Case Name: Littleton & Lamar v. Loan, Mercantile and Stock Association, etc.
Court: Supreme Court of Georgia
Jurisdiction: Georgia
Decision Date: 1895-10-05
Citations: 97 Ga. 172
Docket Number: 
Parties: Littleton & Lamar v. Loan, Mercantile and Stock Association, etc.
Judges: 
Reporter: Georgia Reports
Volume: 97
Pages: 172–180

Head Matter:
Littleton & Lamar v. Loan, Mercantile and Stock Association, etc.
1. One who deals with a special agent, knowing at the time the limits within which the agent, under the terms of his appointment, has authority to hind his principal, is bound to act with reference to this knowledge, and cannot hold the' principal liable for loss occasioned by acts of the agent in excess of, or contrary to, the latter’s authority in the premises.
2. Where an agent to buy had no authority to make his principal directly liable to the seller for the price of the goods purchased, but was required to ship the same to the principal, draw upon the latter in favor of a specified bank, with bills of lading attached to the drafts, which drafts the principal had arranged with the hank to cash so as to supply the agent with money to pay for his purchases, one who, with knowledge of these facts, sold and delivered goods to the agent for his principal, and, without seeing to it that the agent complied with the above stated requirements, accepted in settlement for the goods the agent’s individual check on the bank in question, which was dishonored, could not recover from the principal the value of the goods without proving affirmatively that he actually received them; and even then, the latter would not be liable if he in fact paid for the goods by honoring the agent’s draft in pursuance of the terms under which the agency was created.
3. In view of the law as above announced, the evidence in this case did not warrant the verdict in the plaintiff’s favor, and it was error to refuse a new trial.
AtMnson, J., dissenting. — 1. Where the relation established between a principal and agent is that of a general agency upon the part of the latter to purchase cotton upon the credit of the principal, the seller of cotton to such an agent for the account of the principal is not affected by private instructions of the latter to a third person, not affecting the power of the agent to purchase, but only directing how, in what manner and upon what terms such third person would be authorized to pay drafts drawn by the agent for the purchase price of such cotton, even though such private instructions be known to the seller.
2. If the agent have competent authority to complete the contract of purchase, and, in pursuance of -such authority, the purchase be completed and delivery to the agent thereunder be effected, the seller is entitled to be paid the purchase price, notwithstanding the infidelity, negligence or disobedience of instructions by the agent in his further dealings with his principal respecting the delivery to the principal of the cotton so purchased.
3. According to the principles above announced, under the evidence submitted in this case, the court committed no error in refusing to grant a new trial.
October 5, 1895.
Brought forward from the last term.
Complaint on account. Before Judge Fish. Sumter superior court. November term, 1893.
Outts & Hicoon, J. 11. Lumphin and E. F. Hinton, for plaintiffs in error. Morgan MoMichael, Brannon, Hatcher & Martin and G. J. Thornton, contra.

Opinion:
Lumpkin, Justice.
The record discloses that Littleton & Lamar, of Americus, had at Buena Vista an agent named Lowe, whose business it was to buy and ship cotton to them. They required him to ship daily the cotton he bought, and had arranged with a bank in Buena Vista to cash his drafts drawn upon them for purchases made, when the same were presented to the bank with bills of lading attached. Lowe had no authority,*except as above stated, to draw upon his principals in settlement for any cotton purchased by him; and no authority at all, so far as Littleton & Lamar were concerned, to keep an account of his own at the bank and draw upon it his individual cheeks in settlement of such purchases. All this appears from a letter addressed to the bank by Littleton & Lamar, of which the following is a copy:
"Buena Yista Loan & Savings Bank, Buena Yista, Ga.
"Sirs: — Mr. O. E. Lowe is in your town for the purpose of buying cotton for us, and we wired you to pay for his purchases, requiring him to ship daily, drawing cost with B/L attached. ' We had his draft for $100.00 presented to us in your favor, for what he says is a 'bonus' you require, which we refused to honor. We hoped that our established credit here and at all the cotton ports would be sufficient guarantee for any transactions we might see proper to authorize; hence our refusal. If you see proper to pay for Mr. Lowe's purchases, requiring him to ship daily, with B/L attached to draft, we will always honor same. Yery respectfully, Littleton & Lamar."
Short, as manager of the plaintiff corporation, sold to Lowe, as agent, a lot of cotton, and accepted in payment Lowe's individual check upon the bank, without requiring him to draw upon Littleton & Lamar with bills of lading attached. The check was dishonored by the bank, and thereupon the corporation of which Short was manager brought an action against Littleton & Lamar for the price of the cotton, and obtained a verdict for the same. It plainly appears from Short's own testimony as a witness that, before making the sale in question, he was fully aware of the nature and extent of Lowe's agency for Littleton & Lamar. The following is an extract from his testimony: "Before I sold any cotton to this party [Lowe], I was shown that letter that has just been read to the jury [referring to the letter above quoted]. I saw that letter. Mr. Lowe came to me and stated that he was there for the purpose of buying cotton for them [Littleton & Lamar] ; that the bank had refused to pay for his cotton without a bonus, and he had a letter of credit at the bank that he thought was a sufficient guaranty. He applied to me to purchase cotton for them. He referred me to this letter, and I went there and examined this letter."
There is no difference of opinion between the majority of this court and Justice Atkinson, who dissents from the judgment rendered, as to the questions of law involved. Indeed, these questions are simple and well settled. Our disagreement arises entirely from the conflicting views we entertain as to the character of Lowe's agency for Little-ton & Lamar. If he was their general agent to buy cotton, it would seem that his principals would be bound to pay for cotton sold and delivered to him for them, whether they actually received it or not; but if he was only their special agent, having limited authority, one who dealt with him as agent, and who had full knowledge as to the limits within which he, under the terms of his appointment, had authority to bind his principals, was bound to act with reference to this knowledge, and consequently could not in law hold the principals liable for loss occasioned by acts of the agent in excess of, or contrary to, his authority in the premises.
Chief Justice Simmons and the writer are satisfied that Lowe was only a special agent, and that in the performance of his duties as such he was restricted by the terms set forth in the letter to the bank. If we are right in this view, it was incumbent upon Short, knowing the facts, to see to it that Lowe paid for each purchase by drawing upon Littleton & Lamar with the requisite bill or bills of lading attached to his drafts. When Short accepted Lowe's individual check upon the bank, he did so at his own risk, and could not hold Littleton & Lamar liable for the value of the cotton sold and settled for in this manner, without proving affirmatively that such cotton was actually received by them.' Even then, Littleton & Lamar would not be liable if they in fact paid for the cotton by honoring Lowe's draft, or drafts, which came to them through the bank in pursuance of the terms under which Lowe was appointed agent and of their arrangement with the bank to supply him -with money with which to pay for cotton purchased.
The evidence does not show that the particular cotton, the price of which is the subject-matter of this suit, ever went into the hands of Littleton & Lamar at all; and we therefore think the verdict in the plaintiff's favor was entirely unwarranted, and ought to be set aside.
Judgment reversed.