Case ID: hill_6/html/0318-01.html
Source: Caselaw Access Project
Author: {"author": "\n      By the Court, Cowen, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Allen vs. Coit and others, impleaded &c.
    The agent oí a company, with the assent of his principals, and in order to raise money for their benefit, drew a bill of exchange in his own name on a part of them, payable to the order of A., who endorsed it for the accommodation of the company. The drawees accepted the bill, and it was discounted by a bank and the proceeds applied by the agent in the company’s business. A. was obliged to pay it on its becoming due, and he afterwards brought an action against all the members of the company to recover the amount. Held, that though they were not jointly liable on the bill, A. could recover under the common counts as for money paid to their uso.
    All the members of a company are chargeable with knowledge of the entries made on their books by their agent in the course of his business, and with the true meaning of the entries as understood by the agent. Per Cowen, J. Accordingly, in an action against the company, if there be any thing obscure in the entries, the plaintiff may prove by the agent what was meant.
    Assumpsit, tried at the Monroe circuit in February, 1843, before Dayton, C. Judge. The action was brought by John Allen, against G. P. Griffith, W. Griffith, D. Griffith and J. M. Griffith, who composed the firm of G. P. Griffith & Co., and against Coit, Townsend, Thompson and Kimberly, who composed the firm of Coit, Kimberly & Co. The declaration contained the money counts, and was accompanied by a notice that the plaintiff would give in evidence a bill of exchange of which the following is a copy:
    “Rochester, Sept. 1st, 1841.
    Sixty-three days after date, pay to the order of John Allen, Esq., ene thousand dollars, value received, and place to account
    Yr. ohd’t, &c. ■
    Griffith & Fish.
    To Messrs. G. P. Griffith & Co., Troy.”
    
      The Messrs. Griffith suffered a default to be entered against them, and the other defendants appeared and pleaded. The facts of the case, as proved at the trial, were as follows: The firm of G. P. Griffith & Co., and of Coit, Kimberly <fc Co., together with Rufus Putnam and John S. Ide, were proprietors of a line of canal boats, known- as the Troy and Brie Line. G. P. Griffith & Co. transacted the business of the line at Troy, and Coit, Kimberly & Co.'transacted its business at Buffalo. The firm of Griffith & Fish were agents of the line at Rochester, whose duty it was, among other things, to obtain money and pay the expenses of towing the boats; and the bill in question was drawn by Fish to raise money for that purpose. He procured Allen to endorse it, for the accommodation of the line, and it was discounted by the Commercial Bank at Rochester, after being accepted by G. P. Griffith & Co., and the proceeds were applied to the purpose mentioned. Fish testified that such had been his usual practice in raising money for the line, and that this was known to all the proprietors. The bill was protested when it became due, and the plaintiff was finally obliged to pay it.
    On the 13th of January,. 1842, about four months after the bill was drawn, an agreement in writing was entered into, by which G. P. Griffith & Co. .transferred their interest'in the line to the other proprietors, who, in consideration thereof, released the Griffiths from all contribution for debts due from the line, then appearing upon the books. The agreement was executed at Troy, where the books were kept. Thornton, the bookkeeper of the line at Troy, testified that the drafts drawn on G. P. Griffith & Co. were entered on the books of the line, and he jn-oduced the journal which contained an entry in his hand-writing under date of January 1st, 1842, thus: “ G. P. Griffith & Co. To bills payable—$24671,06. For the following drafts forjhe acceptance of which they (G. P. G. & Co.) have been credited, but which they have not paid. Griffith <fc Fish’s drafts, favor of Jno. Allen, Trea’s of Towing, viz: of Sept. 1, 63 days, due Nov. 3-6—$1000.” This was followed by a number of entries mentioning other drafts. The defendants’ counsel objected to the reading of the entries, but the circuit judge overruled the objection, and the evidence was received. Exception. The plaintiff’s counsel then proposed to prove by Thornton that the draft in question was one of those alluded to in the entries. This avbs objected to on the ground that parol evidence to explain and enlarge the meaning of the entries was inadmissible. The circuit judge, however, received the evidence, and the defendants’ counsel again excepted. The defendants’ counsel then offered to show that G. P. Griffith & Co. had not been credited with the bill in question, as stated in the entry; but the plaintiff objected, and the circuit judge excluded the evidence. Exception. After the parties rested, the defendants moved for a nonsuit, insisting, 1. That the names of Coit, Kimberly & Co. did not appear on the bill; and 2. That the proof did not shoAV any joint liability on the part of the defendants. The circuit judge overruled the motion, and directed a verdict for the amount paid by the plaintiff on the bill in question, together with interest; and the defendants’ counsel excepted. Verdict accordingly. The defendants now moved for a new trial on a bill of exceptions.
    
      H. K. Smith, for the defendants.
    S. Mathews & F. M. Haight, for the plaintiff.
   By the Court, Cowen, J.

Conceding that the defendants are not liable as parties to the bill, and I think they are not, this does not preclude the plaintiff from showing that he in fact endorsed for the accommodation of the defendants who owned and did business under the name of the Troy and Erie Line. The proof was quite decisive that the drawers, who were the agents of the defendants at Rochester, had, with the privity of the defendants, been accustomed to obtain moneys for them, by a discount of drafts like this. Several of the parties to the draft were OAvners in the line, who, on the evidence, must I think be considered as partners. But whether so or not, the drawers, with the assent of the line, and as their agents, requested the plaintiff to endorse, which he did on the credit of the line ; and on this endorsement they obtained the money, and applied it, as they told the plaintiff they should, in the business of the line. This very transaction was afterwards entered on the line books as raising a debt against it. The bill was not paid at the bank, and the plaintiff was obliged to take it up. It is said, the names of other firms, and not that of the Troy and Brie Line, were on the bill, and the drawers or acceptors only can be charged. That would be true, if the plaintiff were obliged to rest his right of recovery on the bill alone. But he may pass by that, under the circumstances. He may regard it as a mode in which the defendants requested him to endorse and pay money for them. We may, for the purposes of this question, consider all the defendants as actually present, and joining in the request that the plaintiff would, in this form, procure money for them from the bank, to be applied in their business; for what they did through Griffith & Fish, they did themselves. They say, “Sir, get us money on the draft of our agents or, in other words, “ Pay money for us on the draft of our agents.” They thus make themselves principal debtors for the money paid; and the draft is a mere collateral security. Such I take to be the construction which the law places on this transaction. It is not, as the defendants’ counsel supposes, money obtained on the credit of Griffith & Fish, and used by them as their own money; they paying it out for the defendants. The whole begins, progresses and ends on the credit of the defendants. I do not see that the mere mode adopted by the defendants can make any difference. Suppose they had requested the like favor on a bond and mortgage or a judgment of their agents, it would still be, not only in legal effect, but literally, money paid at their request. The plaintiff, therefore, made out a case of money paid for the defendants’ use under the general count. There are several cases in point. •(Denton v. Rodie, 3 Camp. 403; Ex parte Bolitho, Buck's Cas. 100; and see Bank of South Car. v. Case, 8 Barn. & Cress. 427.) The proof was entirely convincing, and there was no question for the jury.

As to the entry in the books of the defendants, they must all be taken to have had constructive knowledge of it; and it appears they probably had knowledge in fact. As members of the firm, they were affected by the entry, whether made by themselves or their agent Thornton. They must moreover be presumed to have understood its true import. Indeed, the knowledge of their agent was, in this respect, their own knowledge; and the judge was right in allowing him to explain the meaning of the entry, if there was any thing in it which could be considered obscure. That there was any thing wanting explanation, it is difficult to see.

Whether the draft had been credited to G. P. Griffith & Co. or not, was quite immaterial. The point was, its entry on the defendants’ book as a draft for which they were liable; a draft which entered into their business, and which was recognized as a debt of the Troy and Erie Line in the agreement of the 13th of January. That, connected with the testimony of Fish, the agent, made out a case quite satisfactory in favor of the plaintiff.

New trial denied.