Case Name: E. B. Stoddard & Co. vs. James D. McIlwain, S. B. Massey and R. E. Wiley
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1853-12
Citations: 7 Rich. 525
Docket Number: 
Parties: E. B. Stoddard & Co. vs. James D. McIlwain, S. B. Massey and R. E. Wiley.
Judges: O’Neall, Wardlaw and Glover, JJ., concurred.
Reporter: South Carolina Law Reports
Volume: 41
Pages: 525–532

Head Matter:
E. B. Stoddard & Co. vs. James D. McIlwain, S. B. Massey and R. E. Wiley.
A clerk employed by written agreement to “ purchase goods, and conduot a moroantile house in the village of Lancaster, upon the cash system,” with a certain sum of money placed in his hands for that purpose, has no authority to bind his principals for goods purchased for the house, on credit.
The question, whether the principals (the defendants) had confirmed the aots of the clerk in buying goods on credit, by taking and selling a remnant of tho goods, and receiving and collecting notes and accounts due the house, after they know that he had purchased goods on credit, was submitted to the jury, with proper instructions, and their verdict for the defendants the Court of Appeals refused to disturb.
Tho mere leaning of a Judge, in charging a jury upon a question of fact, adverse to a party, is no ground for a new trial — at any rate in a civil case.
Before Withers, J., at Lancaster, Fall Term, 1853.
The report of his Honor, the presiding Judge, is as follows:
“The defendants were sued upon three several notes, each at six months, dated 26th March, 1851, 28th February, 1852, 31st July, 1852, with a credit on the first of $62; all in favor of the plaintiffs, and signed, “ J. D. Mcllwain, per J. B. Boyd.” The aggregate principal was $628.90.
“ The case turned upon the question, whether Boyd had the right to bind the defendants by the execution of these notes.
“By a written instrument dated November 11, 1850, it was stipulated, according to my very brief memoranda, that the defendants would each furnish $500, to be placed in the hands of Mcllwain, who was to employ a competent “clerk,” to conduct in Lancaster “a mercantile house,” “on the cask system,” in the name and style of J. D.. Mcllwain ; that the defendants should have the right to inspect the books, and should share profit and loss, upon the employment of the aforesaid fund, and any amount additional, that might be contributed.( .)
“ Mcllwain appointed J. B. Boyd, who was examined as a witness, and he was the only one. He said he went to Charleston and laid out the $1,500, and no more. Some or all, he laid out with the plaintiffs, and told them, or one of them, that “ he had just so much money to lay out in goods, and beyond that he could not go.” That he went to Charleston about twice a year, and exceeded his authority in executing the notes in question ; that he took bills of the goods purchased for the- notes, and receipted by note given, but concealed from defendants the fact, trusting that he would be able to pay them off without their knowledge; that each of the defendants purchased some goods at the store, on account, in the aggregate, perhaps, 450 or 500 dollars; that they did not pay much attention to the course of the business; that they found out, however, the fact that he had been buying on credit in Camden, or elsewhere, or both, contrary to the agreement; that thereupon he was discharged, and a notice, dated November 24, 1852, of dissolution (which was produced) published in a newspaper at Lancaster, requiring all persons indebted, to pay up by the 1st January next following, proclaiming the purpose to close the business that had been conducted by J. B. Boyd; that the remnant of goods would be sold at cost, and that Robert G. Mcllwain had been appointed agent to sell and receive; that at that time “ every thing was pretty much sold out; ” that it was some days after Boyd’s dis charge before the Stoddard bills were found and shewn to defendants ; that defendants were engaged a month or so in selling the remnant; that they had received no dividend before Boyd’s discharge ; that they knew he did keep books and sold on credit; and the notes and accounts went into their hands ; that he (Boyd) thought if solvent, the concern was barely so; that he owed it about 1000 dollars, and he supposed the wages due to him would about equal that sum.
“Such was the case made, and the question was whether Boyd had original authority, by the agreement, for he had no other, to sign these notes for his principals; or if not, whether they had become liable for them by ratification subsequent.
“ For the plaintiffs it was contended, that a “ mercantile house” could not be conducted in Lancaster, otherwise than by laying in oh credit purchases, occasionally, since such was the universal habit, and that Boyd’s conduct was, therefore, within the scope of his authority. I did not ratify this view as matter of law, though the question of fact was left to the jury. I suggested to them that it appeared to me, the pivot of the case was the question of ratification.
“Though the law laid down for their guidance seems not to be questioned in the grounds of appeal, I may as well subjoin what it was, to wit:
“That to fix an obligation by ratification, it was necessary to show that a party so charged was acquainted with the transaction ; that the case must be fairly and intelligibly before him, or that he must be shown to have had such fair opportunity to know it, as to justify the inference that he did know; that what he should do ignorantly, and without culpable negligence, ought to entail no liability upon him. That one, not knowing the terms of an agency in writing, might cite his acts as binding on the principal who held him out as agent, and ratified those acts, by acquiescence after knowledge, or otherwise, though the contract, inter partes, should be thereby extended, as to a person thus trusting; but in the absence of all fraud, the proof of facts to show agency, thus extended beyond the agreed limits, should
be reasonably well established and free from ambiguity: for the general rule was, that one might not bind another without actual authority,- or that fairly to be inferred from facts importing it. That it was, in general, important to regard the limits of a restrictive agency; that the burthen of proof was on the plaintiffs, to show an original agency in Boyd, or a subsequent ratification since; in the absence of all else, the contract between him and his principals was the rule of right as to those who chose to deal with Boyd in capacity of agent. I approved the doctrine of the cases cited for the plaintiffs by their counsel.
“The jury found for defendants.”
The plaintiffs appealed, and now moved this Court for a new trial, on the grounds:
L Because Boyd was authorized, under the articles of partnership, as a necessary incident to conducting the business of the firm, to purchase goods on credit, and to give the note of the firm for the purchase money.
2. Because the defendants confirmed the acts of Boyd, after they knew he had purchased goods on credit, by taking and selling the goods, and receiving and collecting the notes and accounts for which the goods were sold.
3. Because Boyd was the agent of the firm to purchase goods, and whatever may have been the particular understanding of the firm as to the manner in which the business was to be conducted, if he acted within the usual scope of his general agency, his principals are bound by his acts.
Dawkins, Melton, for appellants.
Clinton, contra.
(a) Tho following is a copy of the agreement referred to:
“ South-Caholina, )
“ Lancaster District. J
• “ Know all men Try these presents, That we, Jamos D. Mcllwain, Samuel B. Massey and Dr. R. E. Wiley, do hereby agree to advance five hundred dollars, each, for the purpose of establishing, in the name of said James D. Mollwain, a mercantile house, in the village of Lancaster, for the term of one year or more, upon the following conditions, viz: The said James D. Mollwain is to employ a competont clerk, who shall, with the money above spoken of, purchase goods, and conduct a mercantile houso in the village of Lancaster, upon the cash system, reserving to ourselves the right of inspecting the books at any time, and also, of closing the concern whenever a majority see fit. W0 further agree to equally divide the profits arising from the above fund, or any other sums, we may hereafter advance, and also bear our equal portions of whatever loss may occur.
“"Witness our hands and seals, November 11, 1850.
“ Executed in presence of } “ James H. wither spoon. )
“ James D. McIlwain, l. s.
“ Samuel B. Massey, l. s.
“Richard E. Wiley, l. s.”

Opinion:
The opinion of the Court was delivered by
Withers, J.
Without recapitulating the facts which appear in the brief, we shall proceed to consider the questions that arise on them.
The first is, was J. B. Boyd authorized to bind the defendants, according to the law of agency, by the execution of the notes that are the subject of this action? As between Boyd and his principals, the defendants, he had no such authority; for, as between such parties, the agreement put in evidence stipulated that as a clerk, Boyd was employed to purchase goods for a sum in cash, placed in his hands by the defendants, " and to conduct a mercantile house in the village of Lancaster upon the cash system." If we look to the ordinary import of these last words, Boyd would be thereby restricted to the duty of both buying and selling for cash only. It would not be on a cash system, if the one or the other was done upon a credit. Nor can it be said to be impracticable to do both, or either, for cash only. If we consider the natural motive to be inferred from the restrictive words, as moving the defendants, we must perceive that it was especially interesting to them to withhold from Boyd the power, so dangerous in all agencies, to pledge their credit in purchases. Such a power they could least supervise, and check in any particular instance, while the abuse of selling upon trust it was far more convenient to the principals to detect and restrain ; for they reserved the right to inspect the books at any time, and to close the concern at any time when a majority might see fit; so that the argument is stringent to force upon us the interpretation of the agreement as a prohibition to Boyd of buying on the credit of his principals.' Boyd's conduct, in the outset, reinforces the confidence which we feel in such construction ; for when he first went to Charleston to provide a stock of goods, he went to lay out the $1,500 and no more; and said to the plaintiffs themselves, that he had so much money to expend, and beyond that he could not go; and he testified, expressly, that he exceeded his authority in executing the notes, and concealed his acts from the defendants. Whether, at that time, he disclosed to the plaintiffs the fact of his agency, or, if so, the character and extent of it, the names'of his principals, and so forth, does not appear. In about five months after his appointment, he executed a note signed "J. D. Mcllwain per J. B. Boyd, agent," in favor of plaintiffs, upon which he afterwards made a payment. In less than a year after the date of the first, he executed another note, and in about five months after the date of the latter, a third note, in favor of the plaintiffs ; and during all this time a balance remained unpaid upon the first. At the date of this first note, at least, the plaintiffs knew he was an agent, and the name was disclosed of a principal to whom they could have applied for information. If Boyd exhibited the agreement that gave - existence to his agency, they saw he could not deal on credit; and if he did not, they were put on enquiry, according to the dictates of reasonable prudence, as to the character and extent of his agency — the more reasonable for them in consideration that he had told them, at first, he could not go beyond his money then in hand. That, in the meantime, between the date of the agreement with Boyd and the date of either of the notes, the principals, or either of them, had done anything, in pais, to enlarge Boyd's authority as to third persons, or as to these plaintiffs in particular, so as to authorize him to bind them by note, (and such they might have done by acts sufficient thereunto,) there is no evidence to show. A previous authority, therefore, to execute these notes, the defendants did not give, according to the evidence, and the circuit Court was right in refraining from instructing the jury that they did.
The second and remaining question involves the doctrine of ratification. Though no instruction to the jury is made matter of complaint, in this Court, yet it has been urged that a leaning of the Judge presiding, adverse to the plaintiffs, upon this inquiry, was to be inferred by, and was perceptible to the jury; while the charge upon this point is reported. This Court cannot overrule a result upon circuit on such a ground. Whatever may be the individual opinions of members of this Court, one or all, as to what is sometimes called the moral justice of a cause, or although the Court, or members of it, may think they would otherwise resolve the facts, if in the jury box, yet no point of law arises out of it, and it opens a province of differences of mere speculative conjecture, of disputation' and doubt, into which an appellate tribunal ought not to stray, unless most manifestly the ends of justice would else be defeated. Where the law is properly expounded, the facts fairly exhibited, and the leaning of the Judge is the question, it is enough for us (in civil cases, at any rate,) to know that the jury have been left free to reason to their own conclusion.
It must be admitted that this is not a case of express or positive confirmation of the agent's act. The facts on which the inquiry rests, are so far subject to different interpretations, that the office of the jury becomes indispensable. We have examined the instructions to the jury, on this subject, and can find nothing to condemn. It was not illiberal law for the plaintiffs, when the jury were told, that a party to be charged by reason of ratification should be shown, to have been " acquainted with the transaction — that the case must be fairly and intelligibly before him, or that he must be shown to have had such fair opportunity to know it, as to justify the inference that he did know." This is the more manifest when we turn to authors on agency, and find it advanced that the principal is bound who ratifies " after full knowledge of the transaction; " and this is said touching contests between principal and agent, and principal and third parties. It was well- enough to say, that the jury might inquire whether the defendants had a fair opportunity to be acquainted with the fact in question, for it might be the basis of strong observation in argument, if it appeared, that a principal, reserving- the full right of inspecting the business of an agent, saw upon his shelves $>5,000 worth of goods, for example, when he had supplied only $500 to buy them. The argument would take a different hue, if the fact should be, that inconsiderable surplus additions were occasionally, and by picce-meal introduced, in the course of an active business, not exceeding the value of a reasonable estimate of cash profits— and this by a clerk, or agent, who was studiously concealing his dealing upon credit; and who, it might be, was abstracting the goods or money of the principal, and supplying the same by an abuse of his authority, practised on the easy, negligent acquiescence of third persons — resulting in the complete decep tion of even a vigilant principal. We do not, however, desire to enlarge upon this matter, because it is manifest that the addition or subtraction of a single fact may change the face of a case, proceeding upon the question of ratification; and because, we are given to understand, that other actions are pending against the same defendants, resting upon the conduct of the same agent. Our own case of Miller & Co. vs. Sims & Askford, (2 Hill, 479,) was cited here, as it was cited and recognized on the circuit. If we discard all observation as to distinguishing particulars in that, as that it was a question of ratification by an adult of his acts as a minor, established (it was said) by " slight circumstances," as held by Cheshire vs. Barrett, 4 McC., 241, it may be sufficient to remark, that there, the instruction to the jury was, that the acts proved did not amount ta a confirmation, while the Appeal Court thought they tended strongly to show it, "though perhaps" (said the Court) " they are not so conclusive as to be unsusceptible of explanation. On this part of the case we shall conclude nothing, but leave it for future explanation." In the present instance no such instruction was given to the jury; and this Court is incompetent to fix for them the interpretation of inconclusive facts.
The motion for a new trial is refused.
O'Neall, Wardlaw and Glover, JJ., concurred.
Motion dismissed.