Court Opinion

ID: 8270483
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:31:31.524356+00
Date Added: 2024-06-11T16:43:29.863466
License: Public Domain

The opinion of the court was delivered by
Dbpue, J.
The transaction was a sale of personal property by an agent who had authority to sell, and who sold in his own name without disclosing his agency, to a purchaser who bought in good faith, believing that the agent was the owner, and the inquiry is, under what circumstances such a purchaser, in an action by the principal for the contract price, is entitled to set off a debt due him from the agent.
The son, when he negotiated the sale, had neither the possession of the property nor any muniment of title to it in himself. He sold it in his own name, without any authority from his father to sell it in that way.
The two leading cases on the subject of the right of a purchaser of personal property to set off a debt due to him from the agent through whom the sale was made, where an action has been brought by the principal to recover the contract price, are Rathbone, Jr., v. Williams, reported in a note to George v. Claggett, 7 T. R. 359, and Baring v. Corrie, 2 B. & Ald. 137. In Rathbone v. Williams, the action was for the value of goods sold. The sale was made through Rathbone, Sr., & Co., who were the plaintiff’s factors, and had sold the goods in their own names as principals, without disclosing their agency. The purchaser, in an action by the principal for the contract price, was allowed to set off a debt due to him from the factors. In Baring v. Corrie, the sale was made by a broker, who did not disclose his principal; and the purchaser, in an action for goods sold, brought by the principal, was not allowed to set off a debt he had against the broker.
The distinction between these two cases is explained by Abbott, C. J., in his opinion in Baring v. Corrie. He says: The distinction between a broker and a factor is not merely *541nominal, for they differ in many important particulars. A factor is a person to whom goods'are consigned for sale, * * * and he usually sells in his own name, without disclosing that of his principal. The latter, therefore, with a full knowledge of these circumstances, trusts him with the actual possession of the goods, and gives him authority to sell in his own name. But the broker is in a different situation.. He is not trusted with the possession of the goods, and lie ought not to sell in his own name. The principal, therefore,, who trusts a broker has a right to expect that he will not sell in his own name.” And, referring to the cases cited in which the set-off had been allowed, including Rathbone v. Williams, the Chief Justice said that “in all the eases cited,, the factor was in actual possession of the goods, and the purchaser could not know whether they belonged to him or not,, and at all events, they knew that he had a right to sell the goods.” In Baring v. Corrie, where the claim of set-off was-disallowed, the property sold was not in the possession of the-broker who negotiated the sale- It was lying in the West India docks, from which it could not be obtained without a delivery order, countersigned by the plaintiffs’ custom-house clerk; and, as was said by Bailey, J., “the plaintiffs did not trust the broker with either the muniments of their title or the possession of the goods, as was done both in the case of Rathbone v. Williams and that of George v. Claggitt.”
The language of Abbott, C. J., and Bailey, J., quoted from Baring v. Corrie, is quoted with approval by Cresswell, J., in Fish v. Kempton, 7 C. B. 687, 693. And the’ distinction between a factor having the possession of the goods with power to sell, under the usages of trade, and a broker or other agent who has not such possession, has been adopted as settled' law in cases where the right to set-off has arisen — the right to a set-off being recognized only where the sale was made by a factor. Carr v. Hinchliff, 4 B. & C. 547; Purchell v. Salter,. 1 Q. B. 197; Semenza v. Brinsley, 18 C. B. (N. S.) 467, 477, per Willes, J.; Ex parte Dixon, 4 Ch. Div. 133; Borries v. *542Imperial Bank, L. R., 9 C. P. 38; Hogan v. Shorb, 24 Wend. 458, 462; 2 Kent 633.
Ramozetti v. Bowring, 7 C. B. (N. S.) 851, is also an important case in this line of .decision. The action was brought for a bill of wine sold and delivered to the defendants. The plaintiff carried on the business of a wine merchant, under the mame of the Continental Wine Company. The business was conducted by one Nixon, the plaintiff’s son-in-law. Nixon, representing himself to be the proprietor of the Continental Wine Company, induced the defendants to take the goods in .question in part satisfaction of his debt to them. The defendants contended that the goods having been sold by Nixon, the .agent, without disclosing his principal, the contract could not be enforced by the latter, discharged of the defendants’ right of set-off. The Common Serjeant left it to the jury to say whether the plaintiff or Nixon was the real owner of the business, telling them to find for the defendants if they were of opinion that Nixon was the owner ; but if they thought the plaintiff was owner they must find for him. The court in ■band held this to be a misdirection, and that the proper question was whether the plaintiff had so conducted himself as to enable Nixon to hold himself out as the proprietor, and whether the defendants dealt with him on that footing.
Mr. Chitty, with characteristic exactness, states the principle to be that “ Where a principal permits one who is not known to be an agent to sell as apparent principal, and after-wards intervenes, the buyer is entitled to be placed in the same situation at the time of the disclosure of'the actual principal as if the agent had been the real contracting party; and he is entitled to the same defence against the principal, whether it be by common law or by statute, as he was entitled to at that time against the agent, the apparent principal. Accordingly, if in such a case the defendant has acquired a set-off against the agent, before the principal has interposed, the latter will be bound by the set-off” “ But,” he adds, “ this doctrine does not apply where the agent is a mere broker, *543and has not the possession of or is not intrusted with the indicia of property in the goods.” Chitty on Cont. 306.
In the case now before the court the son had neither the possession nor the indicia of property. He was an agent with a naked power to sell. The judge properly denied the defendant’s claim to set off the son’s debt, and the judgment should be affirmed.
For affirmance — The Chancellor, Chief Justice, Depue, Dixon, Knapp, Magie, Parker, Scudder, Van Syckel, Clement, Cole, Green, Kirk, Paterson, Whitaker. 15.
For reversal — None.