Case ID: johns_15/html/0276-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Cheever against Smith, Pardee and others.
    If a man deals with another's agent, and gives the agent a receipt for a sum of money, which the agent had a right to pay, and on the faith Qf that receipt the principal settles with the ag.nit, and pays him money, the party giving jthe receipt is concluded from looking to the principal, for he _ shouldhave given him notice of ’the mistake in the first instance ; and his only remedy is against the agent.'
    THIS was an action of debt on a bond for the performance of the covenants contained in articles of agreement; and the only question in dispute was, whether the defendants were to be charged with the sum of 5,000 dollars, mentioned in the receipt of the 29th of October, 1814, given by the defendants, Smith and Pardee, to Nathaniel Allen, the agent of the plaintiff.
    
      Smith and Pardee, two of the defendants, the others being their sureties, contracted with Cheever, to supply the forces on the northern frontier, during the late war, with beef. Funds were placed by the plaintiff in the hands of N. Allen, to be advanced to Smith and Pardee, as occasion should require. Allen, and Smith and Pardee, settled their accounts every month, when receipts in full were given, and the balance carried to the next month’s account. In November, 1814, Smith stated to Allen and his clerk, that he had been charged with 5,000 dollars, in the October preceding, more than he had received. They denied that any mistake had been made. Smith continued to sign receipts in full on ¡every monthly settlement, but still urged the adjustment of the alleged mistake. The plaintiffs and Allen settled their accounts on the 11th of July, 1815, when there appeared to be due to Allen a balance of 4156 dollars and 6 cents, allowing him the 5,000 dollars in dispute. This balance the plaintiff paid to Allen. The plaintiff bad not been on the northern frontier between the time pf the alleged mistake and his settlement with Allen.
    
    The above facts having been admitted, or proved on the trial, the defendants then offered to prove that they were charged by Allen on the 29th of October., 1814, with the sunq of 10,000 dollars, when he had, in fact, paid them hut 5,000 dollars. The testimony was objected to on the part of the plaintiff, on the ground that no notice of the alleged mistake had been given to the plaintiff previously to his settlement with Allen, and it was rejected by Mr. J., Van Ness, before whom the cause was tried.
    
      A verdict having been found for the plaintiff, the defend- , ants now moved for a new trial.
    
      Wells and Brinckerhoff, for the plaintiff.
    P. W. Radcliff, for the defendants.
   Per Curiam.

We are of opinion that evidence of a mistake in the accounts of Smith and Pardee with Allen was properly rejected. The alleged mistake took place in October, 1814, and in July, 1815, the plaintiff settled with Allen, when there appeared to be due to the latter 4156 dollars and 6 cents, allowing him the 5,000 dollars, in respect of which the mistake is alleged to have been committed. On that settlement the sum of 4,156 dollars and 6 cents, which appeared to be due to Allen, was paid to him.

Now, had the defendants given notice of that mistake to the plaintiff, he would have made the settlement on very different principles; at all events, he would not have paid Allen, until the fact, whether there had been a mistake or not, was ascertained. If a man deals with another’s agent, and gives the agent a receipt for a sum of money which he had a right to pay, and on the faith of that receipt the principal settles with his agent, and pays him money, the party giving the receipt cannot lie by, until after the settlement between the principal and the agent, and then charge the principal with the payment of the same sum again. Good faith requires that the mistake should be communicated to the principal as soon as it is known ; and, indeed, if a loss is to be borne, it must fall on him who occasioned it. In the present instance, it is not stated that Allen is irresponsible. That fact makes no difference, for he is answerable to the defendants as for money had and received, if it can be shown that he has been allowed 10,000 dollars, as paid to the defendants, when only 5,000 dollars were received by them. The case of Wyatt v. The Marquis of Hertford, (3 East’s Rep. 147.) supports the principle of this decision.

Motion for a new trial denied.