Court Opinion

ID: 5465726
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:52:08.308735+00
Date Added: 2024-06-11T08:33:06.054181
License: Public Domain

By the Court,

Nelson, Ch. J.
The plaintiff having dealt with the agent of the defendants was bound to inquire into the authority under which he acted, and therefore is presumed to be cognizant of the restrictions and limitations therein prescribed; and should have seen to it, that his dealings were kept strictly within their scope and limit. As the power in this case was in writing, he should have' called for that-instrument and examined it for himself; if *151he has neglected to do so, it was his own fault, and any failure to comply with the conditions therein, for this reason, can in no way vary or affect the liability of the principals. That must be determined by consulting the instrument, or in case of a departure, by proof of subsequent ratification with full knowledge.
It is clear, therefore, that the giving of the two notes by Greves for the balance of the purchase money, imposed no obligation upon the defendants; these were given wholly without authority, and imposed liability upon no one but himself; he stood individually responsible to the plaintiff.
Two grounds are put forth, upon either of which, it is insisted, the defendants are still liable, notwithstanding this departure from the authority.
1. That they have accepted a conveyance of the lands, and must, therefore, be regarded as having ratified the purchase, in the way and upon the terms it was made.
There is no doubt this act precludes them from disavowing the purchase, and avoiding the payment of the purchase money, as they might have done, if they had refused to accept the conveyance. But fixing an original liability upon the defendants, alone, can not help the plaintiff.
The material and controlling question in the case is, not whether they were liable, that is admitted; but whether they have not already' advanced the payment, according to the terms of the power 1 I think they have. That instrument shows a fund provided by the defendants upon which the agent was to draw from time to time as the purchases were made. He might doubtless have drawn directly in favor of the vendor or to his order, and have made the payments in that way; or in favor of himself, and with these funds made the necessary advances and ultimate payments, as the fulfillment of the contracts of purchase may have required.
The power, obviously, contemplates that the several payments should be made in one or the other of these modes, and if in this case drafts had been given to the plaintiff for the balance of the purchase money at the time of the contract, there can be no doubt of the obligation of the defend*152ants to have met them. But he chose to take the individual notes of the agent, in no way connected with, but wholly independent of his authority, and this known to him, or at least he is chargeable with knowledge, leaving it open to the former to draw for the funds that must become necessary to meet them at maturity, and discharge his personal liability; and, which in effect, have been drawn for, and are now, for aught that appears, in his hands. At all events, the full amount has been advanced to him on drafts, over and above all other purchases that have been made.
After this, the plaintiff is not at liberty to change the form and shape which he chose to give to the provision for securing the balance of the purchase money, when we see that such change would work manifest fraud and injustice to the defendants.
2: It is further insisted in answer to the objection of departure from the authority, that the defendants approved of the same after a full disclosure by the agent of the terms and conditions upon which it was made.
One answer to this ground is, that Graham, one of the defendants, was not present, and the approval of all of them is essential to maintain.the action.
But the more decisive answer is, that the nature of the particular securities given by the agent for the balance of the purchase money was not disclosed, and hence there could be no ratification of them. They were, it is true, advised that the purchase had been made; that time had been given for payment of part of the purchase money; and knew that they were responsible for such payment; so they might well have believed without this information; as, for any thing they knew or were advised to the contrary, at the time, the purchase had been made in pursuance of the authority given to the agent. I do not see that their liability is thus made any stronger, or broader, than that which arose out of the power, or, at least, resulted from the acceptance of the conveyance of the lot That bound them to provide for the ultimate payment; but which we insist has been made accordingly, by furnishing the agent who gave hi's own liability with the funds to meet it As we have already stated, this *153seems to have been the mode contemplated in the power, where, instead of drafts drawn at the time, in favor of the party dealing with the agent, he chooses to take the personal security of the latter, leaving him to provide the means for discharging the obligation.
It is true, the agent annexed to his name, as maker of the notes, “ attorney for Watts Sherman,” but that in no way changes the legal character of the transaction, as there was no pretence of authority for making notes in his name; the addition neither bound him, nor made them less the individual notes of the agent; and the plaintiff, being- chargeable with a knowledge of the extent of the authority, must be taken to have known this at the time.
A present fund having been raised by the association, and the agent authorized to draw at ten days’ sight for payment of all purchases made, I think the plain intent of the parties clearly was that they should be made for cash. There is no intimation in any part of the articles of association of a desire that any credit should be obtained; nor is there any express provision authorizing the agent to purchase on such terms. The whole scheme seems to be founded upon the contrary idea: else why provide the fund, and require that all the payments should be made by drafts to be drawn directly upon it ? Still, I admit, as there is no express restriction in respect to the length of time for which the drafts might be drawn, doubtless they could be extended beyond the ten days specified, and still fall within the authority. But, even then, the mode of payment by drafts .was a material provision, and would operate as a check upon the agent, as the holder would in the usual course of business, and for his own security, be interested in presenting them at an early day for acceptance. For, although presentation for acceptanee might not be essential to preserve any liability created under the power, it would still be a step, almost of course, for more abundant caution.
New trial granted, costs abide event.