Higgins v. Moore — 19 N.Y. Super. Ct. 344

Majority

p. 344

Robert Higgins and Augustus G. Gould, Plaintiffs and Appellants, v. George Moore, Defendant and Respondent.

Headnote

1. An unconditional and unrestricted authority given to an agent to sell goods, implies authority to receive payment for the goods sold.

2. Where the plaintiffs, residing at Albany, sent a cargo of rye to the city of New York for sale, and one of the plaintiffs, being in New York, requested S., a broker, to take charge of the same and sell it, and he sold a part thereof to M. & E., and another part to the defendant, and, after the delivery of the part sold to M. & E., the plaintiff directed S. to collect the money from them, and said that the plaintiffs would draw on him therefor; and such plaintiff thereupon returned' to Albany and subsequently drew on S. for

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that money, and he, having rendered a bill and collected the amount, paid the draft; and afterwards, the delivery of the rye sold to the defendant being completed, S. rendered a bill therefor to the defendant, and received payment in full; and where it also appeared that it is the usage and custom of the trade, where grain is sold by brokers for non-resident owners, for the broker to sell and render the bill of sale in his own name and collect the amount: Held, that such payment by the defendant was a valid payment, although the defendant, when he made the payment, was aware that the plaintiffs were the owners of the rye so sold. (Monorief, J., dissented.)

(Before Hoffman, Woodruff and Moncrief, J. J.)

Heard, January 11th;

decided, March 17th, 1860.

This is an appeal by the plaintiffs from a judgment for the defendant, entered upon the report of Livingston Livingston, Esq., to whom the action was, by consent, referred, and before whom it was tried on the 29th day of December, 1858.

The action was brought to recover the price of 3,426§£ bushels of rye sold to the defendant on the 27th day of August, 1858, at seventy-five cents per bushel.

The answer of the defendant denied any purchase from the plaintiffs; averred that the purchase was made from J. 0. Sayles, and payment to Sayles therefor; and, further, that, if the plaintiffs had any interest in the rye, the said Sayles was their agent to sell the same and receive payment therefor, and that the defendant purchased the same from or through him, and paid him in full therefor.

On the trial it appeared that the plaintiffs reside and do business at Albany; that a cargo of rye, belonging to them, was sent by them to New York for sale, and arrived here on the 21st of August, 1858; that the plaintiff Higgins came to New York, and was here when the rye arrived; that he employed John 0. Sayles, a broker, who sometimes acted as a commission merchant, to sell the rye: and Sayles testified that Higgins requested him to take charge of and sell the rye. On the 24th or 25th, Sayles sold the rye by sample to the firm of Manly & Embree: the delivery thereof was begun, and 1,649§§ bushels were delivered, when they objected that the bulk did not correspond with the sample, and refused to receive any more. The plaintiff Higgins was still in New York, and was informed by Sayles of this refusal, and, with his assent, Sayles proceeded to find another purchaser. The measurer’s return of the measure

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ment of the rye delivered to Manly & Embree described the rye as measured for account of Sayles; and this return Higgins saw as early as the 26th, and made no objection to its form. On Friday, the 27th, or Saturday, the 28th, Sayles sold the residue of the rye, 3,426f£ bushels, to the defendant, at seventy-five cents per bushel, (there having been a previous agreement for a sale at seventy-six cents, which, on examination of the rye, was abandoned.) Before the consummation of the sale, Higgins had one or more interviews with the defendant; and the fact that the plaintiffs were the owners of the rye thus became known to him.

On Saturday the 28th, before the delivery of the rye to the defendant was completed, the plaintiff Higgins returned to Albany. Before he left, in reference to the refusal of the former purchasers to take the rye, he wrote to Sayles “if you are compelled to put it on market to-morrow, I am persuaded it will sell at the going rates.” Expecting to return to Albany on Friday the 27th, he spoke to Sayles in relation to calling on Manly & Embree, to obtain payment, but did not go as it was deemed too late in the day. Sayles then said to him, “ I will get their check and you can draw on me if you want to,” to which he replied “very well.” Hot leaving town that night, he called on Sayles on Saturday, and went with him to the office of Manly & Embree to obtain payment, but they did úot find them in, and Higgins told Sayles he would have to draw on him and he must get the check. The testimony of Sayles on this transaction was, that Higgins called and asked him if he, Sayles, had collected that bill, that he expressed a desire to have the money to take or send to Albany, and asked him if he thought that he, Sayles, could collect it; that he told Higgins it was not usual to collect bills the same day of sending them in, but he “ would make the bills right out and go and see.” They then went -together but did not find Manly & Embree in. That the bill was made out in his (Sayles’) name, and Higgins saw it and made no objection. Higgins on his examination positively denied that he saw the bill.

Higgins thereupon (on Saturday the 28th) returned to Albany, and remained there till Friday the 3d of September, on the morning of which day he again reached Hew York. Meantime Sayles had collected the amount due from Manly & Embree, and on the

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30th, at Albany, the plaintiffs drew on him for the amount, and his draft was paid by Sayles.

Before Friday, the delivery of the rye sold to the defendant was completed, and Sayles received the measurer’s return of quantity, (which was also made out as a measurement for his account,) and made out a bill in his own name against the defendant for the rye so delivered, and received payment therefor.

On the plaintiff’s (Higgins’) arrival in Hew York on the 3d of September, he called on the defendant and was informed that Sayles had received such payment. Sayles used the money for his own benefit, and has not paid the plaintiffs therefor.

Much testimony was given on both sides to show on the part of the defendant, that, according to the general and uniform usage and custom of the trade, brokers who sell grain for nonresident principals render the bills of sale in their own name and collect the amounts, and on the part of the plaintiffs to show that there is no such general or uniform custom. The testimony was quite conflicting on this subject.

The report of the Referee was as follows, viz.:

“ And I find and report as matters of fact, that on or about the 27th day of August, 1858, at the city of Hew York, the plaintiffs sold to the defendant, 3,426|| bushels of rye, at seventy-five cents per bushel, that such sale was made to the defendant by John 0. Sayles, as the broker for the plaintiffs, and who was duly authorized by said plaintiffs as such broker, to sell the same; that at the time of such sale, the defendant did not know who was the owner of said rye, but that before said rye was delivered, the defendant knew that the plaintiffs were the owners thereof. That the said rye was delivered to the defendant on the 30th day of August, 1858. That the plaintiffs resided in the city of Albany, and were dealers in grain. That Robert Higgins, one of the plaintiffs, was in the city of Hew York, at the time of the sale of the said rye, that said Higgins remained in the city of Hew York, until August 29, 1858; when he returned to Albany; and that said Higgins was not in the city of Hew York, from the 29th day of August, 1858, until the 3d day of September, 1858. That the said defendant paid to the said John 0. Sayles, the broker of the said plaintiffs, prior to the said 3d

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day of September, 1858, the sum of $2,578. T°W6W, for the said rye, so delivered to defendant, as aforesaid.

“ And I further find and report as matters of fact, that there is a custom or usage of trade in the city of Hew York, where grain is sold by brokers, for the brokers to have the bill for the grain, sold by them, made out in the name of the brokers, and for the brokers to collect the money for the grain sold, from the purchasers, where the seller resides out of the city of Hew York; and that the defendant paid to the said John 0. Sayles, as the broker for the plaintiffs, for said rye, according to the usage of trade in the city of Hew York, and that said defendant is not indebted to the said plaintiffs in any sum of money whatever.”

Erom the judgment entered upon the report, the plaintiffs appealed to the General Term.

John Graham, for the plaintiffs (appellants).

I. The rule of law as to brokers, is this: “ A broker has, ordinarily, no authority to receive payment for property sold by him, and if the purchaser make payment to him, he does so at his own risk, unless, from other circumstances, an authority to receive it can be inferred.” (1 Story on Contracts, [4th ed.,] § 348; Story on Agency, § 109.)

The report of the Referee in this case, repudiates the idea of authority, from the plaintiffs to Sayles, to receive the money for the rye.

It did not find the existence of the usage or custom, as the Referee found it in Brower v. Peabody. (3 Kern., 121.)

II. The elements of a usage in reference to which parties are presumed to contract, are, that it be uniform, general, universal. (1 Story on Contracts, § 14.)

A usage must be reasonable, or it will not be admitted in explanation of a contract. (2 id., § 650, a.)

It must not be narrow, local, and confined, nor must it be the private opinion of a few, but it must be so uniform and notorious and of such long standing, as to afford a presumption that the parties contemplated it as a part of their contract. (Id., § 650, b.)

If the evidence for the defendant, in this case, is examined, it will not stand the test of these principles, as to the alleged usage or custom.

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III. The Referee in reporting his conclusion of law, that judgment should be entered for the defendant with costs, does it upon the “ said facts so found,” (i. e.,) the facts stated in his report.

They are manifestly insufficient to sustain his legal conclusion. He could well have found such a custom or usage as he has stated, without, being willing to say that it was up to the standard of the second point, or that the parties contracted in reference to it.

IV. The defendant parted with his money to Sayles upon pretenses, almost, if not certainly, criminal. He has the right to avail himself of stringent remedies, to try and get it back, of which the plaintiffs could not avail themselves. He is in a better position than they would be, were they compelled to resort to Sayles.

The judgment in question should be reversed, and a new trial ordered, &c.

John E. Parsons, for the defendant (respondent).

I. That there is such a custom as the Referee has found, is a matter of fact, the Referee’s conclusion as to which, the Court will not disturb. The fact, however, was sustained by the evidence of the witnesses, Cutting, Stutzer, Bell, Witherspoon, Lord, Davett and Ketcham, who are proved to be the largest grain dealers in the city. There was no evidence against this. The witnesses, Herrick, Knight, Wild and Carmichael, all swear that they don’t know what the custom is, where the seller resides out of the city of New York, and they are contradicted as to their statement, that where the seller resides in New York, it is the custom for him to collect, by the very parties upon whose transactions they base their knowledge of the custom, and who swear that in such cases the broker makes out the bill in his own name, and collects.

That Mr. Higgins knew of such a custom, is evident. One thousand six hundred and forty-nine bushels of the same cargo of rye were sold in a similar way through Sayles to Manly & Embury, paid for to Sayles, and drawn for on Sayles by plaintiff Higgins, who, though he never saw Manly & Embury, or made them out a bill, or gave Sayles any authority to collect from them, assumes that they will pay Sayles, without any order from

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Mm on them, or other act on Ms part, and arranges to draw on Sayles for the very amount.

II. Payment to an agent is good in all cases where the agent is authorized to receive, either by express authority, or by that resulting from the usage of trade. (Story on Agency, § 429, and cases cited; Paley on Agency, 278; 1 Livermore on Agency, 226. [Ed. 1818.] Capel v. Thornton, 3 Carr. & Payne, 352.)

The judgment should be affirmed.

1. In my opinion, an unconditional, unrestricted authority given to an agent to sell goods, contradistinguished from a mere power to negotiate a sale, such an authority as will bind the owner to deliver the goods, implies the power to receive payment.

Lord Tenterden, in Capel v. Thornton, (3 Carr, and Payne, 352,) laid down that rule at nisi prius. (Pickering v. Busk, 15 East., 38,) almost establishes it. The sale was by a broker, but the principal was unknown, and the broker had possession. (Favenc v. Bennett, 11 East, 36,) involves the same rule when there is an agency known, and the principal unknown.

In Ireland v. Thomson, (4 Com. Bench R., 149,) the case of Mynn v. Jolliffe, (1 M. & Rob., 326,) is recognized as settling that an agent to sell real estate is not of course empowered to receive the purchase money. But it was considered clear, that there was such a power in the case of the sale of a vessel made by the master abroad.

■ In Gross v. Haskins, (13 Yt. R., 536, 540,) the Court say: “ "When the plaintiff employed an agent to sell hats, he was authorised to receive payment; and all who purchased of and paid him in good faith, are protected, notwithstanding he appropriated the avails to himself, especially when the purchaser knew nothing of the agency.”

Hackney v. Jones, (3 Hum. R., 612,) is an express authority that a general unqualified power given to an agent to sell goods, involves the right to receive payment, so as to protect the purchaser.

The case of Pinckney v. Hagadorn, ( 1 Duer, 89 ; approved and said to have been affirmed, 14 N. Y. R., 584, 590,) determined that an auctioneer empowered to sell real estate, and by the

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terms of sale to receive ten per cent on the day of sale, could receive it on a subsequent day, and bind the principal. (Story on Agency, § 98; Paley on Agency, 278.)

The authority conferred upon Sayles, the agent of the plaintiff in this case, to sell, is found by the Referee.

I do not think that actual knowledge of the name of the owner is sufficient to vary this rule, any more than knowledge of some one else being an owner, implied in the fact of dealing with an agent or broker, would be sufficient.

2. If the proposition thus stated were, in my opinion, questionable, I should think the present case not so, because the plaintiff knew on the day of the sale that Moore, the defendant, was the purchaser, as the defendant knew that the plaintiff was the owner. This knowledge was acquired on Saturday, the 28th day of August. With this knowledge, the plaintiff returns to Albany; and although it was a cash sale, which (even as interpreted by the alleged custom,) justified the presentment of a bill on Monday, the 30th of August, takes no step himself, or by any one else, to obtain payment, nor inquire as to the transaction until the 3d of September. He refrained from giving notice not to pay Sayles, or to pay himself only.

I do not doubt the right of the General Term to look into all the evidence, and sustain a judgment upon it, even if the facts are not deduced, by the Court or Referee, from the evidence. The serious difficulty upon an appeal to the Court of Appeals, may require a new trial, and this the 28th rule of 1858 seems intended, but imperfectly, to remedy.

3. The Referee has explicitly found that there is a custom or usage of trade in New York, when grain of a non-resident owner is sold by brokers, for the brokers to have the bill made out in their name, and to collect the money; and that the defendant paid Sayles according to that usage. The evidence of such custom is not very satisfactory to my mind, but I do not think that we are warranted in saying that the Referee was clearly wrong in his conclusion.

I think the judgment should be affirmed.

Woodruff, J., concurred with Mr. Justice Hoffman, that, upon the proofs and report of the Referee, due authority to make

Dissent

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payment to Sayles, the plaintiff’s agent, was sufficiently established, and that the judgment should be affirmed.

Assuming, for the present purpose, that such a usage, or custom of the trade, as the Referee has stated, was sufficiently proven to admit the finding of fact to be correct, the material question arises, whether, under such circumstances, the conclusion of law thereon, as found, can be sustained.

The custom, or usage, was in no wise material, or necessary or proper, to explain or give character or meaning to the power actually bestowed upon the broker. The words are clear, plain, and unambiguous. The plaintiffs authorized the broker to sell the grain, and nothing more. The authority, of and in itself, neither by express terms nor by any implication, gave to the broker the right to treat the rye as his own property, make out a bill therefor in his own name, collect the money, or receipt for its payment. The broker, as such, had no such authority. A sale being made, his duty, office and function was at an end. His name is indicative of restricted authority: he is the negotiator, or middleman (2 Barn. & Ald., 137, 143, 148.) It was not sought to show that a usage or custom of the trade existed, of which, it being general, the plaintiffs might be presumed to have knowledge, and have given the employment intending and implying the power to receive payment. Nor was it proven that either the defendant or the plaintiffs knew of such a custom or usage, and therefore could be assumed to act with such intent in the sale and purchase of the grain. The plaintiffs were not acquainted with such a usage or custom. The defendant said he had paid the money “in the usual course of businessnot that he knew or believed a usage or custom existed to pay the broker the avails of the plaintiffs’ rye. The defendant was told by the broker, at the time of the payment to him, that the plaintiffs “had drawn for the amount.” If this statement was true, and the defendant, believing in its truth, in good faith had paid the money, the payment was made, not in the usual course of business, perhaps, as arising from a usage or custom to pay the broker, as for his own goods, but from an implied authority to the broker as an agent to collect the money to meet the draft of his principal. And this was the case with the other lot of rye sold by this

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broker for the plaintiffs, in which an implied authority to pay him was found by the Referee. The defendant knew the plaintiffs were the owners of the rye. No other than these two transactions were shown to have been made by the broker for the plaintiffs. There was, therefore, no implication of authority from previous transactions. It does not appear that the plaintiffs ever ratified the payment: on the contrary, they claimed to recover from the defendant, made out a bill, and demanded the money. Comstock, J., in 3 Kernan, 632, says: “ Á principal is bound only by the authorized acts of his agent. The relation of principal and agent may be proved by the instrument, (or verbal commission,) which creates it; and beyond the terms of the instrument, or of the verbal commission, it may be shown that the principal has held the agent out to the world in other instances as having an authority which will embrace the particular act in question. ITcnow of no other mode in which a controverted power can be established.”

The proposition, that persons, engaged in a particular trade, at a particular place, can, by the custom or usage adopted and regulated by themselves, create a power beyond what is actually conferred or necessarily implied, depriving an owner of'his property, the possession of which he had not parted with until a sale to the purchaser, seems to me to be so fraught with mischief, as well as unsoundness, as to require only its announcement to meet with repudiation. The grain was not delivered to the broker. The custom or usage would transform him into a factor in possession of the goods, or with the indicia of title or ownership. (2 Barn. & Ald., 137, 143, 148.)

I think the Referee erred in his conclusion of law upon the facts found by him. A new trial should, therefore, be directed, &c.

Judgment affirmed, with costs.