Court Opinion

ID: 8256235
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:31:52.646128+00
Date Added: 2024-06-11T16:43:00.158462
License: Public Domain

Mr. Justice Clayton
delivered the opinion of the court.
This was an action of assumpsit upon a promissory note for some $2,100, which was executed under the following circumstances. The defendant, Gayden, signed the note in blank, and delivered it to Blasdale & Grubbs, with authority to them to fill it up with the amount which they might purchase at the sale of Thomas Land, deceased, of whose estate Johnson was the administrator. It was the intention that Gayden should be their surety for the amount of their purchases. At the sale, Blasdale & Grubbs bought to the amount of about $1,800, and two men, by the name of Beasley and Thompson, likewise bought to the amount of $300, and when the note was about to be filled up, Blasdale & Grubbs included the amount of the purchase of Beasley and Thompson, with their own, and inserted the two together in the note, taking the note of the latter to themselves for the amount of their purchases. This was done with the knowledge of the administrator, and Blasdale stated at the time to him, that he was authorized by Gayden to fill it up with from $2,300 to $2,500. There was no proof that Johnson, the administrator, had any knowledge of what the understanding between Gayden and Blasdale & Grubbs was, other than the above statement, which was made in his presence by Blasdale.
The jury, upon the testimony, found a verdict in favor of the defendant, Gayden. A motion for a new trial was made and overruled, and the case brought up to this court by writ of error.
It is certainly true that he who signs a bill or note in blank, and delivers it to another, makes that other his agent, and authorizes him to fill it up with an indefinite amount. It is an unlimited letter of credit. Yet the rule must be received with this qualification. If there is, in fact, a limit to the authority, which has been exceeded ; if a third person takes the note with knowledge that the limit has been transcended, the note will not be binding in his hands as against the surety for the full amount. Ch. Bills, 33. 5 Cr. 151. 2 Doug. 514. But the question will arise whether the note is voidable in toto, or only for the excess beyond the sum which was authorized. The latter seems to us to be the true rule, and that the act of an *21agent, who exceeds his authority, binds his principal to the extent of his authority, but is void for the residue. 2 Kent, 617. Story, Agency, 158. Winth v. Crowther, 1 Cromp. and Jer. Ex. Rep. 316. If the principle of failure of consideration is applied to this note, the result is the same. There was a good consideration to the extent of the purchase of Blasdale & Grubbs, but none which can be extended to Gayden for the purchase of Beasley and Thompson.
The plaintiff should therefore be permitted to recover the amount for which Gayden agreed to become bound—the amount, namely, of the purchase of Blasdale & Grubbs—but no more from Gayden. From the nature of the transaction itself, the administrator might have inferred, that Blasdale & Grubbs had authority to bind Gayden for the amount of their own purchases at the sale; but that they had none to bind him for the purchases of others. There is not, however, in our view, any evidence to create a presumption of fraud on the part of the administrator, which would prejudice his right of recovery to the extent before indicated.
A new trial will be awarded, with instructions to conform to the principles herein laid down.
Judgment reversed, and new trial awarded.