Case ID: app-dc_48/html/0476-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Van Orsdel Mr. Chief Justice Smyth", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

EISINGER v. E. J. MURPHY COMPANY.
    Motion for Directed Verdict; Effect; Agent; Personal Liability; Proof of Authority.
    1. A motion for judgment for a directed verdict in an action upon an order to pay money to the plaintiff does not foreclose the right of the defendant, who admitted signing the acceptance of the order, to challenge, on appeal, the judgment on the ground of his non-liability upon the order as matter of law, because his acceptance was on behalf of a principal.
    2. One who signs, though without describing himself as an agent, the acceptance of an order to pay money addressed to him as the agent of a named principal, is not personally liable thereon, under see. 1324 of the D. C. Code (31 Stat. at L. 1398, chap. 854), providing that where the instrument contains words indicating that the subscriber signs for or on behalf of a principal, he is not liable on the instrument if he was duly authorized. (Mr. Chief Justice Smyth dissenting.)
    
      3. An agent attaching his personal signature to the acceptance of an order to pay money addressed to him as agent can, without proving Ms authority as agent, claim exemption from personal liability under sec. 1324 of the D. C. Code, which provides that where the instrument contains words indicating agency, the signer will not be liable thereon if he was duly authorized. (Mr. Chief Justice Smyth dissenting.)
    No. 3168.
    Submitted January 9, 1919.
    Decided March 31, 1919.
    Hearing on an appeal "from a judgment of the Supreme Court of the District of Columbia, on verdict, in. an action of debt on a written order.
    
      Reversed.
    
    Tbe Court in tbe opinion stated tbe facts as follows:
    Appellant Walter G. Eisinger, defendant below, appealed from tbe judgment rendered against him upon the following order:
    Washington, D. C., Feb. 17, 1915.
    Mr. W. G. Eisinger, Agent for Harry Lambros and Louis Kanelopoulos:
    Kindly pay to the order of E. J. Murphy Company tbe sum of Four Hundred and Seventeen Dollars ($417), covering glass and glazing at No. 600 N. Capitol street and No. 3 “E” street N. W.
    James E. Blakeney.
    Accepted:
    W. G. Eisinger.
    Tbe president of tbe E. J. Murphy Company, appellee, testified that it had furnished tbe labor and material called for in tbe order; that it was the owner and bolder of tbe order, and that it had not been paid. Defendant admitted signing tbe acceptance. On this evidence, both parties moved for a directed verdict. Tbe court sustained plaintiff’s motion, and tbe verdict and judgment followed.
    
      
      Mr. Hayden Johnson, and Mr. T. H. Patterson for the appellant.
    
      Mr. D. W. O’Donoghue and Mr. A. A. Alexander, for the appellee, in their brief cited:
    
      Bank of N. A. v. Hooper, 66 Ana. Dee. 390; Daniel v. Olidden, 38 Wash. 76; De Forest v. United States, 11 App. D. C. 458; Evans v. Shoemaker, 2 App. D: 0. 62; Exchange Nat. Bank y. Tlvird Nat. Bank, 112 U. S. 276; Frankland v. Johnson, 147 111. 520; G-reenl. Ev.; Hypes v. Griffin; 89 111. 134; Koenigsberger v. Mining Go. 158 IT. S. 41; Lallerstedt y. Griffin, 29 Qa. 708; Meaehem, Law of Agency; Nupen y. Pearce, 235 Eed. 497; New York Electric B. Go. y. Fifth Nat. Bank, 135 IT. S. 432; Poiuers y. Briggs, 79 111. 493; Bandon v. Toby, 11 How. 493; Bobinson v. Kanawha Valley Bank, 58 Am. Rep. 829; 3 R. C. L. Bills & Notes; Scanlan y. Keith, 102 111. 634; Shaw y. Stone, 1 Cush. 228; Styles & C. Agency; Smith y. Morse, 9 Wall. 76; Thompson y. McKay, 41 Cal. 221; Turner y. Trail, 24 Okla. 129 ; Tuttle y. Bank, 187 Mass. 533 ; Wege v. Safe Cabinet Go. 249 Eed. 696; Beuttell y. Magone, 157 H. S. 154; Colo. v. Harrison, 228 Fed. 894; Illinois G. B. Go. y. Egan, 203 Eed. 939 ; Bunkle y. Burnham, 153 H. S. 216 ; Sena y. American Turguoise Co. 220 U. S. 497; Union P. B. Go. y. Harris, 63 Fed. 800; Western U. Teleg. Go. y. Thompson, 144 Fed. 583.
   Mr. Justice Van Orsdel

delivered the opinion of the Court:

It is urged that a motion for judgment for a directed verdict, being in the nature of a demurrer to the evidence, admits the validity of the order and forecloses the right of defendant on appeal to challenge the judgment on the ground of his nonliability upon the instrument sued on as matter of law. We are not impressed with this contention. The rule invoked admits the truth of the facts proved, but not matters of law. Hence, defendant’s motion for judgment admitted the competency, of the order as evidence in the case, but not the legal interpretation thereof as affecting his liability.

This brings us to the single question, whether or not defendant, in accepting the order, did so personally or as the agent of Lambros and Kanelopoulos. Section 1324 of the District Code [31 Stat. at L. 1398, chap. 854], provides as follows: “Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized, but the mere addition of words describing him as an agent or as filling a representative character without disclosing his principal does not exempt him from personal liability.”

The language of the statute is clear and needs no extended interpretation. If the instrument anywhere contains words indicating agency with a disclosure of the principal,' or if the acceptor uses such words after his signature, it is sufficient to put the payee on notice. The name of the party to whom the order is addressed is a material part of the instrument. If the agency is disclosed in the address, as here, the instrument will be held to contain words indicating that the acceptance is not personal, but as agent for the principal named therein.

But it is contended that defendant failed to prove his authority as agent, and, therefore, is not entitled to claim exemption from personal liability under this section ¡of the Code. By the great weight of modern authority, no action can be brought against an agent on a contract executed in the name of a principal, even though the agent was without authority; for the reason that the contract was not intended to be the personal contract of the agent. The only remedy against him is on the ground of fraud and deceit, or breach of an implied warranty of authority. As was said in Kent v. Addicks, 60 C. C. A. 660, 126 Fed. 112: “There are authorities which hold that the contract in such a case is that of the agent, against whom a recovery may be directly had; but the prevailing and the better doctrine is that where, as in the present instance, the undertaking on its face is that of the supposed principal, the agent is liable only on tbe implied warranty that he bad tbe right to make it.”

Tbe acceptance of tbe order purports to be tbe acceptance of the principals, through defendant as agent, and not tbe personal acceptance of defendant. Hence, under tbe rule laid down in tbe Kent Case, no action lay against defendant on tbe order, irrespective of whether or not be bad authority. Even according to tbe section of tbe Code here under consideration a construction changing tbe above rule in so far as negotiable instruments are concerned, and permitting an action to be maim tained on the instrument itself against tbe agent acting without authority, there is, nevertheless, a presumption that tbe instrument is what it purports to be, — tbe obligation of tbe disclosed principal,- — and tbe burden is upon tbe plaintiff of overcoming this presumption by affirmative proof of tbe want of authority of tbe agent.

Tbe judgment is reversed’with costs, and tbe cause remanded for a new trial. Reversed and remanded.

Mr. Chief Justice Smyth

dissenting:

Eor tbe following reasons I dissent: Tbe action is based on an acceptance of an order, evidenced by Eisinger’s unqualified signature, and tbe question is whether be signed as a principal oías an agent. In Exchange Nat. Bank v. Third Nat. Bank, 112 U. S. 276, 28 L. ed. 722, 5 Sup. Ct. Rep. 141, a draft was drawn on “Walter M. Conger, Sec’y Newark Tea Tray Co. Newark, N. J.,” and accepted by him by writing upon its face these words, “accepted, payable at tbe Newark National Banking Co., Walter M. Conger.” There, as here, tbe instrument was addressed to tbe acceptor in a representative capacity, and there, as here, be signed personally. Tbe court held that bis acceptance was individual and did not bind tbe Tray Company. That case, it seems to me, is directly in point and rules tbe one at bar.

But if it be admitted, as tbe majority bold, that tbe instrument in question contains words indicating agency, with a disclosuré of tbe agent’s principal, that does not help tbe matter, because unless Eisinger had authority under Code sec. 1324 to sign as agent, he is liable as principal. “Whether an agent * * * or other person attempting to sign a negotiable instrument en autre droit is to be held liable personally depends on the question whether as such representative he is empowered to do the act.” 3 K. C. L. 1092. Before he can escape liability on the ground that he signed as agent he must show that he had authority to do so, or else he is liable as a principal. Tuttle v. First Nat. Bank, 187 Mass. 535, 105 Am. St. Rep. 420, 73 N. E. 560. According to other authorities he would not be liable on the contract, but in damages for a breach of the implied warranty that he had a right to make the contract. Kent v. Addicks, 60 C. C. A. 660, 126 Fed. 113. Whatever the correct rule may be in other jurisdictions, sec. 1324 [31 Stat. at L. 1398, chap. 854] settles the question so far as the District of Columbia is concerned, for it provides that “where the instrument contains * * * words indicating that he signs for or-on behalf of a principal * * * he is not liable on the instrument if he was duly authorized. * * *” Assume, therefore, that the paper sued upon contains words indicating that he signed on behalf of a principal, he can escape personal liability only by showing that he was “duly authorized.” This seems to me so plain that argument cannot make it clearer.

There is no evidence in the case at bar that Eisinger was duly authorized to sign as agent for Harry Lambros and Louis Kanelopoulos. Appellee sought to prove that Eisinger accepted as a principal, but on the latter’s objection that his liability must be determined by a consideration of the instrument alone the testimony was excluded. When Eisinger came to make his case he reversed his position and offered a letter from one Blakeney to Lambros and Kanelopoulos for the purpose of establishing that he was agent for the latter. The court ruled it out because, at Eisinger’s instance, it had been established as the law of the ease that evidence outside the instrument in suit was improper. Just how a letter from Blakeney to Lambros and Kanelopoulos could have any tendency to prove that Eisinger was the agent of the latter is not clear. However that may be, Eisinger is in no position to complain of a ruling based on a proposition of law applied to tbe case at his request.

There is nothing in Kent v. Addicks, supra, cited by the majority, which supports their construction of sec. 1324. In that case it was admitted by both parties that the person sued had signed as an agent and without authority, and the question was as to whether or not he was liable upon the unauthorized contract or for breach of the implied warranty that he had the right to make it. Here, the appellant Eisinger asserts that he signed as agent. The appellee denies it. The questions, therefore, are entirely different, and the Kent Case contributes nothing to a solution of the difficulty.

My position is that (a) Eisinger signed as an individual, but (b) that if there are words in the paper indicating that he signed as agent he is still liable as principal, under the Code, ■because he has failed to show that he was duly authorized. Eor these reasons I think the judgment should be affirmed.