Case ID: ny-st-rep_39/html/0469-01.html
Source: Caselaw Access Project
Author: {"author": "Barrett, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Modesto Pineiro, Resp’t, v. Richard Gurney, App’lt.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed June 26, 1891.)
    
    1. Principal, and agent—Partnership—Authority of agent.
    Plaintiff acted as agent in Spain for B. & Co., shipping merchants of New York, paying port charges and disbursing vessels chartered by the firm for out and home voyages. B. & Co. dissolved June 14th, and plaintiff received notice thereof on the 80th, having on the 23d paid out moneys on account of a vessel chartered by the firm prior to its dissolution, and by which the firm profited. Held, that the item was properly allowed to plaintiff.
    2. Same.
    On the 9th and 31st of July plaintiff paid port charges on vessels, he not having had any instructions or authority, and being only a special agent. Held, that he took the risk of the ratification by all parties, and the item should not have been allowed him.
    •3. Same.
    A draft for £100, sent to plaintiff by the new firm, which had assumed the indebtedness of the former partnership, was appplied to that of the new firm incurred after the dissolution. Held, error; that it being sent as ■“further on account,” the intention was to apply it on the general account and for the benefit of the retiring partner.
    Appeal by defendant Gurney from a judgment rendered upon the decision of a judge at circuit, the jury having been discharged pending the trial.
    
      Hobbs & Gifford, for resp’t; Henry D. Hotchkiss, for app’lt
   Barrett, J.

—The plaintiff is a merchant doing business at Santander, in Spain. The defendant Gurney is the sole surviving member of the firm of Ruger Brothers & Company, who were shipping merchants in this city. The action was brought to recover a balance of £234, 2s. Id. which the plaintiff claimed to be due him by Ruger Brothers & Company. He had acted as the agent of this firm at Santander for some time prior to its dissolution, paying port charges and disbursing vessels which the firm had chartered for out and home voyages. The substantial dispute arises with regard to disbursements made by the plaintiff, subsequent to the dissolution of the firm, and there is also a dispute with regard to the proper application of a payment made after such dissolution. The firm was dissolved upon the 14th day of June, 1883, Gurney retiring and the Rugers continuing the business. The plaintiff received notice of the dissolution upon the 30th of the same month. The notice informed him that Gurney had retired from the firm, and that the business would be “ carried on again ” by William and Emil Ruger, “ under the former firm of Ruger Brothers.”

There are three items in the account to which special objection is now taken by Gurney. We will deal with them seriatim. The first is a sum of £101, 11s. 5d. paid by the plaintiff on the 23d day of June, 1883, for port charges on account of a vessel called the Acturus, which had been chartered by the late firm some time prior to its dissolution. We think this item was properly allowed to the plaintiff, for the reason that, when he made the payment, he had not yet learned of the dissolution of the firm, and although the payment was not in strict accordance with his instructions, it was a payment made for the benefit of the firm and by which it profited.

The second item is a sum of £35, 10s. Id. paid by the plaintiff on the 9th day of July, 1883, for port charges on account of a vessel called '“Kennard.” This vessel was also chartered prior to the dissolution of the firm. The payment, however, was made without any instructions or authority whatever. The plaintiff was not the general agent of the firm. He was specially employed and received distinct instructions with regard to each vessel. And, further, he acknowledged in his letter to the firm of July 9,1883, that he made the payment without orders. He did this after he had received notice of Gurney’s withdrawal. It was, of course, competent for the new firm to ratify this payment and to bind themselves therefor, but they could not bind Gurney, who no longer had any interest in the transactions of the old firm. According to Gurney’s uncontradicted testimony, the Eugers were to liquidate all outstanding matters; to receive all amounts that were coming in and pay out what was due, and to leave all that was outstanding.” It is true that the plaintiff was not informed of the terms of dissolution, but when, with notice of the fact, he ventured to make payments without authority, he certainly took the risk of their ratification by all parties. This item should not, in our judgment, have been allowed to the plaintiff as against Gurney.

The third item is a similar payment of £75 3s. 6d. made on account of a vessel called the “William Phillips.” This payment should also have been disallowed. It was made on the 31st of July, 1883, over a month after the plaintiff had been notified of the dissolution. And it was made in disregard' of instructions. The instructions were, in case the amount entrusted by the firm to' the captain was insufficient to pay the port charges, “ to take an advance on the homeward freight for the balance.” Finding that this advance could not be obtained, the plaintiff paid the deficiency himself and charged it to the firm in his account. This was unauthorized, and the plaintiff could not thus bind Gurney after notice of dissolution. His doing so was in conflict with the orders given while Gurney was yet a member of the firm, and, if those orders had been obeyed, the advance would have been a lien upon the freight and would have been settled upon the arrival of the vessel at this port It was well enough for the Eugers, who were “ to receive all amounts that were coming in,” to ratify this payment, for it was immaterial to them whether they repaid the port charges to the plaintiff or repaid advances to an equivalent amount upon the homeward freight Indeed, upon the principle already suggested with regard to the Acturus, the firm would have been liable for this payment, as it was made for its benefit and it profited thereby. But this principle would certainly not apply to Gurney after notice of dissolution.

The remaining question is as to - a credit of £100, of date, October 27, 1883. It was disallowed to Gurney and applied to the indebtedness incurred by the Eugers after the dissolution. This, we think, was erroneous. By the very terms of the letter in which it was remitted, the Eugers speak of the drafts as ■ u further on account.”

The plain intention was to apply it on the general account, there being no break between the firms of Eugers Brothers & Company and Euger Brothers. In fact, the business went right on as before. The Eugers, as we have seen, had assumed all the outstanding affairs of the old firm and had agreed to pay its debts. They simply continued the business, and there was but one account, namely, that represented by the bill of particulars in this case. We are not altogether satisfied with the disposition made of certain other items of the account, but as the allowance to Grurney of this credit of £100 and the disallowance of the second and third items of debt suffice to wipe out the balance allowed by the trial court, we need not consider the case further.

The judgment appealed from should be reversed and a new trial ordered, with costs to abide the event.

Van Brunt, P. J., and Patterson, J., concur.