Case ID: va_1/html/0366-01.html
Source: Caselaw Access Project
Author: {"author": "The PRESIDENT", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hooe & Harrison, and Others, v. Oxley & Hancock.
    April Term, 1791.
    Agency — When Principal Bound by Acts of Agent. — To what extent an agent may bina his principal. If in consequence of a notorious agency, the agent is in the habit of drawing bills, which the principal has regularly paid, this is such an affirmance of his power to draw, that the principal will be bound to pay other bills, though the agent should misapply the money raised by such bills.
    In the year 1783, Oxley and Hancock merchants in Great Britain, appointed Richard Ponsonby their agent in this Country, authorising him to purchase tobacco for them on Potowmack river, and to draw bills of exchange upon them to enable him to make the purchases. On the 31st of December 1783, they write to Ponsonby as follows, “ we will take care “to give due honor to thy bills as they appear” — in their letter of the 9th February 1784 they write “thy bills on us are many *of them now in course of payment, and we have received no tobacco but what came by the Peace and Plenty, &c. the being in advance, besides payment of the duties, makes it inconvenient. We must beg of thee in future to avoid, if possible drawing bills ’till the ship with the tobacco is ready, as we may then have a better chance of being in cash before they are due, but we do not mean to limit thee to any fixed plan, wishing thee to act as nearly in conformity thereto as circumstances will admit.” On the 21st of February 1784, they write him thus, “ we duly honored thy bills as they have appeared, many of which are paid, and we have made nothing of the tobacco as there has been no demand for that article lately, for which reason we request that thou wilt endeavor in future not to draw any bills till the ship is ready to sail.” In their letter to him of the 19th of March 1784 they point out the necessity of his being cautious in advancing money for tobacco and conclude with saying “ and the bills becoming due before the arrival of tobacco must be obviated if possible. We think no money should be paid, till the ship is ready to sail, which would be the means of expediting the lading of her, we just drop these hints for thy government, having no doubt of thy acting in the best manner for our interest — on the 18th of May 1784, they say, “the several bills mentioned in your letters of the 20th and 22d of March will meet due honor.” — In their letter of the 27th of March 1784, they write, that they shall endeavor to charter a ship of 400 or S00 hogsheads to be in the Chesapeake about August, and wishing that Ponsonby may by that time have a full cargo for her. On the ISth of April following, they inform Ponsonby that they had chartered the Snow Lady Johnson then ready to sail for Quebeck, and to be at St. Mary’s by by the 1st of September, if she sails, it is to be at the option of us or our agents to accept or refuse her ; from this early notice we hope the tobacco will be ready to load her. ” On the 29th of September 1784, they write, “we hope the Lady Johnson will get loaded and have no doubt of thy best endeavours — all thy bills as advised will be regularly paid;” this is again repeated in October and November. Ponsonby not having a cargo engaged for the Rady Johnson, and without any expectation of being able to procure one on consignment, by the time of her arrival, determined to purchase, and did actually purchase about 500 hogsheads in order to load her. To enable him to raise money for this purpose, he drew bills on Oxley and Hancock, which *were either paid away for the tobacco or sold for cash, and that applied to the purchase of this commodity.
    The Rady Johnson did arrive about the 10th of September. 1784, was taken up and loaded by Ponsonby with the tobacco thus purchased, consigned to Oxley and Hancock, but chiefly shipped on his own account.
    The bills drawn on account of this cargo which bore date between the 11th of October, and the 4th of December 1784, were protested.
    In their letter to Ponsonby of the 30th of November 1784', they say, “ we are sorry to observe that the Lady Johnson was taken up, as it will lay thee under the necessity of purchasing a large quantity of tobacco to compleat her loading ; this is a plan we do not approve, as we never intended to be purchasers on our own account, so we by no means wish thee to adventure largely, or, indeed in any degree (especially when it must be attended with a certain loss) to promote our interest ; our original intention when we accepted thy agency was solely for thee to procure us consignments from the planters and not for either of us to be concerned on our own - accounts. This must be highly disadvantageous in the present state of the trade, and though in this instance the loss whatever it may be, will fall upon thyself, yet it will give us pain, &c.” they add that there was no necessity of taking up the vessel, as the captain would have taken in any quantity which was ready to be put on board, and conclude thus “ what we are now saying is not by way of blame, for we are well satisfied of thy acting intentionally for the best ; but we wish our sentiments to be rightly understood, for thy government in future ; that is, we are unwilling thee should ship any tobacco either on our account, or thy own, except in the latter case a few hogsheads now and then. We wish not to have any tobacco shipped, except such as may be consigned to our address, nor is it our intention to honor any bills,but on their account.” In a letter dated December the 1st, 1784, they express themselves dissatisfied with his present mode of doing business, and inform him, that they have authorised Haxall and West to investigate his transactions, and either to put them in such a train as in future to be consistent with their intentions, or finally to close them ; that they are pleased with his diligence, but wish to prevent his becoming a purchaser and speculator, to so large an amount.
    *On the 14th of January 178S, after expressing their surprise to find the cai'go of the Rady Johnson (except a few hogsheads) shipped on his, the said Pon-sonby’s own account. They write thus, “ notwithstanding thou hast acted in this strange manner, we shall use every exertion in our power to make the matter as little injurious to thee as possible, and hope we shall be enabled to pay a great part of thy bills ; we shall accept no more of thy drawing, and desire a state of thy account, that all transactions between us may cease. We shall guard our correspondents against any dependence they may have in our accepting thy bills ; we must however, confess, that except this strange mode of procedure we were perfectly satisfied with thy management, we will do everything we can to prevent any of thy bills going back, under a persuasion that there will no more appear.”
    To recover the amount of the bills drawn by Ponsonby on Oxley and Hancock, and which they had protested, the holders of them filed their bill in equity in the county Court of Fairfax against the said Oxley and Hancock, Ponsonby, and sundry others who were indebted to Oxley and Hancock, in this state, praying to condemn in the hands of the latter so much of the debts due from them, as would satisfy the amount of the bills so protested.
    The defendants Oxley and Hancock filed their answer, and alleged that Ponsonby had been employed early in the year 1783, by Roberts their partner, to procure consignments for Roberts, Oxley and Hancock. That the letters of Roberts, as well as of these defendant after Roberts retired from the copartnery (which happened sometime in Autumn 1783) were never intended to confer on him greater powers than those of soliciting and procuring consignments from the planters, and of advancing to them certain sums of money for tobacco actually consigned. That to enable him to make those advances he usually drew bills upon them, which, whenever they appeared to be drawn for those purposes, they accepted, notwithstanding Ponsonby was never authorised to draw them. That the above quotations from their letters were written in answer to letters from Ponsonby specifying particular bills which he had drawn. That the bills in question were drawn to enable Ponsonby to pay for tobacco purchased on his own account.
    The cause being removed by certiorari into the High Court of Chancery, sundry depositions were taken, many of which *prove that it was the general custom of the Rnglish merchants, who solicited tobacco consignments, to appoint agents in this country for that purpose,with power to make advances to the planters, and to draw bills on their principals to enable them to do this — that without such powers being vested in their factors here, the business could not have been carried on. That Ponsonby was generally considered as possessing those powers, and without 1he sanction of such an opinion, could not have sold his bills. — There are other witnesses who declare that they did not conceive that Ponsonby was authorised to draw bills on Oxley and Hancock. Reake, one of their agents for soliciting tobacco consignments, swears that he never conceived that he was cloathed with such a power. — It is stated in the answer and proved by the deposition of Mr. West, that West and Haxall of Baltimore were, the agents and attorneys in fact of Oxley and Hancock in the states of Maryland and Virginia, and had a power of general superintendance over their business in those states. West deposes that he never considered Ponsonby as being authorised to draw bills, and expressed this opinion generally to others.
    The court dismissed the bill from which decree the plaintiffs appealed.
    
      
      Agencies — When Principal Bound by Acts of Agent. —On the question as to when the principal is bound by the act of his agent, the principal case is cited in Hopkins v. Blane, 1 Call 373, 379; Blane v. Froud-ft. 3 Call 214; Kramer v. Blair, 88 Va. 461, 13 S. E. Rep. 914. See monographic note on “Agencies” appended to Silliman v. Fredericksburg, etc., R. Co., 27 Gratt. 119. The principal case is reported in 1 Am. Dec. 425.
    
   The PRESIDENT

delivered the opinion of the court.

Agents may be cloathed either with general, or special powers. — 1st, A general agent may do every thing which the principal may. Powers of this sort are not usually granted, and none such appear in the present case,

2d, Of the second sort are agents limited as to the objects, or the business to be done, and left at large as to the mode of transacting it. Eor example. Ponsonby was limited to the business of procuring consignments of tobacco to his principals, and of loading their ships ; but he might be left to his own discretion as to the mode of conducting that business.

If a particular mode is not prescribed by the original power, that which the agent may adopt, the principal may, by approving, sanctify, and give to it equal validity as if it had made a part of the original authority.

If in consequence of a notorious agency, the agent is in the habit of drawing bills, and the principal in the habit of paying them, this is such an affirmance of his power to draw, that a purchaser of his bills, has a right to expect payment of them by the principal, and if refused, he may coerce it.

*These, I hold to be clear principles of law. They exclude however, the idea of collusion between the bill holder and the agent, to abuse the powers considered by the principal. Such a circumstance would defeat the bill holder in his attempt to charge the principal.

The great bulk of the trade between Great Britain and this country has been principally conducted by factorage. The ostensible object of that trade was prima facie, the barter of foreign merchandise for native commodities.

Experience, however, soon proved, that money must be advanced to the planters, and this necessity introduced a custom generally practised by the factors of drawing bills upon their principals, to enable them to make those advances. The mode of doing this was varioqs ; sometimes the factor prevailed upon the planter to wait until the meeting of the merchants, at which time he would draw for as much as was necessary for his purposes ; others would procure a kind of banker, to advance the money as they wanted it, and take their bills at the meeting of the merchants : whilst others who could not succeed by either of those modes were obliged to draw bills at once to enable them, by sale of them, to make advances as the tobacco was purchased.

I„ never before heard it doubted, but that the principal was bound to accept and pay those bills ; however the factor might have misapplied the money which they produced. If any case has been otherwise determined, it must have proceeded from some proof of notice of a revocation of the .factor’s power, or of some collusion between him and the bill holder.

Alarm'of danger to the fortunes of all principals has been founded, if this doctrine should prevail. The answer is a short one. This danger should be contemplated at the time the power is given, and not when it has been exercised, and many innocent men thereby drawn in, to advance their money on the faith of an open and notorious-agency.

In this case, it appears that the appellees were warned of the danger and consequences of the agency exercised by Ponsonby, so early as the fall of 1783, but they still went on.

It is unnecessary to travel over the particular correspondence between Ponsonby and his principals. Though in their answer they say that Ponsonby derived his power not from them but from Roberts their former partner, yet they not only confirm that appointment in a letter of the 12th of December 1783, but in their circular letter of May 31st preceding, they had fixed their signatures or firms to the letter of Roberts, *and these letters were transmitted to Ponsonby as their agent. The correspondence between Smith and Oxley and Hancock is very strong evidence to prove the credit which they were disposed to attach to Ponsonby’s bills, for though Smith is an interested witness, and therefore, as to facts which he may relate, is not to be regarded, yet the correspondence to-which, in his deposition, he refers, speaks for itself. In his letter of September 1783 he writes, that Ponsonby had applied 1o him to endorse his bills on them to get money to advance to the shippers, and that he had endorsed one. In answer to this letter, they thank Smith for his assistance to Ponsonby, whose bills on “them,” they say, “will meet due honor;” a general expression, not confined to the particular bill which Smith had endorsed, but to Ponsonby’s bills, generally. This too, was in the infancy of this agency, when Ponsonby’s power to draw was not so notorious, and an endorser was required; but when this letter was received, and Ponsonby’s bills were uniformly paid, he required a credit for them, which afterwards gave them currency without an endorser. This continued without interruption till the fall of 1784, when the present, bills were drawn.

It is said, that Ponsonby, changed his agency from that of procuring consignments, of tobacco from others, to that of purchasing this article for himself, and consigning it to-his principals ; which not being authorised by them, they were not bound to pay his bills drawn on that account.

This brings us to the affair of the Lady Johnson. Let it be considered as between Oxley and Hancock, and Ponsonby. On the 27th of March 1784 they apprize him of their intention to charter a ship of 400 or S00 hogsheads, to be in the Chesapeake about August, and wish that a cargo may by that time be procured for her. — In April, they name the ship in question, and say, .she is to be at St. Mary’s by the 1st of September, if she sail, to be at their option or that of their agents, to accept or refuse her. “From this early notice” (they say) “We hope the tobacco will be ready to load her.” From these letters it appears that he was not to wait her arrival, but to procure her loading in the meantime, and that he was also entrusted with a discretionary power of taking her up or not, in case she did not arrive in time. 8he arrived on the 10th of September. He did take her up, and loaded her with tobacco consigned to them, but chiefly purchased by himself, and shipped on his own account.

*Upon a correct view of this transaction, it would be doubtful, were this a question merely between them and Ponsonby, whether he was not strictly within the limits of his agency : the hazard of loss by the purchase was his, not theirs : the only difference being, that they thereby trusted him for their advance, instead of many ; and lost the opportunity, which that advance would have afforded, of engaging many future correspondents.

In their letter of November 30th 1784, with full information before them, of what he had done, they seem to confirm it, but forbid its being repeated.

But let the question, as between those parties, stand as it may, in what light is it to be viewed as it respects the bill-holders ? They found him loading this ship, as he had before loaded others ; selling bills as he ha d been accustomed to do, to raise money for the purposes of that business ; they 'purchased his bills as usual, and were not concerned in the enquiry, whether he applied that money in making advances to others, or in purchasing tobacco to consign on his own account.

Upon the whole, we are of opinion, that Oxley and Hancock are liable to the plaintiffs, for the amount of the protested bills, with interest and such legal damages as they have been obliged to pay in consequence of such protest. __