Case ID: serg-rawl_10/html/0442-01.html
Source: Caselaw Access Project
Author: {"author": "Gibson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

[Philadelphia)
    December 22, 1823.]
    SEIDEL against PECKWORTH and Wife, administratrix of SUMMERS.
    IN ERROR,
    In a suit against an agent to recover back money improperly paid to him, on the ground that there was nothing due to the principal on whose account he received the money, the principal is a witness for the agent who alleges payment over without notice.
    An agent paying over money received without notice is liable to a suit to recover it back, if he obtained the money fraudulently.
    Error to the District Court for the city and county of Philadelphia.
    
    
      John N. Seidel, the plaintiff in error,
    was sued by John P. Peckworth, and Mary his wife, administratrix of John Summers, to recover the amount of a note, dated the 10th January, 1818, for 391 dollars, and 13 cents, drawn by John Summers in favour of John N. Seidel, and indorsed by him. It was proved that Seidel called on the acting agent for the administratrix, and received payment of this note, without mentioning that it belonged to Samuel Summers, but on the contrary, asserting that it belonged to himself. About a twelve-month afterwards, it was made known, that Seidel had acted for Samuel Summers, in receiving payment of the note, and had paid S. Summers the sum received by him for it, from the agent of the administratrix of John Summers. On this discovery, the administratrix of John Summers demanded repayment of the money paid to Seidel, and by him to Samuei Summers, alleging that John Summer’s estate owed nothing to Samuel Summers, of which proof was given by a receipt in full, dated the 10th December, 1819.
    On the part of Seidel it was proposed to examine Samuel Summers, as a witness, to explain the transaction. But he was objected to by the plaintiff, and rejected by the court as incompetent, and an exception was taken by the defendant.
    The court was requested to charge, that the action could not be sustained against Seidel, because it appeared by all the evidence, that the money was paid to him as agent for Samuel Summers, which was known to the administratrix of John Summers, when she sued Seidel-, that with knowledge, before suit, that Samuel Summers was the principal, in possession of the money, and Seidel only his agent in obtaining it, the action should have been against Samuel Summers, the principal in possession of the fund; and not against his mere agent Seidel, who had paid it over to Samuel Summers.
    
    
      But the court charged, that the rule of law is, that the agent is liable when he sells without disclosing his agency, and in that case the purchaser may set off any demand he has against the agent. ¿The cases read at the bar, do not comprise all the instances that may be put. For example, if an attorney recovers money* and pays it over before notice with opportunity to disclose his principal, he is liable. In this case the defendant did not represent himself as agent, or claim as agent, but in his individual right, and, therefore, is not within the protection of the law, relating to agents.
    But in the opinion of the court, the question is here decided by a circumstance in favour of the plaintiff. If the evidence shows that Seidel received the money claiming it in his own right, and not as agent, then he is liable in this action; The jury will say, therefore, whether the defendant did so. The whole cause thus resolves itself into this point of fact. If the defendant received the money, claiming it as his own, then he is liable to the plaintiffs in this action. Or if the defendant fraudulently colluded with Samuel Summers, then he is not within the protection of an agency.
    To this charge an exception was taken on the part of Seidel*
    
    
      C. J. Ingersoll for the plaintiff in error, now contended,
    1. That A. Summers was improperly rejected ás a witness. His interest in the event of the plaintiffs recovery was merely contingent, not fixed and certain. Besides, he is indifferent between the plaintiffs and defendant, because he is liable whether there is a recovery or not. If the plaintiffs fail, S. Summers is bound to refund the money he has received. He cited Baring v. Shippen, 2 Binn. 165. Phill. Evid. 36. 6 Binn. 319. 1 Yeates, 84. Hayes v. Greer, 4 Binn. 83. Willing v. Consequa, 1 Pet. 301. 3 Serg. Rawle, 132. Lewis v. Manly, 2 Yeates, 200. Brown v. Downing, 4 Serg. & Rawle, 497. Livingston v. Swanwick, 2 Dall. 300. Anderson v. Hughes, 2 Yeates, 95.
    2. The action does not lie against Seidel, bat should have been brought against Samuel Summers, to whom he was agent and to whom he had paid the money over. An agent is not liable after paying over the money he has received, to his principal. Good bailey’s case, Dy. 230, a. note. Pal. Princ. and ag. 289. 305, 306. 309. 1 Str. 480. Pond v. Overwood, 2 Ld. Ray. 1210. Sadler v. Evans, 4 Burr. 1985. Girard v. Taggert, 5 Serg. & Rawle, 27. The defendants claiming the money in his own right does not deprive him of the privileges of an agent.
    The court requested Kittera for the defendant in error, to confine himself to the first point.
    
      Kittera, contra,
    agreed that where the interest is equal either way, the witness is competent. But if the plaintiffs recovered against the defendant, then the defendant might recover against Samuel Summers, not only the debt, but the costs of this suit: whereas if the plaintiffs failed, and then sued Summers, he could recover no more than the debt. It was a further objection, that S. Summers was offered as a witness to protect his partner in iniquity. He denied, however, that if the plaintiffs failed in this suit, they could recover against Summers. They had made their election to sue the defendant when he might have sued S. Summers. The case being tried on its merits they cannot have it tried in another action.
   The opinion of the court was delivered by

Gibson, J.

Whether Summers, the witness, if we were to grant that he would be liable to the defendant for whatever might be recovered in this suit, would be equally liable to the plaintiff in a. new suit, in case of failure in this, and thus stand indifferent in interest, it is Unnecessary to decide, as it is perfectly clear on the ground assumed by the plaintiff himself, and on which alone he can in any event recover, that the money paid over to the witness can never be recovered back by the defendant. A principal is undoubtedly bound to compensate losses suffered by his agent in consequence of acts honestly done in the course pf the agency. But here the money received by the agent was actually paid over to his principalbefore notice; which is sufficient for his protection if the relation of principal and agent existed for a fair purpose; and the plaintiff is, therefore, put to the n.ecessityof proving it to have been fraudulent. But it is impossible to do that without at the same time proving a collusion, between the defendant, the agent, and the witness, his principal; in which result the contract of agency being shown to have been founded on fraud, would afford no party to it a remedy; neither would the law, from a consideration so base, raise an assumpsit in favour of the defendant. So that the case presents this dilemma: If the money were fairly received by the defendant, he cannot, after having paid it over without notice, be successfully called on by the plaintiff; and if fraudulently, he cannot call on the witness. The only imaginable ground of interest that could exist would be a possibility that the defendant, after a recovery against him on the ground of fraud, might nevertheless be able to' make out a case' against the witness, by proving that the agency and all the transactions in the course of it, were perfectly fair. But such a graceless assumption on the part of the plaintiff, ás that of a right to treat the agency as fraudulent for the purpose of sustaining the action; and as fair, for the purpose of excluding the only witness who could show the truth of the case, would rest on the ground of an interest merely contingent, which does not go to competency. By his own showing the transaction was fraudulent; and as against himself it, must betaken to have been so. The witness, therefore, ought to have been received.

With respect to the direction of the court, it is necessaiy to say no more than that the cause was put to the jury on the ground of fraud; and nothing is more clear than that if the intervention of the defendant were with a view to procure payment of the note after he knew it had been already paid, he could not insist .on being treated as an agent; but would have to refund, whether the money thus wrongfully received were paid over or not. In this part of the record, therefore, there is no error; but on the first exception the judgment is reversed.

Judgment reversed, and a venire facias de novo awarded.