Court Opinion

ID: 5469669
Source: CourtListenerOpinion
Date Created: 2022-01-09 20:27:07.986689+00
Date Added: 2024-06-11T08:33:15.449006
License: Public Domain

By the court, Bockes, Justice.
It is urged that the defendant’s set-off was not admissible, because not set up in the answer. Also that the note sought to be set off was not read in evidence. But neither of these objections were raised on the trial before the justice, where they could have been readily obviated if taken, and they are not therefore now subjects of consideration.
The question in this case is in regard to the claim of the defendant to set off the note of Bush against the plaintiff’s demand in this action.
It is a well settled principle of law that if goods are sold by a factor or agent in his own name without disclosing his principal, the purchaser has a right to set off a debt due *523from him, in an action by the principal for the price of the goods. (Story on Agency, §§ 390, 404, 419, 420, 444; Ray-born agt. Williams, 7 T. R. 356, note a ; George agt. Clagett, 7 T. R. 355; Westwood agt. Bell, 4: Camp. 348, 353 ; Barring agt. Corrie, 2 Barn, & Ald. 137 ; 3 Hill, 72, 2 Kent, 632 ; Hogan agt. Shorb, 24 Wend. 458 ; Bliss agt. Bliss, 7 Bosworth, 339.) This rule however is subject to the qualification, clearly stated by Judge Woodruff in Bliss agt. Bliss, that though the sale be made without disclosing the principal, yet if the purchaser knows or has reason to believe that the seller is not the owner, but is acting in the sale as an agent, the purchaser can not make the set-off. Judge Bronson says, in Hogan agt. Shorb, that: “ When the name of the principal is disclosed at the time of the sale, the vendee has no right to set up any equities between himself and the factor, to defeat the action of the owner; and the same consequence will, I think, follow if the vendee knew or had good reason to believe he was dealing with the agent of another, although the name of the principal was not disclosed.” This qualification of the rule above stated, is marked in all or nearly all the cases above cited. And it was said in Barring agt. Corrie, by Bayley J. in effect, that when the purchaser had the means of knowledge, and the circumstances were such as should have put him on inquiry, he was negligent in not inquiring, and could not make such set-off against the true owner. (Moore agt. Clementson, 2 Camp. 22; Maanss agt. Henderson, 1 East, 335; Fish agt. Kempton, 7 Man. Gran, & Scott, 687 ; Brown agt. Robinson, Caines’ C. 341; Gordon agt. Church, 2 Caines’, 299.) The question, therefore, to be here determined is this : Did the defendant, when he made the purchase of the sewing machine, know or have reason to believe that Bush was selling as agent and not as principal; or were the circumstances such as to put him on inquiry in that regard ? If so, then, according to a long line of authorities, the defendant was not entitled to his set-off.
*524I am inclined to the opinion that there was evidence in the case sufficient to make it a question of fact whether the defendant had not reason to believe that Bush acted as agent; also, whether the circumstances were not such as should have put him on inquiry in that regard.
It seems that the defendant knew by report that Bush was doing business in the name of another; that is, that he was doing business, or assuming to do business, for another. The defendant also purchased the note for fifty cents on the dollar, raising an inference of Bush’s irresponsibility. Bush had advertised his business as agent in the village papers, which, however, the defendant had not seen until after the purchase; and the bill of sale was made in Bush’s name. On this evidence, was not the justice authorized to find, either that the defendant had good reason to believe that Bush was selling as agent, or that the circumstances attending the sale were such as to put the defendant on inquiry in that regard ? The fact that the bill of sale was made in the name of Bush, is not conclusively in defendant’s favor ; but this must be considered in connection with the other evidence.
In Barring agt. Corrie, the bill of sale was in the name of Coles & Co., who were agents merely. In the case cited, Abbott, C. J., says: “ They (the defendants) knew that Coles & Co. acted as brokers and merchants ; and if they meant to deal with them as merchants, and derive a benefit from so dealing with them, they ought to have inquired whether, in this transaction, they acted as brokers or not; but they make no inquiry.” And he adds : “ They might have made inquiries in the circumstances of the case if they had not chosen to remain in ignorance.” So in the case in hand, the defendant knew by report—that is, he had been informed—that Bush was doing business in the name of another. This was the same in substance as if he had seen the advertisement in the newspapers, for in such case he would have known that he was doing business for *525another by report—by hearsay. In this the case is very like Barring agt. Corrie. In that case the defendant knew that Coles & Co. acted as brokers, and also as merchants.. So in the case at bar, under the most favorable construction to be given it, the defendant knew—having been so informed—that Bush acted for another in some of his business transactions. Abbott, C. J. says in substance, that in cases when the party acts for another, as well as on his own account, the vendee should inquire, or remain in ignorance at his peril. The argument of Bayley, J., in Barring agt. Corrie, is to the same effect. In Brown agt. Robinson, (Caines’ Cases in Error, 341,) the facts were these: The plaintiffs consigned the property to Cooke, to be sold by him as their factor. Cooke sold to the defendant without notice that he was plaintiff’s agent, nor, as the case states, was there any evidence offered to show that they knew that he acted as agent for the plaintiffs, or any other person. But it was proved “ that it was generally known that Cooke was factor to the plaintiffs, and that he then transacted business as well on his own account as upon commission.” The court held that the defendants could not set off a debt (promissory note) due to them from Cooke. Judge Bronson says in Hogan agt. Shorb, that a mere general knowledge that the person selling the goods is a factor, if he also carry on business on his own account, will not be sufficient to charge the vendee with notice, and cites Moore agt. Clemension, (2 Camp. 22). This observation does not seem in entire consonance with the case of Barring agt. Corrie, and Brown agt. Robinson. But Judge Bronson recognizes the rule that if the vendee have good reason to believe that the vendor is acting as agent of some other person in that particular transaction, he will not be entitled to the benefit of set-off of a demand against the agent. In Bliss agt. Bliss, (7 Bosworth, 339,) the bill of sale was in the name of the agent, with the addition “ foreign dry goods commission merchant.” It was held that these words *526conveyed notice of his agency to the vendees, or were sufficient to put them on inquiry, and their set-off was not allowed.
The introduction of these words into the bill of sale, make, in my judgment, an important distinction between that case and some others cited. But there was in the case under examination, no evidence that Bush carried on any business on his own account, certainly no more than there was in Barring agt. Corrie. It seems therefore, that according to the decisions, a mere general notice to the vendee that the vendor is acting as agent, is sufficient to deprive him of his set-off of a debt due him from the agent in ail action by the principal.
In my judgment there was sufficient evidence in the case to support the finding of the justice; if so, his judgment should have been affirmed by the county court.
I must advise the reversal of the judgment of the county court, and the affirmance of the judgment of the justice.
I have arrived at this conclusion after considerable hesitation and study, inasmuch as it was against the judgment of a court whose opinion is entitled to the highest consideration.