Case ID: ad_48/html/0134-01.html
Source: Caselaw Access Project
Author: {"author": "McLaughlin, J. : Ingraham, J. (dissenting):", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Henderson, Hull & Company, Limited, Respondent, v. Harry McNally and Others, Appellants.
    . A defendant in default cannot appeal — a principal may, after notice, enfm'ce a written contract made by the agent in his own name.
    
    A defendant who has made default in pleading is not in a position to appeal from a judgment rendered against him. •
    Where an agent makes a written contract not under seal with a third party who is ignorant of his agency, without mentioning or referring to his principal therein, payments made to the agent by the third party after receiving notice of the agency from the principal, do not relieve the third party from liability to the principal.
    Ingraham, J., dissented on the facts.
    Appeal by the defendants, Harry McNally and others, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the. 28th day of September, 1899, upon the decision of the court rendered after a trial at the New York Special Term.
    The action was brought to foreclose a mechanic’s lien and to recover the contract price of certain building materials.
    
      Henry G. K. Heath, for the appellants.
    
      Theo. H Friend, for the respondent
   McLaughlin, J. :

The defendant McNally contracted by a written instrument not under seal with one Hale for certain building materials, to be used in the erection of a school building for the city of New York. In making the contract,.although Hale did not mention or refer to the plaintiff, he acted for it, which fact McNally at the time did not know. The materials, by different shipments, were delivered by the plaintiff to McNally, and in each instance a bill rendered direct to him.

The contract price for the materials delivered was $4,814, which sum, with the exception of one check for $150, McNally paid to Hale, or upon his orders. This sum Hale kept, with the exception of a small amount. The plaintiff demanded payment from McNally, and he having refused to pay, plaintiff filed a notice of a mechanic’s lien, which was subsequently discharged by the defendants giving the usual bond for that purpose, with the defendants McCarthy and Loonie as sureties. Thereafter this action was brought to recover the contract price of the materials delivered from McNally and from the other two defendants as sureties upon the bond.

The complaint, in substance, alleged the foregoing facts. McNally, alone, interposed an answer, which was substantially a general denial of the allegations of the complaint, coupled with an affirmative allegation that the contract for the materials was with Hale and that he dealt with him as principal, and not as agent; that he had paid him the amount called for by the contract, and that at and prior to the time such payments were made, he had no knowledge that Hale represented the plaintiff, or that the plaintiff claimed to be the principal in the sale and delivery of the materials referred to.

The learned justice sitting at Special' Term held after the trial had before him, that McNally had the right to deal with Hale as principal until he had notice of a claim by the plaintiff and that such notice was not given until the 14th of December, 1897. At that time, the defendant had paid to Hale $2,450, and the plaintiff was entitled to recover only the difference between that sum and'the $4,814, the amount called for by the contract, and judgment was directed against the defendants for that sum. From this judgment all of the defendants have appealed.

The defendants McCarthy and Loonie having made default in pleading, were not in a position to appeal from the judgment, and, therefore, so much of the appeal as relates to them must be dismissed ; and as to the defendant McNally, we are entirely satisfied, after a careful consideration of the record, that the judgment is right and should be affirmed.

There is an abundance of evidence to sustain the finding that all payments made after the 14th of December, 1897, were made by McNally with knowledge of the plaintiff’s claim. On that day the plaintiff wrote McNally the following letter : •

“ Montgomery, Lycoming Co., Pa., Dec. 14¿/¿, 1897.
“ Harry McNally, Esq., New York, N. Y.:
u Dear Sir.— Won’t you please send. us a check for $1,000 or $1,500, on your account, by return mail ? At the present time we are very much pressed for money and whatever you can send us we will consider it a special favor.
“ Hoping to hear from you by return mail, with a good check, we remain,
“ Y ours, truly,
“ HENDERSON, 'HULL & GO., Lim.”

The plaintiff, as before stated, at the time of each shipment of the materials (and there were somé seventeen or eighteen shipments in all) mailed a bill to McNally, and he did not deny that he received them. All he would say on that subject was that he did not personally get them, but that his carpenter, who had charge of the building, might have done so, But that he, or some one representing him, received the bills, or some of them, is apparent from what transpired at the trial. There the plaintiff’s .counsel requested the defendants’ counsel to produce the bills, and in response- the defendants’ counsel said “ These are what we have got ” — at the same time handing several bills to the plaintiff’s attorney, and stamped upon the face of each one of these bills, in red ink, was the statement, “No settlement will be alloAved unless made payable to the order, of Henderson, Hull & Co., Lim.”

It is not disputed that after the receipt'of the letter of December fourteenth McNally paid to Hale, or upon his orders, the amount for which judgment .was directed— $2,364 — and of this sum something like $1,100 was paid after the notice of lien was filed, and a portion of that after the commencement of this action.

After McNally had notice of the plaintiff’s claim, he had no right to make further payments to Hale, and the payment to him did not discharge his obligation to the plaintiff. The fact that the contract was made in Hale’s name, and- that the plaintiff was not mentioned or referred to in it, did not, after the receipt of such notice, change the legal rights of the parties or relieve McNally from dealing with the plaintiff- as principal.

One cannot obtain the property of another through the medium of a third party and escape paying for it on the ground that he dealt with the third party as principal and not as agent. This is elementary. The general rule is that an executory contract, in writing, not under seal, executed by an agent, and within the scope of his authority, may be enforced by the principal, although executed in the name of the agent, and this whether he describes himself as agent or not, or whether the principal is known or unknown. (Nicoll v. Burke, 78 N. Y. 580; Ludwig v. Gillespie, 105 id. 653; Brady v. Nally, 151 id. 262; Ford v. Williams, 21 How. [U. S.] 287; Story Agency, § 396.)

The letter of December fourteenth, taken in connection with the other circumstances, was sufficient notice to McNally that the payment for the materials, under the contract, should be made to the plaintiff and not to Hale.

We have examined the other questions raised, but they do not seem to be of sufficient importance to require consideration here'.

It follows that the judgment must be affirmed" as to the defendant McNally, with costs, and the appeal dismissed as to the other two defendants, with costs.

Van Brunt, P. J., Barrett and Rumsey, JJ., concurred ; Ingraham, J., dissented.

Ingraham, J. (dissenting):

I am unable to agree in the affirmance of this judgment. Hale made a contract with McNally to furnish him with the articles, to recover for which this action is brought, for the sum of $4,814. In making this proposal, there was no indication of any kind that Hale was acting for the plaintiff, or for any one else. The proposal was in' writing, and is as follows : “ Revising my estimate of the Trinity A Avenue School, I propose to furnish, according to plans and specifications, window frames,” etc.,- for $4,814, delivered.

McNally accepted Hale’s offer by letter, saying: “I hereby accept your estimate for the Trinity Avenue School building of forty-eight hundred and fourteen dollars ($4,814.00) for frames, * * * according to plans and specifications. Please put the same in Avorlc at once and have ready as called for.”

Here avbs a personal contract betAveen McNally and Hale, by which Hale agreed to furnish articles specified for a sum of money. When this contract was made Hale had. no agreement with the plaintiff, but over a month after the contract was made Hale wrote to the plaintiff as follows: Please quote net figure f. o. b. Harlem River for the enclosed list No. 833.”

This inclosed list apparently was a list of articles which Hale had agreed to furnish to. McNally. On March twenty-sixth plaintiff wrole to Hale as follows: “ We find that the best we can do on these three lists would be $3,675.00, and there would be but little profit in it for us at that price.” In reply to that letter'Hale wrote as follows : “ I note what you say regarding the price on No. 833, and would be willing to give you the order at $3,675,. if you wish to handle it.”

On April first plaintiff wrote to Hale accepting Hale’s offer, saying : “We have decided to accept job 833 at $3,675.00. You will please send us prices at which to bill this, and also send us an acceptance to ns from Mr. McNally.”

It is quite evident that Hale,- in making this offer to McNally, did not make it as agent of the plaintiff. He made it as an individual offer, and the contract which was.made -between Hale and McNally was an individual contract of Hale’s by which he agreed to furnish McNally at a sum specified the articles described. To procure those articles Hale applied to the plaintiff, and the plaintiff agreed to furnish the articles to Hale at a price considerably less than that for which Hale had agreed to furnish them to McNally. Plaintiff requested Hale to procure from McNally an acceptance of the order, and from that it would, appear that the plaintiff understood that Hale had made the : contract with McNally. No such acceptance was given, but, on the contrary, McNally expressly refused to make any contract with the plaintiff, or. to deal with it in any way. Notwithstanding this the plaintiff went on and delivered the goods to McNally. The plaintiff, however, made no specific claim upon McNally that he was under any obligation to pay it any sum of money. Nor was there any contractual relations of any kind between the plaintiff and McNally, by which McNally became under any obligation to pay any sum of money to the plaintiff. There was no assignment of this contract between. Hale and McNally to the plaintiff. What the plaintiff agreed’ to do was to furnish Hale the goods which he (Hale) had contracted to furnish to McNally; and certainly at no time was McNally under any obligation to pay to the plaintiff any sum of money. He had refused to recognize it as a contractor; he had agreed to pay it no sum of money. The fact that it had furnished Hale with tlie materials to enable him to complete his contract with McNally would give it no lien upon the money that McNally was to pay to Hale until it had filed a mechanic’s lien under the statute. The request of the plaintiff to McNally on December 14, 1897, to send to the plaintiff a check for a thousand or fifteen hundred dollars “ ou your account by return mail” was certainly not a notice to McNally 'that Hale had transferred his contract to them; but in ansAver to that, McNally wrote to the plaintiff to say that he had made the contract with Hale, and was accountable to Hale for the amount,, having already paid Hale the sum of $2,450 on account. Here Avas the distinct statement of McNally to the plaintiff that he recognized Hale, and Hale only, as the person with whom he had a contract; that he accounted to Hale for the price, and that the plaintiff was to look to Hale. It did not appear that the plaintiff answered this letter or objected to this construction of the relations that existed between them, or notified McNally that subsequent payments must be made to the plaintiff. Thus, McNally had made a contract Avith Hale, and refused to recognize any one else as a contractor. Hale, Avhen he made the contract, was not acting, as agent for the plaintiff, nor did he make the contract on the plaintiff’s behalf, for it Avas over a mouth after the contract was made that the plaintiff consented to furnish the goods to complete Hale’s contract. The plaintiff never notified McNally that it Avas its contract, except so far as to ask him to send it money, which McNally refused to do, upon the ground that he had contracted with Hale and was responsible to Hale; and to that the plaintiff made no objection, and made no claim that McNally was responsible to the plaintiff, or should not pay Hale the amount of the contract price. Under these circumstances, I fail to see any relation between the plaintiff and McNally which would entitle the plaintiff to recover from McNally the amount of the price of the articles AA’hich Hale had contracted to deliver to him, and for which he had paid Hale.

I think the judgment should be reversed.

Judgment affirmed as to defendant McNally, with costs, and appeal dismissed as to other defendants, with costs.