Downer v. Carpenter — 8 N.Y. Sup. Ct. 591

Majority

p. 591

EDWARD F. DOWNER and LE ROY F. SHEPARD, Respondents, v. ALEXIS C. CARPENTER and JOHN BAIRD, Appellants.

Headnote

Agent— acts of, in excess of a/utharity—principal not bound by, to party who hots not sustained ingvry thereby.

By the act of an agent within the general scope of his employment, hut in excess thereof, the principal is not bound to a third person who has rightfully believed the agent was acting within his authority, unless such third person has sustained some loss by reason of such act of the agent.

Appeal from a judgment entered upon the report of a referee in favor of the plaintiffs, in an action for goods and merchandise sold to defendants by plaintiffs.

The referee in this case found that the plaintiffs had sold goods to the defendants, in the amount, and on the credit mentioned in the complaint, and that on the 23d day of January, 1872, there was due to plaintiffs on account of such goods and merchandise so sold, the sum of $133.50.

That prior to February 1, 1872, and on that day, one David Gormly was the traveling agent of the plaintiffs, and was author

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ized to collect outstanding bills in cash, but was never to receipt an account for which a note should be taken by him, but was, in every instance, to send the note to the plaintiffs for their approval, and they were to determine whether to accept the note and settle the account.

Gormly, on February 1, 1872, called on defendants and presented the plaintiffs’ account against them; defendants proposed to give their note for the amount, payable in sixty days, to which Gormly assented, and received the note, as he stated, in settlement of the account, but gave no receipt for the- account or for the note, as being given in settlement. Subsequently, and on the afternoon of the same day, the plaintiffs, having no knowledge of the transaction by Gormly, caused to be served on the defendants, a summons and complaint in the action brought for the recovery of the amount due on the account.

The note was sent by Gormly to the plaintiffs, and by them returned to the defendants.

Vary <& Stone, for the appellants. -

Lewis H. Babcock, for the respondents.

The referee finds that the authority of Gormly, the agent, did not empower him to take the note, so as to extend the time of payment, without the approval of the plaintiffs, and that the plaintiffs refused to approve. There is evidence sufficient to sustain these findings, and, as the case does not show that all the evidence is set forth, we cannot review the findings.

The taking of the note, therefore, had no legal effect on the original demand If the defendants had sustained any loss, in consequence of the agent’s act in excess of his authority, they might have been protected, upon the principle that where the agent’s act was within the general scope of his employment, but in excess thereof, the principal is responsible to a third person, who, having rightfully believed the agent was acting within his authority, would sustain a loss if the act were not considered the act of the principal. But this rule is applicable only where the question is, which of two

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innocent parties ought to bear a loss resulting from the agent’s misconduct.

The judgment must be affirmed.

Judgment affirmed.