Case Name: Henry Oelrichs and Gustav W. Lurman, vs. Benjamin Ford
Court: Court of Appeals of Maryland
Jurisdiction: Maryland
Decision Date: 1864-06-01
Citations: 21 Md. 489
Docket Number: 
Parties: Henry Oelrichs and Gustav W. Lurman, vs. Benjamin Ford.
Judges: The cause was argued before Bowie, C. J., and Bartol, Goldsborough and Cochran, J.
Reporter: Maryland Reports
Volume: 21
Pages: 489–524

Head Matter:
Henry Oelrichs and Gustav W. Lurman, vs. Benjamin Ford.
jpaiNMPAi. and Agent. — Tile right of a principal to maintain an action on a written contract made by his agent in his own name, without disclosing the name of the principal, although formerly sometimes questioned, is now well settled.
-: Parol Evidence. — It is also well settled, that, to prove the agency in such case, parol evidence is admissible.
Evidence: Principal and Agent: Res Gestie. — The agent of B. F.,.in his own name, entered into a written contract with O. & L. for a sale of flour, and on the same day an entry of the sale, as made on behalf of B. F., was made in the agent’s day book by his clerk; and a letter announcing the sale was written by the agent to his principal, who wrote a letter in reply, noting the sale without disapproval' and commenting on tho state of the market. In an action by the principal against the purchaser .for a non-compliance with the contract of sale, Held :
■1st. That this correspondence was competent and admissible evidence to prove, that the contract was made by the agent for and on behalf of the principal. ’
2nd. That the letter of the principal in reply to that of the agent, was evidence not only of his ratification of the contract, but of the agent’s preexisting authority and power to make it, as his agent.
3rd. That the question, of agency and the authority of the agent, necessarily depend upon the agreemont between the agent and the principal, and may be evidenced by parol, or by writings entered into between them. "
4th. It is true the agency may be proved by the agent himself. He is a competent witness ex necessitate, or upon grounds of public policy; but it is not necessary to call him to the stand if the agency can be proved aliunde.
•5th. That the entry made in the agent’s day book, was properly admitted in evidence as part of the res gestas.
Practice in the Court of Atteals: Evidence. — If an objection to evidence goes to the whole evidence offered, it follows from the established rule of this Court, that there was no error in overruling the objection, if a part of the evidence offered was admissible, although a portion of iUmay have been inadmissible.
Principal and Agent: Contracts. — The effects of an agent’s contracting in his own name, without disclosing the principal, are: First. That he thereby makes himself personally answerable for the fulfilment of the contract; and second. That the principal cannot interpose and claim the benefit of the contract, without giving to the other party who has dealt with the agent as if he were the principal, tho benefit of all set-offs and other equities existing against the agent.
•Contracts, Abandonment and Rescission of. — The inability of a party to perform his contract by reason of insolvency, amounts to an abandonment or rescission of it only when that inability exists at the time when the other party is entitled to demand its performance.
-: Usage: Evidence, Admissibility of. — O.&L. entered into and signed a contract for the purchase of flour from J. W. B., to be received from him from the 10th to the 20th days of January then following, they paying for the same at the rate of $9 per barrel on the day said flour was ready for delivery. J. W. B. was agent for a principal whose name was not dis closed. In an action on this contract by the principal against the purchasers, Held:
1st. That by the terms of the contract O. & L. had no right to demand from J. W. B.s nor from his principal, any other security for its performance; and until its breach by the vendor, (which could not occur before the time fixed for its performance,) or what would amount to a breach, viz: the inability of the vendor to comply with it at that time, the vendees had no right to rescind it, or to treat it as abandoned by the other party.
2nd. That evidence was inadmissible to show in explanation of said contract, that there existed an usage among a certain class of flour dealers in Bal- ■ timore City, accustomed to deal in time contracts for that article, under which the buyer or seller in such contracts might demand security, by way of a margin, to he put up by both whenever the faithful performance of a contract should be considered doubtful by either party.”
3rd. That the Court cannot say that the purchasers had a right to rescind the contract for a failure to comply with such demand of a margin, when the usage, if admissible in evidence, is silent on that subject.
Appeal from the Superior Court of Baltimore City:
This action wa& brought January the 10th, 185V, in the Superior Court of Baltimore City, by tbe appellee against the appellants, co-partners, trading under the firm of Oelrichs & Lurman, for a violation of the following contract:
“Baltimore, October 31si, 1855.
“For and in consideration of the sum of one dollar, the receipt whereof is hereby acknowledged, we have this day purchased from John W. Beall, and agreed to receive from tbe 10th to the 20th days of January next, at his option, one thousand barrels of Ohio Super flour and one thousand barrels Howard Street flour, we paying for tbe same at the rate of nine dollars per barrel, on the day said flour is ready for delivery.
1.000 Ohio, ) S. O. Oelrioiis & Lurman,
1.000 How. St., J 10 & 20 Jan'y ’56. — $9”
The defendants filed a plea alleging, that at the time of making said agreement there was a usage between said John W. Bell and the defendants, in their business with each other, whereby either party to such agreement might at any time between the making and the time of performance thereof, demand a reasonable margin to be put up by both parties to secure the performance of the same, and require said agreement to bo cancelled, on the failure to put up said margin; that the defendants on the 22d of December 1855, demanded of said Bell a margin of §2,000 to> be put up by him at the Merchants Bank of Baltimore, at which time and place the defendants were ready and willing on their part to put up said margin, but said Bell and the plaintiff failed to do the same, wherefore tire defendants cancelled said agreement.
The defendants.subsequently pleaded non assumpsit, and the plaintiff joined issue on both pleas. All errors of pleading were waived on both sides.
Eour exceptions were taken by the defendants during the trial of the cause. The 1st exception was to the ruling of the Court below, (Martin, J.,) admitting certain evidence offered by the plaintiff and objected to by the defendants; the 2nd and 3rd exceptions to the refusal of the Court to admit certain evidence offered on the part of the defendants; and the 4th exception to the granting of the instruction offered by the plaintiff. The material facts embraced in these exceptions, as well as the questions arising thereon, and in the plaintiff’s prayer, are very fully presented in the opinion of this Court, and in the dissenting opinion of the Chief Justice. The verdict and judgment thereon being for the plaintiff, the defendants appealed.
The cause was argued before Bowie, C. J., and Bartol, Goldsborough and Cochran, J.
Wm. F. Frick, for the appellants :
1. The plaintiffs instead of calling Bell, offered his declarations, viz: his letters and the entries on his books to prove the main fact, that he was their agent. This was in no sense other than hearsay, or secondary evidence, and not admissible under any of the exceptions to the rule excluding such testimony. Such declarations are only ad missible against and not in favor of the.principal; and upon tbe ground, that where tbe agency is proved and tbe acts of tbe agent will bind the principal, then the representations, declarations, and admissions of the agent respecting the subject matter of tbe act, if made at tbe time, and constituting part of the res gestee, will also bind the principal. Lauber vs. Shaw, 5 Mason, 242. Greenleaf’s Ev., vol. 1, secs. 113, 416, 417. Story on Agency, secs. 134, 135, 136, 137 and seq., and notes. Besides, these are declarations not made to or in the presence of the parties to be affected by them, but private communications between tbe alleged agent and bis principals; and there is no rule of evidence under which third parties can be bound by such. Where the agency itself is the substantive fact to be proved, against tbe principal, it may be done directly by tbe evidence of tbe agent himself, or proof of bis appointment; or indirectly by evidence of tbe relative situation of tbe parties, their usual course of dealing, or subsequent ratification by tbe principal. This being first done, the declarations of the agent within the scope of his authority are evidence against the principal; because tbe question is not whether the declarations are true, but whether they were in fact made. If they were, they bind the principal. But when tbe agency is to be proved by tbe principal, as against a third party who has dealt with the agent as principal, the alleged agent himself must be produced and subjected to cross-examination. It is not allowable in such case to prove this fact by hearsay; for tbe question then is not whether the alleged agent made the statement that he was an agent only, but whether the declaration was true, or to what extent, and subject to what qualifications, it was true. Green-leaf’s Ev., vol. 1, sec. 191, and secs. 98 and 39. StarJde’s Ev., part IV., p. 55 and seq., (Lib. Ed., vol. 2, part IV. 42.)
II. The facts offered in evidence under the second exception it will be contended, were, admissible, on various grounds,
1. -If exclusive'credit was given to Bell, his principal could neither sue nor be sued on the contract. Story on Agency, secs. 400, 423, et seq. The right to sue must be mutual. The defendants could not have maintained an action against Ford for non-delivery, under the contract, after their election to give him no credit; and he therefore had no claim against them for non-acceptance. Story on Agency, secs. 288, 289, 290, 291, and cases cited in the notes.
2. Supposing, however, that in such a case, the principal has a technical right of action, it is clear that the third party is entitled to be placed in the same situation, at the time of the disclosure of the real principal, as if the agent had been the sole contracting party. Sims vs. Bond, 5 Barn & Adol., 393. The principal must take the contract subject to all equities, and liable to the same defences, as if the agent were the sole principal. Story on Agency, secs. 390, 419, 420, and cases in notes. Practically, this puts the case just as if the suits were in the name of Bell, and subject to such defences as arise (a) out of his absconding, and (b) his insolvency.
(a.) His absconding was a virtual abandonment of the contract, rendering its performance by him impossible. Boper vs. Coombes, 6 Barn. & Cress. 534, (13 Eng. C. L. Bep., 246.) Planche vs. Colburn, 8 Bing., 14, (21 Eng. C. L. Bep., 203.), Keys vs. Harwood, 2 C. B,, (M. G. & S.,) 905, (52 Eng. C. L. Bep., 904.) Dubois vs. Delaware Canal Co., 4 Wend., 285.
(b.) His insolvency superadded to his absconding, amounted to a rescission of the contract. Cross on Lien, 34 Law Lib., 403. Story on Sales, secs. 424, 425 and 321. 1 Parsons on Cont., 447, and cases referred to in note (k.) Smith, et al., vs. Bowles, 2 Esp., 578.
3. But if it'be urged that in this case, performance of the contract was actually tendered, the answer is, that on the failure of Bell and in default of any security that the contract would be performed, the defendant at once, and properly, bought elsewhere the flour contracted for. This he had a right fo do. If goods sold aro perishable or of fluctuating value, the vendors, in case of insolvency of the vendee before delivery, or his refusal to accept, may sell them without waiting for the period of credit to expire. Sands vs. Taylor, 5 Johns. Oh. Hep., 395. Girard vs. Taggart, 5 Serg. & Bawle, 34. Meivhall vs. Vargas, 15 Maine, 317. 2 Parsons on Gont., 484.
III. The evidence offered under the third exception was rejected by the Court on the ground of its having been determined in a like case, (Ford vs. Oclrichs & Lurman, 23 Howard,) by the Supreme 'Court United States, to be inadmissible, as varying and adding to the written contract.
Tbe general rulo as announced by the Supreme Court, is not denied, but its application to the present state of the facts is disputed. It is not contended that evidence of usage is admissible to vary or to contradict, either expressly or by implication, the terms and provisions of a written contract, but it is claimed that in commercial transactions, extrinsic evidence of custom and usage is admissible to annex incidents to written contracts, in matters in respect to which they are silent. Hutton vs. Warren, 1 M. & W., 475. Greenleaf’s Ev., vol. 1, sec. 294. Hence, an established custom, and, a fortiori, one specially recognized by both parties as invariably governing all their-contracts of a certain kind, may add to such contracts stipulations not contained in them, on the ground that the parties must be supposed to have bad these stipulations in their minds, as a part of their agreement, when they put upon paper or expressed in words tbe other part of it. Parsons on Gont., vol. 2, p. 49, and cases in note (z.) Bonner vs. Bank of Columbia, 9 Wheaton, 581. Bank of Washington vs. Triplett, 1 Peters, 25. Syers vs. Jonas, 2 Exchequer, Welsby, Hurl-stone and Gordon, 111. Queen vs. Tnhab’s of Stoke upon Trent, 5 Q. B. (Ad. & Ellis M 8.,) 303. 1 Gill. Ev., part II., 702. Scarkie on Ev., partIV., p. 1038. And especially tbe case of Bliven, el al., vs. Mew England Screw Go., also in 23 Howard, 431, in which the íáupremo Court in the case of a written agreement to deliver goods to bo manufactured within a certain time, allowed proof of a usage to deliver only a part of the goods, where other orders interfered with the delivered of the whole.
This suggests another ground upon which this evidence ought to be admitted. Each party expressly agrees with the other, that the contract between them is made with reference; and subject to the usage, &c. Now, where an agreement between parties is one and entire, and only a part of it is reduced to writing, the residue of the contract may be proved by extrinsic evidence. Also, it is competent to prove an additional or suppletory agreement' by parol. Therefore, whether the special agreement about the usage was cotemporaneous with or subsequent to the written paper, it is equally admissible. That would leave.'open only the question, whether it was competent to prove by parol what was meant by the term “margin,” and about that there can be no dispute. Greenleaf’s Ev., vol. 1, secs. 284 (a) and 304. Parsons on Coni., vol. 2, p. 65. Jeffrey vs. Walton, 1 StarJcie, 267, (2 Eng. C. L. Pep., 385.) .Knapp vs. Harden, 6 C. & P., 745, (25 Eng. C. L. Pep., 630.) Coates vs. Sangston, 5 Md. Pep., 131.
IY. The fourth exception refers to the Court’s instruction, which, is incorrect, if any of the points above made are well taken.
George Wm. Brown, for the appellee, argued :
I. In reference to the first bill of exceptions, that the agency of Bell was a fact to be proved like any other similar fact, and that the evidence admitted by the Court was proper and competent. The question was only as' to the admissibility of the testimony. The defendants made one •specific objection to it, and to this objection they are now confined, to w'it: that it should have been shown that Bell’s testimony could not be procured; but there is no rule of evidence, which requires the fact of the agency to be proved only, or in the first instance, by the agent himself. If Bell had been examined and denied the agency, the plaintiff had the right to prove the fact by other testimony. If the defendants required his testimony, they should have procured it, or made an endeavor to do so. Ford vs. Williams, 21 How., 287.
II. In the second bill of exceptions the defendants offered in evidence a number of particulars, and on being asked by the Court for what purpose they were offered, stated that they did not offer the testimony as bearing on the question of fact, whether Bell was the agent of 'the plaintiff in making the contract, but as touching the plaintiff’s right of action in case the jury should believe all the facts stated in the offer, and as touching the true measure of damages. The Court refused to permit the facts to be given in evidence for either purpose.
The plaintiff will contend, that the facts offered to be proved are one and all irrelevant, and inadmissible for either purpose for which they were offered, and if they had been admitted, were calculated to mislead the jury; and the bill of exceptions should name the different witnesses, and the facts expected to be proved by them respectively. Ford vs. Williams, 21 How., 287. Oelricks & Lurrnan vs. Ford, 23 How., 49. 2 Parsons on Cont., 485. McNaughter vs. Cassally, 4 McLean, 530. Stanton vs. Small, 3 Sand. Sup. Gt. Hep., 230. Hibbleiuhite vs. McMorine, 5 Mees. <& Weis., 462. Mortimer vS. McOallan, 6 Mees. & Weis., 58. New Jersey Nav. Go., vs. Merch. Bank, 6 How., 381. Salmon Falls Go., vs. Goddard, 14 How., 455. 2 Smith’s Le. Ca., 370, 371, 372. Story on Agency, sec. 161. 1 Parsons onGont., 53. 3 Bobinson’s Prac., ch.S, p. 34. Patapscolns. Go., vs. Smith, G II. & J., 167. Sims vs. Bond, 5 Barn, db Adol., 393, (27 Fng. G. L. Hep., 97.) Higgins vs. Senior, 8 Mees. c% Weis., 834. Beckham vs. Brake, 9 Mees ds Weis., 78, and lllfccs. ch Weis., 315. Dykes Alexander vs. Barker, 2 Twyrrh., 140. Trueman vs. Loder, 11 Adol. & Eli., (39 Eng. G. L. Hep., 178.) Bylcs on Bills, 27. Bussell on Factors, 246; 48Law Lib. Bank U. S.vs. Lyman, 20 Verm., 673, 674,- 676. Williams vs. Bacon, 2 Gray, 387. Ilubbert vs. Borden, 6 Wharton, 92. Bateman vs. Phillips, 15 East., 272. Elkins vs. Boston, &c., R. B. Co., 19 N. H. Bep., 342. Sargent vs. Morris, 3 Barn. & Adol., 277, (5 Eng. C. L. Bep., 283.) Huntington vs. Knox, 7 Cush., 374. Walshe vs. Provan, 20 Eng. Law & Eg., Bep., 573. Phelps vs. Prothero, 32 Eng. Law c6 Eg. Bep., 474. Humphrey vs. Lucas, 61 Eng. C. L. Bep., 152. Skinner vs. Slocks, 6 Eng. C. L. Bep., 478. Beébee vs. .Robert, 12 Wend., 413. Taintor vs. Pendergrast, 3 Hill, 72. Sanderson vs. Lamberton, 6 Bing., 129.
. III. In the third bill of exceptions the defendants again offered the testimony stated in the second bill of exceptions, and, in addition thereto, a number of particulars in reference to an alleged usage. The testimony offered in the second bill of exceptions has not the slighest bearing •on the point raised in the third, and therefore was properly rejected. But the new testimony offered in the third bill of exceptions was also inadmissible. An usage, to be valid, must be general, reasonable and certain. This usage which is said to prevail “among a certain class of flour dealers in Baltimore City, accustomed to deal in time contracts for that article,” is not general. It is not even an usage of that entire class, but of a part, it may be of a •small part of the class. It was not competent for the defendants to prove, as they offered to do, that it had been acted upon “in numerous cases,” because numerous cases do not constitute a general usage. The pretended usage does not state any rule by which a margin “reasonably sufficient” may be determined. The usage is said to he, that “a margin may be demanded whenever the faithful performance ■of such a contract should be considered doubtful by either party.” The doubt may bo wholly ridiculous and unreasonable, but if either party chooses to entertain it, or say ■that ho does, he may demand a margin. Such an usage is not reasonable, and cannot be valid. No usage is reasonable which authorizes a party to act unreasonably. ■
The cause for which the margin may be demanded is not sufficiently certain. It ds said to be, “whenever the faithful performance of such contract should he considered doubtful by either party.” Various causes may render the faithful performance of a contract doubtful, such as death, war, impossibility of obtaining the article at the proper time, dishonesty or insolvency of the party.. (Is it meant that the usage embraces all such cases ? If so, it should so state.) But such a usage would not be reasonable. It does not say what notice of the demand for a margin is to bo given, nor what is to' be done with the margin, if put up; and is therefore not certain.
But even if the testimony offered were sufficient to prove an usage, and it were general, reasonable and certain, it would not avail in this case; for it does not appear that by the usage, as stated, either party has a right to rescind the contract, if the demand is not complied with. If the defendants had a right to demand security, and did so in the proper way, they have their remedy by suit against the plaintiff for his failure to comply with the demand, hut not a right to cancel the contract. The defendants in their letter to J. W. Bell, dated 22d December 1855, which is offered as part of the testimony in said exception, do not assert that they have a right to rescind the contract on the ground of usage, but place their claim on an “understanding,” or contract.
The Court therefore was right in excluding the entire testimony offered in the third bill of exceptions:
1st. Because a great portion was wholly irrelevant, and the rest relating to the usage was illegal, for the .following reasons:
2nd. Because the alleged special usage of Bell and the defendants, and their admission of that fact, could not control the written contract. It does not appear when said admission was made. Even if it had been made at the date of the contract, any conversations and verbal understanding were merged in the contract, and parol evidence was inadmissi ble to engraft them upon it, and tbe usage as alleged is not certain, and therefore not valid, and did not authorize a rescission of the contract.
3rd. Beeause the alleged usage among a certain class of merchants in Baltimore was not valid, not being general, reasonable and certain.
4th. Because if proved it did not authorize the rescission of the contract.
5th. Because the clear and positive terms of the written agreement cannot be varied or contradicted by the proof of any usage.
6th. Because the notice given was insufficient, as it relies on an alleged understanding between the parties, and not upon the usage.
7th. Because the defendants had no right to require the arbitrary sum of $1 per barrel to be put up on a contract on which, at the time of the demand, they were in fact losers, without tendering any proof that such amount was reasonable. Nor had they a right to select the Merchants bank as the place of deposit of the plaintiff under the penalty of a cancellation of the contract.
8th. And because the bill of exception should name the different witnesses, .and the facts expected to be proved by them respectively. Oelrichs & 'Lurman vs. Ford, 23 How., 49. United States vs. Buchanan, 8 How., 83, 102. Williams vs. Woods, 16 Bid. Bep., 220. Foley vs.'Blasón, 6 Bid. Bep., 50. Adams vs. Otterback, 15 How., 545. Britlcm vs. Barnaby, 21 Hovo., 538. 1 Greenleaf’s Fv., secs. 275, 278, 281/ 284, 288, 292, 293, 294. Goxevs. Heisley, 19 Penn. State Bep., 247. Macy vs. Ins. Go., 9 Met., 363. Brown vs. Stoddard, 10 Met., 381. Adams vs. Wordley, 1 Mees. & Weis., 374. Magee vs. Atkinson, 2 Mees. & Weis., 442. Trueman vs. Loder, 11 Adol. & Ell., 596. Allen vs„ Dykers, 3 Hill N. Y., 597. Hinton ¡os. Locke, 5 Hill N. Y., 437. Gross vs. Criss, 3 Grait., 262. Macomber vs. Parker, 13 Pick., 182. Hone vs. Mutual Ins. Go., 1 Sand. Sup. Gt. Bep,, 137. Barlow vs. Lambert, 28 Ala., 710. 1 Smith’s Le. Ga., 307, 308, 309, margin; and sec note of II. B. W., to p. 309. Bouce vs. Gatlijf, 11 Gl. & Fin., 45, 70. Ford vs. Yates, 2 Man. & Grang., 549. Browne on St. Frauds, 116, secs. 118, 448, 451. 2 Farsons on Contracts, 59.
IY. The instruction given by tlio Court in the fourth hill of exceptions, is in the language sanctioned by the Supreme Court of the United States, in the case of Oelrichs dc Lurman vs. Ford, 23 How., 49, and is correct.

Opinion:
Bartol, J.,
delivered the opinion of this Court:
This action was brought by the appellee to recover damages, for an alleged violation by the appellants of their contract to purchase two thousand barrels of flour. The contract is in writing made by the appellants with one John W. Bell. The appellee claims the right to sue, on the ground that ho was principal, and that Bell, in making the contract, acted as his agent.
The right of a principal to maintain an action on a written contract made by his agent in his own name, without disclosing the name of the principal, although formerly sometimes questioned, is now well settled. See Ford vs. Williams, 21 How., 287. Hubbert vs. Borden, 6 Wharton, 79. In this case this question was very fully considered "by the Supreme Court of Pennsylvania, in an able opinion delivered by Judge Kennedy.
It is also well settled, that to prove the agency in such case, parol evidence is admissible; such proof does not vary or contradict the writing, but merely establishes a separate collateral fact, namely the relation existing between the party contracting for bim, and for whose benefit the contract is made; or in other words, the authority under which the agent acts, out of which grow the rights and obligations of the principal under the contract.
In this case the first exception was taken by the defendants below to the evidence offered, for the purpose of proving that in making the contraes sued on, Bell acted as the agent of the plaintiff. This evidence consisted of the cor respondence between Bell and the plaintiff, and the entry on the day-book of Bell made by his clerk on theday of the sale.
The contract was made on the 31st of October 1855, for 1000 barrels Ohio super flour, and 1000 barrels Howard street flour, at f 9 per barrel, to be delivered at the option of the seller, from the 10th to the 20th of January following:
On the same day the following entry was made in Bell's day-book by his clerk:
Sold O. & Lurman for B. Ford.
1000 Hd. St. ? in+ on t ' m 1000 Ohio. \ 10 t0 20 Jan y» ^9-
On- the same day Bell wrote to the plaintiff the following letter:
Balto., Oct. 31, 1855.
Mr. Benj. Ford, D. Sir: — Your favor of yesterday covering acc. sales 352 bbls. flour. Our market not active as yesterday, moderate sales at $>9-.
I sold for you this morning and telegraphed you:
1000 Ohio, ) Sellers option at $9, 1000 How. st. J 10th to 20th Jan'y.
2000 How. st. at $9, all February.
4000
I could not sell for all January, but came as near it as I could. These are good sales you may depend. Your average is now a good one; should prices advance further, sell more at á higher price. This plan can't fail to come out right. Eesp'y Jn. W. Bell.
The following letter was also offered in evidence:
New York, Nov. 1, 1855.
John W. Bell, Esq., Dr. Sir: — Yours of 31st ulto. at hand, and I see you have sold 2000 bbls. flour for Jan'y to 20th, and 2000 bbls. flour for Feby. Things are very quiet here to-day, all waiting for steamer; considerable selling at 12-|- on 8.87, and some on 9, for the steamer now due.
It is very hard to say how flour will work, receipts are siol so largo for last two days — -more wheat coming than flour, being higher. It will be surprising if they keep flour at present prices, with the great abundance of every thing in the country; three weeks will determine. The demand coming so early looks as though they were deficient considerably. Respectfully, yours, &e., Benj. Ford.
In addition to the above evidence the plaintiff proved, that he was a flour merchant in the City of New York, and that Bell was then extensively engaged in Baltimore as a flour merchant, and bought and sold flour both on his own account and on commission.
In the opinion of a majority of this Court the correspondence was competent and admissible evidence to prove that the contract was made by Bell for and on behalf of the plaintiff as his agent. There can be little doubt that the sale referred to in Bell's letter of the 31st of October, is the same evidenced by the contract; although the defendants' names are not mentioned, in the letter, the date, quantity, price and terms are the same. Nor can there be any doubt that the letter of the plaintiff is evidence not only of his ratification of the contract, but of Bell's pre-existing authority and power to make it as his agent. ¡Supposing this correspondence to be in good faith, of which the jury was to judge, it would seem to be difficult to conceive oí stronger proof of agency. The objection that the defendants were no parties to that transaction, and ought not. to be bound, by it, has no force. Their rights and obligations under the contract, are in no manner changed or affected thereby" The questions of agency, and the authority of the agent necessarily depend upon the agreement between, the agent and the principal, and may be evidenced by parol, or by writings entered into between them, and such proof it seems to'us is free from, all objection. It is true the agency may be proved by tbe agent himself, bo is a competent witness ex necessitate, or upon grounds of public policy; but it is not necessary to call him to the stand if the agency can bo proved aliunde.
This question arose in the case of Hubbert vs. Borden, 6 Wharton, before cited, and was expressly decided in conformity with the views above expressed. In that case the contract in writing sued on by Borden, was made with the defendant by Thomas and Martin in their own name, and the Court say, (page 96,) "That the correspondence between the plaintiffs and Thomas and Martin, was properly admitted, because it showed the authority, which the latter had from the former, to make the contract on their behalf, and likewise the terms and conditions upon which it was to be made with the defendant."
The objection taken at the trial, and embraced in this exception, going to the whole evidence offered, it follows from the established rule of this Court that there was no error in overruling the objection, if a part of the evidence was admissible, although a portion of it may have been inadmissible. This rule would entitle the appellee to an affirmance on this exception, even if the entry from the day-book were held to be illegal testimony. With reference to that, however, a majority of the Court are of opinion that it was properly admitted in evidence as á part of the res gestee. 1 Greenleaf's Ev., sec. 115. Of course the honesty and good faith of that entry, as well as of the correspondence, if they were denied, were proper questions for the jury.
Second exception. The questions presented by this exception were argued with great ingenuity and ability by the appellants' counsel, and are certainly not free from difficulty; but after the best consideration we have been able to give them, a majority of the Court are of opinion the ruling of the Superior Court was correct and ought to bo affirmed.
This exception was taken to the rejection of a mass of evidence offered by the defendants, a brief statement of which is necessary in order to show the questions involved in its decision. The plaintiff having proved that on the 19th of December 1855, Bell disappeared from his place of business and never returned to Baltimore, no one knowing what had become of him, and leaving his affairs in an insolvent condition, and that he went to California where he has since resided; then proved by 'George Wm. Brown, Esq., that he called as the plaintiff's attorney, in company with John H. Ford, son of the plaintiff, on the 29th December 1855, upon Mr. Frick, the attorney of the defendants, having been referred by the defendants to Mr. Frick, and showed to him the contract in question of the 31st of October, and informed him that the same was made by Bell for him, the plaintiff, as principal, and that'he would comply with it. Mr. Frick replied, that the plaintiff had not put up any money under the contract; to which Mr. Brown replied, that he denied the right of the defendants to demand any, but that the plaintiff was prepared to do any thing required by the contract. Mr. Frick then said that the defendants did not know the plaintiff in the transaction, and considered the contract at an end.
The plaintiff then proved that, on the 16th of January 1856, in pursuance of the contract, he tendered to the defendants 1000 barrels of Ohio Super flour, and 1000 barrels of Howard street Super flour; but the defendants refused to receive it. The market price of flour on that day was $8 per barrel. The defendants then proved that on the 31st of December 1855, they purchased from Mr. Hincks 6000 barrels of the same kind of flour mentioned in the contract, deliverable in the ensuing January and February at $8.15 per barrel.
The defendants then proceeded to offer evidence, to the rejection of which this exception was taken, substantially as follows;
That the defendants wore shipping merchants largely engaged in purchasing flour for exportation to Europe to fill orders to them from abroad. That the existence of the Crimean war at that time had produced an extraordinary demand for American bread stuffs, which rendered it necessary to make contracts in many instances for flour to be delivered at a future day, and that the price of flour at that period was constantly fluctuating and varying with the arrival of every steamer. On account of the negotiations for .peace then pending and the uncertainty of the result, the, price would vary from two to three dollars a barrel in forty-eight hours. That the contract with Bell was made by the defendants in order to enable them to fill in part their orders from abroad. At that time Bell was a general flour merchant, selling on his own account as well as on commission, and in excellent standing and credit. That Bell absconded on the 19th of December 1855, leaving his affairs in an insolvent condition, and his property was immediately seized by his creditors, under attachments against him as an absconding debtor. That at the time of his absconding, Bell had many contracts outstanding, like that offered in evidence, for the future delivery of flour; and that the opinion of the best informed merchants in Baltimore at that time was, that flour would reach the price of $12 a barrel in-the January and February ensuing. That after the absconding -of Bell, the defendants demanded at his store of his chief clerk, security for the performance of the contract, and failing to receive it, they at once bought flour to replace that which he had agreed to furnish at $8.75 per barrel. That on the 29th of December 1855, the plaintiff, who was a flour merchant of New York; gave notice to the defendants, that he claimed to be principal in the contract, and offered to perform it. That plaintiff was at that time known to the defendants, and generally known to be a broken merchant without any credit or standing, and that they refused to give him credit, or take him for the contract, unless he would give security for its performance, which he refused to do. That the defendants in making the contract with Bell, treated him as principal, and never heard of the plaintiffs having or claiming any interest in the transaction, until his notice to them of the 29th of December. This evidence was offered for two purposes: first, in bar of of the action; and secondly, in mitigation of dama ges; and in the opinion of a majority of the Court it was not admissible for either purpose.
By the well established law of agency, the principal may maintain a suit upon a contract made for him by his agent, as well where he is not named or known to the other contracting party, as where the principal is disclosed by the contract. The effects of an agent's contracting in his own name without disclosing the principal, are first, that he thereby makes himself personally answerable for the fulfillment of the contract; and secondly, that the principal cannot interpose and claim the benefit of the contract, without, giving to the other party, who has dealt with the agent as if he were the principal, the benefit of all set-offs and other equities existing against the agent. Story on Agency, sec. 420. "But subject to these rights and those of the agent," says the learned author, in the section referred to, "the principal may generally sue upon such a contract, in the same manner, as if he had personally made it."
This brings us to the inquiry, what were the rights of the defendants under their contract with. Bell — assuming as wo must do for the purposes oí'this exception, that they gave credit to him exclusively in making the contract ? The appellants' counsel has argued, that when he proved insolvent and absconded, there was a virtual abandonment of the contract on his part; his performance of it being thereby rendered impossible, which authorized the vendees to treat it as rescinded. We have found no case going so far as to sustain this proposition, and we think the error of the learned counsel grows out of a misapprehension of the nature of the contract. The inability of a party to perform his contract by reason of insolvency, amounts to an abandonment or rescission of it, only when that inability exists at the time when the other party is entitled to cIct mand its performance. It is true that a vendor who has sold goods on time, giving credit to the vendee, may refuse to deliver them, if the vendee becomes insolvent before the possession has passed, and in some cases may stop them in transitu. This grows out of the lien of the vendor upon the goods, as a' security for the purchase money; but the contract is not thereby rescinded. Story on Sales, sec. 320. And no case can be found of a contract of sale for cash on delivery to be made at a future day, where it has been held that the vendor may refuse to deliver the goods on the day, if the cash be then tendered, on the ground that the vendee had become insolvent in the- mean time. Nor does such insolvency entitle the vendor to rescind the contract. The rights and obligations of the parties in such case are correlative. Under the contract before us, the defendants contracted with Bell, relying exclusively upon his ability to deliver the flour purchased at the time named. By the terms of the contract they had-no right to demand from him, nor from his principal, any other security for its performance, and until its breach by the vendor, which could not occur before the time fixed for its performance, (or what would amount to a breach, viz: the inability of the vendor to comply with it. at that time,) the vendees had no right to rescind it, or to treat it as abandoned by the other party. Such stipulations might have" been made as would have conferred such rights upon the vendee; but it contains no such provisions, and the parties must be held bound by their engagement according to its terms.
A great many authorities were cited by the appellants' counsel, to support his views on this part of the case; they have been examined, and without referring to them here particularly, we think the principles above stated are sound and not inconsistent with the authorities cited: and we conclude that the evidence offered by the defendants, and contained in this exception, was properly rejected, as irrelevant and incompetent testimony for either of the purposes mentioned.
Third Exception. In this exception, the defendants, in addition to the evidence contained in the second exception, offered to prove a usage among flour dealers in Baltimore, governing contracts of this kind, winch is particularly set out in the defendants offer, (and stated ante pp. 491 and 492.) A majority of this Court are of opinion that there was no error in rejecting this evidence. Under the usage, the defendants claimed the right to rescind the contract upon the failure of the other party "to put up a margin" on demand , that is, to deposit a sum of money as a security for the performance of the contract. In treating upon this exception, the offer must he considered as if the proof was actually produced in the terms therein stated, and we think that even supposing the proof of such usage were admissible to affect the contract, the offer is insufficient, and falls short of establishing the defence. In the offer it was certainly necessary to state as a part of the usage, that in the event .of either party failing to put up the margin demanded in a reasonable time, the other party had the right at his option to cancel the contract. In the offer this is not stated, though in the appellants' argument it was assumed that such was the usage. The Court cannot infer that such a result would follow. It is not a matter of legal conclusion, but ought to appear as matter of fact, as part of the usage.
If one party fail to do a- collateral act, which the other has a right to demand, it will not follow as a legal consequence that the contract is for that reason void, or may bo wholly rescinded. That would be the effect of a failure to comply with the contract itself, which in this case was to deliver 2000 barrels of flour at a future day. Now the usage offered to be shown is, "that in the mean time either party has a right to demand a margin to be put up, rea-' sonably sufficient to secure tbe performance of ibe contract," but is altogether silent as to the consequences of a failure to comply with such demand. Under such usage, the Court cannot say the defendants had a right to rescind the contract for that reason, when the usage, as set out in the offer, is silent on that subject.
But this question is more speculative than material in this case, because in our opinion the usage as described in tbe offer was wholly inadmissible to affect the construction of the contract. This opinion was expressed by the Supreme Court in a case between, the same parties, 28 Howard, 63, where an attempt was made to establish a similar usage; as set out in the offer we think it is vague, uncertain and unreasonable. And these objections are not removed by the offer to prove by the declarations of the parties, or their verbal understanding, that their dealings were made with reference to and subject to the usage. Such evidence could not control the written contract. The effect of admitting such testimony would be to set up as many usages as there may be contracts made, and to open the door for the admission of parol evidence of the particular customs of parties and their modes of doing business, to determine their legal rights and obligations, which ought to depend only on their agreements as they have made them in writing.
The fourth exception was taken- to the instruction given by the Court to the jury. But it is conceded by the appellants' counsel to be free from objection, unless there was some error in the ruling of the Court upon the other bills of exception. It is in the language sanctioned by the Supreme Court, in the case before referred to, in 23 Howard.