Argersinger v. MacNaughton — 24 N.Y. St. Rep. 16

Majority

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Philetus P. Argersinger and ano., Resp’ts, v. Ramsey MacNaughton, App’lt.^[1]

(Court of Appeals, Second Division.

Filed June 11 1889.)

Headnote

1. Pbincipal and agent — Limitation oe poweb oe agent to act.

The general rule is that an agent employed to do an act is deemed authorized to do it in the manner in which the business entrusted to him is usually done, and such is the presumed limitation upon his power to act for his principal.

3. Same — Duty oe commission mebchant in begabd to goods consigned to him.

Unless the character or quality of goods consigned to him is communicated by the consignors, it is the business of a commission merchant to-ascertain what they are in that respect, and put them on the market only as such, and when he goes beyond that, he is not as between him and his principal, within the authority presumptively conferred by the latter upon him,

3. Same—When agent pebsonally liable.

An agent contracting in his own name and failing to disclose the name of his principal at the time of making a contract for the sale or purchase of goods, is personally liable for whatever obligation may arise out of the, contract.

4. Same—How pebsonal liability avoided by agent

When there is in fact a principal, the agent may, ordinarily, relieve himself from personal liability upon a contract, made in his behalf, by disclosing his name at the time of making it Upon such disclosure the party proceeding 1o deal with the agent, may or may not, as he pleases, enter into contracts upon the responsibility of the named principal.

5. Same—Innocent pajrties—Loss bobne by whom.

Where one of two innocent parties must suffer loss, it should fall upon . him who has furnished the means and opportunity to another to do that, which is done by 'the latter to cause it.

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Appeal from judgment of the general term of the supreme court, in the third judicial department, affirming judgment entered on report of referee, against the defendant.

A. Blumenstiel, for app’lfc; James A. Dennison, for resp’ts.

This action was brought to recover damagss alleged to have been sustained by breach of warranty, in the sale by the defendant to the plaintiff of a quantity of amelope skins, and the plaintiff recovered. The defendant was a commission merchant in the city of New York. The sale in question was in the line of his business, and made by him as such merchant. The referee found that the warranty was made by the defendant, that they were a sound, choice lot of Indian-handled skins, free from damage by worn-cut, and that there was a breach of such warranty. The evidence on the part of the plaintiffs tends to prove those facts, and for the purpose of this review they must be deemed established. The main contention on the merits, on tl\e part of the defendant, is that he was not liable, because the sale was made by him as agent of his consignors of the property sold.

Upen that subject the referee found that the defendant did nob sell the skins upon his own account, but as commission. merchant, and that the plaintiffs knew that he was acúng as an agent only, and that his commission was five per cent. The referee, however, determined that the warranty was the undertaking of the defendant, and that he was charged with liability by its breach. The general rule is that an agent employed' to do . an act is deemed authorized to do it in the manner in which the business entrusted to him is usually done, and such is the presumed limitation upon his power to act for his principal. Easton v. Clark, 35 N. Y , 225 ; Smith v. Tracy, 36 id., 79; Upton v. Suffolk Co. Mills, 11 Cush., 586 .

While the defendant dealt in the property of . others, for whom he made sales, his business of commission merchant was his owa. He undertook to sell the goods sent to him for this purpose, and to account to his consignors for the proceeds, less his commission As between him and them, without any special instructions or authority, it would seem to be inferred that he should sell the goods as they were; and it is difficult to find in such case any implication of power derived from them to undertake that the goods were, in any respect, other, or different, than they, in fact, were. Unless the character or quality of the goods consigned to him is communicated by the consignors, it is the business of the commission merchant to ascertain what

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they are in that respect, and put them upon the market only as such, and when he goes beyond that, he is not, as between him and his principal, within the authority presumptively conferred by the latter upon him. It does not appear that those parties, from whom the defendant received the property in question for sale, gave him any description of the quality or condition of it, or that he acted otherwise than upon his own knowledge or judgment in that respect, in making the sale and warranty ; nor is it found that he Jaad authority from his consignors to warrant it. But there was some evidence given on the part of the defendant to the effect that it wTas the custom in the trade of commission dealers not to warrant goods sold. While the purpbse ■of such evidence was to bear upon the fact whether any warranty was made, and in support of his proof that rone was made in this instance, it also went further, and may have been treated as bearing upon the question of the presumption of authority from his principal. If the custom of such dealers was to sell goods as they were, and solely upon the inspection and risks of the purchasers, it is certainly difficult to see how any authority from the defendant’s principals to warrant, could presumptively arise, to relieve him from personal liability for such undertaking made by him to the plaintiffs.

The conclusion was, therefore, permitted that the defendant’s relation to the warranty and its consequences was not qualified by his agency, pursuant to which he made the sale to the plaintiffs.

The defendant did not inform the plaintiffs, nor were they in any manner advised of the name, or names, of the garty, or parties, who sent the skins to the defendant to e sold by him. The question is presented whether the fact that the defendant failed to give the plaintiffs such information, was sufficient to deny to him the right to make his agency effectual as a defense.

It does not appear that the plaintiff had any knowledge ■of the names of the consignors of the property, or that the ■defendant supposed they had such knowledge. In such ■case there is some reason to conclude that the defendant intended to make the warranty his own as between him and the purchasers. And the proposition that an agent contracting in his own name, and failing to disclose the name of his principal at the time of making a con tract for the .sale or purchase of goods, is personally liable for whatever ■obligation may arise out of the contract, has the support of authority. Mills v. Hunt, 17 Wend., 333 ; Morrison v. Currie, 4 Duer, 79 ; Cobb v. Knapp, 71 N. Y., 348 ; Ludwig v. Gillespie, 105 id., 653; 7 N. Y. State Rep., 527; Jemison v. Citizen's Savings B’k, 44 Hun, 412 ; 9 N. Y. State Rep , 366.

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That doctrine is applicable to the present case. The defendant made the contract of sale in his own name as commission merchant, without disclosing the name of any principal; and his warranty given to produce it may, within that rule, as bétween the parties, be deemed his undertaking. In such case it may be supposed that a purchaser relies' upon the responsibility of the person with whom he deals, for the performance of the contract, and that he is nob required to look elsewhere to obtain it. When there is in fact a principal, the agent may ordinarily relieve himself from personal liability upon a contract made in his behalf, by disclosing his name at the time of making it. Upon such disclosure, however, the party proceeding to deal with, the agent may or may not, as he pleases, enter into contract, upon the responsibility of the named principal, but to permit an agent to turn over to his customer an undisclosed, and, to the latter, unknown principal, might have the effect to deny to the "customer the benefit of any available or responsible means of remedy or relief, founded upon the-contract. The rule is no less salutary than reasonable, that an agent may be treated as the party to the contract made-by him in his own name, unless he advises the other party to it of the name of the principal whom he assumes to represent in making it, where that is unknown to such party.

This proposition is not inconsistent with the general rule-that an agent acting within the scope of his authority with a party advised of his agency, will not be personally charged, unless it appears that such was his intention. Hall v. Lauderdale, 46 N. Y., 70 .

The disclosure of his agency is not completely made unless it embraces the name of the principal. And without that the party dealing with him may understand that he intended to give his personal liability and responsibility in support of the contract, and for its performance. The cases, cited by the defendant’s counsel having relation to the right, of set-off in behalf of a person who has dealt with an agent, whose agency was unknown to such person, have no necessary application to the question now here.

In those cases the question arose between the principal, and the party dealing with the agent without any knowledge of his agency, and upon the faith that he was dealing on his own account in selling property in his possession and of which he apparently was the owner. And in such cases the right of-the party purchasing property of the-agent to set-ofí a claim against the latter in an action, brought by the principal, is dependant upon not only want of actual knowledge of the agency, but of circumstances, which would direct a prudent man to inquiry and information of the fact, or furnish him reason to believe that he;

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was dealing with an agent. Wright v. Cabot, 89 N. Y., 570 ; Nichols v. Martin, 35 Hun, 168 , and cases there cited. This rests upon the principle that where one of two innocent parties must suffer loss, it should fall on him who" has furnished the means and opportunity to another to do that which is done by the latter to cause it. The contract of sale was an executed one, and while the return of the ■ property to the defendant may have been a suitable manner of amicably adjusting the matter, the plaintiffs were not legally required to do so. After the skins were purchased by and delivered to them, the plaintiffs had the right to retain them, and seek their remedy founded upon breach of the warranty. Nor is it seen how that right is. qualified, as ' applied to this case, by the fact that the defendant was dealing with the property of others to whom he was required to account for the proceeds of sales made by him. He was, soon after the sale, advised of the claim of the plaintiffs for damages on account of the impaired condition of the skins ; and if the defendant, as between him and his consignors, acted within the authority derived from them in making the warranty, he had the opportunity of seeking indemnity in some manner, before he paid over such proceeds to his principals. It is deemed unnecessary to advert more fully to the evidence in support of the facts found ky the referee, as it does not appear that the case contains all the evidence. Porter v. Smith, 107 N. Y., 531 ; 12 N. Y. State Rep., 479.

We have examined all the exceptions taken by the defendants on the trial, and to the conclusions of fact and law of the referee, and find no error in any of the rulings to which they were taken.

The judgment should be affirmed.

All concur, except Parker, J., not sitting.