Majority
p. 38WILLIAM H. TALMAGE and TUNIS P. TALMAGE, Plaintiffs and Appellants, v. GEORGE L. NEVIUS and PETER I. NEVIUS, Jr., Defendants and Respondents. [Decided December 4, 1869.] Before Chief-Justice Barbour and Justice Freedman.
Headnote
A principal will be held liable for acts of his agent done in excess of the actual authority conferred upon the agent, provided such acts be within the scope of the apparent authority, and be such as an innocent third party, from the recognized acts of such agent, had a right to infer such agent was authorized to do.Where a broker had the apparent general charge of plaintiffs’ office, and effected a sale therein in the usual course of the business in the plaintiffs’ name, without disclosing that he acted as a broker, and subsequently delivered to the purchaser, who was a stranger to plaintiffs, the evidences of the title to the property sold, upon which a delivery took place, and he thereupon presented to the purchaser the bill for the price made out on a printed form generally used by plaintiffs for such purpose, and received from the purchaser, upon a demand made, a check for the amount, drawn to plaintiffs’ order, the money for which he obtained from the bank by means of an indorsement purporting to have been made by plaintiffs, but in fact made by himself—Held, that the purchaser was justified in considering the broker as plaintiffs’ general agent, having authority to collect as well as to sell, and that the plaintiffs having, by their own acts and conduct, misled the purchaser into making payment to such agent, could not compel him to make a second payment.
This case was tried before Mr. Justice Monell without a jury.
It is an appeal from a judgment entered in favor of defendants. The court found the following facts:
That on or about the 19th day of September, 1868, the plaintiffs sold to defendants ninety-oue tons and fourteen hundred weight of coal.
That the contract of sale was made through one Charles L. Foxwell, acting for and on behalf of plaintiffs.
That the coal was delivered to defendants a day'or two before the 26th day of September, 1868, and was delivered by Foxwell, who held the shipper’s receipt for the coal, and which receipt he delivered to the defendants.
That on the delivery of the coal and the shipper’s receipt
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therefor, Foxwell presented to defendants a bill for the coal, made out in the name of the plaintiffs’ firm and upon the usual billheads of the firm, and thereupon defendants made and delivered to Foxwell, in payment therefor, their check on the Merchants Bank of the City of Mew York, for the sum of five hundred and seventy-three dollars and thirteen cents, and Foxwell receipted and accepted the same in payment of the bill, and gave a receipt therefor in the name of plaintiffs.
That the check was duly paid by the Merchants Bank, and the amount thereof charged to the account of defendants, and the check returned to them by the bank.
That defendants had no acquaintance with plaintiffs, or either of them, and no notice or knowledge that Foxwell was not in fact a member of their firm, and that the acts and doings of plaintiffs in the premises were such as to induce the belief on the part of the defendants that Foxwell was a member of their fiim, or duly authorized to act for them in the collection and receipt of bills.
That Foxwell was authorized and empowered by plaintiffs to collect and receipt bills in the name of their firm, and to receive payment of bills in checks drawn to the order of plaintiffs.
The conclusions of law were:
That the coal sold and delivered to defendants, and to recover which this action was brought, was paid for by defendants prior to the commencement of said action, and that the defendants were entitled to judgment and for the costs of the action to be adjusted.
The plaintiffs requested the court to find the following facts:
To amend the fourth proposed finding by adding thereto the word as “ broker.”
That Foxwell was a coal-broker selling coal for the plaintiffs, or any other person, on commission.
That the defendants had no previous transactions with the plaintiffs, and no knowledge of any transactions between them and F. E. Smith & Go., or any other persons.
That the check was not delivered to Foxwell by the defendants
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until a day after he gave them the shipping receipt for the coal or the bill.
That Foxwell made out and delivered the-bill to defendants without the authority or knowledge of the plaintiffs.
That the plaintiffs never accepted the check of the defendants as payment.
That it is not proven the papers delivered by Foxwell to the defendants were muniments of title to the coal.
That the indorsement “ Wm. H. Talmage & Co.” of the check by Foxwell was a forgery.
That Charles L. Foxwell acted as broker in the sale of the coal named in the complaint.
That Charles L. Foxwell had no authority to collect of the defendants the amount due the plaintiffs upon said sale.
"That said Foxwell had no other connection than as broker with the plaintiffs.
That he had no authority from the plaintiffs to sign their firm name, or to collect money, or to make out or receipt bills.
That the defendants’ check was not duly paid by the bank.
That the indorsement of plaintiffs’ firm name was not made by authority, or with the knowledge or assent of the plaintiffs.
That the delivery of the check to Foxwell was not a delivery to the plaintiffs, so as to entitle them to recover the amount thereof from the bank.
That the check never came to the hands of .the plaintiffs.
That it does not appear that the check was paid by the bank to any person.
That the coal was not paid for by defendants prior to the commencement of this action.
The plaintiffs requested the court to find as matter of law:
1st. That the defendants are in possession of the check, and to defeat a recovery they must surrender the check to the plaintiffs.
2d. That the plaintiffs are entitled to judgment against the defendants for the amount of the bill and interest.
The court refused to find as requested, and the plaintiffs duly excepted to each refusal separately.
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The plaintiffs also excepted to the following findings of fact and law:
That said contract of sale was made by one Charles L. Fox-well, acting for and on behalf of the plaintiffs.
That said coal was delivered to defendants’ firm a day or two before the 26th of September, 1868, and the same was delivered by Foxwell, who held the shipper’s receipts for said coal, and which receipts he delivered to the defendants.
That said Foxwell received and accepted the check of the defendants in payment of the bill of said coal.
That said check was duly paid by the-Merchants Bank, and the amount thereof charged to the account of defendants, and said check returned to them by said bank.
That the acts and doings of the plaintiffs in the premises were such as to induce the belief on the part of the defendants that said Foxwell was a member of said firm, or duly authorized to act for them in the collection and receipt of bills.
That said Foxwell was authorized and empowered by plaintiffs’ firm to collect and receipt bills in the name of their said firm and to receive payment of bills in checks drawn to the order of plaintiffs’ firm.
That the coal sold and delivered to defendants’ firm, and to recover which this action is brought, was paid for by the defendants prior to the commencement of this action.
That the defendants are entitled to judgment and for costs of this action.
Mr. W. W. Goodrich for appellants.
The court admitted evidence of a transaction between Smith and the plaintiffs, of which the defendants had no knowledge at the time of defendants giving Foxwell the check, and which could not have influenced the defendants’ action. Such admission was erroneous, as was also the refusal of the court to find that defendants had no knowledge of this transaction.
The request to find that Foxwell acted as a broker was clearly proven. Foxwell was a broker, and as such sold the coal.
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The refusal to find that the cheek was not delivered by defendants to Foxwell till a day after he gave them the shipping receipt was error. It was material to the plaintiffs’ case that the fact should be found whether Foxwell made and delivered the bill to defendants without the knowledge or authority of plaintiffs.
Also the refusal to find that the plaintiffs never accepted defendants’ checks. This was material to show that no payment was actually made to the plaintiffs.
So the refusal of the court to find that the indorsement of the check was a forgery, and that the indorsement was made without their knowledge, and that Foxwell had no authority to collect bills for the plaintiffs, or to make out or receipt their bills.
The court refused to find that Foxwell had no connection with the plaintiffs except as broker; the fact was clearly proven, and the only question was whether the court should have found that fact.
The court was requested to find that the delivery of the check to Foxwell was not a delivery to the plaintiffs so as to entitle them to recover of the bank. The court was bound to find that fact affirmatively in order to sustain its finding of law that the defendants had paid the plaintiffs’ claim. There is no proof that the check was ever paid by the bank, even to Foxwell, and the court refused to find that there was no such evidence.
The defendants proved that the purchase was made of the plaintiffs. The receipt produced by them shows the same fact. It can make no difference that the defendants gave a check to the order of plaintiffs. B"o authority is shown in Foxwell to receive it. On the contrary, it is distinctly disproved by plaintiffs’ evidence. The money was due from the defendants to the plaintiffs. The only question, therefore, is, has the debt been paid? The only claim of payment is, that the payment was in the check given to Fox-well. A broker has no authority to receive payment for property so sold; his duty ends when he has made the bargain (Story on Agency, § 109; Higgins v. Moore, 34 N. Y., 417 , 424; Easton v. Clark, 35 N. Y., 225 ).
The principal was known to the defendants, who received a bill
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in the plaintiffs’ name and gave a check to plaintiffs’ order. They dealt with an unauthorized person at their own peril.
It is claimed that Foxwell had authority to collect the bill on the ground that he had the muniments of title. The delivery of the check to Foxwell was not a delivery to the plaintiffs. He was not their agent for that purpose. They have not ratified or adopted his action, and it never came to their possession, or to the possession of any agent of theirs. A principal is bound by the acts of his agent only so far as the agent is acting in the course of his employment (Weisser v. Denison, 10 N. Y., 6 Seld., 68).
The taking of the note or promise of the defendants to pay is not a discharge of the debt, unless the plaintiffs agreed to take it as such (Fobey v. Barker, 5 Johns., 68 ; Murray v. Gouverneur, 1 Johns. Cases, 440).
The giving of a check, even to the plaintiffs themselves (much less to an unauthorized person), is no payment of a debt, unless the check be paid (People v. Howell, 4 Johns., 296 , 304).
The defendants have their right of action against the bank, and it is undoubted. They directed the bank to pay Wm. H. Talmage & Co., or order; the bank paid on a forged indorsement; and that this is no defense to an action by the defendants (Weisser v. Denison, 10 N. Y., 68 ).
Mr. John E. Burrill for respondents.
The findings of the court on the questions of fact involved are not only warranted by the evidence, but, like the verdict of a jury, are conclusive upon this appeal. Should the court on this appeal examine the evidence, it will see that the findings of the court are fully warranted by the evidence.
The contract for the sale of the coal was made at the office of the plaintiffs by Foxwell, who was there present and in charge, and acting as one of the firm. Foxwell held the shipping receipt of the coal, which was delivered on board the Florence, and a bill and receipt. Foxwell was in fact acting in behalf of the plaintiffs, and kept their books at the time of the transaction. He oc
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cupied a desk behind the railing the same as a partner; made sale of coal and collected the bills therefor, used the billheads of the plaintiffs, and received checks payable to the order of the plaintiffs, which were indorsed by Foxwell in the name of the plaintiffs and deposited to their account. When the check in question was given to Foxwell, he delivered the bill, shipping bill, and receipt.
The principal is liable for the acts of the agent even in excess of the actual authority conferred upon the agent, provided such acts be within the scope of the apparent authority, and be such as an innocent third party, from the recognized acts of such agent, had a right to infer such agent was authorized to do (Dunny v. Roberts, 35 Barb., 463 ; Brindenbecker v. Lowell, 32 Barb., 9 ).
The principle contended for by plaintiffs, that a mere broker has no implied authority to collect, has no application to this case, because here Foxwell was not a mere broker, but was intrusted with the possession of the evidences of title to the property and to the money to be paid, and also because it is shown that the acts of Foxwell in collecting and receiving payment of bills were known to be recognized by the plaintiffs.
The cases referred to, that a check does not operate as payment unless expressly agreed to be received as payment, have no bearing, because in this instance the check, was paid at bank by defendants, and they have parted with their money. And again, the check is not in the possession of the plaintiffs, but has been by their agent disposed of.
By the Court:
The general doctrine undoubtedly is, that a broker employed to sell has no authority as such to receive payment, for the reason that he has no authority to sell in his own name. The duty of a broker, in general, is ended when he has found a purchaser and has brought the parties together, and evidence of a local usage, allowing mere brokers to receive payment in certain cases, is not admissible for the purpose of. establishing
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authority in such brokers to receive such payment. But the plaintiff's in this case cannot, in my judgment, invoke the application of these general rules for their benefit. The evidence shows that Foxwell was more than a mere broker. He seems to have had general charge of the office of the plaintiffs at the time the clerk of the defendants purchased the coal there; he was behind the railing in plaintiff's’ office in the same manner, as a member or clerk of plaintiffs’ firm, and one of the plaintiffs testified that he had that privilege; he effected the sale in plaintiffs’ name without disclosing that he acted as a broker merely, and the sale was made openly in a business manner and in the presence of other persons; the next day Foxwell called at the office of the defendants and procured the name of the vessel, on board of which the coal was to be delivered; the coal was delivered accordingly ; after that he brought the company’s receipt for it, the bill of lading, and the bill for the price made out on one of the blanks with a printed billhead usually used by plaintiffs’ firm for that purpose, to the office of the defendants and finally demanded and received the money. Up to this moment the defendants neither knew nor suspected that they were dealing with a broker; they had had no previous acquaintance or previous dealings either with the plaintiffs or with Foxwell; they, therefore, had every reason to believe, and I cannot doubt that they did believe, that Foxwell was either a member of plaintiffs’ firm, or at any rate an agent clothed with general authority, and consequently did not hesitate to give him their check payable to the order of the plaintiffs, for which he signed a receipt in plaintiffs’ name. Thus it will be perceived that Foxwell not only negotiated the sale behind the railing in plaintiffs’ office, but that subsequently he had the possession of the evidences of the title to the property as well as to the money to be paid, and as his acts up to the time of payment including the presentation of the bill for the price had apparently been ratified by the plaintiffs in every particular, the defendants were justified in dealing with him as if he was authorized to collect bills and receive payment, and after having done so as innocent parties,
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they have a right to invoke the protection of the rule, which holds the principal liable for acts of the agent done even in excess of the actual authority conferred upon the agent, provided such acts be within the scope of the apparent authority, and be such as an innocent third party, from the recognized acts of such agent, had a right to infer such agent was authorized to do. In cases of this description, the real question ip not what power was intended to be given to the agent, but what power a third person, who dealt with him, had a right to infer he possessed, from his own acts and those of Ms principal (Dunning v. Roberts, 35 Barb., 463 ; Bridenbecker v. Lowell, 32 Barb., 9 ).
In the cases relied upon by the plaintiffs in this action a different state of facts existed. In Higgins v. Moore ( 34 N. Y., 417 ), the referee found as matter of fact, that the sole authority of the agent was to sell, and that simply as broker, and he rested his judgment upon a custom or usage which he found to exist in the City of Hew York, that when grain is sold by a broker for the broker to have the bill for grain sold by him made out in Ms own name, and for Mm to collect the money from the purchaser, where the seller resides out of the city of Hew York; and on further examination, it will be found that at the time of making the sale, the defendant in that case did not know who was the owner of the rye, but before any part of the same was delivered, he knew that the plaintiffs were the owners thereof; and, in fact, the rye was delivered directly to the defendant by the plaintiff’s bargemen from the barge in which it was brought to the city. In Easton v. Clark ( 35 N. Y., 225 ) there was an unauthorized sale of the property, by wMch, if the plaintiff had so elected, no title passed. In the case of the New York Life Insurance and Trust Company v. Beebe ( 7 N. Y., 364 ) the agent was employed to obtain a loan for the respondent from the appellants, but Ms alleged declarations, wMch were relied upon, were entirely without the scope of such or any other agency. Instead of acting as the respondent’s agent he represented himself as acting in Ms own name and right, and on his own account, in effect denying any agency whatever, and the respondent did nothing
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to mislead the appellants. These cases, therefore, do not help the plaintiffs. On the other hand it seems to be well settled, as a rule, based on principles of policy, propriety, and justice, that if a principal puts his agent in á position to impose on innocent third persons by apparently pursuing his authority, he shall be bound by the agent’s acts, for the reason that he, by his own acts and conduct furnishes the opportunity to the agent to deceive, and because such innocent third persons should not be made to suffer for the positive carelessness of the principal. The evidence in this case shows that the arrangements between Foxwell and the plaintiffs were generally very loose, indeed. Shortly before the sale to the defendants, Foxwell made some sales to other parties; he used plaintiffs’ billheads, presented the bills, received the checks to plaintiffs’ order, indorsed the latter in plaintiffs’ name, deposited them, thus indorsed, to plaintiffs’ credit, and plaintiffs ratified his acts. This evidence was not received for the purpose of showing that the defendants were in any wise influenced thereby, for they had no knowledge thereof, and had already rested their defence upon other testimony, but in rebuttal of statements made by plaintiffs upon the stand, to the effect that Foxwell never acted otherwise than as a broker for them, and in part refutation of the claim set up by plaintiffs generally, that because Foxwell was in point of fact a broker, and as such also sold for other houses, he must have acted as such in the particular transaction which plaintiffs had with the defendants. Ho error was committed by the admission of this evidence. It also appears that shortly after the sale to the defendants, Foxwell, at plaintiffs’ request, kept plaintiffs’ books for a short time, and collected bills for them. There is some evidence tending to show that during that time the bill of defendants was marked or crossed off plaintiffs’ books, and the fact that plaintiffs, although the sale was for cash, made no demand for the money upon the defendants until after the expiration of about two months from the time of the delivery by the defendants of their check to Foxwell, is not disputed at all. Upon the whole evidence there can be no doubt that the plaintiffs are alone
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to blame, and that it would be highly inequitable to compel the defendants to pay a second time, upon the sole ground that plaintiffs’ agent, who to all appearances had full authority to receive payment, had none in point of fact. The defendants having thus been induced to part with their check, and the bank having paid the same, and charged the defendants therewith, it becomes immaterial to inquire by what means Foxwell got hold of the proceeds of the same, and for the same reason an examination of the cases cited by plaintiffs’ counsel, for the purpose of demonstrating that a check does not operate as a payment, unless expressly agreed to be received as payment, is unnecessary.
I am of opinion that the findings of "the court below are fully warranted by the evidence ; that no error was committed by the refusal of the court to find as requested by the counsel for the plaintiffs, and that, therefore, the judgment appealed from should be affirmed, with costs.