Case Name: Benoit Wasserman, Appellant, v. Charles P. Bacon, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1903
Citations: 80 A.D. 505
Docket Number: 
Parties: Benoit Wasserman, Appellant, v. Charles P. Bacon, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 80
Pages: 505–508

Head Matter:
Benoit Wasserman, Appellant, v. Charles P. Bacon, Respondent.
Undisclosed principal — liability of, for goods sold to his agent — effect of giving credit exclusively to the agent—burden of proof thereof.
If the purchaser of goods is an undisclosed agent, his principal not being known to be such, and credit is given to such agent, the vendor may hold responsible either the principal or the agent at his election.
One Bacon, who was the owner of a liquor business and the appurtenances thereof, agreed to'sell and transfer the same to one BurgdorfE for the sum of §25,000, to be paid at the rate of §6,000 per year. The agreement provided that BurgdorfE should have §125 per month out of the receipts as his own, and that the balance should be turned over to a trustee, and that “Upon said BurgdorfE fully complying with this agreement and paying purchase price in full said Bacon will convey and transfer said business, lease, stock in trade, fixtures, furnishings and appurtenances to said Burgdorff; but until such time he shall not be entitled to such conveyances.”
Burgdorff never paid the $35,000 and Bacon never conveyed the business to him or any part thereof.
Held, that the effect of the agreement was that Burgdorff should manage the business and should receive therefor a salary of §135 per month, and that, if Burgdorff, as such manager, could make a profit of §35,000 in four years, Bacon would convey to him the property;
That a person who sold goods to Burgdorff, supposing him to be the owner of the business, might hold Bacon liable for the purchase price;
That Bacon, if he contended that the vendor of such goods knew him to be Burgdorff’s principal and gave credit exclusively to Burgdorff, was obliged to establish that fact by clear proof.
Appeal by the plaintiff, Benoit Wasserman, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Kings on the 14th day of May, 1902, upon the dismissal of the complaint by direction of the court after a trial at the Kings County Trial Term.
Ira Leo Bamberger [ John, Mcureus with him on the brief], for the appellant.
Edward Stetson Grifflng, for the respondent.

Opinion:
Hooker, J.:
It is elementary and undisputed that if the purchaser of goods is an undisclosed agent, his principal not being known to be such, and credit is given to such agent, the vendor can hold responsible either the principal or agent, at his election. (Meeker v. Claghorn, 44 N. Y. 349.)
In this ease the defendant was the owner of a certain liquor business, lease, utensils of trade, stock in trade, furniture and other property in the city of New York, and agreed to sell and transfer the same to one Burgdorff for the sum of $25,000, payable at the rate of $6,000 per year; it was provided that Burgdorff should have out of the receipts $125 per month as his own, and that all of the balance should be turned over to a trustee. The agreement continues as follows: " Upon said Burgdorff fully complying with this agreement and paying purchase price in full said Bacon will convey and transfer said business, lease, stock in trade, fixtures, furnishings and appurtenances to said BurgdorfE; but until such time he shall not be entitled to such conveyances." It also appears from the evidence of the plaintiff that he had a talk with the defendant not lonv before the action was commenced, and the defendant told him in speaking of the account: " You do not lose a cent on it. I will pay you, you need not worry."
This agreement was executed in 1894. BurgdorfE never paid the $25,000, and the defendant never conveyed nor transferred to him the business, lease, stock in trade, fixtures or furnishings, or any one or more of those items. From 1894 to 1901 BurgdorfE conducted the saloon, and nothing appeared by which the plaintiff or any other person dealing with him might suspect that Bacon had any interest whatever in the business. Between the execution of that agreement and the month of Hay, 1901,-plaintiff sold a large quantity of cigars to BurgdorfE, and charged them to him, supposing, as he testified, that he was the owner of the business. BurgdorfE made an assignment for the benefit of his creditors in the latter part of Hay, 1901, and then this plaintiff learned for the first time the true relationship which Bacon bore to the business. Thereupon this action was commenced, the plaintiff claiming to be entitled to recover against him as the undisclosed principal of BurgdorfE.
At the close of plaintiff's ease the defendant moved for a dismissal of the complaint, and this motion was granted. Early in the trial the jury- were discharged by consent and the matter submitted to the determination of the court. The court made no findings, however, and we must treat his dismissal of the complaint in- the same manner as we would a nonsuit with the jury present.
We cannot construe the agreement of 1894 between BurgdorfE and the defendant otherwise than as an agreement in effect that BurgdorfE should manage the defendant's business and should have therefor a salary of $125 a month; that if BurgdorfE, as such manager, could make for the defendant a profit of $25,000 in four years,' he, the defendant, would turn over and convey to his manager the whole business, including business, lease, stock, fixtures and everything pertaining thereto. Had such been the language of the agreement, Bacon would, of course, have been the undisclosed principal, and plaintiff would have been entitled to hold the defendant at his election.
It was also held as undisputed and elementary in Meeker v. Claghorn (supra) that if a principal claims that the vendor knew him to be such, and gave credit exclusively to the agent, he assumes the burden of establishing this by clear proof, the assumption being that the credit is given to the principal. In this case the plaintiff swore that he never knew of Bacon's connection with the business until after Burgdorff's assignment for the benefit of creditors. Burgdorff swore, however, that about the time this agreement between Burgdorff and defendant was entered into, he informed the plaintiff that he was at work for Bacon at $125, and that Bacon was the real owner of the business. This defendant invokes the rule of law that if the plaintiff knew that he was the principal and still charged the goods to Burgdorff, it' was an election to extend credit to Burgdorff, and the defendant was not liable. In view of the conflicting evidence it was a question of fact to be determined, and the dismissal was error.
The judgment should be reversed and a new trial granted, with costs to abide the event.
Goodrich, P. J., Bartlett and Jenks, JJ., concurred.
Judgment reversed and new trial granted, costs to abide the event.