Case ID: ny-st-rep_20/html/0557-01.html
Source: Caselaw Access Project
Author: {"author": "Haight, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Joseph W. Doty, Resp’t, v. The Case and Willard Thresher Co., App’lt.
    
      (Supreme Court, General Term, Fifth Department,
    
    
      Filed January 11, 1889.)
    
    1. Contract—Subrogation—Release.
    The plaintiff, who was an agent of the defendant, procured an order from one C. for a machine; this order, together with three promissory notes, given in payment therefor, and a property statement of U., as promised in the contract, was forwarded to defendant, who filled the order by shipping the machine. It was found that the property statement was false, U. being at the time insolvent. Thereafter 0. died, and the defendants settled with his personal representatives and surrendered up to them the notes. Held, that the settlement and surrender of the notes deprived the plaintiff of the right of subrogation which would otherwise have existed in his favor and operated as a waiver and release of the plaintiff from liability on the notes.
    2. Contract eor services—Renewal.
    A renewal of the contract on the same terms is presumed where the principal receives and accepts the benefit of a contract made by an agent after the expiration of the agent’s term of service.
    Appeal from, a judgment entered upon the report of a referee in Niagara county.
    
      John Cuneen, for app’lt; E. J. Taylor, for resp’t.
   Haight, J.

This action was brought to recover pay for commissions, storage and services performed as the agent and servant of the defendant in the sale of threshing machines.

■The referee has found as facts, that on or about the 11th day of July, 1885, the plaintiff procured an order from one John Cooke, of Lockport, for an improved No. 1 separator, with straw stacker and hoisting windlass complete, together with a traction engine, for which he agreed to pay the sum of $1,715 by his promissory notes; one payable December 1, 1885; another December 1, 1886; another December 1, 1887, and the last payable December 1, 1888. This order together with a property statement of Cooke showing that he was the owner of real estate worth the sum of $4,400 over and above all encumbrances, was forwarded to the defendant, who filled the order by shipping the machinery called for. The referee further found as facts, that the property statement of Cooke was false; that he was at the time insolvent and that the plaintiff was guilty of negligence in not making proper inquiry into his financial condition. Thereafter Cooke died and the defendant settled with his personal representative and surrendered up to him the notes given for the property sold, losing thereby the sum of $276. This sum the defendant seeks to have allowed as a counterclaim against any sum that may be found due and owing to the plaintiff, and a judgment for the balance thereof.

The referee has found as a conclusion of law that the settlement of the defendant with the administrator, and the giving up of the notes to him operated as a waiver and release of the plaintiff from any liability by reason of the transaction. An exception taken to such finding presents the important question for consideration upon this appeal.

The contract under which the plaintiff was engaged to sell threshing machines for the defendant was in writing, and among other things provided that: “ Orders from, purchasers shall be accompanied by a true property statement, and in the absence of _ such property statement, or if the purchasers are not parties of well known responsibility and good reputation for honesty and the payment of their debts at the time the notes are delivered, the second party ” (meaning the plaintiff) “for value received, hereby guarantees the payment of said notes, at maturity or any time thereafter, waiving demand, notice of protest and non-payment, and this shall be sufficient evidence of such guaranty.”

As we have seen from the findings of. the referee, the property statement procured was not true, and the purchaser, Cooke, was not of well known responsibility and good reputation for honesty and the payment of his debts, and these facts could have been easily ascertained by the plaintiff had he made inquiry in the neighborhood in which Cooke resided. But what is the penalty for his negligence ? We find it given in the language of the contract that he . hereby guarantees the payment of the notes at their maturity, and so forth. He consequently, under the express terms of the contract, became a guarantor, and must be treated as such in determining his liability upon the notes. As such guarantor, the defendant had the right to call upon him at maturity of the notes for their payment, and could maintain action against him upon the contract for the amount of such notes. On the payment of the notes by him he would become subrogated to the right of the defendant, and in turn could maintain action and collect the same from. Cooke or his personal representative, provided sufficient property could be found out of which collection could be made. By the settlement of the defendant with the administrator of Cooke, and the surrender of the votes, the plaintiff was deprived of the right of subrogation, which otherwise would have existed in case.’ he had been compelled to' pay them.

We are therefore of the opinion that the conclusion of the referee was correct and that the settlement operated as a waiver and release of the plaintiff from liability thereon. 2 Daniel on Negotiable Instruments, § 1310; Murray v. Fox, 104 N. Y., 382-388; 5 N. Y. State Rep., 749; The Weir Plow Co. v. Walmsley, 110 Ind., 242.

The referee further found as facts that one Charles O. Hartwell was the general agent of the defendant "in western New York, and that after the written contract had terminated the employment of the plaintiff as agent, he-orally authorized the plaintiff to make sales of machines for the defendant and agreed with the plaintiff that he should have commissions on the sales made by him, but nothing was said as to the amount of such commissions. Thereafter the plaintiff procured a written order from one Joseph Oarlock for a separator at the agreed price of $400, and sent the same to the defendant with a letter in which he stated that by direction of Mr. Hartwell, and at his re- ' quest, he had taken an order for an advance thresher and herewith forwarded it. -

He then stated: “I trust it will be satisfactory to you. Please advise me if you accept, and I will fill the order, as otherwise the party desires to do something else. Respectfully yours, J. W. Doty.” The defendant received the-order and this letter at its place of business, in Battle Creek, Mich., and immediately answered back: “We have yotirs of the 19th, with order for thresher, which is accepted,” etc. Signed: “The Case & Willard Thresher-Company.” The machine was thereupon shipped and delivered to Garlock, who paid cash therefor. The plaintiff' testified that his commissions upon such sale were fairly and reasonably worth twenty per cent, or eighty dollars. Two witnesses on behalf of the defendant testified that the-fair and reasonable value of his services or commissions for-making the sale was but twenty dollars. The referee has-found that the plaintiff’s commissions upon such sale was-eighty dollars. The contract previously existing between the plaintiff and defendant fixed the plaintiff’s commissions-upon the sale of separators at twenty per cent. The fact that nothing .was said as to the amount of commissions by Hartwell, the general agent, at the time the plaintiff was-instructed to make sales, under the promise that he should have the commissions, doubtless led him to understand and suppose that he was to receive the commissions that had previously been paid to him under the written contract, and under the circumstances, we think, such must be deemed to be the legal conclusion. Vail v. Jersey L. F. Manufacturing Co., 32 Barb., 564; Wallace v. Devlin, 36 Hun, 276.

But it is claimed that the sale was for $400, and that that-was less than the schedule price, and for this reason full commissions are not allowable. The order, however, for the separator at $400 was forwarded to the defendant, accepted by it, and in so doing it must have acquiesced in the> deviation from the schedule price.

The judgment should be affirmed.

Barker, P. J., Bradley and Dwight, JJ., concur.