Case Name: Heubach Brothers v. Rother & Mollmann
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1853-07-02
Citations: 2 Duer 227
Docket Number: 
Parties: Heubach Brothers v. Rother & Mollmann.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 9
Pages: 227–261

Head Matter:
Heubach Brothers v. Rother & Mollmann.
A remittance by a factor to his consignor is at his own risk, unless made under a prior direction or authority.
When he has been directed or authorized to remit, he is answerable only for good faith and due diligence.
(Before Duer and. Campbell, J.J.)
April 28;
July 2, 1853.
.The guaranty of a del credere commission is limited to the payment of the price ■ of goods sold upon credit, and does not extfend to the remittance of funds received.
But when, by the agreement of the parties, the factor is entitled to charge a guaranty, commission upon exchange remitted, he cannot discharge himself from his liability by omitting to charge the commission.
"When a factor charges himself, by anticipation, with the price of goods sold upon credit, the remittance then made by him is of his own funds, in discharge of a personal debt, and is therefore made at his own risk.
Bemble, that the weight of authority is, that a factor, who endorses generally the bills which he remits, renders himself personally liable, upon his endorsement, to his principal, as well as to third persons.
Report of referee in favor of defendants set aside, rule for reference discharged, and new trial ordered.
Motion, on behalf of the plaintiff, upon a case to set aside the report of a referee, and the judgment entered thereon at special term, in favor of the defendant.
A.s the questions that arose, and were decided by the court, turned partly upon the pleadings, it is deemed proper to. set them forth i/n, extenso.
' The following are the complaint, answer, and reply:—•
The plaintiffs complain against the defendants, and state, on information and belief, that the plaintiffs, before the eighteenth day of November, 1847, employed the defendants to sell certain goods and merchandise of the plaintiffs, of the value of four hundred and eighty dollars or thereabouts, for reward to the defendants in that behalf, and then delivered said goods and merchandise to the • defendants ; and the defendants then promised to sell said goods and merchandise, and to be responsible to the plaintiffs for the price thereof.
And the plaintiffs further state, on information and belief, that after said goods and merchandise were so delivered to the defendants, and on or before the said eighteenth' day of November, 1847 (but on what particular day or days they are not informed and cannot state), the defendants sold said goods and merchandise for the sum of four hundred and eighty dollars and two cents, on a credit of six months from the day or days of such sale; and that although such credit has long since expired, and the defendants have received the price of said goods and merchandise, yet they have not paid the same nor any part thereof to the plaintiffs.
And the plaintiffs admit that the charges of the defendants for commissions and expenses, in and about such sale or sales, amount to the sum of fifty-four dollars and eightv-two cents ; which sum the plaintiffs are willing, and hereby offer, to allow to the defendants out of the price of the said goods and merchandise.
And the plaintiffs further state, on information and belief, that the price of said goods and merchandise (after deducting said charges) became due and payable to the plaintiffs by the defendants, on the 14tli day of April, 1848.
And the plaintiffs demand judgment against the defendants, for the sum of four hundred and twenty-five dollars and twenty cents, with interest from the 14th day of April, 1848.
The answer of the above named defendants to the complaint of the plaintiffs in this action, respectfully shows—
That the defendants admit that they were employed at or about the time for that purpose mentioned in the complaint to sell certain goods and merchandise, of the value of $472.14, or thereabouts, and not of the value of $480, as stated in the complaint, for reward to the defendants as commission merchants; and the said goods and merchandise were delivered to the said defendantsand the said defendants, as commission merchants, promised and agreed to sell the same in good faith, and remit the proceeds by a bill of exchange of a person or persons in good credit, but deny that they, the defendants, promised to be responsible for the pficé thereof. The defendants further answering, say, that they admit that afterwards, to wit: on or about the 18th day of November, 1847, the defendants sold said goods and merchandise, for the sum of $472.14, and not as stated in the said complaint for the sum of $480.02, on credit of six months from the "day or days of such sale. And the defendants further say, that their charges for commissions and expenses thereon, in and about such sales, amounted to $54.43, and not $54.82, as stated in the complaint, leaving a net balance of $417.71.
And the defendants further answering, say, that besides the bill of goods above mentioned,'they collected a small bill, amounting to $7.88, from Messrs. Gillespie, Moffat & Co., of Montreal, for and on account of the said plaintiffs, five per cent, commission on which said last mentioned sum, for the costs and charges of these defendants in and about the collection whereof, these defendants neglected to charge by inadvertence ; which said last named commission, amounting to the sum of thirty-nine cents, has been added by the plaintiffs to the sum of $54.43, being the amount of the commissions of the defendants first above mentioned, and allowed by them to the said defendants, included in the sum of $54.82, stated in the complaint as the amount of defendant’s commissions.
And these defendants further answering, say, that at and previous to the time of their receiving the said goods and merchandise, they received instructions from the plaintiffs to sell the said goods on credit or for cash, and to remit the proceeds by a bill of exchange, drawn by persons in good credit.
And these defendants further say, that on or about the 17th day of November, 1847, they, the said defendants, with the said balance of $417.71, together with the said sum of $7.88 collected as aforesaid from Messrs. Gillespie, Moffat & Co., of Montreal, less thirty-nine cents for commissions, purchased and remitted to the plaintiffs a bill of exchange, drawn by J. C. Muller & Co., of the city of New York, merchants, a house then in good credit, dated that day, directed to Mr. Jos. Chi’. Muller, of Bremen, payable sixty days after sight, to the order of Messrs. A. Rolker & Mollmann, for 546 63.73 Bremen rixdollars, and by them endorsed, by which said endorsement, the said bill was made payable to the order of Messrs. Gebr. Heubach (or Heubach Brothers), a firm at Sonnenberg in Germany, composed of the plaintiffs; that they, these defendants, made the remittance aforesaid, before the said credit on which the said goods were sold, as aforesaid, had really expired; and this they did as an act of accommodation to the plaintiffs, as they, these defendants, had previously done in other cases with which the plaintiffs were well satisfied. That the said bill of. exchange was remitted by the transmission to the plaintiffs of the first of the set. That the same was received, and the remittance approved by the plaintiffs, who endorsed the said bill, of exchange with.their name of Heubach Brothers; and the said hill of exchange, on the sixteenth day of December, 1847, was duly accepted by the said Jos. Chr. Muller, as by the same will appear.
That after the bill was purchased, the defendants discovered that they had omitted to deduct the interest to which they were entitled for payment or remittance by them in advance, to wit: the sum of $10.61, which left the balance in favor of the plaintiffs of only $414.98, and that the defendants, instead of remitting that sum only, had remitted, in fact, $432.03, so that they in truth remitted $17.05 more than the sum which they had to or were obligated to remit in the premises.
The defendants therefore deny that the sum of $480.02, after deducting their charges, &c., or any sum, became due and payable to the plaintiffs by the defendants on the fourteenth day of April, 1848, or that the same or any part thereof is due from the defendants to the plaintiffs.
The defendants therefore pray that they may have judgment against the plaintiffs, for their reasonable costs, charges, and expenses, in this behalf wrongfully sustained.
The plaintiffs, for reply to the answer of the defendants, deny, on information and belief, that the house of J. C. Muller & Co., the drawers of the bill of exchange referred to in the answer, was in good credit at the time of the purchase of said bill by the defendants.
And they aver, on information and belief, that the house of Jos. Chr. Muller, the drawee of said bill, was not, at that time, in good credit; and that said house of J. C. Muller & Co., and said house of Jos. Chr. Muller, were composed wholly, or in part, of the same persons.
And the plaintiffs, for further reply, also deny, on information and belief, that the said bill was purchased or remitted for the accommodation, or with the funds of the plaintiffs, or by their authority, or that they ever approved the same ; but they aver, on information and belief, that the same was so purchased and remitted for the accommodation and with the funds of the defendants ; and that the plaintiffs duly repudiated and rejected the same, of which the defendants had due notice.
And the plaintiffs, for further reply, also deny, on information and belief, that the defendants had previously, in other cases, by the authority, or for the accommodation of the 'plaintiffs, in like manner pm-chased and remitted bills of exchange to the plaintiffs, as stated in the answer; or that the plaintiffs had notice that any such remittances were made with the funds of the defendants ; or that the plaintiffs were well satisfied with any such remittances. And they aver, on information and belief, that if any such remittances were ever made, the same were so made by the defendants for their own accommodation, and without notice to the plaintiffs that the same were made with the funds of the defendants.
The action having been duly referred to Benjamin D. Silliman, Esq., as sole referee, was brought to trial before him on the 23d and 24th days of May, 1851.
The following facts, having been agreed upon by both parties, were received in evidence without proof, viz:
The plaintiffs are merchants and manufacturers, composing the firm of Gebruder Heubach (Heubach Brothers), and doing business at Sonnenberg, in Germany. The defendants are importing and commission merchants, composing the firm of A. Rolker and Mollmann, and doing business in the city of New York.
By agreement between the parties, the defendants were to act as agents of the plaintiffs, in the city of New York; and, as such agents, to sell all goods which should be consigned to them by the plaintiffs for sale, on the following terms, that is to'say: the defendants were to receive 5 per cent, commissions for selling; 21 per cent, del creciere commissions; and 1 per cent, exchange (lord) sel) commissions; together with the customary charges for expenses, &c. Under this agreement the parties transacted business for a long time.
In the year 1847, the defendants were in possession of certain goods belonging to the plaintiffs, and which had been consigned to the defendants by the plaintiffs for sale; and which goods are described in the accounts of sale hereinafter mentioned. (Schedules Hos. 1 and 2.)
On or before the 17th day of Hovember, 1847, the defendants sold all of said goods; and on that day they forwarded to the plaintiffs two accounts of the sales; copies of which ac counts are hereto annexed, marked respectively, Schedules Ros. 1 and 2.
The defendants, also, on the same day, forwarded to the plaintiffs an account current, a copy of which is hereto annexed, marked Schedule Ro. 3.
The defendants, also, on the same day, forwarded to the plaintiffs the bill of exchange mentioned in the answer, a copy of which, with the endorsements, is hereto annexed, marked Schedule Ro. 4.
The defendants, also, on the same day, forwarded to the plaintiffs a letter, of which a copy is hereto annexed, marked Schedule Ro. 5.
At the time of the purchase and remittance of the said bill of exchange, the defendants had no funds in their hands belonging to the plaintiffs, except the sum of $7.49, being the first item contained in said account current, Schedule Ro. 3.
The bill of exchange was received by the plaintiffs, and by them endorsed as appears on the bill, and thereupon forwarded by them to their agents at Bremen, for collection. It was accepted by the drawee.
In January, 1848, the said drawee became insolvent; and the said "bill was thereupon, to wit, on the twenty-second day of January, 1848, presented to him, and security demanded, which was refused, and the bill was protested for want of such security. The plaintiffs, thereupon, to wit, on the 27th day of January, 1848, forwarded said protest to the defendants, inclosed in a letter, a copy whereof is hereto annexed, marked Schedule Ro. 6; which letter and protest were received by the defendants.
At maturity, to wit, on the 23d day of February, 1848, the said bill was duly protested for non-payment. The plaintiffs thereupon, to wit, on the 28th day of February, 1848, forwarded the said bill, and said last mentioned protest to the defendants, inclosed in a letter, a copy whereof is hereto annexed, marked Schedule Ro. 7 5 which letter, protest, and bill were received by the defendants on or about the 1st day of April, 1848.
The letters, copies whereof are hereto annexed, marked respectively, Schedules Nos. 8, 9, 10,11, and 12, were after-wards exchanged between the parties.
Schedule, No. 1.
Account sales of Stoneware, sold for account of. Messrs. Heubach Brothers, in Sonnenberg.
Sold at 6 months’ credit.
No. 81. 1 cask, containing 57 m. slate pencils,
at 675 cents.,.....$38 47
88,89. 2 casks, containing 100 m. colored
marbles, damaged, 61.37, - - 61 37
90, 91, 92, 93. 4 cases, containing each 30 dozen slates, 0 at 6—120 dozen at 51
cents,......61 20
94,95. 2 cases, containing each 36 dozen
slates, No. 3—72 dozen, at 55 cents, 39 60 96,97. 2 cases, containing each 30 dozen '
slates, No. 4—60 dozen, at 65 cents, 39 00 98-101. 4 cases, containing each 50 dozen slates, 0 at 6—200 dozen, at 57 cents, ------ 114 00
Due per average, 14th April, 1847, - $353 64
Charges.
Cartage and labor delivering, advertising, postage, and petties, - Storage and fire insurance, 25 per cent., - Commission and guarantee, 75 „ „
$5 15 8 88
26 50 $40 53
Net, due per 14th April, 1848, - $313 11
To the credit of Messrs. Heubach Brothers, New York, November 15th 1847.
A. Roller & Mollmanh.
Schedule, No. 2.
Account sales of stone goods, sold for. account of Messrs. Heubach Brothers, in Sonnenberg.,
Sold at 6 months’ credit.
No. 109,110. 2 cases, containing each 30 dozen
slates, No. 4—60 dozen, at 65 cents, 94. 1 case, containing 36 doz. slates, $39 00 No. 3, at 55 cents, 104. 1 case, containing 30 doz. slates, 19 80 0 a 6, at 57 cents, 105, 106. 2 cases, containing each 30 slates, 0 a 6—60 dozen, dozen at 54 17 10 cents, - - - - 111. 1 case, containing 50 doz. slates, 32 40 0 a 6—at 60 cents, - 30 00 Due per average, 14th April, 1848, - - $138 30
Charges.
Cartage and labor delivering, advertising, postage, and petties, - - - $2 40
Storage and fire insurance, 2i per cent., - 3 45
Commission and guarantee, 7i per cent., 10 37 $16 22
Net, due per 14th April, 1848, - $122 08
To the credit of Messrs. Heubach Brothers, New York, November 18 th, 1847
A. Rolkee & Mollmanh.
Off this, the annexed account sales, already rendered, case 94, gross amount, $19 80 Less expenses,..... 2 32 $17 48
Remains net, per 14th April, 1848, - - - $104 60
Schedule, No. 3.
Messrs. Heubach Brothers, in Sonnenberg, in account current with A. Rollcer & Mollmann. With interest at 6 per cent.
1847. , Ore.
March 24. By invoice of one case slates, for Canada, fls. 19, 24. R 10 a 781, - - - - $7 88
Less commission, 5 per cent., - 39
- $7 49
Nov. 17. By net proceeds of marbles and slates,
due pr. 14 April, ’48, - 313 11
Nov. 17. By net proceeds of slates, pr. 14 April, 122 08
$442 68
Drs.
Nov. 17. To interest on $435.19, from November 17 to April 14, 147 days, at 6 per cent., ------ $io 65
Balance in your favor pr. date, - - - - $432 03
E. E.
New York, November 17, 1847.
A. Rolkek & Mollmakct.
Off this, error as annexed,
Off 147 davs’ interest, at 6 per cent.,
$17 48 43
- $17 05
Remains net, pr. 17 Nov. ’47, - $414 98
Schedule, No. 4.
Exchange for L’dor. 546.63 gt.
New York, 17 November, 1847.
Sixty days after sight of this first of exchange (second and third unpaid), pay to the order of Messrs. A. Rolker & Mollmann, five hundred forty-six 63-72 Bremen rix-dollars, value received, and charge the same to account of shipment per Elorian, as advised by
J. C. Mulleb & Co.
To Mr. Jos. Che. Mullee, Bremen.
(Endorsed on face.)
Acc. 16 December, 1847.
Jos. Che. Mullee.
(Endorsed on back.)
Pay to the order of Messrs. Heubach Brothers, value in account. New York, November 17, 1847.
A. Rolkeb & Mollmahh.
Pay to the order of Messrs. Frege & Co., value in account.
Sonnenberg, December 11,1847.
Heubach Beothebs.
Schedule, No. 5.
(A. Rollcer & Mollmann, to Heubach Brothers.)
New York, 17th Nov. 1847.
We have the honor to send you this day account sales of stone goods, which have been sold so far, for your account, viz.:
Nos. 81 a 101 net, pr. 14 April, 1848, $313.11 104 a 111 - - - - 104.60
and also a statement of your account, closing with a balance in your favor, of $414.98, due this day; and we remit you against it inclosed,
L’dor 546, 63 gt. on Jos. Chr. Muller of Bremen, making, a 79 ct. $135.03,
for which you will please credit us, if found correct.
(The further contents of this letter refer only to general business matters, except the closing paragraph, viz.:)
We have made an error in our account sales of this day, by which our remittance amounts to something more than the balance; for which you will please give us credit.
A. Rolkeb & Mollmahct.
Schedule, No. 6.
(Heubach Brothers, to A. Rolker & Mollmann.)
Sonnenberg, near Coburg, 27th Jan’y, 1848.
We are in possession of your honored letters of 4th March and 17til JSTovbr, last year; and we are this day under the unpleasant necessity to be obliged to inform you that the remittance by your last, of L’dor 546.63 on Jos. Chr. Muller, of Bremen, has been protested, as the drawee has declared his insolvency. We inclose the said protest, requesting you to be pleased to discharge us for this amount; reserving it to us to account to you later, for the protest charges, which amount so far to L’dor 3. (The further contents do not refer to the matter at issue.)
Heubaoh Brothebs.
Schedule, Ho. 7.
(Heubach Brothers, to A. Bolter & Mollmann.)
Sonnenberg, near Coburg, Feb’y 28th, 1848.
Confirming our letter of the 27th last month, we acknowledge receipt of your favor of the 14th last month.
(The beginning refers only to general business matters.)
We also inclose protest for want of payment of your last remittance of L’dor 546.63 on Bremen; according to which you will please credit us for L’dor 566, as follows.
Account of your remittance on Jos. Chr. Muller of Bremen, protested for want of payment:
Capital....... Ldor 546.63 Protest charges ----- 1.54 Commission in Bremen, ■£ per ct., - 2.53 Postage, brokerage, and stamp - - 70 Ldor 552.24 at 1121 ctf. 620.20 Commission at Leipzig \ per ct., - 2. 2 Protest of surety, 3 w£, Postage, 7. 3. 7
ctf. 625.29
at 7 fl. at 4 ctf. £ 1095.27 Commission § per ct., - - - - “ “
Postages, ------ 2.33
. 1098 00
at 97 £ for L’dor 50 L’dor 566.00 which we have charged to-day to account of Messrs. A. Rolker & Mollmann in New York.
Sonnenberg, Feb. 23d, 1848.
Heubach Beothebs.
Schedule, No. 8.
(A. Rolker & Mollmann, to Heubach Brothers.)
New York, 4th April, 1848.
We acknowledge receipt of yoxir favoi’s of the 27th January and 28th February, which have reached us in quick sxxccession, a few days ago. The first brings us protest of our last remittance of L’dor 546.63 on Jos. Chr. Muller of Bremen, on ■ account of the insolvency of the drawee. To our regret, has the house here, drawers of the bill, also suspended payment, in consequence of said failure, and is required to liquidate; from which reason we cannot do any thing in this matter for the present. A statement of their affairs we have not seen yet, as all depends on the realization of the shipments in Europe, and in particular on the house in Bremen. The character of the house has been always vex-y respectable, and it has here immediately given every thing in trust of an assignee, Mr. Koop, of the firm of Koop, Fischer & Co., which will guarantee to the creditors that the actual proceeds will be divided. But in particular, the winding up of the affairs of J. C. Mxxller & Co. of Bremen, has to be awaited, in order to see for how much the business here remains responsible, as the said bill of exchange has been accepted there. As far as we hear, the estate in Bremen promises to give about sixty per cent. We have sent, by this steamer, the bill of exchange to Johs. Heckermann, of Bremen, with orders to remit to you the net proceeds of it; and yon will please to give to this, our mutual friend, all further instructions which may he required. In conformity with the laws here, you get from the house here ten per cent, damages, added to the amount of the bill, instead of actual protest charges; which you will please note. We regret it very much that, by having bought this bill of exchange, we have brought you to loss; but we can assure you, as you will hear upon inquiry, that the house has had a good reputation in November, which sold its bills of extensive amounts, always in the market, and the failure of which was caused by the fall of cotton prices, originating in England; so that there is no.neglect on our part. We have even been obliged to pay for this bill of exchange a little higher than the rate of exchange of that day, as J. C. Muller and Co. were the last who drew, and they felt easy and strong.
To meet the doubts which might spring up, whether we did not express, by our endorsement, that we also guaranteed the bill, we refer you to the first letter of our correspondence with your hon. house, of the 20th April, 1836, in which we stated, in reference to consignments, ’that in conformity with the use here, for the commission of exchange guarantee one per cent, was charged, besides the 5 per cent, commission and 2¿ per cent, guarantee on sales, and which we never have charged you, and which you have never claimed, just as much as we did not guarantee our remittances for collections for order goods, which only gave us 5 per cent, commission for. orders. (The remainder of this letter does not refer to the matter at issue.)
A. Rolkee & Mollhahh.
Schedule, No. 9.
(Heubach Brothers, to A. Rolker and Mollmann.)
Sonnenberg, near Coburg, May 14, 1848.
We come just now in possession of your letter of the 4th ultimo, and we wonder very much to see brought forward by you, principles which are indeed quite new, and to which we can indeed not agree at all. It is true you refer, for maintain ing this principle, to yonr letter of the 20th April, 1836, but also therein is no stipulation which would release you from the responsibility to be accountable for the payment of your remittances, as you ask (brbingcn) therein 5 per cent, sales commission of the amount of sales (Erloes) 2| per cent, del credere, and one per cent, exchange commission; of exchange guaranty, no word is mentioned in it, which also would have been a, singular (sonberbttr) pretension if you would claim for your own remittances a compensation of a particular guaranty. As it is, we should think, self-understood, and it is also acknowledged in all the wide commercial world, that by charging 2| per cent, del credere, the commission merchant (her Eonsiguer) is not only responsible for the correct payment of the sales made, but has also, in particular, to liquidate (abpigerorteljmt) this amount punctually and correct; by which course the responsibility of the del credere is only fulfilled. But it would be quite • a new discharge of this responsibility, if we should suffer the loss, as you pretend it with your last protested remittance, which originates from the insolvency of the seller of your bill. In conformity with the stipulations of common justice (law) adopted by the whole world, as also with the use of commerce, you are our debtor as soon as you have collected money for us; has the collection 'once been made, then there is even no necessity of a del credere before being charged, as you have done it always; and it follows, consequently, that if your remittances are not paid, we are entitled and in the right to return them to you for discharge (release) and to demand other better remittances. The matter is so simple and plain-,—requires so little explanation,—and we always had so much confidence in your judgment and your feelings of justice, that we really wonder how you can charge to us the loss which arises out of the insolvency of the seller of your remittance, as we can demand according to common and exchange law, through the protest, the immediate payment of the bill and all charges, without concern to us what has caused the nonpayment of your remittance, if we have not neglected anything otherwise; and therefore we cannot explain it to us that you have misunderstood your own stipulation in your letter of the 20th April, 1836, and define wrong the one per cent, exchange commission, which signifies nothing more than commission for procuring the bills : That you have not charged them does not release you from guaranteeing your remittances. And therefore we must insist on it that yon make us, by return mail, remittances for the full amount of the bill of exchange; and we hope that by doing so, you will not force us to measures which will terminate the long business connexion between us, which we should regret very much. That therefore the failure in Bremen connected with your remittance does not concern us, is a matter of course; and we have therefore not given any instructions to Mr. Jos. Heekerman, in Bremen, and shall not do it. (The remainder of this letter does not refer to the matter at issue.)
Heubach Brothers.
Schedule, Ho. 10.
(A. Eolker & Mollmann, to Heubach Brothers.)
New York, July 8th, 1848.
We acknowledgé receipt of your favors of 11th April ana 14th May. With the former we received invoice, &c., which will be collected and remitted. The latter disputes the correctness of our position in regard to the remittance bought for your'account on J. C. Muller, protested for want of payment. We regret it very much to see doubts arise in you in regard to the correctness of our statements, and the more as your Mr. Ernest Heubach has been a resident of the H.S., -and New York, for a long time, where in the office counting house directory and yearly almanacs, as also in the shipping list, which is published twice a week, the rates of the board of commerce, of commissions acknowledged here, are published. We therefore send you inclosed, an extract made by the board of commerce concerning these rates, from which you will see the usance in existence in this place. You must allow us that we also differ from you, as if it was law everywhere, for instance a debt guaranteed in Frankfort, if we remit it sure to Sonnenberg; both is different in itself to guarantee a debt in a named place, and to keep it subject to order, or to remit a sum by bill or specie. Anyhow, our position on shipments of produce to the ports of Europe is the same as you are with consignments to New York. The commission for the sale is charged, and for time sales the guarantee for the payment of the money; for instance in Bremen the net proceeds are brought to the credit of the shipper (consignor), against which he draws or orders it on his own risk to another place, if he does not claim to have the amount remitted under guarantee against charge of the usual guarantee commission to this or that place. We do not deny, nohow, of having owed you the sales in New York; but by purchasing the bill, this debt ceases on proving that we have bought with due caution and according to our best knowledge and belief, the bill in this market being open for sale, and having it remitted to you. You have frequent intercourse with merchants from this country; even you find them often with you personally; who will be acquainted with the commission branch of business; or the first mercantile houses and consuls of the sea-towns may certify the correctness of this usance. A special or other tract of course goes before usance, but under this r connection does not come; on the contrary our letter 20th April, 1836, states explicitly, the commission of cent, at which rate the guaranty of bills would have be<& taken by us; and for the trouble of purchasing bills, the b commerce allows half per cent, without guaranty, greater part of those who consign goods here cause remittanc to be made them without having guaranteed them, not willing to pay the commission; anyhow such is the case with our correspondents ; and as you have not demanded it that we should take the guaranty of the bills, although we had offered to do so, we have of course not done so. ,
But it appears from your letter, that you suppose the exchange guaranty, being included in the guaranty on sales, which is explained above, is not the case. Besides the usance of business in this place, does the law through our juries not bind the endorsement on a bill or note without having been paid a consideration for it, that is to say, without getting a remuneration for it. Nobody can be forced to take obligations; but the voluntary undertaking of obligations makes it binding by a consideration. Where this consideration has not been given, the endorsement may have been given out of accommodation, with the particular understanding that the endorser never shall be called upon to pay. In this way the law might interfere where no interference in the law has been intended; as the intention of the law is only to force those who do not fulfil their contract. The drawers of bills do not always like to draw to their own order, and require to do it to the order of the purchaser. On the contrary the purchaser of bills does not like to give the name of their correspondents in Europe, for the purpose not to expose the names for competition; from this cause, very often, bills not guaranteed are endomed without making the endorsers responsible for the payment of them.
(The further contents do not refer to the matter at issue.)
A. Rolker & Mollmann.
Schedule, No. 11.
(A. Rolker & Mollmann, to Heubach Brothers.)
New York, June 19th, 1849.
We are since some time, without your letters; and we regret it very much that the guaranty on our remittance of Hovember, 1847, caused an interruption in our intercourse; although in consideration of all sides, we cannot alter now the position we have taken in regard to it. We have sent said bill some time ago, to Mr. Jobs. Heckerman, of Bremen, subject to your orders, who will have collected there a dividend and remitted it to you. Since, Mr. Heckerman has returned the bilí to us, for the purpose of attending to the dividend here. We have first thought not to do any thing in the matter, but in order not to neglect any thing which might cause loss to you, we have, under approbation of the assignee, collected the dividend of ten per cent., as agents for you, amounting to $47 52; and we remit you the same, inclosed a 721 with L’dor 59 56, 3d. s. on C. L. Brauer & Son, Bremen, which you will please carry to the credit of the estate of J. G. Muller & Co.
A. Bolker & Mollmann.
Schedule, No. 12.
Heubach Brothers, to A. Rolker & Mollmann.)
Sonnenberg, 13th July, 1849.
We are in possession of your letters of 19th March, and 19th June, the latter containing L’dor 59 56, on C. L. Brauer & Son, Bremen, which we return to you to our release, as we cannot accept it under existing circumstances, it being the proceeds of a dividend from the estate of J. C. Muller & Co., from which we do not look for any thing, as we have already communicated to you, under date 14th May, last year; and in conformity with that communication, we have accepted nothing from Mr. Jobs. Heekerman, of Bremen, what refers to said matter.
11 Heubach Beothees.
Several witnesses were examined and depositions read on the part of the defendants, but as the testimony related chiefly to the standing and credit of the firm of J. C. Muller & Co., by whom the bill remitted by the defendants was drawn, none of it has any bearing upon the questions decided. It is wholly omitted. The referee made the following special report:
In this case, I find as matters of fact, that the defendants, merchants in New York, as agents of the plaintiffs, who are merchants at Sonnenberg, in Germany, sold certain merchandise for the plaintiffs on or before the 17th November, 1847, the net proceeds of which, amounting to $442.68, would not be due until the 14th April, 1848; that, on the 17th November, 1847, the defendants, with money of their own, bought a bill of exchange for this amount, less interest from the 17th November to the 14th April, and remitted the same to plaintiffs, in payment of the said sales, and before the said sales became due; that said bill was drawn by J. C. Muller & Co., of New York, on J. C. Muller, of Bremen, payable 60 days after sight, to order of defendants, and was by them endorsed to plaintiffs in these words, “ Pay to the order of Messrs. Heubach Brothers, value in account,—New York, November 17th, 1847,—A. Rolker & Mollmann.” That said bill was protested for non-payment, and notice of protest was sent by plaintiffs to defendants in a letter, dated at Sonnenberg, January 27th, 1848, in which the plaintiffs claimed that defendants should pay them the amount.
The plaintiffs insist, that the defendants, having purchased the hill with their own funds and not with the funds of the plaintiffs, the former are bound to make good the amount; according to the principle laid down in Hayes v. Stone et al., 7 Hill, 128; S. C. m error, 3 Denlo, 575.
In that case, however, the defendants had the plaintiffs’ funds in their hands, and instead of using them in the purchase of a bill, made such purchase on them own credit, with their own note, on time, and at a rate higher than for cash; and although they debited their correspondent only with the price for which the bill could have been bought for cash, yet the courts held that the defendants had placed their own interests in conflict with those of their principals; and that they probably would not have purchased the particular bill, but for the opportunity of getting it on credit; thus enabling them to use the plaintiffs’ funds for their own purposes, and in effect pay the plaintiffs by the note of the defendants. The leading opinion given in the Court.of Errors, puts the decision on the' ground stated by Judge Story in his work on agency, sec. 210, that it is a rule of general application in regard to duties of agents, that in matters touching the agency, they cannot act so as to bind their principals where they have an adverse interest in themselves.”
How, the reason of the rule in Hayes v. Stone et al. doeq not seem to me to exist in the present case. . I do not see that the defendants had any interest in conffict with that of their, principals. On the contrary, in remitting the money before if became due, they acted with a promptitude which could not have been required of them. They had not, like Stone & Co.% the plaintiffs’ funds in hand, nor did they, like Stone & Co., buy the bill on credit and give for it their own note.
It is objected by the plaintiffs that the- drawers of the bill were not of the very highest repute; and that therefore the defendants have become liable, because they purchased the'bill from a house of second rate standing. I think, on the whole, the fair inference from the testimony is, that although some other houses may have been of more distinguished responsibility, still thq drawers of the bill, were of good repute, and that, the deien dants showed no want of care and vigilance in buying of them. It can hardly be objected that an agent is unfaithful because, Brown Brothers & Co. being the most wealthy drawers of exchange, he purchased of another house, which, though less wealthy, were esteemed good and responsible. Again, the de fendants could have no possible motive for buying any other than the best bill. They would neither profit nor lose by the rate of exchange ; whether the rate were higher or lower, would affect the plaintiffs only; but to the defendants it would necessarily be matter of indifference.
Again, the plaintiffs knew by the account sales and account current, that this bill was remitted to them in advance of the maturity of the sales; that it consequently was not purchased with their funds, but with the funds of the defendants. They should, therefore, have disclaimed the time and mode of payment if they were dissatisfied with it; instead of ratifying it, as? I think, under the circumstances they did.
It was also claimed by the plaintiffs that the defendants were liable as endorsers of the bill. I think the notice of protest was sufficient to charge the defendants as endorsers if they were liable; but it strikes me that their endorsement of the bill did not render them liable to the plaintiffs. Judge Story lays down the rule very broadly in his text (Story on Agency, sec. 157) that where an agent endorses a bill or note, though known to be an agent, he becomes liable not only in respect to third persons, but also in respect to his principals. He partly retracts this proposition, however, in a note, in which he says, “ In respect to the principal the doctrine may in many cases require to be qualified; for if as between him and the agent there was no intention to create a personal liability, it will not arise.” In Sharp vs. Emmet, 2 Wharton’s R. 288, it was held that, if an agent remits a bill in payment for goods sold on account of his principal, and endorses the bill, he does not'thereby become responsible thereon to his principal, if he received no consideration for guaranteeing the bill, and does not expressly undertake to do so. My conclusion in the present case is, that the defendants received no consideration for guaranteeing the bill, and that they did not expressly undertake to do so. If the bill had been drawn directly to order of plaintiffs, I do not see that they could have objected that it did not bear the defendants’ endorsement.
This case was thoroughly and very ably argued by counsel, ■but from the best consideration I have been able to give to it, I think the plaintiffs are not entitled to recover.
June 21,1851. B. D. Sillimait,
Sole Referee.
Judgment was perfected for defendants on the report. The plaintiffs made a case, and appealed to the special term.
C. O'Conor, for plaintiffs,
insisted that the judgment ought to be reversed and a new trial granted, mainly on the following grounds.
1. The bill of exchange remitted by the defendants was no discharge of the plaintiffs’ demand, even if it was, in itself, a good bill. (Stone v. Hayes, 7 Hill, 128; S. C. (aff’d) 3 Denio, 575.) 1. The bill having been purchased by the defendants with their own money, was their property, and they could not compel the plaintiffs to receive it on account or in payment of the demand, (a.) The defendants were liable to the plaintiffs for the proceeds of sales, only at expiration of the credit given. The del credere commission bound the defendants as guarantors of the purchaser, but did not make them primarily liable. (Story on Agency, § 33, note 2.) (b.) The bill, treated as a volunteered advance by defendants to plaintiffs, is not governed by the agreement, and the relations of the parties to it must be determined by the circumstances of the remittance itself. These showed the bill to be the property of the defendants, tendered by them to the plaintiffs as a payment, with the guaranty of their endorsement. Such a transaction is always a payment sub modo. (Jones v. Sevage, 6 Wend. 662.) 2. The plaintiffs (even supposing they had sufficient notice of the facts) did not receive the bill both without recourse to the endorsers and as an absolute payment; nor did they (in the aspect claimed) ratify the acts of their agents, the defendants, in remitting the same, (a.) It is an elementary principle that where a creditor receives of a debtor the obligation of a third person, he takes the same merely as collateral; and the debtor is not discharged, unless the creditor expressly stipulates to that effect. (Tobey v. Barber, 5 John. R. 68; Murray v. Gouverneur, 2 John. Cases, 438; Herring v. Sanger, 3 id. 71; Schermerhorn v. Loines, 7 John. R. 311; Johnson v. Weed, 9 id. 310; Hoar v. Clute, 15 id. 224; Van Eps v. Dillaye, 6 Barb. S. C. R. 244; People v. Howell, 4 John. R. 296; Olcott v. Rathbone, 5 Wend. 490.) Ho such stipulation was given in this case. The plaintiffs never even acknowledged the receipt of the bill, except by returning it under protest, (b.) The fact that the bill was endorsed by the defendants, is evidence that it was not intended to be, and was not, in fact, received by the plaintiffs in payment. (Monroe v. Hoff, 5 Denio, 360.) (c.) The lapse of time before the return of the bill (only forty-two days) was not sufficient, under the circumstances, to raise any implication in favor of the defendants, (d.) Endorsing the bill, by plaintiffs, signified nothing. It was endorsed by defendants to order of plaintiffs, and could not be collected without plaintiffs’ endorsement. (e.) The bill being payable in a foreign country, the plaintiffs were justified in holding it for payment, for the benefit of the defendants. 3. The plaintiffs had no notice that the bill was not purchased with their money; and their acts, therefore, of whatever character, could have no effect upon their rights. Ratification, to be effectual, must be with full knowledge ; and the defendants, in order to charge the plaintiffs with having accepted the bill as their own, were bound to establish, at least, that the plaintiffs received the bill as their own, with full knowledge of all the facts. (Story on Agency, §§ 239 to 243 ; 1 Greenleaf’s. Ev., § 197.) (a.) The plaintiffs did not, in any way or manner, receive the bill as their own. (b.) All the facts being particularly and exclusively within the knowledge of defendants, they "were required to give the fullest possible notice to the plaintiffs; more especially as the plaintiffs resided abroad, and the defendants were their agents. If any point was left open for inference, that inference must be against the defendants. (1.) The account current debits the defendants with the “net proceeds;” and.the letter transmitted with it says, that the balance was due to the plaintiffs that day. This left the matter open to the inference that in some (unexplained) manner the defendants were actually in funds at the time they purchased the bill. (2.) The rebate of interest charged in the account current was no notice to the plaintiffs, because as the sales were made on credit, and, of course, at credit prices, the purchaser would have been entitled to the rebate if he discounted his paper, or paid the bill in cash. This is always allowed, if the purchaser desires; and, of course, it would be a proper charge against the plaintiffs: (e.) The plaintiffs were under no obligation to inquire as to the means by which the defendants came in funds. If the papers justified the inference, they had a right to draw it and repose upon it. 4. The defendants were bound to wait until they were actually in funds, before they took the risk of buying a bill to remit. If they had done so, this loss would not have happened. The drawers of the bill in question suspended payment before that time. (a.) When an agent, of his own motion, performs an act not within the line of his duty, he acts on his own responsibility. He cannot shield himself by claiming to have done more than his duty. If he has done something different from his duty, that is enough to charge him. The intent can be taken into account only where fraud of some kind is alleged. 5. The defendants entirely failed to prove any custom or course of business between the parties, which would authorize them to remit in advance of the actual receipt of proceeds.
II. The plaintiffs are entitled to recover against the defendants as endorsers or guarantors of the bill in question. 1. The defendants, by their agreement, were to guarantee their remittances, receiving therefor one per cent, commission, (a.) The commission was charged by the defendants, it being included in the general charge of per cent. The commissions being charged in gross, the law will infer that this particular commission was included: (b.) If the commission was not charged, it would make no difference, as it was the defendants’ mistake or fault, and not the plaintiffs’; and the plaintiffs cannot be prejudiced thereby. (c.) Under the circumstances, procuring the bill to be di’áwn to their own order, and endorsing it, is conclusive evidence that the defendants intended to guaranty the bill. (1.) They were under no obligation to have the bill made payable to their own order, unless they were to become guarantors. (2.) They could have endorsed it “ without recourse,” if they wished to avoid liability. (3.) As they remitted in advance, it was their duty to guarantee the remittance; and, therefore, the duty and the act form satisfactory evidence of the intent. 2. The bill belonged to the defendants, and as they sought to transfer it to the plaintiffs, it must be presumed to have been for them advantage to do so. This advantage, whatever it may have been, was a sufficient consideration to uphold the guaranty. 3. The fact that the plaintiffs might refuse to receive the bill, except as collateral, unless it was guaranteed by the defendants, was a sufficient consideration for the guaranty. 4. The advantage which an agent derives by retaining the business of his principal, is a sufficient consideration to support a voluntary guaranty, of a remittance. 5. No consideration beyond that necessarily arising from the relation of the parties, is required to sustain the guaranty of a bill remitted by an agent to his principal. The question is purely one of intention. (Story on Agency, §§ 156, 157, 269, and cases cited.) 6. The notice of protest was sufficient to charge the defendants as endorsers or guarantors, (a.) The bill was protested in Bremen, Feb. 23d. On the next day it was forwarded to the plaintiffs at Sonnenberg, and reached them not sooner than Feb. 26th. The 27th was Sunday, and on Monday, 28th, the plaintiffs forwarded the bill, with the protest, to the defendants. (5.) The former protest, for want of security, was notice to the defendants that the bill would not be paid.
III. The plaintiffs were not bound, when they returned the protested bill, to specify any grounds for their claim against the defendants; it was enough that the defendants were notified' that the plaintiffs made a claim against them.
E. Sandford, for defendants.
I. The plaintiffs’ alleged cause of action was that they employed the defendants to sell certain goods and to be responsible to the plaintiffs for the price thereof. That defendants-sold them upon credit of six months, which has elapsed, and the defendants have not paid the price. The answer alleged that the goods were delivered.to defendants to sell, and to remit- the proceeds hy a bill of exchange of persons in good credit. That they purchased the bill in question of a house then in good credit, and remitted it to the plaintiffs. That they made the remittance before the credit on the goods had expired as an accommodation to the plaintiffs. That it was received, approved of, and endorsed by plaintiffs. The reply put in issue only the allegations as to the good credit of the drawers, at the time of the purchase of the bill by the defendants, and the approval of the bill by the plaintiffs. The evidence warranted the findings by the referee, upon both of the issues.
II. The finding of these issues against the plaintiffs upon sufficient evidence, is conclusive upon the merits of the controversy ; it being admitted by the plaintiffs that the defendants were to remit by bill of exchange, and the defendants having remitted a bill pursuant to their agreement, and plaintiffs having approved and accepted such bill, there is an end of the cause.
III. If any question had been raised whether the plaintiffs could have charged the defendants as endorsers of the bill of exchange, the decision of the referee on that point was warranted by the evidence, and by the law applicable to the case.
IV. The motion to set aside the report of the referee should be denied with costs.

Opinion:
By the Court. Duer, J.
The general rules of law applicable to this case may be stated in a few words.
When a factor has funds in his hands, belonging to a foreign correspondent, it is his duty, giving early information of the fact, to retain them, subject to the order of his principal, unless he has been previously directed or authorized to remit them. If he undertake to remit, when no such direction or authority has been given, the remittance is at his own risk; and consequently, when it is made by a bill of exchange, it is only the actual payment of the bill that can discharge him from his liability. On the other hand, when he has been directed, or has a discretionary power to remit, he acts, in purchasing a bill for that purpose, simply as the agent of his correspondent, and is then responsible only for good faith and due diligence. The remittance of the bill, when it appears that it was purchased in good faith, and upon due inquiry, operates as between him and his principal as an absolute discharge, and the risk of the dishonor of the bill is cast wholly upon the latter, who, in that event, can look only to those whose names are on the paper.
Since the decision of the Supreme Court, in Leverich v. Meigs (1 Cow. p. 645), the law in this State must be regarded as settled, that the rules which have been stated apply, as well to a consignee under a del eredere commission, as to an ordinary factor; although I apprehend that the law is certainly otherwise on the continent of Europe, and probably in England. Such a commission gives of itself no authority to remit; and when that authority is given, the guaranty which the del credere imports is limited to the due payment, by purchasers, of the price of goods sold upon credit, and does not extend to the remittance of funds actually received. These general rules may be varied, as in other cases, by the special agreement of the parties. The consignee, or factor, may agree, with or without an addition to his ordinary commission, to guaranty all the remittances which he makes, or his authority may be limited by the instructions of his principal, and then he is only exonerated when the prescribed limits or conditions are observed. To which I add, that, whether he acts with or without authority, he may, in all cases, render himself personally liable, not only to third persons, but to his principal, by the form in which his remittance is made; that is, as drawer or endorser of the bills or notes which he remits.
The answer of the defendants in this case admits, that they received and sold the goods, to recover the price of which the suit is brought, as the agents and on account of the plaintiffs, but sets up, as a principal defence, that they had been previously instructed, by the plaintiffs, to sell the goods for cash or upon credit, and to remit the proceeds by a bill of exchange, drawn by persons in good credit; and then avers that, in pursuance of this authority, they purchased and remitted to the plaintiffs a bill of exchange, drawn by a house in good credit, payable to the order of the defendants, and endorsed by them to the plaintiffs; and covering the whole balance due to the latter, as the proceeds of the sale. In fewer words, the defence is, payment by a bill of exchange, which the plaintiffs received, and were bound to receive, in full satisfaction of their claim.
It was insisted by the counsel for the defendants, that the only reply that has been made to the defence is, a denial that the drawers of the bill were in good credit at the time of its purchase; and certainly, were this the only issue raised by the pleadings, we could not hesitate to affirm the report of the referee, since we are by no means prepared to say that his finding upon this question of fact is against the weight of evidence. But, as we construe the pleadings, this is not the only, nor the most important issue which is raised. The reply, as we read it, contains a distinct and positive denial of the authority of the defendants, which we understand to mean their authority to purchase and transmit the bill in question, as the agents and at the risk of the plaintiffs. Hence, in order to sustain them defence, so far as it rests merely upon the purchase and transmission of the bill, the defendants were bound to prove that the instructions which they allege in their answer were, in fact, given, and that,'by their fair construction, they embraced and warranted the remittance, upon which they rely as an absolute discharge.
The first inquiry, therefore, is, whether this necessary proof has been given; .and the reply must be that assuredly it has not, unless it is contained in the terms of the agreement, under which it is admitted that the original connexion of the parties was formed, and their subsequent business transacted. This agreement is the only evidence bearing upon the question; and it does not appear, nor has it been pretended, that any instructions were ever given by the plaintiffs, by which its true import could be varied or enlarged. The terms of the agreement, it seems to us, are plain and unambiguous. The defendants agreed to "sell the goods consigned to them by the plaintiffs, and remit the proceeds, charging a commission of five per cent, on sales, two and a-half per cent, del credere, and one per cent, exchange; and these commissions the plaintiffs agreed to pay. It is true it appears, from the correspondence of the parties, that they differed as to the proper application and effect of these commissions; the plaintiffs naturally supposing that the law in this State was the same as in Germany, believed that the guaranty of the del credere covered remittances, while the defendants insisted that the del credere was confined to sales, and that it was by the exchange commission alone that their guaranty of remittances was meant to be compensated; but we regard this difference as in truth im'material, since, accepting the interpretation of the defendants, it remains certain that, according to the understanding of both parties, the defendants were to guaranty the exchange which they purchased, as fully as the sales which they effected; and, in our judgment, the obligation thus created by the agreement was as positive and imperative in. the one case as in the other. It is possible that the defendants had a discretion to remit immediately or wait the instructions of the plaintiffs : but if, without thus waiting, they chose to remit, we are clearly of the opinion they were bound to guaranty; in other words, that the agreement into which they had entered, and from which all their authority was derived, imposed upon them a duty, from which, by no act of their own, without the consent of the plaintiffs, could they be discharged. It could never have been the meaning of the parties, that the defendants might assume the risk of exchange, or cast it upon the plaintiffs, at their pleasure; such a construction of their agreement would be just as unreasonable in reference to the guaranty of exchange as to that of sales. We apprehend, however, that it has never been imagined, that a del credere agent may, in his discretion, guaranty or not the sales which he effects, and whenever, from any cause, he is unwilling to assume the risk, by "relinquishing his commissions, cast it upon his correspondent. The object of the foreign merchant, in requiring a guaranty, as a general rule, would be wholly frustrated by vesting in his agent this unlimited discretion— a discretion, which, in a large majority of cases, would be certainly abused, and, in all, would be a direct temptation to negligence, dishonesty, and fraud. No man of common prudence would think of vesting it in an agent, and no agent of common sense venture to claim it; and so great is the improbability, that, in any given case, such was the understanding of the parties, that, in our judgment, it could only be overcome by uncontradicted evidence of an express agreement.
In our opinion, the remarks that we have now made apply with equal force to a guaranty of exchange. In making it discretionary, there is the' same danger of abuse, the same temptation to carelessness and fraud ; and, consequently, there are the same reasons for holding the obligation to be positive and universal, unless, by Undoubted proof, it is shown to have been otherwise. There is nearly the same risk in purchasing exchange as in effecting sales; and the testimony shows, that there is a wide difference, naturally affecting their-market value, between bills of the first and of the second.class. Those of the. first are believed to be good ; they are those, in the language of one of the witnesses, in relation to which " not the slightest doubt is entertained." The solidity of the sécond is a matter of opinion, not of knowledgethey are believed to be good, but no one 'will say that they certainly are so. Give to the agent the discretion that is claimed; and the general mode of its exercise may-be safely predicted. Bills of the first class will be covered by his guaranty, and the naked risk" only of the second, be thrown upon the principal. . The guaranty, when useless, will be given, and withheld, only whe.n a just regard to the interest and security of the principal would render it of value, i That the plaintiffs never meant to give to the defendants a power so liable to be abused, we are entirely satisfied; nor is there any evidence that the defendants, until the dishonor of the bill, which is now set up as an absolute payment, claimed 'to possess it. By their own admission, the defendants agreed, for a commission of one per cent., to guaranty the exchange which they remitted; and this stipulation, from its nature, attached itself to every remittance which they subsequently made, unless it can be shown that the plaintiffs, with a full knowledge of the facts, released them from its observance; in other words, consented to accept the "remittance as an absolute payment. The case, in our opinion, discloses no evidence whatever that the plaintiffs meant thus to adopt the remittance that is now relied on as a defence ; nor have any facts been proved, from which the defendants had the right, or we, as judges, are bound, to infer that such was their intention.
It is possible that the defendants meant that the remittance should operate as an absolute payment; but it would be absurd to suppose that their secret intention was alone sufficient to discharge them ; and we mean distinctly to say, that there is no evidence that this intention of the defendants, if it existed, was made known to the plaintiffs, and that it was with this understanding that they accepted the remittance.
It is seen from these observations, that we attach no weight to the fact upon which the defendants' counsel laid the entire stress of their argument, namely, that in the account of sales which accompanied the remittance the defendant omitted to charge an exchange commission; for while we agree with the counsel that this omission is apparent upon the face of the account, we are compelled wholly to dissent from the conclusions that have been drawn from it. The argument is, that the defendants, by not charging the exchange commission, gave notice to the plaintiffs, that the remittance was not to be considered as protected by their guaranty; and, consequently, that the plaintiffs, by retaining the bill, sanctioned the remittance as properly made, and dispensed with the guaranty, upon which they might otherwise have insisted. This reasoning is specious, but dissolves upon examination. An agent, who has bound himself to guaranty, may abandon, if he will, his right to the stipulated reward; but he cannot, by relinquishing his commission, release himself from his obligation. He cannot, by his own act, rescind his contract, and cast upon his principal the risk which he had himself consented to bear; and by holding otherwise, it is plain that we should give to the agent the very discretion which it has been shown that he ought not, and could never have been meant, to possess. Hence, the principal, when it is known to him that in a particular transaction the guaranty commission has not been charged, is not bound to infer that the agent meant, by the omission, to violate his contract; but may well suppose, either that the omission was accidental, or that the agent was content with the commissions he would otherwise receive.
A principal, having any confidence in his agent, would never suspect that the omission was intended to deprive him of the security for which he had stipulated, and a court of justice, in holding such to be its effect, would, in our judgment, give its sanction to a fraud.
If the defendants meant that the plaintiffs should understand that the bill which they remitted was intended by them as an absolute payment, they were bound to say so in the plainest terms; and even had this express communication been made, the plaintiffs would have been justified in replying, that they would retain the bill until its maturity, and, if then dishonored, would hold the defendants to their original guaranty. As no such communication was made, the reply was unnecessary, and their silence, whatever may have been the views of the defendants, is no evidence of their acquiescence. Hence, the allegation that the plaintiffs approved and adopted the remittance as made by their authority, and at their own risk, we cannot do otherwise than regard as groundless. The defendants, under their agreement, had no right to remit at all at the risk of the plaintiffs ; and if such was their intention in the remittance, upon which they rely, we have no right to say that the intention was made known to the plaintiffs, far less that it was ratified by their subsequent conduct.
The result is, that the defendants either made the remittance under their original agreement, or without authority ; so that, qudoumque, vid ¿laid; it was made at their own risk, and having failed, they must be liable. Nor is this all. Had there been no positive stipulation of guaranty on the part of the defendants, and had their instructions from the plaintiffs been exactly such as are alleged in their answer, we must still have held that the plaintiffs, under the special circumstances of this case, are entitled to recover.
The goods of the plaintiffs were sold on a long credit, and on the very day of the sale the defendants charged themselves with their price ; and it was for the purpose of satisfying the balance, which, deducting interest and commission, was thus created in favor of the plaintiffs, that they purchased and remitted the bills, the dishonor of which has led to this controversy. Our opinion is, that this remittance was not made by them in their capacity of agents, nor covered by their supposed instructions; but, on the contrary, was a remittance which, upon well settled rules of law, unless it proved to be effectual,, they were bound to make good. It was emphatically a remittance at their own risk, not at that of the plaintiffs.
For reasons that we shall not now attempt to explain, we exceedingly doubt whether a del credere agent may, in his discretion, charge himself immediately with the price of goods sold upon credit; but, admitting that, by his voluntary act, he may thus constitute himself the debtor of his principal, it is plain that the remittance which he then makes is of his own funds, not of those of his principal, received as the actual proceeds of the sale. It follows that the remittance is made by him, not in the necessary discharge of his duties, or in the proper execution of his trust as agent, but for the sole purpose of satisfying a personal debt, which, without necessity and without request, he chose to assume. It is a novel doctrine that a debtor may, in any case, by remitting a bill to his creditor, impose upon him the risk of its ultimate payment; and the doctrine is as unreasonable as it is novel.
Let it not be said that the principal, if not willing to treat the remittance as an absolute payment, is bound to return the bill, and makes it his own by retaining it: The conclusive answer is, that he is not bound to know, or even suspect, that his reception of the bill was intended to operate as an immediate payment; but, on the contrary, has the right to believe that the bill was transmitted only as a collateral security. As such, he is justified in returning it when it proves unavailable, and justified in then demanding payment of the debt it was remitted to cover.
In this State the law is settled, by a long series of decisions, that the acceptance, by the creditor, of the bill or note of a third person, can never be held to cancel an existing debt, unless it appears that, by the express agreement of the parties, it was received as an absolute and final payment.
In other cases, and even where a receipt in full has been given, the bill or note is held to have been received merely as a collateral security, which, unless realized, creates no bar to a subsequent recovery of the original debt. (Toby v. Barker, 5 John. 68; Muldon v. Whitlock, 1 Cowen, 290, 308; State Bank v. Fletcher, 5 Wend. 85; Olcott v. Rathbone, idem. 490; Hays v. Stone, 9 Hill, 128; S. C. in Error; 3 Denio, 575; Van Eps v. Dillaye, 6 Barb. 244.)
Upon the fullest reflection, we can perceive no ground for excepting the present case from the operation of these rules. Had the term of credit upon the sale of the goods expired, and the purchaser had then failed to pay, the defendants, by force of the del credere, would have been immediately liable ; and none can doubt that a remittance, then made by them, to cover the price of the goods, would have been made for the purpose of satisfying their personal' debt. We can make no distinction between a debt, which, by anticipation, they chose to assume, and a debt which would have been imposed upon them by the terms of their contract. In both cases it is equally true, that the funds remitted are not the actual proceeds of the sale, which, as such, the defendants, as agents, were bound or authorized to remit. In both, the funds are those of the agents, not of the principals.
We remark, in conclusion, that the reason why an exchange commission was not charged by the defendants is now apparent ; making the remittance, not as agents, but as debtors, not under their agreement, but as a voluntary act, they had no right to charge the commission.
Believing, for the reasons that have now been stated, that the referee has erred, and that the judgment entered upon his report must therefore be reversed, we deem it needless to inquire, whether, if these reasons had not existed, it must not have been held, that the defendants had rendered themselves liable by endorsing generally, and not as agents, or without recourse, the bill which they remitted. It is sufficient for the present to say, that we are not to be considered as assenting to the propriety of the decision of the Supreme Court of Pennsylvania, in Sharp v. Emmet, 5 Wharton E. 288; but, on the contrary, are disposed to think that the position of Judge Story, " that when an agent, employed to jmrch^se bills, makes them payable to his own order, and then endorses and remits them to his principal, he is liable thereon, as endorser, to his principal, as well as to third persons" (Story on Agency, sec. 269, 2d ed. page 332), is fully sustained by the authorities to which he refers. Goupey v. IIarden, 7 Taunt. 159, is an express decision; and Lefevre v. Lloyd, 3 Taunt. 149; Sampson v. Jevan, 3 Camp. 291; and Leadbetter v. Farren, 5 M. & Sel. 345, involve the principle. There is doubtless an excep '.ion, where, with the knowledge and assent of the principal, Jie agent endorses the hill, for the sole purpose of facilitating its collection ; and it was upon this exception, we think, the decision in equity, in the Court of Exchequer, in Ridson v. Dilworth, 5 Price, 564, mu°t have proceeded. It is only by this explanation that the decision can be reconciled with the cases at common law.
It is doubtful whether the liability of the defendants, as endorsers, is a question properly arising under the pleadings ; and, if it exist, whether it can be otherwise enforced than in an action upon the bill itself. We therefore leave the question undecided.
The judgment at Special Term is reversed, and the order for a reference discharged, costs to abide the event. The cause must now go to a j ury; who, unless the case shall he materially altered by further evidence, must be instructed to find a verdict for the plaintiffs.