58 S.E. 1010 | N.C. | 1907
This action was brought to recover the sum of $3,906.25, which the plaintiff alleges is due to him from the defendant by reason of the fact that the latter, who lived in New Bern, was conducting a mercantile (145) business in Washington, Beaufort County, N.C. by and through his agent, A. B. Smith, and that Smith was authorized to purchase such goods, wares, and merchandise as were necessary to be used in the conduct of the said business, either for cash or on credit, and that, in the usual and necessary conduct of the affairs of his principal, A. B. Smith borrowed from the plaintiff the said sum, which was used in the said business and of which the defendant derived the use and benefit. The defendant denied all of this, and averred that his agent was authorized to buy only for cash, which was to be furnished by him or procured through the bank. *105
The court charged the jury as follows:
1. The plaintiff brings this action to recover money which he alleges was borrowed by the defendant's agent, A. B. Smith, for use in defendant's business of buying and selling cotton and merchandise in Washington, and that the agent, when he received the loan of the money, was acting within the scope of his authority, and that the defendant received the benefit of the money so borrowed in the prosecution of his business in Washington.
2. The defendant admits that he was doing business in Washington, by his agent, A. B. Smith, but he denies that Smith, as his agent, had any authority to borrow money, but, on the contrary, he was instructed to buy only for cash and to draw checks on the bank for the purchases so made by him, both of cotton and merchandise, and that sufficient arrangements had been made with the bank to honor all checks so drawn; and he avers that he is not liable to the plaintiff for any money borrowed by Smith from him.
3. A principal is not bound by the act of his agent unless the act is within the authority of the agent. This authority may be expressly given, but there is no evidence of such authority in this case. It may also be implied. If the principal acts in such manner and permits his agent to so conduct his business as to lead one of ordinary prudence to believe he has authority to do a particular act, and a third party deals with the agent, relying upon this apparent authority, the (146) principal is liable.
4. If an agent has no authority to borrow money in order to pay for goods, but is directed to buy for cash with money advanced by the principal, and the latter fails to furnish the cash, and the agent, for the purpose of promoting the business, borrows money and uses it to pay for goods for his principal, and the goods are used in said business for the benefit of the principal, then the principal is liable for the money so borrowed.
5. The court here stated the contentions of the parties, and recited the testimony, showing its bearing upon the issues in the case.
6. If you find by the greater weight of the evidence that the defendant held Smith out as his agent, and, with his knowledge and consent, permitted the business to be so conducted by Smith as to lead a man of ordinary prudence, to believe that he had authority to borrow money, and the plaintiff, while acting upon this belief, loaned money to said agent, which was used in buying goods for the defendant, you will answer the first issue "Yes." If you find by the greater weight of the evidence that the defendant failed to furnish his agent with sufficient funds to pay for goods, that he knew goods were to be bought for cash, that his agent borrowed money from the plaintiff and used the same to pay for goods, *106 and that these goods went into the business of the defendant and were disposed of for his benefit, you will answer the first issue "Yes"; otherwise, "No."
7. If you believe the evidence in this case, the plaintiff loaned to Smith $1,548.75 in October, 1903; $857.50 on 16 February, 1904, and $1,500 on 16 December, 1904. If you further believe the evidence, the first two of these transactions are usurious, and the plaintiff would not be entitled to recover any interest thereon, and all payments made would be deducted from the principal sum. The third transaction is dependent upon the intention of the parties. If it was made for the purpose of securing a greater rate than 6 per cent, it was usurious, (147) but if otherwise, it was not.
8. If you answer the first issue "Yes," you will answer the second issue, if you believe the evidence, "$1,356.25 on the first transaction, $778.75 on the second, $1,500 on the third" if you find it was usurious, or "$1,500 and interest from 16 December, 1904," if it was not usurious.
9. If you answer the first issue "No," do not consider the first and second loans any further, but you will still consider the third; and if you find from the evidence that Smith borrowed the $1,500 from the plaintiff on 16 December, 1904, and used it to buy goods for the defendant; that these goods were received by the defendant and used by him with a knowledge of these facts, then the defendant is liable therefor; and if you so find, answer the second issue "$1,500," if usurious, or "$1,500 and interest," if not usurious. If you do not so find, and you answer the first issue "No," then you will answer the second issue "Nothing." If you believe the evidence, and answer the first issue "Yes," you will answer the second issue "$300, less $92, leaving $207.12, with interest from 7 January, 1905."
The following issues were submitted to the jury:
1. Was A. B. Smith, prior to 13 December, 1904, authorized by the defendant to enter into the contracts with the plaintiff sued on in this case, and to charge defendant with the payment of the money received thereby? Ans. "Yes."
2. Is the defendant indebted to the plaintiff; and if so, in what amount? Ans. "$3,635."
There was a verdict, under the evidence and the charge of the court, for the plaintiff, as appears in the record, and judgment was entered thereon, from which the defendant, having duly excepted to the alleged errors of the court in the trial of the case, appealed to this Court.
After stating the case: It seems to us that the presiding judge went too far, under the facts and circumstances of (148) this case, in the fourth instruction given the jury, which was as follows: "If an agent has no authority to borrow money in order to pay for goods, but is directed to buy for cash with money advanced by the principal, and the latter fails to furnish the cash, and the agent, for the purpose of promoting the business, borrows money and uses it to pay for goods for his principal, and the goods are used in said business for the benefit of the principal, then the principal is liable for the money so borrowed." We presume that his Honor, in giving this instruction, was attempting to follow the principle which he thought had been declared in Brittain v.Westhall,
In Brittain v. Westhall, as reported in
1. That an agent can only contract for his principal within the (149) limit of his authority, and persons dealing with an agent having limited powers must generally inquire as to the extent of his authority.Brittain v. Westhall,
2. When the authority to buy or to sell is given in general terms, it is clear, in the absence of any restriction to the contrary, that the agent has the power to buy for cash or on credit, as he may deem best, and to sell in the same way. Ruffin v. Mebane,
3. On the face of the contract it appeared that Townsend was directed to buy only for cash, and, this being so, he could not, of course, buy on credit, contrary to the instruction of his principal. Whether the defendant subsequently ratified what he did, and is therefore liable to the plaintiff, is quite another and different question. Brittain v. Westhall,
4. The contract expressly required Townsend to buy for cash, and the only possible ground of defendant's liability is, that he received and appropriated the lumber to his own use, knowing that his agent (150) had bought it on his credit, or that he had not provided his agent with the cash to buy lumber, in which case the latter had implied authority to buy on credit, and that fact would also be some evidence of notice to defendant that his agent had so bought. 1 A. and E. Enc., 1021, and notes; Brittain v. Westhall,
It follows from this statement of the law, as declared by the two decisions in that case, that the instruction of the judge below was erroneous, because the defendant's liability, as principal of A. B. Smith, to the plaintiff was made to turn only upon whether the borrowed money had *109 been applied to the payment for goods which were used in the defendant's business, in which event the jury were told that the defendant would be liable, not merely for the value of the goods so used by his agent in his business, or for the value of any benefit he may have derived therefrom, but for the full amount of the borrowed money. The defendant lived in New Bern; the business was carried on by his agent, Smith, in Washington. It may be that, under the real (151) facts and circumstances of this case, the defendant did not know that his agent had violated his instruction, and his liability to the plaintiff for the amount of the borrowed money depended upon such knowledge. This was the ultimate fact to be established, and the jury should have been so instructed. Whether the defendant would be liable for the value of the goods actually used in his business, or for the value of any benefit derived therefrom, even if he had no notice that his agent had disobeyed his instructions, is a question which is not now before us. We simply decide that there was error in the instruction of the court to the jury.
There are some expressions in the receipts given by A. B. Smith, the agent, to the plaintiff for the borrowed money which might indicate that they were buying flour on joint account for the purpose of speculation, using the credit of the defendant for that purpose. We may not correctly understand these receipts, and their meaning and significance may be far otherwise than would appear on their face, but it is not permissible for an agent thus to use his principal's credit, if we are right in our interpretation of these receipts. An agent cannot, in law, represent himself and his principal where their interests conflict, and without the knowledge of the latter. An agent cannot thus well serve in two capacities — for himself and his principal — because the latter's interests may be prejudiced even by an unconscious and unintentional desire to advance his own. Sumner v. R. R.,
If the transactions between the plaintiff and the agent, A. B. (152) Smith, were usurious, in so far as they affected the defendant, we do not see why this is not at least a circumstance to be considered by the jury upon the question as to whether the plaintiff did not know that the agent was exceeding his authority and acting contrary to his principal's instructions.
New trial.
Cited: Bank v. Drug Co.,