Case ID: dc_12/html/0005-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Mr. Justice James,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Margaret P. Brooke vs. Theodore Barnes et al.
    In Equity.
    No. 6513.
    Decided June 14, 1880.
    Justices Wylie, Hasher and James sitting.
    1. A husband can only act in respect of the wife’s separate estate as her agent, and he can hind her only to the extent of the authority she gives him, or which she by her acts gives him the appearance of having.
    2. The fact that a wife had previously given her husband authority to act for her in two or three transactions, is no ground for inference that she has therefore given him authority to do whatever is to be done in another transaction of an altogether different character.
    3. When the husband undertakes to act as agent of the wife, he who deals with him as such must inquire into the extent of his authority. The mere assertion of the agent as to his powers, is not sufficient to bind the principal.
    4. A husband being indebted to B, gave him in .satisfaction thereof an order, signed by himself and wife, upon a fund belonging to the separate estate of the wife. The wife had signed and given the order to her husband for another purpose; but the husband- represented to B that he had authority to use it in payment of this indebtedness. On a bill in equity filed by the wife, the court compelled B to refund the money.
    STATEMENT OE THE CASE.
    Appeal from Decree in Special Term.
    Clement H. Brooke, husband of the complainant, was the owner of a house air'd lot in Washington, D. C., upon which there were two deeds of trust, the second being to securé a promissory note held by a Mrs. Stewart. The defendant, Theodore Barnes, also held a promissory note (unsecured) of Brooke, endoi’sed by Edward Brooke, brother of Clement. The Stewart note and the Barnes note were about equal in amount. The trustees of the Stewart trust were threatening foreclosure, and at the same time the Barnes note was about to mature. Under these circumstances Brooke, being without means of his own to meet his liabilities, proposed to Barnes that if he (Barnes) would take up and hold the note secured by the Stewart trust, he, Brooke, would give him an order signed by himself and wife upon their attorney, Mr. William J. Miller, to pay the Barnes note out of the proceeds of a judgment, held by Mrs. Brooke in her separate right as distributee of her brother’s estate, and which had been placed in Miller’s hands for collection. Barnes made inquiry, and having found that Brooke had on several previous occasions, with the consent of his wife, represented her in transactions with other parties respecting her separate estate, and that she had’ previously paid oif one or two of her husband’s debts, consented to the arrangement. Accordingly an order was given him signed by Brooke and wife, and accepted by their attorney, Mr. Miller. Barnes then took up the Stewart note and stopped the threatened sale. This was in May, 1877. In August, 1878, Brooke being insolvent, his property, subject to the two trusts above mentioned, was sold under a creditor’s bill. The house having brought enough to pay off both trusts, Barnes demanded of the trustees payment of the Stewart note. Whereupon complainant filed this bill to enjoin Barnes from receiving same, except upon terms of refunding to her the money already paid him under the order signed by herself and husband, or giving credit for same upon the Stewart note, and turning the same over to her when paid. Complainant aLleging that when she signed the order her husband represented to her that such was the understanding with Barnes.
    The defendant Barnes, in his answer, set- up that Brooke was agent for complainant, and that defendant dealt with him as such, and if he deceived his principal it was without the knowledge of defendant, who dealing with him in good faith ought not now to be made to suffer ; that complainant, as principal, received all the benefit of the contract, and that the husband’s statement, even if her allegations were true, were made to carry out her wishes, and she is bound by them. That at most it is a question between two equally innocent parties, and that equity in such a case would refuse to interfere, but leave the parties to their legal status.
    Testimony was taken, and upon the hearing at Special Term the court dismissed the bill.
    J. J. JDaelington- and Irwin B. Linton for complainant:
    1. To a contract there are four requisites : (a) An agreement {aggregatio mentium); (b) A consideration ; (e) Capable parties ; and (d) Some particular thing to be done. All four of these are wanting in the case at bar ; for—
    
      (а) There never was any agreement. The complainant consented to one thing, the defendant to a wholly different thing. 1 Parsons Cont., 476 ; Green vs. Bateman, 1 Wood & M., 359.
    (б) No consideration. The enjoyment of their home for the year intervening between the transaction in question and sale of the property under the creditor’s bill was not a consideration. See Nat. Bank New Eng. vs. Smith, 43 Conn., 327.
    (c) Incapacity of one of the parties. A contract that a married woman shall pay one of her husband’s debs, on condition that the creditor shall purchase and extend another of the husband’s debts, is not a “contract in a matter having relation to her sole and separate estate.” On the other hand, the contract contemplated by the complainant was one strictly within her capacity to make. Rich vs. Hyatt, Wash. Law Rep., Yol. 7, No. 13. It was an investment of her sepai’ate estate in other property.
    
      (d) The absence of the fourth requisite necessarily results from the absence of the first. The minds of the parties contemplated wholly different things as the subject-matter-of the contract; and consequently there was no “agreement to do or not to do a particular thing.”
    2. Ás complainant was not competent to make a contract, it follows that she could not make it by an agent. But was her husband her agent, either general or special ? The theory of a “ general agency ” upon the part of the husband enabling him to bind the separate estate of the wife by his contracts, is inconceivable as a proposition of law. As to the alleged special agency of the husband for the wife in this transaction, it is clear that he was in no sense and in no particular the agent of the wife, in which he was not equally the agent of Barnes. See Cent. Bank Frederickburg, vs. Copeland, 18 Md., 805.
    3. Complainant was not estopped to deny the contract as understood by Barnes. Parties not sui generis cannot effect by estoppel what they cannot effect by contract. Lowell vs. Daniels, 2 Gray, 161; 2 Smith’s Lead. Cas., 753-5.
    4. Barnes has not been damnified :
    
      (a) He has lost nothing on the SteAvart note, the pi’opertv on which it Avas secured has been sold, and the fund is now in court amply sufficient to pay both principal and interest.
    (5) He has lost nothing on the unsecured note which he already held, because that note was then uncollectable. The testimony shows both the maker and the endorser to have been insolvent.
    Henry Wise Garnett for defendant: -
    1. If it be true that complainant was deceived, she has been benefited by the deceit; the sale of her home was prevented. Where equities are equal the court Avill not interfere, but here defendant by his act benefited complainant; he has, therefore, the stronger equity, and the court will not interfere, even if complainant and defendant were both deceived.
    2. Complainant cannot ask a-court of equity to set aside this oi’der unless defendant can be put in as good a position as he was at the time the order was given ; at that time he could and would have gotten his debt from the endorser. and probably something from the maker, both of whom are now hopelessly insolvent.
    3. Clement H. Brooke was agent of his wife on this occasion. Where one of two pei’sons must suffer by the act of a third person, he who held that person out as worthy of trust and confidence, and having authority in that matter shall be bound by it.” Story on Agency, §127, n. 2.
    4. The representations of an agent are, in law, the representations of the principal; and where a married woman is at full liberty to appoint an agent she comes under the operation of this rule so as to be liable for damages by the fraudulent representations of the husband. Vanneman vs, Powers, 7 Bans., 185 ; Evans on Prin. and Agent, 465.
    5. He was acting for her advantage as well as his own, the object being to prevent the sale of their home. Any false representations he may have, made, were made to carry out their joint plans. The rule is that the principal is chargeable with agent’s fraudulent representations when representations are in furtherance of the principal’s plans. Wharton Prin. and Agent, §§164, 167, 171, and cases cited.
    6. As between the principal and third parties, the true limit of the agent’s authority to bind the former is the apparent authority with which the agent is invested, but as between the principal .and agent the true limit is the express authority. Evans on Prin. and Agent, 452. The complainant allowing her husband to so conduct himself about, her separate estate, and receive money, make contracts, etc., as to induce 'the general belief of his agency, she is bound thereby. “ Where married women clothe another with apparent authority to act for and bind them, the apparent must be taken for the real authority, and they are estopped from disputing it, so far as others have been induced to act upon the faith of it. Bodine vs. Killeen, 53 N. Y., 93.
    7. Complainant received the benefit of the transaction, aá she retained her home for fifteen months by means of the action of her husband. “ Principal is liable for agent’s deceit of which principal takes advantage.” Wharton on Prin. and Agent, §478.
   Mr. Justice James,

after stating the case, delivered the opinion of the court:

The defendant Barnes takes the position that the complainant had authorized her husband to act as her agent. This proposition turns upon the question whether the husband had been held out by her as having that authority.

The principle is simple enough. Her husband could claim to act only as her agent, and he could bind her only in case he had actual authority to make the arrangement with Barnes or in case she gave to him the appearance of having that authority.

A good deal has been said in the books about the test of authority beyond that which was actually given. Sometimes, it is said, that it turns upon the question whether the person was a general agent. That is only one of the tests. The true test is this: Has the principal given the agent the appearance of having the authority ? When a principal employs an agent as a general agent for the transaction of all business, he gives to him the appearance of having the power to do whatever it is proper to do in the business in hand. So if a principal employs an attorney at law in a special matter, although the attorney is not his general agent, he is held out as having that authority which an attorney is understood to possess in that particular matter. Again, if the principal employs a commercial factor, he holds him out as having such authority as a factor has by his calling. Or, if he employs what is called a livery-stable agent to sell a horse, he holds him out as having power to warrant the condition of the animal. But if he should employ a casual person; it is otherwise. That is simply because the character of the person holds out that he has the powers of that character. The question, then, is whether there is anything in the circumstances, or in the character of the agent which holds out the agent as having a certain amount of authority ? If there is, the principal must stand by what the agent does.

It is said that the principal is liable for the frauds and misrepresentations of the agent. That is where he actually employs the agent to do a certain thing. Then, if the agent commits a fraud in that which he is authorized to do, the principal is bound by it. But if the fraud consists in the agent’s pretending to have the authority for that which he does, the principal is not affected.

Now, the only evidence given us of Mrs. Brooke having employed her husband as her agent with this amount of authority was, that she had authorized him to act in some of her matters before, chiefly, it would seem, to collect any moneys due her, and in one instance, perhaps in two, to apply it in payment of his debts. But she had not so employed him as to hold him out as having the position of her general agent to do for her whatsoever need be done in her matters. It was not to be inferred from one, two, or three transactions of a difl'erent character altogether, that she gave him power to do whatever was seen fit to be done in this matter. In fact, one of the arguments on these previous transactions seems really to present this case to us ; that because he had used up a good deal of her estate heretofore, therefore, she authorized him to keep on doing so. We are by no means inclined to make such a broad inference. She did not hold him out as having this authority. It was a special case of agency, the bounds of which are not to be judged of by Barnes by what had been done before; or, if he were to so judge of them, he was bound to see that they indicated no authority to make this particular bargain. It was Mr. Barnes’ duty to inquire into the extent of Brooke’s authority ; and if he had gone to the principal — certainly he had no right to take the agent’s assertion — he would have learned what the contract was.

The decree of the court, therefore, is that he surrender this order and return the money. This reverses the decree below, and the court under its power to modify the decree disposes of the case here.