Doty v. Case & Willard Thresher Co. — 57 N.Y. Sup. Ct. 595

Majority

p. 595

JOSEPH W. DOTY, Respondent, v. THE CASE & WILLARD THRESHER COMPANY, Appellant.

Headnote

Guarantor of a debt, discharged by a settle'ment made between the owner of the claim and the debtor — commissions to an agent for a sale effected after the termination of his employment.

In an. action, brought to recover for commissions for services performed by the plaintiff, as the agent of the defendant, in the sale of certain threshing machines, it appeared that the plaintiff had procured an order from one Cooke for a machine for which Cooke paid by giving his promissory notes. The order for the machine, together with a statement of his property made by Cooke show

p. 596

ing that he was the owner of real estate worth $4,400, over and above all incumbrances, were forwarded to the defendant, who shipped the machine to the purchaser.

The referee before whom the action was tried found that the statement made by Cooke was false; that he was at the time of making it insolvent, and that the plaintiff was guilty of negligence in not making inquiry in regard to his financial condition.

The contract under which the plaintiff acted for the defendant provided that orders from purchasers should be accompanied by a true property statement; and in the absence of such statement, or if the purchasers were not parties of well known responsibility, the plaintiff agreed to guaranty the payment of notes given for the machines, at the maturity thereof.

The defendant, subsequently to receiving the notes of Cooke, settled with the administrator of Cooke for a sum, $276 less than their face value, and surrendered the notes.

Meld, that the settlement operated as a waiver and release of the plaintiff from the liability existing, under the terms of his contract, by reason of insolvency of the purchaser and the negligence of the plaintiff in accepting the order from such purchaser.

An agent who, having been formerly employed to sell machines at a commission of twenty per cent, subsequently to the termination of his employment advises his former principal that he can effect a sale of one of the machines at a price named, and is authorized to do so, is presumptively entitled to twenty per cent commission upon such sale.

Appeal from a judgment in favor of tbe plaintiff, entered in Niagara county July 9, 1888, upon the report of a referee.

JoJm Cuneen\ for tbe appellant.

2£ J. Taylor, for tbe respondent.

Tbis action was brought to recover pay for commissions, storage and services performed as tbe agent and servant of tbe defendant in tbe sale of threshing machines.

Tbe referee has found, as facts, that on or about tbe 11th day of July, 1885, tbe plaintiff procured an order from one John Cooke, of Lockport, for an improved Number One Separator, with straw stacker and hoisting windlass complete, together with a traction engine, for which be agreed to'pay tbe sum of $1,715 by bis promissory notes, one payable December 1, 1885, another December 1, 1886, another December 1, 1887, and tbe last payable December 1, 1888. Tbis order, together with a property statement of Cooke,

p. 597

showing that he was the owner of real estate worth the sum of $4,400, over and above all incumbrances, was forwarded to the defendant, who filled the order by shipping the machinery called for. The referee further found, as facts, that the property statement of Cooke was false; that he was at the time insolvent and that the plaintiff was guilty of negligence in not making proper inquiry into his financial condition. Thereafter Cooke died and the defendant settled with his personal representative, and surrendered up to him- the notes given for the property sold, losing thereby the sum of $276. This sum the defendant seeks to have allowed as a counter-claim against any sum. that may be found due and owing to the plaintiff, and a judgment for the balance thereof. The referee has found, as a conclusion of law, that the settlement of the defendant with the administrator and the giving up of the notes to him, operated as a waiver and release of the plaintiff from any liability by reason of the transaction. An exception taken to such finding presents the important question for consideration upon this appeal.

The contract under which the plaintiff was engaged to sell threshing machines for the defendant was in writing, and, among other things, provided that: “ Orders from purchasers shall be accompanied by a true property statement, and in the absence of such property statement, or if the purchasers are not parties of well-known responsibility and good reputation for honesty and the payment of their debts, at the time the notes are delivered, the second party ” (meaning the plaintiff), “ for value received, hereby guarantees the payment of said notes at maturity, or at any time thereafter, waiving demand, notice of protest and non-payment, and this shall be sufficient evidence of such guaranty.”

As we have seen from the findings of the referee, the property statement procured was not true, and the purchaser Cooke was not of well-known responsibility and of good reputation for honesty and the payment of his debts; and these facts could have been easily ascertained by the plaintiff had he made inquiry in the neighborhood in which Cooke resided. But what is the penalty for his negligence ? We find it given in the language of the contract, that he hereby guarantees the payment of the notes at their maturity, and so forth. He consequently, under the express terms of the contract, became a guarantor, and must be treated as such in

p. 598

determining his liability upon the notes. As such guarantor the defendant had tbe right to call upon him, at tbe maturity of tbe notes, for their payment, and could maintain action against him upon tbe contract for tbe amount of sucb notes. On tbe payment of tbe notes by him be would become subrogated to tbe right of tbe defendant, and in turn could maintain action and collect tbe same from Oooke, or bis personal representatives, provided sufficient property could be found out of which collection could be made. By tbe settlement of tbe defendant with tbe administrator of Oooke, and tbe surrender of tbe notes, the plaintiff was deprived of tbe right of subrogation, which otherwise would have existed in ease be bad been compelled to pay them. We are, therefore, of tbe opinion that tbe conclusion of tbe referee was correct, and that tbe settlement operated as a waiver and release of tbe plaintiff from Lability thereon. (2 Daniels on Negotiable Instruments, § 1310 ; Murray v. Fox, 104 N. Y., 382 , 388; The Weir Plow Co. v. Walmsley, 110 Ind., 242 .)

Tbe referee further found, as facts, that one Charles O. Hartwell was tbe general agent of tbe defendant in Western New York, and that after tbe written contract bad terminated tbe employment of tbe plaintiff as agent, be orally authorized the plaintiff to make sales of machines for tbe defendant, and agreed with tbe plaintiff that be should have commissions on tbe sales made by him, but nothing was said as to tbe amount of sucb commissions. Thereafter tbe plaintiff procured a written order from one Joseph Gar lock for a separator at tbe agreed price of $100, and sent tbe same to tbe defendant, with a letter, in which he stated' that, by direction of 5dr. Hartwell, and at bis request, be bad taken an order for an Advance thresher, and herewith forwarded it. . He then stated:

“ I trust it will be satisfactory to you. Please advise me if you accept, and I will fill tbe order, as otherwise tbe party desires to do something else.

" Respectfully yours,

“J. W. DOTY.”

Tbe defendant received tbe order and this letter at its place of business, in Battle Creek, Mich., and immediately answered back :

“We have yours of tbe nineteenth, with order for thresher, which is accepted, etc.

(Signed.) “THE CASE & WILLARD THRESHER CO.”

p. 599

Note.— The balance of the cases of this term, which are to be reported, with the list of decisions in those cases decided and not reported, will be found in the next volume.(51 Hun).— [Rep.

The machine was thereupon shipped and delivered to G-arlock, who paid cash therefor. The plaintiff testified that his commissions upon such sale were fairly and reasonably worth twenty per cent, or eighty dollars. Two witnesses on behalf of the defendant testified that the fair and reasonable value of his services or commissions for making the sale was but twenty dollars. The referee has found that the plaintiff’s commissions upon such sale was eighty dollars. The contract previously existing between the plaintiff and defendant fixed the plaintiff’s commissions upon the sale of separators at twenty per cent. The fact that nothing was said as to the amount of commissions by Hartwell, the general agent, at the time the plaintiff was instructed to make sales under the promise that he should have ¿he commissions, doubtless led him to understand and suppose that he was to receive the commissions that had previously been paid to him under the written contract, and, under the circumstances, we think such must be deemed to be the legal conclusion. ( Vail v. Jersey L. F. Mf’g Co., 32 Barb., 564 ; Wallace v. Devlin, 36 Hun, 276 .) But it is claimed that the sale was for $400, and that that was less than the schedule price, and for this reason full commissions are not allowable. The order, however, for the separator at $400 was forwarded to the defendant, accepted by it, and, in so doing, it must have acquiesced in the deviation from the schedule price.

The judgment should be affirmed.

Barker, P. J.; Bradley and Dwight, JJ., concurred.

Judgment affirmed.