Case ID: ad_143/html/0402-01.html
Source: Caselaw Access Project
Author: {"author": "Laughlin, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Philip H. Gaspard and Harry H. Levy, Respondents, v. The Fourteenth Street Store, Appellant.
    First Department,
    March 10, 1911.
    Principal and agent — knowledge of agent acquired while acting for other principal—when principal chargeable with knowledge—evidence — knowledge of agent at time of transaction.
    A principal is chargeable with notice to or knowledge acquired by his agent out side of his employment and while acting for another principal, provided that the agent had such notice or knowledge in mind when carrying out a particular transaction for his new principal.
    Thus, where an alleged contract of .sale was made through the agents of both parties, the seller is chargeable with notice that the buyer’s agent had no authority to make purchases unless his order was confirmed by his principal, if at the time of the contract his agent had in mind the limitation placed on the buyer’s agent’s authority although he acquired that knowledge while acting for another principal.
    Evidence examined, and held, that a finding that the seller’s agent when acting for his principal did not have in mind the limitation placed on the buyer’s agent’s authority was against the weight of evidence.
    In an action for the breach of a contract of sale negotiated through the agents of both parties it is error to exclude evidence tending to show that the seller’s agent had in mind at the time of the transaction the fact that orders placed by the buyer’s agent required confirmation by his principal in order to be valid.
    
      Appeal by the defendant, The Fourteenth Street Store, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 7th day of March, 1910, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 3d day of March, 1910, denying the defendant’s motion for a new trial made upon the minutes.
    
      Benjamin G. Paskus [Worman P. S. Schloss with him on the brief], for the appellant.
    
      Otto C. Sommerich [Gharles Trosh with him on the brief], for the respondents.
   Laughlin, J.:

This is an action on contract to recover the purchase price of a quantity of goods, consisting of men’s and boys’ worsted suits, which, it is alleged, the defendant after purchasing refused to accept or to pay for according to its agreement. The plaintiffs allege that the goods were purchased by the defendant on the 14th day of November, 1907, to be delivered during the month of March, 1908; and that defendant accepted delivery of part of the goods of the value of §888, but refused to accept the balance. The negotiations which the plaintiffs claim resulted in the contract on which the action is based were had on the part of the defendant by one Wolf, who was the buyer in its clothing department, and on behalf of the plaintiffs by one Bosenthal, who was a salesman in their employ. It appears that the plaintiff Levy took part in the negotiations to some extent, but the case was tried and submitted to the jury upon the theory that the contract was made in behalf of the plaintiffs by Bosenthal; and the argument of the learned counsel for the respondents in support of the recovery is based upon the theory that the order for the goods was taken by Bosenthal. The plaintiffs alleged'that the contract was for the sale of a bill of goods amounting to $8,199.50, but the contract price of the goods which, on the plaintiffs’ theory of the case, the defendant agreed to purchase, was only $4,619.50, and the case was tried as if that were the value of the goods stated in the complaint. The plaintiffs delivered a bill of goods of this description amounting to $888 to the defendant on or about die 26th day of March, 1908, and it accepted and paid for the same. The plaintiffs claim that this was part of the order for goods of the aggregate agreed value of $4,619.50 placed with them by Wolf on the fourteenth of November preceding, but the defendant claims that it was a separate purchase made by Wolf for it the day before or the day the goods were delivered and confirmed by it the day the selections were made by Wolf. The balance of the goods which plaintiffs claim the defendant agreed to purchase were subsequently tendered and owing to negotiations with respect to the delivery thereof or to the liability of the defendant to take the goods, the plaintiffs held them until such negotiations were broken off in the month of June thereafter, when the defendant finally declined to accept them. At that time the market value of the goods undelivered was only $2,615, but the contract price thereof as claimed by plaintiffs was $3,731.50. The court instructed the jury that if the plaintiffs were entitled to recover, the measure of their damages would be the difference between the market value of this balance of goods which the defendant refused to accept and the contract price thereof, which would be $1,116.50. The verdict was for that amount. There was a sharp conflict in the evidence with respect to whether or not the defendant’s representative, Wolf, assumed to place a definite unconditional order with the plaintiffs in November, 1907, as claimed. The plaintiff Levy testified that an unconditional order was at that time given for the amount of goods to be delivered in March thereafter and his testimony is to some extent although not fully corroborated by the salesman Rosenthal; but Wolf testified that no order was placed at that time and, in substance, that the negotiations were limited to a discussion of the kind, style, quality and quantity of goods in the lines carried or manufactured by plaintiffs that the defendant would likely require for the spring trade.

On the 28th day of September, 1907, Wolf had given the plaintiffs an “ open order” in writing for a number of suits at specified prices with a proviso that the il styles & sizes ” were to he given later, but as we understand the evidence, it was not shown that there was any connection between that order and the order claimed to have been given on the fourteenth day of November thereafter. It was not clearly shown that there was ever any delivery of goods ’ by plaintiffs to defendant other than the single delivery in March, 1908.

It appears that the authority of Wolf to purchase clothing for the defendant was limited to negotiating contracts subject to confirmation by the defendant’s manager, Goldman, or an officer of defendant. The plaintiffs had no actual knowledge of the limitation of Wolf’s authority, but their salesman Rosenthal had notice and knowledge of such limitation. He acquired this knowledge in business transactions with the defendant during a number of years immediately before he entered the employ of the plaintiffs and while he was representing another employer. He had been in the employ of plaintiffs about six months on the 14th of November, 1907. It further appears by the testimony of Wolf that this limitation of his authority was alluded to by him in his conversation with Rosenthal on November 14, 1907, which the plaintiffs claim resulted in placing the order, and that he distinctly informed Rosenthal that the selections made by him could not be considered an order for the purchase of the goods until confirmed by the defendant. This is not controverted by Rosenthal. It does^not appear whether the suits were manufactured at the time of the negotiations in November or were to be manufactured thereafter, but it is clearly to be inferred they were of lines carried or manufactured by plaintiffs. Evidently with a view to bringing the case clearly within the rule that a principal is chargeable with notice to or knowledge acquired by his agent outside of his employment, and while acting for another principal, provided the agent has such notice or knowledge in mind at the time of transacting the particular business for his new employer (Constant v. University of Rochester, 111 N. Y. 604, and kindred authorities), counsel for the defendant asked Rosenthal, who was called as a witness for plaintiffs, whether in his dealings with Mr. Wolf in connection with the business of plaintiffs he had in mind that any selections of goods by Wolf would not be received by defendant unless the selection were confirmed by it. On objection by counsel for plaintiffs this evidence was excluded and an exception was duly taken.

W e are of opinion that the fair construction of the testimony of Rosenthal is that he did have this limitation of Wolf’s authority in mind at the time he was negotiating this order with him, and there were admissions in the testimony of the plaintiff Levy tending to show that he in some manner acquired knowledge that it was necessary to receive from the defendant a confirmation of ordérs for goods placed by Wolf before shipping the goods. It is claimed on the part of the plaintiffs that Levy acquired this knowledge after the contract was made, and by a confirmation order for the goods delivered in March, which they received the day after Wolf selected and directed the shipment of those goods. That confirmation order contained a printed notice as follows: “ This order is not valid unless confirmed by an officer of the corporation,” and it contained such a confirmation in writing. The plaintiffs, however, were chargeable with the information possessed by their salesman Bosenthal, and which he had in mind at the time of negotiating the contract, concerning the authority of Wolf; and if the testimony of Bosenthal, to which reference has been made, does not show that he had this information with respect to the limitation of Wolf’s authority in mind at the time the contract was negotiated, it was prejudicial error to exclude the evidence offered to show that lie ^ did have that ^knowledge in mind then. The learned court, in submitting the case to the jury, left it for the jury to determine as a question of fact whether Bosenthal knew that Wolf was not authorized to give the order which the plaintiffs claimed he gave, and instructed the jury that if Bosenthal had such knowledge then plaintiffs could not recover. Under the instructions given to the jury there could be no recovery by the plaintiffs if Bosenthal knew' that Wolf was not authorized to give an unconditional order which required no confirmation by the defendant or any one else in its behalf.

We are of opinion that if there be any evidence in the record to sustain the determination of the jury that Bosenthal was without such knowledge, which is extremely doubtful, the determination in that regard' is, at least, against the weight of the evidence.

It follows, therefore, that the judgment and order should be reversed and a new trial granted, with costs to appellant to abide the event.

Ingraham, P. J., McLaughlin, Scott and Miller, JJ.,concurred.

Judgment and order reversed, new trial ordered, costs to appellant to abide event.