credit or standing', and non-residents of the State, and they refused to give them credit or take them for the contract, unless they would give security for the contract.
Whether the appellants gave exclusive credit to the agent, Bell, was a question for the jury. Thompson vs. Davenport, 9 Barn. & Cres., 78. Without encroaching on their province, it is not too much to say, it had a tendency to prove that fact. To exclude such testimony from their consideration, was to deprive the appellant of the privilege of asking an instruction based upon the hypothesis which such evidence might have warranted. There is a
The 3d and 4th Exceptions. The appellant, after the plaintiff had closed his case, offered again the testimony set forth in the second bill of exceptions, and in addition thereto offered to prove “the existence of an usage among a certain class of flour dealers in Baltimore city, accustomed to deal in contracts for that article, under which either the buyer or seller in such contracts might demand security, by way of a margin, to be put up by both, whenever the faithful performance of such a contract should be considered doubtful by either party; * * * that the existence of this usage was well known to the defendants and to Bell; that it was a special usage of each of them in their business; that they had each of them admitted it to be such, and in a conversation between them, had stated to each 'other that all their contracts, respectively, were made subject to and in reference to the usage," &c. The authorities distinguish between a general usage, so well established that the knowledge and adoption of it is presumed, from the fact of its existence, of which the Courts, ex officio, take notice, and special or particular usages, which must be shown to have been known to and adopted by the parties to the contract, and which, however local or partial, when proved to be so known and adopted, will control the contract. The-former must be general in the whole city or place, or among all persons in the trade, and not the usage of a particular class only, or the course of practice in a particular bank, to whom, or which, the party is a stranger. Gabray vs. Lloyd, 3 B. & C., 793. 6 H. & J., 172. 1 H. & G., 248. Mer. Mut. Ins. Co., vs. Wilson, 2 Md. Rep., 240. In Foley & Woodside vs. Mason & Son, this Court said: “And, in any case, a usage to be admissible must be proved to be known to the parties, or bo so general and well established that knowledge and adoption of it must be presumed, and it must be certain and uniform. Indeed it may be
All the qualities of a special usage are here proposed to be proved. Knowledge, certainty, reciprocity, and uniformity with express application to the contract sued upon; for it does not appear that the conversation referred to, might not have been subsequent to the date of the contract.
It is objected, that it was not proposed to prove, that the usage included a right to rescind the contract, upon non-compliance with its terms. This right is a legal consequence of non-compliance, an inference of law. If the terms or conditions of the usage had been incorporated into the contract, it would have been the province and duty of the Court to instruct the jury, as to the legal effect of the refusal of either party to comply with its conditions. The object of such conditions could only be indemnity or protection from failure to comply. It was preventive; to be construed so as to give equal and full protection to each.
The defendants in 23 How., 62, did not offer to prove a partial or special usage, hut a general usage or custom of trade in the city of Baltimore. The opinion of the Court was, “that the defendants wholly failed to prove any general or established usage or custom of the trade in Baltimore, as claimed in the defence.” .Every witness called on their behalf fails to prove facts essential to make out the custom in the sense of the law; on the contrary, most of them expressly disprove it.
The distinction recognised and adopted by this Court in the case of the Merchants Mutual Ins. Co., vs. Wilson, was not adverted to; the facts of the ease perhaps did not require it, yet however profound our respect for tire high tribunal which decided the questions in 23 How., if that decision conflicted with that of this Court, on questions of commmercial law merely, we should be bound to adhere to the latter.
The instruction granted by the Court, at the instance of the plaintiff, the appellee, which is the ground of the ap
Judgment affirmed.