Schloss & Kahn v. McIntyre

May 8, 1906
Reporters:
, ,
Before:
Weakley
WEAKLEY, O. J.

The contention of appellants is that, inasmuch as the act of 1901 purporting to establish a dispensary at Ashford (Acts 1900-01, p. 800) is, upon principles settled in Mitchell v. State ex rel. Florence Dispensary, 134 Ala. 394, 32 South. 687, and subsequent cases, unconstitutional, the defendants, who acted as commissioners under color of said act, and who as commissioners purchased liquors for the dispensary from appellants, are personally liable to them for the price. The only authority cited in support of the action is Codding v. Munson, (Neb.) 72 N. W. 846, 66 Am. St. Rep. 524, which states the general rule relied on to the effect “that one who assumes to act as agent for a principal who has no legal status or existence renders himself individually liable on contracts so made.” The opinion in that case, however, proceeds to say: “This doctrine receives its most frequent application in cases like the present, where a person or committee incurs obligations as the result of instructions given by a body gathered together informally for a special purpose, and possessing no definite membership or continued power of existence. The rule is founded upon a presumption of fact, and is not the expression of any positive or rigid legal principle. The presumption referred to is that the parties to a contract contemplate the creation of a legal obligation capable of enforcement, and that therefore it is understood that the obligation shall rest on the individuals who actively participate in the malting of the contract, because of the difficulty in all cases, .the impossibility in many, of fixing it upon the persons taking part in or submitting to the action of the evanescent assemblage. If, however, the person with whom the contract is made expressly agrees to look to another source for the performance of its obligation, or if the circumstances be such as to disclose an intention not to charge the agent, as where the other agrees to accept the proceeds of a particular fund, there is no longer reason to indulge the presumption, and it mav be rebutted by proof of such facts.” It was there held that, under the facts of the case, it should have been *560submitted to the jury to determine whether the plaintiff did not look to defendant personally, but was to receive merely the subscription notes, or their proceeds, donated by those attending the public meeting. The case is not similar to this, and does not support this action. Assuming for the sake of the argument that an action in a proper case would lie against the defendants on the contract, although they made the purchases only in their official character yet, we are of the opinion that they are not individually liable for the purchases of liquor for the dispensary.

In Smout v. Ilbery, 10 M. & W. 1, Mr. Baron Alderson, after the examination of the authorities, said that in all the cases in which an agent has been held personally responsible “it would be found that he has either been guilty of some fraud, has made some statement which he knew to be false, or has stated as true what he did not know to be true, omitting at the same time to give such information to the other contracting party as would enable him, equally with himself, to judge as to the authority under which he proposed to act.” In Ware v. Morgan, 67 Ala. 461, 468, it was said by Brickell, C. J., upon the authority of the leading English case above cited, that the liability of the agent rests upon the fact “that he has been guilty of a wrong or omission, depriving the party dealing with him of the benefit of the liability of the principal for which he contracts.” “When he is guilty of no wrong or omission, when there is a full and honest disclosure of the nature ánd extent of his authority, Avhen the party dealing Avith him has all the knowledge and information which the agent possesses, there is no liability resting on him,, though his act or contract proves to be ultra Adres.” Furthermore, “where all the facts axe knoAVn to both parties, and the mistake is one of Iuav as to the liability of the principal, the fact that the principal cannot be bound is no ground for charging the agent.” — 1 Am. & Eng. Ency. Law (26 Ed.) p. 1127; Humphrey v. Jones, 71 Mo. 62; Michael v. Jones, 84 Mo. 578. “It is held that Avhere the officers of a public or municipal corporation acted officially and under an innocent mistake of the law, in which the other *561contracting party equally participated, with equal' opportunities for knowledge, neither party at the time looking to personal liability, the officers are not, in such case, personally liable, nor is the corporation liable.”— 1 Dillon on Muni. Cor. (4th Ed.) § 237, note p. 323. In Humphrey v. Jones, supra, the supreme court of Missouri applied the foregoing principles to defeat a suit upon a note executed by the defendant ás director of a school district, acting officially under the supposed authority of a school law, although in reality under that law no such corporation as that mentioned in the note actually existed.

. In this case, both parties were mistaken in supposing that the dispensary had á legal existence.. It had been established under color of .a statute duly enacted according to constitutional forms, although invalid because of the nature of some of its provisions, and the plaintiff had all the opportunity to know this infirmity which the defendant possessed. The defendants made no promise to pay for the liquors. It is not averred that from them they derived any personal benefit, and they neither made misrepresentations to the plaintiffs nor perpetrated any fraud' upon them. The demurrer was properly sustained.

Affirmed.

Tvkon, Simpson, and Anderson, JJ., concur.