Case Name: GEORGE P. LAWRENCE and JOHN C. GILES, Plaintiffs, v. MARTIN GALLAGHER and DANIEL LANE, Defendants
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1877-05-08
Citations: 10 Jones & S. 309
Docket Number: 
Parties: GEORGE P. LAWRENCE and JOHN C. GILES, Plaintiffs, v. MARTIN GALLAGHER and DANIEL LANE, Defendants.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 42
Pages: 309–324

Head Matter:
GEORGE P. LAWRENCE and JOHN C. GILES, Plaintiffs, v. MARTIN GALLAGHER and DANIEL LANE, Defendants.
I- BBOJTWB—FOB THE SALE OB PUBOBASE OF PEBSONAL PBOPEBTT.
1. Authority to bind his principal by a written contract, IMPLIED FROM HIS EMPLOYMENT TO SELL OR BUY.
1. Only where he effects a sale or purchase pursuant to the oral instructions of his principal.
(a.) It Results,
1. That he cannot, by writing, bind his principal to any contract other than such as he was employed to make.
2. That if he simply brings the parties together, and they make the agreement themselves, he has no implied authority to make a written contract, binding on them or either of them, although he was present and took part in the bargaining.
2. Authority may be otherwise conferred.
1. If he, having brought the parties together and they having themselves made the agreement, proceeds to reduce the agreement to writing, with their knowledge and assent, an authority so to do would be implied.
(a.) The mere act of writing in the presence of the parties would not show knowledge on their part ; but is one fact to be considered in connection with others.
2. In determining what authority was thus conferred, the facts, which would justify the jury in thinking that a bought note, made by the broker, was so made with the knowledge and assent of the purchaser, should be considered in determining whether it was not a part of the understanding of the parties under which the bought note was made, that the broker should also make a sold note which should bind the seller.
(a.) If it was the understanding that such sold note was also to he made, then, unless it was so made, there is no consideration far a bought note made by the broleer.
3. Bought note, . stating that the buyer is to but.—Effect OF ACCEPTANCE OF BY BUYER.
1. Not conclusive that seller has promised to sell.
(a.) It is only one fact to be considered.
H. FRUIT.
1. Sale of cargo to arrive.
1. No reason for applying thereto any other rule of law than is applied to a sale of a cargo of iron or grain.
(a.) An undivided interest may be sold, and delivered either by a fair division or the delivery of a bill of sale to pass the title in prmenti.
HI.—CONTRACT—EXTRINSIC PROOF AS TO EFFECT OF, AND MEANING- OF EXPRESSIONS USED THEREIN.
1. Usage to vary, inadmissible—when.
1. Where the contract, by unambiguous terms, is in a certain event to clothe one of the parties thereto with the rights of an owner of certain property, the subject of the contract, a usage which would annul such right is inadmisssible.
3. Indefinite expressions used in.
1. Evidence is admissible to show the sense in which they were used by the parties ; and under a proper state of evidence it becomes a question of fact for the jury to determine in what sense they were used by the parties.
3. “Usual terms”—“Usual contract.”
1. An expression in a contract of sale and purchase of articles (otherwise clearly expressed), that the same is made ‘ ‘ on the usual terms ” or “ by the usual contract, ” is indefinite and uncertain. It may refer
1. To the terms on which payment and delivery are to be made ; or,
3. That the interests of the various co-owners of the property should be settled as they were usually in the trade.
Therefore evidence is admissible to show in what sense the pa/rties used the expression.
(«.) Facts necessary to be established to
PERMIT A JURY TO FIND AS AGAINST A DEFENDANT THAT THE EXPRESSION WAS USED IN THE LATTER SENSE.
1. That there was a practice in the trade respecting the settlement of the interest of the various co-owners of the article which is the subject of the contract.
This practice need not amount to a legal custom or usage.
3. That the defendant knew what the practice was.
3. That the defendant meant to refer to the practice by the general words used.
IV. PROMISE TO PAY MADE SUBSEQUENT TO TEE ACCRUING OP TEE ALLEGED LIABILITY.
1. Effect of.
1. Contract void by statute of frauds.—Such promise will not make the defendants liable upon such a contract.
But
when there is an issue as to the authority of a bi'olcer to make a binding written contract, to wit, a bought note on behalf of the promisor, and there is some evidence tending to show that the promisor knew that the broker had assumed to make such bought note on his behalf, and assented thereto, the promise is relevant testimony on the question of authority to make a bought note in conformity with the terms of the purchase. But, semble, not to include therein other terms.
3. Indefinite expressions in a contract.
(a.) Where a bill is presented to a party to a contract showing a liability thereunder, which could only be arrived at by reading an indefinite expression in the contract in a particular sense, and he promises to pay, except as to apart, his non-liability for which he places on a ground growing out of and depending on that construction of the contract upon which the bill presented to him was made out, such promise is relevant evidence to the fact that the promisor at the time of making the contract knew what the expression referred to, and that it was used in the sense attached to it by the party making out the bill, and that he, the promisor, intended it to be used in that sense.
V. PARTIES.
1. Defendants, joinder of.
(a.) When a party sells to B 1-8 and to C 1-8 of certain personal property, to arrive, B agreeing to purchase the 1-8 and 0 the 1-8 ; the terms of the contract being, that the property on arrival should be entirely under the control of the seller, and be sold at auction or private sale, at his option, and the profits or loss resulting from such sale should be due and payable on rendering of accounts ; and a broker acting for both purcha sers makes a single bought note, containing above terms of purchase, the seller may Tyring, a separate action against each purchaser far his share of the loss. There is no such joint interest as requires their joinder as defendants.
Before Curtis, Ch. J., Sedgwick and Speir, JJ.
Decided May 8, 1877.
Exceptions ordered to be heard in first instance at general term, after dismissal of complaint.
The complaint averred, that the defendants bought of the plaintiffs one-eighth undivided share of, or interest in, cargoes of fruit, on board of vessels called Unione and Alaska, then at sea, for a price agreed upon; that, at the time of the sale, it was agreed that the fruit on arrival, should be entirely under the control of the plaintiffs and be sold by them, at public auction or private sale, at their option, and one-eighth of the profits should be paid to defendants and one-eighth of the loss paid by them; that the cargoes arrived and were sold at public auction to the highest bidders ; that the sale resulted in a loss, and that accounts of the same were made and presented to defendants; that one-eighth of the loss was §1,456, which was demanded of defendants, but which they refused to pay.
Answer admitted the presentation of account stated in complaint, but otherwise.denied complaint generally; and as a separate defense alleged that there was defect of parties, and that Arthur Pendleton and Charles H. Pendleton should have been made defendants.
On the trial, one Brandigee swore that he was a fruit broker ; that the defendants asked him to buy an interest in the cargo of the two vessels, for them ; that one Pendleton asked him to buy another interest; that he went to the plaintiffs and bargained for them, but there was no agreement, as to the price ; that after- wards one of the defendants, viz: Gallagher, Pendleton, and one of the plaintiffs, viz: Giles, met Brandigee at the office of the last, and they then talked of the-price and it was agreed upon. Proof was given, tending to show that Brandigee acted as broker also for the plaintiffs ; they paid him a commission afterwards.. There was testimony that at the last interview it was stated orally between the parties that the sale was to-be on the usual terms. Without specific authority thereto, the broker, after the oral arrangement, began to write a paper. Mo witness made it clear that the-defendants were present during the writing and signing of the paper, but the broker said they were present at the beginning of the writing. The paper was as follows :
“Mew York, May 18, 1874.
“Bought of Lawrence, Giles & Co.
“for Gallagher & Lane, and A. Pendleton & Son,, each one-half of one-quarter interest in the cargoes of' fruit, to arrive by the Unione and Alaska from Messina, viz:—
(2.000) Two thousand boxes lemons ) per “ Unione,” (2.000) Two thousand do. oranges ) Api. 1.
(3.000) Three thousand do. oranges ) per “Alaska,”' (1,800) Eighteen hundred do. lemons f Apl. 4.
at $6.00 per box for oranges and $6.25 per do. for lemons.
"The said fruit on arrival.to be entirely under the control and management of the sellers, and to be sold at auction or private sale, at their option, and the profits- or loss resulting from such sales are to be due and payable on rendering of accounts.
“Brandigee & Thorne,
“ Brokers.”'
The cargoes arrived, were sold at public- auction,., under the direction of the plaintiffs. There was a loss.. Accounts of the sale were made and sent to the defendants. A bill for one-eiglith of the loss was presented to the defendants, and one of them said “that he would pay all the losses for the cargo of the Unioue and Alaska, with the exception of that occurring by the failure McNeil Brothers ; “that he would not pay that, that he would go to law first,” and the same promise was made on another occasion. Proof was given tending to show, that in the fruit trade, sales of cargoes "of fruit at sea, were always made to be closed and settled in the manner indicated by the paper signed by the broker.
The court dismissed the complaint, on the ground that no cause of action was shown, and the exception to this was directed to be heard in the first instance at general term ; judgment stayed.
Nathaniel & Marston Niles, attorneys, and Wm. W. Niles, of counsel, for plaintiff, urged:
I. An oral agreement is all sufficient, for it is not a sale of “any goods” but of an interest in a venture (Coleman v. Eyre, 47 N. Y. 38).
II. Even if it were not, the statute was, in this case, complied with. The memorandum needs only to be subscribed by the party to be bound (3 R. S. [5th Ed.) 222, § 3). It may be signed by his agent (Id. § 8 ; Seabright v. Archibald, 20 L. J. Q. B. 529).
III. The memorandum may be made by the agent of the party charged, and it is equally binding as if .written by defendant’s own hand (Merrith v. Closson, 12 Johns. 102.
IV. Where a broker has authority from both parties (as in this case), a memorandum signed in his own name, is sufficient to bind both parties (Sale v. Darragh, 2 Hill, 184). And the authority need not, in either case, be in writing (Champlin v. Parish, 11 Paige, 405 ; Lawrence v. Taylor, 5 Hill, 107).
D. G. Wild, attorney, and Sidney S. Harris, of counsel, for defendants, among other things urged:
I. The contract for the sale of 1-8 of the cargoes to defendants “to arrive” was executory, and as there is no evidence of delivery, or offer to deliver, no title passed to the defendants (Shields v. Pettee, 2 Sandf. 262 ; Benedict v. Field, 16 N. Y. 597; Refiners v. Ridner, 2 Robt. 11; Parsons Mercantile Law, p. 49) ; and there was no receipt or acceptance by defendants (Shindler v. Houston, 1 Comst. 261; Rappleye v. Adee, 65 Barb. 589).
II. There is no memorandum in writing of sale, signed by the defendants or their lawfully authorized agents, nor delivery of any portion of the cargoes, nor payment of any part of the purchase money, and the sale is void (2 R. S. p. 136, § 3). Brandigee had no authority from defendants to purchase the interests in the cargoes, on the terms finally agreed upon by Giles and Gallagher, and therefore had no authority to sign any contract of purchase (Aquirre v. Allen, 10 Barb. 74 ; affirmed in 3 Selden, 543; Allen v. Aquirre, 5 N. Y. Leg. Obs. 380 ; Davis v. Shields, 26 Wend. 364).
2. There was no note made by Brandigee and delivered to defendants ; a buyer’s note was sent by Brandigee to the plaintiffs, but neither a seller’s note or a copy of the buyer’s note was ever delivered to the defendants ; the defendants are not bound by the note delivered to the plaintiffs (Seivewright v. Archibald, 19 Queen’s Bench, 115 ; Benjamin on Sales, § 294).
(a.) Defendants did not know that such a note had been made and delivered to plaintiffs.
(b.) The notes delivered to the parties are to inform them what the broker has done for each party, and unless a note is delivered to each party, or both parties assent to one note as the written contract of the parties, there is no contract in writing binding upon the buyer (Seivewright v. Archibald, 17 Queen’s Bench, 115; Benjamin on Sales, § 290, where all the English cases are discussed). The case of Seivewright v. Archibald, supra, decides that a note delivered to seller alone does not constitute a contract. There must be both sellers’ and buyers’ notes to bind the party to be charged.
(c.) So much of the note delivered to plaintiffs as relates to payment of any losses by defendants was inserted without authority of defendants, and the entire note is invalid (Davis v. Sheilds, 26 Wend. 341).
III. But there was no proof even that the defendants agreed to purchase 1-8 of the cargoes on the terms that plaintiffs should retain control of the cargoes, that there should be no delivery; that they would sell the cargoes at public or private sale as they deemed best, and that the profits or losses should be shared pro rata. The most that plaintiffs testify to is, that the sale was on the usual cerras ; but it is not proved that the defendants knew what such terms were, or that they understood the usual terms of sale, to be the same terms that plaintiffs testified to. The plaintiffs resorted to evidence of usage or custom, as proof of what the usual terms of sale were in such cases. This evidence is incompetent, as well as insufficient tó make out a contract, for reasons stated in the next point.
IV. As to the usage relied on by the plaintiffs—(1) A usage among particular persons in the city of New York is void, not being general (Higgins v. Moore, 34 N. Y. 415 ; Wadsworth v. Allcott, 2 Selden, 71; Markham v. Jaudon, 41 N. Y. 245).
(3.) The usage must be known to the defendants. There is no evidence on this point (Walls v. Bailey, 49 N. Y. 477).
(3.) It must be reasonable and certain—this usage is unreasonable, as it changes the rights of the vendors and vendees.
(4.) It must not contradict or vary established rules of law. The usage in question dispenses with delivery of the 1-8 of the cargoes, and is illegal (Hone v. Mutual Ins. Co., 1 Sandford, 137; Suydam v. Clark, 2 Sandford, 133 ; Beirne v. Dord, 1 Selden, 102).
(6.) The usage is illegal, being in direct contravention of the statute forbidding gambling, &c. (1 R. S. p. 662, § 8). This usage binds parties to a speculation in the mere profits and losses on the sale of cargoes to arrive. This is a gambling contract or usage, and is unlawful (Cassard v. Hinman, 1 Bosw. 207).
(7.) The usage dispenses with the requirements of the statute of frauds, and is illegal. The usage does not require delivery of any part of the cargoes nor payment of any portion of the purchase money, and dispenses with any written memorandum as required by the statute. The usage is a repeal of the statute in this case (Lester v. Jewett, 12 Barb. 502).
(8.) The legal effect of the agreement made by the parties in this case was to sell 1-8 of the cargoes to defendants, and make delivery as required by law, and a custom to the contrary is incompetent (Groat v. Gile 51 N. Y. 439 ; Bradley v. Wheeler, 44 N. Y. 500-504 , Higgins v. Moore, 34 N. Y. 422-425 ; Wheeler v. Newbould, 16 N. Y. at pp. 401-402 : Allen v. Dykers, 3 Hill, 593).
V. The complaint, if to recover 1-8 of the losses, was properly dismissed. This action cannot be turned into a suit in equity for an accounting between the parties as to the profits and losses. Such an accounting would require an examination of all the sales, the receipts therefor and expenses, and the amount due to or from each party to the other.
All part owners, whether joint owners, tenants in common, or partners in the cargoes, must be before the court, for the purpose of an accounting and settlement between all the parties interested in the cargoes (Willard's Eq. Jur. 104, 506 ; 1 Story Eq. Jur. § 466 [§ 451]; Story Eq. Pl. §§ 166-168 ; 1 Daniels Ch. Pr. p. 277 [note]; Donnell v. Walsh, 6 Bos. 621, 626 ; Parsons on Maritime Law, p. 103 ; 13 Abb. 563). The same principle applies where several persons are affected by a common burden for the purpose of contribution (Story Eq. Pl. § 162).

Opinion:
By the Court.—Sedgwick, J.
There is no doubt that a broker, employed orally to sell or to buy, receives thereby implied authority to bind his employer, by making a written contract, of the kind designated by the employment. If the broker have received similar authority from the other party he may make the written contract for both (Story on Agency, § 28, 58, 60 ; Smith's Merc. Law, 3 Am. Ed. p. 620 ; Hadoch Stow, 40 N. Y. 368; Bush v. Cole, 28 N. Y., 269 ; Pringle v. Spaulding, 53 Barb. 21; Dyken Townsend, 24 N. Y. 59. In Hadoch v. Stow Judge Hunt said that Coleman v. Carrigues, 18 Barb. 60, was not well decided).
In this case, however,, the broker's power to make the written contract could not depend upon any previous employment to buy for the defendants. At the first the defendants Jiad employed the broker to buy, at a named price. If, under that employment, he had bought at that price, he might have made a written contract on those terms. He did not buy at that price; and to give him fresh implied authority there must be a new employment. The testimony does not show any other employment to make a contract.' After the broker failed to buy he brought the parties together. They made the agreement. He was present and took part in the bargaining, but he did not make the oral contract. Even if the principals were present, it is possible that he might have received authority to conclude the contract for them, but as a fact, in this case he was not so authorized. What the parties did they did for themselves, and the presence of a broker does not delegate a power to Mm. If, without previous authority, he wrote in their presence a contract, it is a question of fact as to whether the parties knew what he was doing and assented to his doing it. The mere act of writing would not show the knowledge, but the jury should consider it in connection with the other facts of the case. If the parties on either side did not know what the broker was writing they were not bound by his individual and unauthorized act. They had a legal right to make a verbal agreement by which they should be only morally bound. The broker could not subject them to legal liability against their will.
If, indeed, the facts would justify the jury to think that the brokers wrote the contract with the knowledge and assent of the defendants, the same facts should be considered in determining, if it were not also to be inferred, that the broker was also to write a contract, which should bind the plaintiffs. If, by the understanding of the parties, he was to do that, then a sold note to be made by him would be the consideration intended by the parties to bind the defendants upon the bought note. For, although an oral promise to sell, invalid in law, is enough consideration to support the written promise to buy, still, if the actual consideration was meant to be a valid promise in writing, it must be proven by the writing (Justice v. Lang, 52 N. Y. 323; 42 N. Y. 493); and the acceptance of a contract by the seller which states that the buyer is to buy is not conclusive that the seller has promised to sell. It is only one fact to be considered. I, therefore, think that here there was a question of fact, on which the' plaintiff had a right to go to the jury as to the consideration. There was no conclusive proof that there was an oral promise to sell as the consideration, but it was for the jury to pass upon the point.
Under no circumstances can a broker bind his prin cipal, by a writing, to any other contract, than such as he was employed to make (Bush v. Cole, supra), or in this case any other contract than such as was orally made between the principals (Davis v. Shields, 26 W. 341; Aguine v. Allen, 10 Barb. 74; affirmed 7 N. Y. 543 ; Pitts v. Bechett, 13 M. & W. 751).
There does not seem to be a reason for applying to a sale of a cargo of fruit any other rule of law than is applied to a sale of a cargo of iron or saltpetre or grain, and an undivided interest in any of them can be bought and sold, as can the whole interest. The present contract was executory for the purchase of one-eighth of two cargoes of fruit to arrive. Upon arrival there would have been no difficulty in making the proper delivery, either by a fair division of the fruit, or, if that were impracticable, by a delivery of a bill of sale to pass the title in prcesenti (Story on Sales, § 311, et seq.). The case is only an extreme 'illustration of the inconvenience of a tenancy in common of chattels. Probably it presents no new kind of hazard or doubt (Schouler Per. Pro. 194-203; 1 Add. on Ship. 98).
On the testimony here we may suppose, that the principals made an oral contract to buy and sell the one-eighth interest, and further, as the broker haltingly said, on the usual terms, or by the usual contract. The plaintiff gave evidence to show that the practice of the trade was, that after undivided interests had been sold, of cargo to arrive, upon arrival the seller took and kept possession of it, sold it, and divided the losses or profits. I see no need of ascertaining how far usage, properly so called, considered as a fact, which entered into the contract, can define it. Here the terms of the oral contract, apart from the addition ' of the words " usual terms," were unambiguous, and by them the parties meant to buy and sell. Indeed, the claim of plaintiff is based upon the treating the de fendants as the owner of one-eighth of the cargoes. The substance of the contract as plaintiffs claim was, that in the manner pointed out by the contract, the sellers as cb-tenants in common were entitled to sell the whole, and to pay themselves the consideration out of the proceeds, if sufficient, and to pay over to defendants, or to charge them in the proper case, but the foundation of all was that by the agreement the defendants were to be the owners of one-eighth of the chattel. In Coleman v. Eyre, 45 N. Y. 38, the contract had no regard to the title of the coffee. It only referred to the profits and losses.
As the contract was in a certain event to clothe the defendants with the rights of owners, a usage which would annul these rights, not being part of the contract (unless adding the words on the usual terms or by the usual contract made it so), cannot vary it.
In Wheeler v. Newbould (16 N. Y. 392), the defendant was pledgee of promissory notes, without special leave to sell at private sale, and it was held that as a mere pledgee had no right by law to do this, a usage in the city, to sell such pledges at private sale, after a demand of payment and notice that it would be sold for the best price, was no part of the contract, as it was in contradiction to its fair and legal import. Markham v. Jaudon (41 N. Y. 235), is a similar case. In Wadsworth v. Allcott (6 N. Y. 71), it was held that a receipt, which by its clear terms created a bailment, could not be shown by usage to import a sale (The Mutual Safety Ins. Co. v. Hone, 2 N. Y. 235). In Dawson v. Kitell (4 Hill, 108), the term "as freight," Nelson, J., said, might be shown by usage to import a sale, but no such usage was proved. This case cannot be deemed to deny the correctness of the rule laid down in Goodyear v. Ogden (4 Hill, 104), for they were decided by the same court.
The usage in this case would have materially changed the rights of defendants as owners. Their right to an undivided eighth of the fruit, and their right to take possession of it, in cases provided by law, would be changed to giving the plaintiffs an exclusive right to retain the custody of the whole in all cases.
We must now consider what was the effect upon the contract of adding the words " on the usual terms" or "by the usual contract. ' ' The proper application of these words is not clear and certain. They might be used to refer only to a simple contract of sale, and to mean that the terms on which payment and delivery were to be made, were to be the usual terms. They might, also, in view of surrounding circumstances, without violence, mean that the interests of the co-owners should be settled as they were usually in the trade. In what sense they were used or assented to by the defendants was a question of fact for the jury. If in the former, the usage could not vary the contract to deliver and pay, so as to make it a contract under which there wa.s to be no delivery and payment. To permit the jury to find that the words were used in the latter sense, they must first have proof before them that the defendants knew what the practice was and'meant to refer to it by the general words. In the absence of such knowledge there would not be enough to justify the jury in saying that a contract of sale, clearly expressed, was meant to be turned into something else by adding, on the usual terms. If by usual terms, the defendants referred to the practice of which they had knowledge, it is not necessary that the practice should amount to a legal custom or usage (Remsen v. Holland, 59 N. Y. 618). Even if the defendants did have knowledge of the practice, they might have meant simply to purchase, and whether they did so mean was for the jury to say.
I think there was enough to take the case to the jury on the point of the authority of the broker, to make the writing in behalf of the defendants, of the consideration, and of what the oral contract actually was. On all these points, a subsequent promise of the defendants was relevant testimony. After the sale of the cargoes by the plaintiffs, they presented to the defendants a bill charging them with the one-eighth of the loss. The defendants promised to pay it, excepting such part of the loss as came from a sale of part of the cargo to a person alleged not to be of good credit. This promise was evidence of what the parties had theretofore agreed upon. It would not make the defendants liable if the agreement referred to by it was void under the statute of frauds, but it would be of some weight to show that the terms of the oral agreement had referred to the practice of the trade. If it were shown that the defendants knew that the broker had written for them a contract, the promise would ratify his act (Commercial Bank v. Warren, 15 N. Y. 577), and bind them by the terms of it, but only if before the promise it was shown that the defendants knew that the particular terms referred to the practice (Baldwin v. Burow, 47 N. Y. 199).
As to this, the character of the promise was evidence, upon proof that defendants knew that there was a written contract made for them.
I am therefore of the further opinion that the plaintiffs had a right to go to the jury upon the question of ratification. This would not dispense with proof of due consideration.
If the contract between the parties were the writing signed by Brandigee, it could be enforced in an action against the defendant alone. I do not see any joint interest which required the presence of other defendants as co-owners. If they were joined, the issues would be several between them.
On the whole case, I think the exceptions should be sustained and a new trial had, with costs to plaintiffs to abide event.
Curtis, Ch. J., and Speir, J., concurred.