Court Opinion

ID: 6410871
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:52:35.77125+00
Date Added: 2024-06-11T15:51:22.183533
License: Public Domain

Dewey, J.
The consideration of the questions arising in the case of Eastern Railroad v. Benedict, ante, 561, has led to a full examination of the adjudicated cases upon the question of the right of the principal, or real party in interest, to sue in his own name on a written promise made to his agent; and, as connected therewith, the liability of .the principal to be sued and charged in damages for the breach of a contract made by his agent.
To a certain extent, we have found the law to authorize the introduction of oral evidence as to the parties in interest, and for the purpose of showing from whom the consideration moved, or for whose benefit the promise was made. The cases cited, and particularly the English cases, are very decisive in favor of the exercise of this right in eases of ordinary simple contracts,' extending it perhaps somewhat further than we should feel authorized to do, without modifying some of the views stated in Stackpole v. Arnold, 11 Mass. 27; unless those remarks are to be considered as made peculiarly with reference to bills of exchange or negotiable promissory notes. While the recent English cases are found to be very strong in favor of the right to charge an unknown principal upon contracts made by his agent, upon oral proof of who is the real party; yet there will be found to be a leading distinction taken between cases of commercial paper in the form of bills of exchange and negotiable promissory notes, and other simple contracts—holding that no one but a party to such negotiable paper can be sued for the nonpayment thereof. Byles on Bills, (5th ed.) 26. Such is the doctrine of Emly v. Lye, 15 East, 7, where it was held that in the case of . a bill of exchange drawn by one only, it was not competent to charge others as parties in interest, but that the liability was confined to the party who signed the instrument. In Beck*571ham v. Drake, 9 M. & W. 92, where upon a written contract it was held that the real party in interest might be shown by oral evidence, the court distinctly except negotiable instruments from the application of the rule, Lord Abinger saying: “ Cases of bills of exchange are quite different in principle.” “ By the law merchant, a chose in action is passed by indorsement, and each party who receives the bill is making a contract with the parties upon the face of it, and with no other party whatever.”
The American cases will, we think, be found to maintain the same doctrine. Pentz v. Stanton, 10 Wend. 276, is strong to this point. Our own case of Stackpole v. Arnold, 11 Mass. 27, was a direct application of this principle. That was a suit upon a negotiable note, and the defendant’s name was not on the paper ante, 565. The oral evidence offered was however full to the point, that the person who signed the note was in fact the agent of the defendant, and that the note was given for the defendant’s debt. But the court held that no action could be maintained on the note against the defendant. That case has ever been recognized, certainly to the extent of its application to negotiable paper, as the law of Massachusetts. Bedford Commercial Ins. Co. v. Covell, 8 Met. 443. Taber v. Cannon, 8 Met. 460. If sound, it meets the present case, and discharges the private estate of Horace Gray from all liability on the draft.
It is urged, for the appellants,that that case must be considered as overruled by the late case of Huntington v. Knox, 7 Cush. 371; and especially that it was in conflict with the principles stated by the court in the opinion given in that case. It is true that the court do there recognize and apparently fully indorse the case of Higgins v. Senior, 8 M. & W. 834; and taking the remarks of the court without reference to the case to which they were applied, they might seem to be somewhat at variance with the decision in Stackpole v. Arnold. But the case of Huntington v. Knox was the case of a simple contract in writing, in reference to the sale of goods. The agent of the plaintiff, in making a memorandum of the contract and giving a receipt for money paid on account of the same, had used his own name exclusively; but his agency being fully proved by *572oral evidence, and the interest of the plaintiff shown as the owner of the article sold, the question was, whether the principal could maintain an action in his own name; and the court decided that he could, citing the case of Higgins v. Senior as a direct authority, as it was, for the case of Huntington v. Knox; for, like that, it was an action upon a contract not negotiable. The adoption of the language of the court in the case of Higgins v. Senior, as sound law, was certainly warranted for the purposes to which it was applied ; but it ought not to be held as going further, much less as overruling Stackpole v. Arnold, without any reference to it, or suggestion of that kind. It seems to us that the two cases may well stand together, applying the law, as stated in each, to its own peculiar facts.
We then recur to the contract in the present ease, and find it to be a negotiable draft, drawn by Joseph Barrell, in his own name, without any indication that he is not the principal, and payable to a third person, who indorsed it to the appellants. There is nothing in the margin or the heading of the draft, that indicates any other principal than Barrell. There is no single circumstance on the face of the paper, which in any way connects Horace Gray or the Pembroke Iron Works with the draft, unless it be the direction to the drawees, to “ charge the same to the account of Pembroke Iron Works.” It has been argued that this direction indicates that the Pembroke Iron Works are the real drawers. But no such inference can properly be drawn from that circumstance. Bills are often drawn by parties on funds of others distinct from the drawer, but with whom arrangements have been made to discharge such drafts.
It is further urged, on the part of the appellants, that the case of Fuller v. Hooper, 3 Gray, 334, furnishes a precedent for maintaining the present action. But, in the view we take of the matter, the cases are widely different. It is true that in that case Horace Gray, or the Pompton Iron Works, were not named on the face of the bill as drawers ; but it was drawn by “ W. Burtt, agent.” But the form of signature indicated that it was in fact drawn in behalf of some other party; and had it been in the form of “ H. Gray, by W. Burtt, agent,” or *573!l Pompton Ron Works, by W. Burtt, agent,” no question could have arisen as to the party liable thereon. It was not as strong a case as that last supposed; but there was in the margin of the draft, which was apparently a business draft prepared to be used for the Pompton Iron Works, “ Pompton Ron Works.” An agency was thus fully disclosed on the face of the bill, and the only further inquiry was, whether enough appeared to connect that agency with Horace Gray or the Pompton Ron Works. The court were of opinion that it was shown that the signature of Burtt was the signature of an agent; and that the face of the bill indicated who the principal was.
But in the present case the signature is without any indication of agency, and nothing on the draft shows that it was drawn by the Pembroke Ron Works; there is no doubt that Joseph Barrell made himself personally responsible as drawer; and we are of opinion that the form of the signature and the nature of the instrument preclude the appellants, who discounted the bills upon the names borne upon them, being those of Joseph Barrell as drawer, J. D. Andrews as indorser, and Horace Gray & Co. as drawees and acceptors, from resorting to other parties not named thereon as parties.
Nor do the facts present a case sustaining a legal claim against the estate of Horace Gray individually, on account of an original indebtedness independent of that upon the bill itself. It is a case of mere discount of a bill; and that a bill drawn upon a third party, and accepted by that party in favor of a fourth, by whom it was indorsed. There was no previous loan to Horace Gray, and no ground for setting up a previous indebtedness. Nor can the appellants maintain their claim upon the ground of an undisclosed principal, the character of the transaction being that of a discount of the paper upon the names borne upon it; and such being the original transaction, the appellants cannot go behind the paper and show that others received the benefit of the money paid for this bill.

Decree affirmed.