Court Opinion

ID: 6119087
Source: CourtListenerOpinion
Date Created: 2022-02-04 18:13:00.813454+00
Date Added: 2024-06-11T08:22:48.086403
License: Public Domain

By Senator Yerplanck.
I concur with the supreme court in their understanding of this negotiation. Taking together the two letters of the parties on which the bargain was concluded, the defendant appears to have acted merely as the known agent of the house at Trieste, for and on account of whom he had made the advances, and to whom the goods were consigned. He contracted for the foreign *258house and in their name, but made no undertaking for himself. This evidence of the correspondence is supported and confirmed by collateral proof of the general belief and understanding among New-York merchants, that the defendant was in business only as the agent of the foreign house. In such dealings, it is settled that the principals are alone responsible, unless there be some special circumstance to fix the responsibility upon the agent personally. I do not think that there is any such circumstance in this case; although the fact of the defendant being an agent of a house abroad, added- to the authority of Judge Story, the reasons he assigns, and the unqualified language he uses as to the liabilities of factors purchasing for foreign merchants, occasioned at first some doubt in my mind. In his late valuable work on agency, Judge Story says, “ On the ground of general convenience and the usage of tráde, the general rule obtains, that agents or factors, acting for merchants resident in foreign countries, are held personally liable upon all contracts made by them for their employers; and this, without any distinction whether they describe themselves in the contract as agents or not. In such cases it is presumed not only that credit is given to such agents, but that it is exclusively given to them to the exoneration of their employers. Still the presumption is liable to be rebutted by proof, that the credit was tgiven to both principal and agent or to the principal alone.” Story on Agency, § 268. See also the reasons assigned in the preceding section, and in § 290. To the same effect a respectable recent English elementary writer speaks thus: “It seems that when a British agent contracts for a foreign principal, the agent is liable.. Smith on Mercantile Law, p. 78. Now, if this be also the doctrine of our own commercial law, it may well be doubted whether the language of the correspondence, though showing Stainer “ to describe himself in the contract as an agent,” is yet sufficient, even with the collateral evidence, (conclusive as the whole would be in the case of agent for a domestic principal,) to rebut such a positive legal presumption, and to prove that credit was given only to the Trieste house, so as to authorize the *259court to pronounce on the facts submitted to them by the referees, “ that the defendant was not personally liable upon the agreement.” But upon examining the several cases cited in support of this rule, I am satisfied that Judge Story lias stated the doctrine in too strong and unqualified terms, as if this presumption were a universal inference of law, applicable every where. I think, on the contrary, that this is a presumption founded altogether upon usage anil the particular course of trade, and arises only, when and where that usage is known or proved to exist; of course, then, that it is not an unvarying legal presumption, to be applied to any contract, mads any where, by a factor or agent representing a person or commercial house in some foreign country.
Doubtless there may be such a local usage or understanding controlling all contracts of this sort amongst us, as there is certainly in London, and probably all over England. But unless it be so firmly settled and generally known that it may be assumed without proof, like any other mercantile mode of business of common and public notoriety, such a usage must be shown before the consequent presumption of the agent’s liability and the principal’s exoneration can arise. I can find no judicial authority for considering this as a rule of general commercial law, independent of a particular course of trade, unless it be a very cautiously expressed dictum of Chief Justice Eyre, giving his own individual opinion on the point, after the case in which it had been raised had been decided by the court upon a very different ground. He then added : “1 am not aware that Í have ever concurred in any decision in which it has been held that if a person describing himself as an agent for another residing abroad, enters into a contract here, he is not personally liable on that contract.” DeGaillon v. L’Angle, 1 Bos. & Pull. 368. In the other cited cases the rule is placed on the ground I have stated. Thus, in Patterson v. Gundasequi, 15 East, 70, Judge Bailey says ; 66 There may be a particular course of dealing with respect to trade, in favor a foreign principal, that he shall not be liable in cases where a home principal would be liable—that would be a ques*260tion for the jury.” So again, some years after, in Thomson v. Davenport, 9 Barn. & Cress. 78, Lord Tenderden argues thus: “ Where a British merchant is buying for a foreigner, according to the usual understanding of all per? sons in trade, the credit is given to the British buyer, not to the foreigner. In this case the buyers lived at Dumfries, and a question might have been raised for the consideration of the jury, whether in consequence of their living at Dum? fries, it may not have been understood among all persons at Liverpool, that the plaintiff had given credit to the agent alone, and not to persons living in a country not amenable to the jurisdiction of our courts.” Now, if this presumption rested not upon the known approved course of trade in the place, but upon a general principle of mercantile law', it is manifest that -there would be no propriety in leaving it to the jury to .consider whether it extended to principals living in Scotland or not; or what was the understanding amongst all .persons living at Liverpool.” Above all, Lord Tenterden decidedly recognizes “ the usual understanding of all persons in trade,” as in effect, the reason and author? ity for the presumption of credit being given to the British buyer, and not to the foreigner. The language of Judge Bayley, in the same case, is equally marked •: There may be a course of trade by which the seller will be confined to the agent who is buying. Generally speaking, that is the case where an agent here buys for a house abroad. There may also have been .evidence of a course of trade applica? ble to an agent acting for a firm resident in Scotland.” Here as late as 1829, this able and very experienced judge speaks of the usage on which the presumption is founded as a “ course of trade which may exist.” He considers that course of trade alone as “ confining the seller to the agent.” He does not say that this course .of trade holds universally with this effect: but “ that generally speaking, it is the case and he suggests that there may have been evidence before the jury of “ such a course of trade applicable to dealings with Scotland.” The language and reasoning of this case admit, I think, no other inference than that both these eminent judges (of the highest authority in all com? *261mercial law,) considered the legal presumption of liability of the agent of a foreign principal, as resting entirely upon the actual custom and understanding of trade ; that it does not apply universally as a matter of course, but arises only upon known and admitted usage, or upon the positive proof of some particular course of trade.
To these judicial opinions I add the authority of a late English legal writer, frequently quoted with high approbation by Judge Story, jLloyd, in his notes on Paley on ,Agency, thus mentions the rule, evidently with some doubt, -as to its extent, and referring it wholly to the usage of trade : •<e It seems, that by the usage of trade, if the principal be a foreigner, the credit is considered as having been given to the English broker, and that he -only,, and not the foreign buyer, will be liable. That question is, however, for a jury.” I therefore infer that the presumption is not one raised by legal reason, to be taken notice of, as of course, and applied to such contracts wherever made, but one of special usage, or of local understanding, entering into and thus controlling -all contracts unless excluded by express stipulation. If, however, the course of trade and of credit is now so fixed -and so universally recognized in England, as to have become a rule of presumptive evidence —a legal inference from known public usage, to be applied without special proof of its existence; still I cannot regard it as being necessarily a part of our own commercial law. It forms no part of the old common law of England, nor is it deduced from any settled doctrine or principle of that law, otherwise than as a rule of presumptive evidence of intention, growing out of positive and unvarying local commercial usage. The oldest trace of it before our revolution, which I have been able to find, -is in the first edition of Buller’s Nisi Prius, the work of a then young though learned lawyer, who there refers only to an older manuscript nisi prius case, tried in 'London, where the evidence of such a course of trade might probably have gone to the jury, or where, it may have been •admitted as a matter of notorious custom in London. I find no judicial notice of-it in the reports until 1797, when Chief Justice Eyre expressed his opinion on the point, as *262having never concurred in any previous decisions contradictory to this rule .; and that such contradictory decisions had been made, I think his -language intimates. The other cases are later, and from all of them I infer that this presumption, (if at length it has become a strict legal presumption, of which I am not satisfied,) has grown up in modern times from the peculiar character of the foreign trade of England. If this presumption be now the law of the English courts, without requiring evidence of usage in every case, it is founded upon admitted general custom and understanding ; but it is now law deduced from the doctrines of the old common law, or resting upon reasons of natural equity or universal public policy, extrinsic to the local usage of trade, and applicable alike at London and in New-York. If such were the .case, I should respect the decision of the able and learned men who adorn the English courts;' because their decisions carry with them the authority of learning and wisdom, arguing from principles and usages common to their country and our own. If-the judges of England have established this as the law of their tribunals, within the last few years, they have done so for reasons and upon former repeated evidence peculiar to the course of trade in England, and not of necessity applicable elsewhere. They have found a usage or course of business so universal, so familiar, as to form a part of every contract on foreign account without being expressed in words. On this, a legal presumption may have been at length raised, as of course. But if here, we have no such universal unvarying usage, nor any evidence in any particular case of a similar special course of trade, it follows that the legal presumption must fall to the ground.
Such a mercantile usage may naturally grow up here, either in the general course of trade, or in any particular branch of distant commerce ; and, whenever it becomes so known, or wherever it is proved to exist, it should certainly raise.the same presumption with us as in England. But it would be of the greatest public inconvenience to assume a general rule applicable to and exonerating every principal residing in another state, and so, (according to Lord Ten*263terden’s idea,) “ not amenable to the jurisdiction of our courts,” or even to principals not resident within the Uuited States. In the present state of business in our commercial metropolis, the rule is in fact contradictory to the understanding on which a vast number of such contracts are made. Besides, I cannot but think that as a mere rule of commercial policy, it would be hazardous to establish any general strong presumption that credit on sales or consignments is not given to well known foreign houses, or to merchants of Boston or New-Orleans, but merely to the transient and often irresponsible agent,, temporarily resident in this state. This would exonerate the foreign trader not only here, but, by the application of the doctrine of the lex loci contractus, it might also do so in the courts of his own domicil ; unless it could be expressly shewn' that the foreign principal was alone trusted, which it would commonly be difficult to do, in the face of a strong legal presumption to the contrary. Such a usage and the consequent presumption, might grow up in New-York with great public convenience as to trade with China or South America, and yet be absurd and injurious in respect to London pr Liverpool. It might even become general in the city of New-York, as to foreign trade, and yet be wholly inappropriate to the business of Buffalo of Oswego with other states of the Canadas. Until commercial convenience gives evidence to the contrary by express, universal and notorious usage, or unless where such usage can be specially proved to exist in some particular branch of business, it is safer and wiser to adhere to the general and ordinary law of agency, keeping the known principal responsible where the agent discloses his name and acts avowedly in his behalf; and leaving it to the discretion of the American trader to obtain the additional security of the factor or agent, or to give credit to him only, when he judges that to be the most for his own interest.
Ho usage or course of business analogous to that prevalent in England, being notorious or well established by former evidence as existing here, and no proof having been offered to the referees of any special or local usage, or com*264mon understanding, charging the agent alone, and not his foreign principal, for purchases or contracts made avowedly for such known principal, the case must be governed by the general law as to the contracts of a private agent, clothed with full authority and acting' openly in' behalf of his principal.
The judgment of the supreme court should, therefore, be affirmed.
On the question being- put, Shall' this'judgment be reversed? the members of the court divided as follows:
In the affirmative: The Chancellor and Senators Hull, H. A. Livingston, Paige, Spraker, Van Dyck—-6.
In the negative: The President" of the Senate, and Senators' Beardsley, Fox, Furman, HawRins, Hunt, Huntington, Jones, Maynard, Moseley, Nicholas, Peck, Powers; Skinner, Sterling, Verplanck, Wager, Works —18.
Whereupon the judgment" of the supreme court was ae-firmeb.