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Ludwig v. Gillespie

51 N.Y. Super. Ct. 310 19 Jones & S. 310 Court N.Y. Super. Ct. Decision date 1885-02-02 English

Delivered by O'Gorman, J.

Contents

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ERNEST LUDWIG, Respondent, v. LOUIS C. GILLESPIE, Appellant.
Decided February 2, 1885.

Headnote

Realpa/i'ty in interest.—Trustee of express trust.—Principal and agent.
In case of a breach of a written express contract, made by or with an agent acting for his principal, but contracting in his own name, with or without description of agency, the agent may sue in his own name without joining his principal.
The contract in this case, under the facts proved, held to be within the provisions of the Code, § 449, which provides that a trustee of an express trust may sue without joining with him the person for whose benefit the action is prosecuted, and that such a trustee is “a person with whom, or in whose name a contract is made for the benefit of another.”
Before Sedgwick, Ch. J., Truax and O’Gorman, JJ.
Appeal from judgment in favor of the plaintiff entered ■ on the report of a referee.
The facts appear in the opinion.
William-Hildreth Field, for appellant.
Plaintiff cannot sue upon the contract in suit in his own name. 1. Before the Code all actions were prosecuted in the name of the party who held the legal title. If a contract
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was made with a party as agent, the legal title was in his principal, and any action upon the contract had to be brought in the name of the principal (Gunn v. Cantine, 10 Johns. 387 ). If, however, a contract was made with a party described as agent, and was, by its terms, made payable to such party, then the words of agency were descriptive merely, the legal title was in the agent, and. he could, sue in his own name. But this decision was put upon the ground that the contract was by its express terms made payable to the agent (Harp v. Osgood, 2 Hill, 216 ). 2. The Code changed the rule of parties by enacting that suits should be brought in the name of the real party in interest, excepting that “the trustee of an express trust ” may sue in his own name, and subsequently the Code enacted that “a person with whom or in his whose name a contract is made for the benefit of another is a trustee of an express trust, within the meaning of this section.” The effect of this enactment in suits brought upon contracts made with agents has been to leave the rule as to proper parties plaintiff the same as before the code. For the courts have held, that unless the agent is the “trustee of an express trust,” the suit must be in the name of the principal; and also, that an agent is the “trustee of an express trust” only when he is vested with a beneficial interest under the contract, or where the contract is by its express terms payable to him. Neither of these conditions exist in the present case (Iselin v. Rowlands, 30 Hun, 488 ; Considerant v. Brisbane, 22 N. Y. 389 ; Funch v. Abenheim, 20 Hun, 1 ). The printed report of Funch v. Abenheim, does not show that the contract was expressly made payable to the agent, but the printed case on appeal shows that the charter party, upon which the action was brought, was made payable to “ the party of the first part,” who was “ Funch, Edye & Co. as agents of the owners.” See also Hughes v. Merc. Mut. Ins. Co., 44 How. 351 (overruled in Ct. of App. on another point, see 55 N. Y. 265 ).
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Martin & Smith, and M. W. Devine, for respondent.
—I. Whether plaintiff’s principals were disclosed or not is wholly immaterial. Plaintiff would still be entitled to maintain this action. The contract was in writing and was made by defendant with the plaintiff in his, plaintiff’s own name. The addition of the word “agent ” was descriptive merely (De Witt v. Walton, 9 N. Y. 513 ). By the Code, § 449, it is provided that a trustee of an express trust may sue without joining with him the person for whose benefit the action is prosecuted. A trustee of an express trust is there defined to be “a person, with whom or in whose name a contract is made for the benefit of another. ” Under this provision and the similar one added to the old Code in 1851 it has been held repeatedly that an action can be maintained by one in whose name the contract is made even though it appear that he was acting for a principal (Bogart v. O’Reagan, 1 E. D. S. 590 ; Harrison v. Marshall, 4 Ib. 217 ; Morgan v. Reid, 1 Abb. 217 ;, Arosemena v. Hinckley, 43 Super. Ct. 443 ; Davis v. Reynolds, 48 How. Pr. 210 , affirmed 5 Hun, 651 ). The provision of section 449 (§ 113 Old Code) extends to a case where the contract is stated to be made with one for the benefit of another. In Considerant v. Brisbane ( 22 N. Y. 389 ), an action was brought by the plaintiff on two notes, in which the promise was to pay “ To V. Considerant, as executive agent of the company, Bureau, Guillon, Godin & Co., the sum of $5,000, for which I am to receive stock of said company, known as premium stock, to the amount of $5,000.” Here the principal was clearly disclosed, but it was held that the action could be prosecuted in the name of the plaintiff (See also Pitney v. Glens Falls Ins. Co., 65 N. Y. 6 ; Knapp v. Simon, 96 Ib. 284; Story on Agency, §§ 268-396).
It is not. necessary where the trustee of an express trust sues in his own name that the complaint should show that other parties are beneficially interested (Hoagland v. Trask, 48 N. Y. 686 ; Merchants’ Bank, &c. v. Union R. & T. Co., 69 Ib. 373; Wetmore v. Hegeman, 88
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Ib. 69). Hence assuming that the plaintiff was acting as the agent of Arles, Dufour & Go., it was not necessary to set this up in the complaint, and this is so whether the principal was disclosed or not.

By the Court.

In April, 1882, a contract in writing was entered into, between the plaintiff and the defendant for the sale, by the plaintiff, to the defendant of four thousand cases of “ Syrian bitumen.”

This contract was executed in two parts, the part known as the “ sold contract,” beginning thus : “ Sold for account of Mr. E. Ludwig to Mr. L. 0. Gillespie, &c.,” and across its face were written by the plaintiff the words: “Accepted, E. Ludwig, Agent.” The contract provided for the times at which the bitumen was to be delivered and the quantity to be delivered at each time and the prices to be paid for the same in “cash thirty days from each delivery.” It was also provided that the seller should not import more of the bitumen, nor make sales of the same in the United States, during the unexpired time and fulfillment of the contract. All the bitumen contracted for was delivered to the defendant in the city of Hew York, and payments were duly made to the plaintiff for all of the same, except for the lot last delivered, the contract price of which amounted to $22,251.60. This sum the defendant refused to pay because : First. The plaintiff did not sell the goods on his own account, but as a known agent of the firm of Arles, Dufour & Go. his disclosed principals, under a special contract in writing, and without authority to receive the proceeds of such sales ; and: Second. Because the seller had violated the contract by importing large quantities of Syrian bitumen into the United States and selling the same at less price than the prices to the defendant, to the great damage of the defendant.

The referee has found that at the time of making the contract the plaintiff was in fact the agent for Arles, Dufour & Go., of Marseilles, and had been their agent for

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three years prior to August 31, 1884, and that the bitumen was sold and delivered by the plaintiff, not on his own account, but for and on account of Arles, Dufour & Go. and as their agent, but that there was no proof that the name of Arles, Dufour & Co. was disclosed or mentioned as principal of the plaintiff in the negotiations for the sale, nor at any time before the contract had been executed and delivered. It is in evidence that on each of the bills sent by the plaintiff to the defendant on each delivery of bitumen, these words were used :—“Bought of E. Ludwig, agent for Arles, Dufour & Co.,” and each of the payments made by defendant to the plaintiff was in a check payable to the order of E. Ludwig, and each of said checks were indorsed by E. Ludwig. Each of the receipts for payments made by the defendant was signed thus: “Rec’d pay’t, E. Ludwig.” Ludwig, the plaintiff, carried on business in the city of New York, using on the sign attached to his place of business the words, “ E. Ludwig, agent of Dufour & Co.”

In April, 1883, during the pendency of this contract, the defendant, in a letter to the plaintiff, refers to the bitumen as due him and “to arrive under contract with you, &c.”

It is clear that the plaintiff was not the owner of the bitumen or the real party in interest, and the question is whether he was, as he contends, entitled to bring this action as a person with whom or in whose name a contract was made for the good of another, as provided for in section 449 of the Code.

The decision of the court of appeals in Considerant v. Brisbane ( 22 N. Y. 389 ), is authority in favor of the plaintiff’s contention. There, the plaintiff Considerant, entered into a contract “as executive agent of Bureaux & Co.,” and it was held that these words indicated the existence of an express trust and that the plaintiff could recover. The court says, written express contracts by or with agents contracting in their own names, with or without description of agency were, even before the Code, not

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exceptions to the general rule, that the right af action followed the legal title ; that “ such a contract was with the agent, when executed by him in his individual name, without expressing the agency, through the other party knew he was acting as agent, and contracted with him in that capacity,” and the contract was equally with him and in his name, though he was described as agent on its face. The words expressive of the agency might, if necessary for convenience of the remedy, be rejected as a mere description of the person.

The principle and reasoning of this decision were followed by the superior court in Arosemena v. Hinckley (43 Super. Ct. 45).

This right in the agent thus contracting for the benefit of his principal, to sue in his own name for breach of the contract, imposes on him a personal responsibility for the due performance of the contract by his principal (Cobb v. Knapp, 71 N. Y. 348 ). And the party thus contracting with an agent can reheve himself of liability to him, only by showing that he has performed his part of the contract to the satisfaction of the principal (Knapp v. Simon, 96 N. Y. 289 ).

The defense interposed in the case at bar, that the plaintiff had no right of action against the defendant, but that the right of action was vested only in Dufour & Co. the principal of the plaintiff, cannot be sustained.

The defendant’s affirmative defense or counter-claim is equally without merit. The referee has found, that there was a breach by the plaintiff of that provision in the contract which forbids the seller to import into the United States, or make sales of more of the bitumen, during the unexpired time and fulfillment of the contract. Inasmuch, however, as no substantial damages to the defendant were shown to have been caused by such breach, the referee properly disposed of the defendant’s counterclaim by awarding him only six cents damages.

The various questions raised at the trial as to the

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admissibility of evidence were properly disposed of by the referee.

The judgment in favor of the plaintiff must be affirmed, with costs.

Sedgwick, Ch. J., and Truax, J., concurred.

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