Case ID: mass_13/html/0146-02.html
Source: Caselaw Access Project
Author: {"author": "Putnam, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George Odiorne and Others versus Virgil Maxcy and Others.
    Of the authority of factors and agents to bind their principals, f
    t See Odiorne vs. Maxcy ^ al.} 15 Mass. Rep. 39.
    Assumpsit upon two promissory notes, given by one Perley Bice to the Neponset Cotton Factory Company, and indorsed to the plaintiffs by Levi Maxcy, agent of the said company, and signing his name as such.
    The action was tried at the last November term, before the Chief Justice, upon the general issue.
    It was in evidence, that the defendants composed a company, under the above name, who had established and carried on a cotton manufactory in the county of Bristol; some of them residing in the city of Baltimore, and the others in this Commonwealth. Levi Maxcy acted as their agent in and about the manufactory, purchasing materi als which were wanted, and disposing of the manufactured cotton. Perley Rice, the promissor in the notes, * resided in Boston, doing business as agent for a number of manufactories in the country, and amongst them for the said Neponset Company; and had frequently been employed to make sales and purchases for the said company. The notes in question were given for a quantity of iron, purchased by the said Perley Rice of the plaintiffs, who were dealers in that article. The plaintiffs required Rice to give an indorser upon the note, and they were accordingly made payable as above stated, and indorsed “ Levi Maxcy, agent for the Neponset Cotton Factory Company.” Some evidence, from a deposition used at the trial, was introduced by the plaintiffs, which went to prove, that the notes had been recognized, and the liability of the defendants acknowledged, by Virgil Maxcy, one of the defendants. This evidence was objected to as irrelevant, by the counsel for the defendants ; but, upon an observation of the Chief Justice:, that the plaintiffs had made out a sufficient case without this evidence, no further consideration of this topic was had on either side ; but still the depositions went to the jury. This was all the evidence in the case, except that the said Virgil Maxcy had secured the payment of a note, given by the said Levi Maxcy under similar circumstances, out of the company’s property.
    The jury were instructed, that, as Levi Maxcy was the general agent of the persons who dealt under the name of the Neponset Cotton Factory Company, doing all the business which was requisite to maintain and carry on that establishment, it was to be presumed that he had authority to obtain credits and give securities in their name, for any purpose connected with the establishment ; and that persons, who received their securities, were not bound to know whether the goods sold went to the use of the establishment or not; that any articles of merchandise might be wanted for their use, to supply laborers, build and repair their works, and for other purposes ; and that a note thus given by Rice to Levi Maxcy as agent, and indorsed by him in that capacity, was to be presumed to have * been given for the purposes of the company, unless the contrary were shown ; an! that, generally, he who acted as the agent of another in business of this sort, in which buying and selling were necessary, and credit was common, had a right to charge his principals by his personal contracts in their name ; unless genera, or special notice was given of some limitation to his authority.
    The jury returned a verdict for the plaintiffs ; and the defendants moved for a new trial, for misdirection, and for the admission of improper evidence.
    
      W. Sullivan and Sedgwick, for the defendants,
    argued, that Levi Maxcy’s agency extended only to the business of selling the goods of the company, and perhaps to purchasing for their use on credit. This was a transaction foreign to the concerns of the company. It was a purchase of Rice for bis own use, and it was so known to the plaintiffs. If Levi Maxcy had authority to bind his principals in such a case as this, he might bind them for the price of a house or of a ship. Had be been one of the company, he could bind the company only for their own debts, not even for his own personal debts, and much less for the debt of a stranger.  The contract being negotiable does not affect the case, as the plaintiffs are original parties to it.
    Whitman, for the plaintiffs.
    The case 'finds, not only that Levi Maxcy was the general agent of the company, but also that Rice was their agent for purchases and sales. The plaintiffs might, then, very well suppose, that this transaction had relation to their affairs. But, in such case, had this note been given for a personal debt of Rice, the company must have been bound by the act of both their agents. Nothing, however, is more common than to purchase one article, which may be had on credit, with a view to exchange it for another, which commands cash in hand ; and this might very probably have been the existing state of iron and cotton in this market, at the time of this negotiation. At any rate, here was no fraud ; and it was certainly the interest of the defendants to maintain the credit of *Rice. In addition to all this, the plaintiffs produced evidence, that one of.- the company had recognized and assumed this demand.
    
      
      
        Shirreff vs. Wilks & al., 1 East, 48. — Hope vs. Cust, Ibid. 53, cited by Lawrence, J. — Kinder & al. vs. Shaw & al., Mass. Rep. 298.
    
   The opinion of the Court was delivered by

Putnam, J.

The plaintiffs undertake to show, that the defendants authorized Levi Maxcy to make the contract declared upon, in their behalf. This authority may be either express or implied. The former is not suggested ; but the plaintiffs argue, that the latter is to be inferred from the general agency which the defendants intrusted to Mr. Maxcy. We do not, however, think ourselves warranted to say, that the law will necessarily imply a promise, on the part of the defendants, from the facts reported. If the sale of the iron was made by the plaintiffs to Perley Rice in his own name, and for his own use, and not for the use of the defendants, we are clearly of opinion, that they are not liable, merely because their general agent has pledged their credit as sureties or indorsers for Rice.

The authority of a general agent is not unlimited ; It must necessarily be restrained to the transactions and concerns appurtenant to the business of the principal. Thus, one who was authorized to buy the raw materials, and to sell the manufactures of a manufacturing company, could not, .by implication, have authority to buy ships or real estate, or any other thing having no relation to the establishment. So, if one was authorized generally to sign promissory notes for the debts of the principal, it could not be reasonably intended, that he might, by implication, have authority to give notes binding his principal to pay the debts of strangers, or to pledge the credit of his principal as a surety for goods which were not bought for him, and which never came to his use.

Analogous to this principle, it has been well settled, that a factor has no authority to pawn the goods of his principal; for the plain reason, that such an authority could not reasonably be implied from the power of selling, to render an account.

*In the case at bar, we are apprehensive that the jury have not distinctly considered the question, whether the iron was bought for the defendants, as an article supposed to be necessary in the management of their affairs. If such was the fact, we should hold the defendants liable in this action ; even if the agent afterwards should have unfaithfully appropriated it to his own use. And, if the goods came to the use of the defendants, we should think that was a fact which was proper for the consideration of the jury, connected with the other circumstances of the case, as tending to prove that the contract was originally made on their account, or that they assented to the act of their agent; a subsequent assent being equivalent to a previous command. And the assent of any one oí the partners would be good evidence, affecting the rest; unless, b} the articles or constitution of the company, the whole concern anu management should have been intrusted to a committee or board ot. managers, in which-case the assent should be proved to have been given by them, or some of them, pursuant to the authority delegated to them by the company.

Upon these views of the case, we are of opinion that a new tria, should be granted.

JVew trial granted.

[See Story on Agency c. 6. — Ed.]