Case ID: ad_113/html/0099-01.html
Source: Caselaw Access Project
Author: {"author": "Houghton, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hermann Norden and Willlam Nicholas Schill, Appellants, v. Brodie L. Duke, Respondent.
    First Department,
    May 18, 1906.
    Principal and agent — evidence showing authority of agent to sell stock in principal’s name.
    In an action by brokers to recover from a principal for losses incurred on orders to sell cotton given by an agent it was shówn that the defendant was engaged in the business of buying and selling cotton; that the agent who gave the order in question had been employed by the defendant for some years; that he was accustomed during the absence or illness of his principal to execute such orders in the latter’s name-; that he had credited a profit received from a previous transaction with the plaintiff carried on by him in behalf of the defendant; that the defendant on learning of the losses had only discharged the agent for one day and then re-employed him, and- did not expressly repudiate his acts.
    
      Mid, that the facts established a prima facie authority of the agent t.o deal in the defendant’s name, and that a dismissal of the complaint was error.
    
      Akpeal by the plaintiffs, Hermann Horden and another, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 5th day of January, 1906, upon the dismissal of the complaint by direction of the court at the close of the plaintiffs’ case, upon a trial at the New York Trial Term, and also from an order entered in said clerk’s office on the 11th day. of January, 1906, depyihg the plaintiffs’ motion for a new trial made upon the minutes.
    
      Edmund L. Mooney, for the appellants.
    
      William F. Goldbeeh, for the respondent.
   Houghton, J.:

The defendant resided at and was president of a cotton manti. " factoring company located at Durham, H. C., "and was engaged in the further business of bhying and selling cptton and various stocks.

One Bramham for some years had been in his employ as secretary, stenographer and bookkeeper.- In December, 1903, Bramham began the buying and selling of cotton through the plaintiffs as brokers in-the name of defendant, which he signed to. all orders, telegrams and letters, the plaintiffs supposing the. communications were from" the defendant himself. The first transaction resulted in no profit or loss: The second produced a profit of $400 for which ‘plaintiffs sent a check payable'to defendant. The. last transaction was an order to sell 2,000. bales of March cotton, .which order was filled and closed on the ’same day, resulting in a loss including 'commissions of $4,900. All these orders, which were closely connected, were executed by the plaintiffs without demanding margin from the defendant, they knowing him by reputation as a man of means and large dealings. Subsequent Correspondence with respect to adjustment of the loss, in the course of which the $400 check was returned and credited, disclosed the fact that Bramham had used defendant’s name and as claimed by defendant without authority. This action was brought to charge the defendant with the loss sustained.

The plaintiffs’ theory on the trial was that Bramham had actual authority, or, if not, that the defendant had ratified his acts.

At the close of plaintiffs’ proofs the defendant moved to dismiss the complaint on the ground that neither actual authority nor ratification had been shown. This motion was granted, arid from the judgment entered thereon the plaintiffs appeal. ,

The plaintiffs were compelled to call Bramham as a witness, and although he appeared quite unwilling to tell all the facts, he did testify that when the defendant was ill or away from .home, it had been his custom to draw checks - on defendant’s bank account for incidental expenses connected with the general business, and under' instruction to honor drafts generally or specifically, "connected with calls for additional margin upon various speculations, and to look after defendant’s affairs generally; that he had closed some business matters when defendant was not present; that in February, 1903, when defendant visited California for several months, for the benefit of his health, defendant’s various accounts (presumably with brokers) were transferred to his (Bramham’s) name, .and that he carried them and managed them; that the $400 check received from plaintiffs as profit on the second transaction was credited on defendant’s books, and the’ memorandum kept therewith placed on defendant’s files relating to speculative accounts; that defendant was sick at the time he opened the account with plaintiffs, and was confined to his house and could not be seen or consulted with respect to business •affairs, which continued until the dealings with plaintiffs were closed; that he gave the order to sell the 2,000 bales of March cotton to meet an emergency ” which had arisen “ at the office; ” and that prior to the transaction in controversy he had had transactions in stocks and cotton in defendant’s name in many different instances.

While the trial court refused to permit the plaintiffs to show what the defendant said concerning these many transactions carried on in his name,' it is fair to assume he did not repudiate them, for he kept Bramham continuously in his employ, except that he discharged him foi; the period of one day on account of the transaction in controversy.

We think the facts thus proven by the plaintiffs established prima facie authority on the part of Bramham to deal with the plaintiffs in defendant’s name. We agree with the trial court that the plaintiffs did not establish ratification by defendant of Bramham’s transactions with the plaintiffs. What the defendant said and did on the occasion when -Bramham told him what he had done, and how it had resulted, can very fairly be taken as indicating that Bramham in-fact had authority to do precisely what he did. Instead of repudiating Bramham’s acts, and declaring that he had no authority to open an account with plaintiffs and to give the orders with respect to the 4 sales of cotton, defendant simply said it ought not to have been done without consulting him, and that lie made .enough mistakes himself without anybody helping him to make them, 'and that Bramham would have to take the matter up and try and effect a Settlement with plaintiffs: The defendant was suffering not only

from ill-health, but from domestic troubles, at this time, and the reply which Bramham riiade was that lie very deeply regretted having brought this misfortune upon the defendant, to add to .the misfortunes which he already had, and that it was such an error of judgment on his part that if he could, from his salary of fifteen dollars a week, make the loss good, he would be glad to d© so,, to which defendant made no response.

From whuff was. thus said and done, as well as from what was not said, it might legitimately be inferred that the defendant recognized that Bramham had authority to do what" he did, and simply reprimanded him for doing it so badly and without advice. This, added to the proof of actual authority, made a grima, facie case against-the defendant, and the plaintiffs’ complaint was, therefore, improperly dismissed.

It is urged- that even though Bramham had authority, the defendant is not liable because the transaction was a mere gambling one, and that the -complaint, was properly dismissed on that ground. This ground was not urged in the court below, and,, while we might have the power, we do not feel called upon, under the circumstances, to decide, on this appeal, whether the contract was an illegal one or not.

- The judgment and order should be reversed and a new trial granted, with costs to the appellants to abide the event.

O’Brien, P. J., Ingraham, McLaughlin and Clarke, JJ., concurred.

Judgment and order reversed, new trial ordered, costs to appellants’ to. abide event; Order filed.