Court Opinion

ID: 6229384
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:18:24.739966+00
Date Added: 2024-06-11T08:57:48.074514
License: Public Domain

The opinion of the Court was delivered, by
Woodward, J.
A creditor, who orders goods from his debtor, which the latter owns and has on hand to sell, is not bound to accept a draft in favor of a third party for the price of the goods, and may set off against the price the vendor’s indebtedness, on the ground of mutual dealings. But when a creditor sends his debtor into a distant market, as his agent, to purchase goods on his account, and the debtor executes the commission, the law implies a promise on the part of the creditor to pay the seller of the goods in the usual course of business, and he cannot set-off against the price the indebtedness of his agent. To permit the set off in *439such a case, would be to pay one man for another man’s property. Relf’s letter of the 18th January, 1849, constituted Hazard his agent for the purchase of 50 bales of cotton in the Mobile market at current rates, and whilst Hazard kept within the circle of an agent’s duties, his acts bound his principal. Was the draft of 13th February within the scope of his authority ? It was quite in the usual course of business, and in conformity with the practice of the parties. Authorized'to purchase cotton and ship it, but furnished with no means for the purpose, Hazard’s negotiations with the bank must be regarded as in'the line of his authority, for they were indispensable to the execution of the order. On the request of the defendant’s agent, the bank furnished the means, and became thus virtually the seller of the cotton. A draft on the cotton in favor of the bank was no more beyond the agent’s authority, and no more subject to equities existing between him and his principal, than a draft in favor of the merchant who furnished the cotton would have been. The idea of set-off springs from the erroneous conception that this was a dealing between the defendant and his agent, instead of a dealing, through an authorized agent, between the defendant and the bank.
It is objected that the defendant’s letter was not shown to the bank. But this is immaterial. An agent’s authority to bind his principal depends on his possessing, not on his exhibition of credentials that are clear. If the bank were content to purchase the draft on Hazard’s representations of his authority, and it turns out that he had authority to draw, the defendant has no reason to complain that the bank had not more evidence than was sufficient to satisfy them of the agent’s authority.
The duty of the defendant to accept the draft results out of his agent’s authority to draw it. Especially clear is that duty in view of the fact that the agent gave prompt notice of the purchase and shipment of the cotton and of the draft, and forwarded the bill of lading, all of which the defendant received without protest or disaffirmance before the draft was presented. The purchase, the shipment, and the draft were connected and dependent acts; and that Relf did not m^an to disaffirm them is shown by his subsequent receipt of the cotton, and appropriation of - it against a 'demand of redelivery. But if he meant to affirm the purchase and consignment, he was bound to 'accept the draft. He might not affirm so much of his agent’s conduct as was beneficial to himself, and disaffirm the rest, when all of it was according to instructions.
On the whole, we see not an inch of ground for the defence to rest on, and we think the judge was right in directing a verdict for the plaintiff.
There is nothing in the exceptions to evidence which demands a reversal of the judgment, and it is accordingly affirmed.
Judgment affirmed.