Sage v. Sherman — 25 Wend. 426

Majority

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Sage vs. Sherman and others.

Headnote

An agent authorized to purchase lands for his principal, and to draw on him for the purchase money, is not a competent witness to charge his principal with the price of lands sold, in an action by a vendor against the principal, if the agent he himself, prima facie, liable' to the vendor for the purchase money. o-

This was an action of assumpsit, tried at the Genesee circuit, in March, 1840, before the Hon. Nathan Dayton, one of the circuit judges. [ *427 ] *The plaintiff declared for lands sold by him to the defendants, and at their request conveyed to Sherman, one of their number. The lands were bargained for by one James P. Greeves; and to obtain proof of his authority to bind the defendants the plaintiff filed a bill of discovery, stating that the lands for which he sought payment were bargained for by Greeves, who at the time professed to act as the agent of the defendants ; that the lands sold were conveyed to Sherman by the direction of Greeves ; and that to show the agency of Greeves in the premises it would be indispensably necessary to produce and prove on the trial certain articles of agreement'made between the defendants and Greeves, bearing date on or about 4th April, 1836. The defendants answered, admitting that Greeves bargained for the lands referred to in the bill, and that they had been conveyed to Sherman; they admitted the existence of an agreement between themselves and Greeves, of the date specified in the bill, and gave a copy of it; by which it appears that the defendants agreed to provide a fund not exceeding $30,000, to meet such drafts as Greeves should from time to time make on Sherman for the purchase of lands in any of the western states or the territories of Michigan and Wisconsin, for the account of the defendants. The money to be expended by Greeves at his discretion in purchasing lands, and the title to the same to be taken in the name of Sherman, to be held by him in trust for the parties to the agreement, in the

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following proportions : three quarters of the net profits, after refunding the $30,000 and interest, to be divided between the defendants in equal proportions ; and the remaining quarter to be for the benefit of Greeves, as a remuneration for his time, &c. It was stipulated that upon all purchases made, Greeves should draw on Sherman at not less than ten days sight. The defendants also say that subsequent to the agreement above stated, a supplementary agreement was subjoined, a copy of which they also give, but which it is deemed not material to state here. They admit that so far as Greeves acted in conformity with the agreement above stated, he was. their agent; but they allege that in making *the purchase of [ *428 ] the plaintiff he exceeded his authority, and that consequently they are not bound to execute the contract made by him with the plaintiff. On the trial of the cause, the plaintiff gave the bill and answer in evidence. The plaintiff next offered in evidence the testimony of Greeves, taken under a commission, which was objected to as inadmissible, on the ground that Greeves was not a competent witness, by reason of his interest in the event of the suit. The objection was over-ruled, the defendants excepted, and his answers to the interrogatories attached to the commission were read to the jury. He testified that under the agreement between him and the defendants of the date of 4th April, 1836, he purchased of the plaintiff on » the 14th May, 1836, the quantity of 179 acres of land situate in Michigan, for which he agreed to pay $7000 in manner following: cash down $3000, and the residue in two equal instalments of $2000 each, payable in one and two years, with interest. That he paid the $3000 to the plaintiff, and .made and delivered to him two notes of $2000 each, payable in one and two years, with interest, which he signed with his proper name, adding thereto the words, “ Attorney for Watts Sherman that the plaintiff executed a deed conveying the land to Watts Sherman; which deed was duly recorded and transmitted to Sherman. He further testified that the purchase made by him of the plaintiff was the first purchase completed for the defendants in pursuance of the agreement between him and the defendants, and that previous to that purchase he had not drawn for one dollar; that on the 22d May, 1836, he was in Albany, and informed the defendants (except one of them, J. L. Graham, who was not present,) of the purchase made by him of the plaintiff, and stated the terms upon which it was made ; that he had given two obligations payable in one and two years for $2000 each ; and that the defendants seemed particularly well pleased with the time obtained for the payment of the $4000. Whether he informed them that the obligations were drafts or notes, he did not recollect; and subsequently testified that he could not say that he informed them that he had given notes. *This interview was had previous to the second [ *429 ] agreement between him and the defendants. He further testifi

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ed that about 1st June, 1837, he was informed by the plaintiff that the note which first fell due had been protested for non-payment; and that the reason which had been assignéd for its non-payment was, that it was in the shape of a note, instead of a draft; and that shortly thereafter he drew and gave to the plaintiff two drafts upon Sherman, dated 17th May, 1837, for $2140 each, one payable in four, and the other in eight months, both payable with interest. In answer to cross-interrogatories, this witness stated that he had drawn on Sherman to the amount of $8000, for lands purchased and to be purchased for the defendants, all of which were paid. When the reading of this testimony was closed, the counsel for the defendants renewed their objection to its admissibility on the ground of the interest of the witness in the event of the suit; but the objection was again over-ruled and the defendants excepted. The counsel for the defendants then requested the judge to charge the jury, that 'the plaintiff had failed to show that Greeves had power to bind the defendants to perform the contract made by him with the plaintiff ; that the plaintiff had not parted with his property on the credit of the defendants ; but by accepting the notes of Greeves had relied upon his responsibility ; that the defendants had not ratified, the contract made by Greeves with the plaintiff; and at all events that such contract had not been ratified by John L. Graham, one of the defendants ; and failing to shew the assent of all, there could not be a recovery against the defendants. The judge refused so to charge, and on the contrary instructed the jury that the plaintiff was entitled to recover. The jury accordingly found a verdict for plaintiff for the sum of $5112.22. The counsel for the defendants excepted to the refusal of the judge to charge as requested, and on a bill of exceptions now moved for a new trial.

I. Harris and A. C. Paige, for the defendants.

M. T. Reynolds, for the plaintiff.

[ *430 ] *By the Court,

There can be no doubt but that Greeves had sufficient authority to make the purchase of the plaintiff; and that the defendants are liable, unless exonerated by the mode of providing for payment.

Looking at the terms of the authority conferred upon Greeves, I think it clear the purchases were to be made for cash. The first article of the association provides for funds, to meet from time to time his drafts, which he is authorized to make at ten days sight. The stipulation was a material one, as it operated by way of check upon the conduct of the agent, and enabled him to purchase upon the most advantageous terms. But as the defendants have got the title to the land of the plaintiff, unless it shall appear

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that they have already advanced the necessary funds to meet the payment upon the drafs of the agent, they should still be liable ; for then they lose nothing by the delay. If, however, they have furnished him with funds in the usual way, equal to the balance due over and above sufficient to meet the other purchases, then I am inclined to think they have done all that can be exacted of them, and the plaintiff must look to the agent.

The ratification was probably void, on the ground that Greeves concealed the fact of giving the notes; but, aside from this, Graham, one of the defendants, was not present at the time of the supposed ratification ; as the plaintiff must make out a joint indebtedness against all, the failure to show the assent of one is fatal.

The view thus far preceeds upon the assumption, that the evidence of the agent was competent for the plaintiff; if it was not, the whole foundation of the action fails, as he is the only witness called to sustain it. The cases of McBrain v. Fortune, 3 Camp. 317, and Ripley v. Thompson, 12 Moore, 55, are decisive against his admission. The first was an action for goods sold; and the plaintiff called one S., who had purchased them in bis own name, for the purpose of proving that he acted as agent for the defendants. He was objected to, on the ground that he was himself prima fade liable, and would be discharged if the plaintiff recovered. Lord Ellen, borough held, that he could not be examined *either on the [ *431 ] ground of necessity, or that he stood indifferent between the parties : the positions taken for his admission. He said the witness had a clear interest in the event of the sale, without any counterbalance. If it succeeded, the verdict would be evidence for him in an action against himself, to which he was personally liable. The other was also an action for goods sold; the defendants were partners. Four horses had been sold by the plaintiff to one G., who had given his own notes for the purchase money, payable at one and two months. The notes had been dishonored. G. was a horse dealer, and several witnesses were called to show that he had been set up by the defendants, and was in fact a partner with them. The plaintiff proposed to call G. himself, for the purpose of showing that the defendants were to provide money for the purchase of horses, and he was to be allowed a weekly salary out of the profits. He was objected to without a release. The judge rejected him, and the plaintiff submitted to a nonsuit, with leave to move to set it aside. The court held him interested in obtaining a verdict against the defendants: Prima faeie he stood liable for the whole debt as principal, and was called to fix it upon the defendants, to whom he would only be liable for contribution. Chief Justice Best said he could not distinguish it .from McBrain v. Fortune, which had been cited.

The principle has been carried into all the elementary books. 1 Phillips on Ev. 130 ; 1 Starkie’s Ev. 108. The last author states it thus : It has

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been held that where a witness is prima facie liable to the vendor of goods which he has purchased in his own name, he is not a competent witness for the vendor against a third person, to prove that the defendant is solely or jointly liable for the goods; for in such case, the witness has a direct interest in causing another to pay or contribute to the payment of the debt.

Here, Greeves is prima fade liable for the debt. The drafts are in his own name ; and though he subscribed the notes as agent, the names of the principals are not given. Sherman had no special agency for them, except to pay the drafts, and take the title in his own name. The wit- [ *432 ] ness is called to fix this debt upon the defendants ; to create *a new liability by means of which he may become discharged ; for if the plaintiff adopts his act as agent, and recovers against the defendants, he could not afterwards resort to him. .

New trial granted; costs to abide ekent.