Court Opinion

ID: 5649124
Source: CourtListenerOpinion
Date Created: 2022-01-11 21:53:14.635826+00
Date Added: 2024-06-11T08:38:29.939959
License: Public Domain

Hunt, J.
Van Inwagen & Co., of Chicago, Illinois, were the special agents of the defendant, who resided at Buffalo, for the purchase of a cargo of number one corn, to be loaded upon the schooner Waureean, at the former place. The authority was in writing, and its legal effect was fixed by its terms. Van Inwagen & Co. were not the general agents of the defendant, and the power to bind their principal extended no farther than was given by the actual authority conferred upon them. They could not, like general agents, bind their principal, when acting within the ordinary scope of the business they were authorized to transact, although beyond their authority. (1 Parsons on Contracts, 40, 41 marg.; Story on Agency, §§ 105,126; Nixon v. Palmer, 4 Seld. 398.) They were acting under precise written directions, limited to the particular action in question. All persons dealing with them were therefore bound to know the extent of their authority, and to' inquire into its limitations. (Story on Agency, §§ 81, 83.) In the language of Judge Cowen in North River Bank v. Aymar (3 Hill, 262), “ The ground on which the rule rests is familiar. The appointee need not deal with the attorney unless he choose, and it is very reasonable that he should be bound to inspect the power, when in writing, or learn its language the best way he can, when it is by parol. On becoming acquainted with it he shall be holden to understand its legal effect, and must see, at his peril, that the attorney does not transgress the prescribed boundary, in acting under it.”
The authority to purchase t]ie load- of corn, by its terms, gave no authority to Van Inwagen & Co. to borrow the money with which to buy it. There are, however, certain incidental powers accompanying the appointment of any agent, which it is supposed may affect the present question. Thus, an authority to buy or sell goods includes an authority to execute the proper vouchers therefor; an authority “ to do the needful ” in respect to the fulfillment of an award, carries the power to prepare a lease, if required by the award; an authority to sell a horse includes the power to ' warrant; a power to buy a thing without any statement at *464what price, includes the power to buy at any price; a power to sell goods includes a power to receive payment on the sale; a power to recover and receive a debt includes a power to sue and a power to execute a release to the debtor; the possession of a bond by an agent is evidence of an authority to receive the money due upon it. (Story on Agency, §§ 102, 103.) So it has been held in Louisiana, that an agent authorized to buy a cargo for his principal, if no other means or funds are provided, has an incidental authority to give notes, or draw and negotiate bills on his principal for the amount. (Perrotin v. Cuculla, 6 La. 587; see, however, on this point, Paige v. Stone, 10 Metc. 160; Taber v. Carron, 8 id. 456; Webber v. Prest. of Williams’ College, 23 Pick. 302.)
In the present case, I think the authority to Van Inwagen & Go.' meant, simply, that they should procure a cargo for this, vessel by their own funds, or upon their own credit. It implied further that they should be paid for the entire service thus rendered, and that they, or the banker from whom the funds were obtained by them for the purchase, should hold the title to the property purchased until it was. paid for by the principal. It is not necessary to decide that if Van Inwagen & Co. had purchased the corn of an owner, and had given to such owner a bill of exchange upon the defendant for the amount, that the defendant would not have been bound by that act. According to the case of Perrotin v. Cuculla (supra), he would have been bound. According to the Massachusetts cases he would not have been bound. The authority to be exercised, either under this principle, or upon the principle as I have stated it, is vastly different from a power to the agent to borrow money for the purpose of making the purchase. In addition to the loss of the right to repudiate the purchase, if in violation of the instructions given, the integrity of an agent, and the hazard of loss to the principal by his dishonesty or his misfortunes, are very different in the cases supposed. The appellant’s proposition involves the broad ground that an authority to a broker to buy and load upon a'vessel a cargo of corn or other produce, gives to the agent the power to borrow the money upon the *465credit of the principal with which to make the purchase. This involves a claim of expensive and dangerous powers. When he borrows, the agent of right receives the money into his own possession. If he spends it, or loses it, or is robbed of it, before a cargo is purchased, the principal is responsible for the loan equally as if the cargo had been received by him. Many men will .honestly discharge the duties of buying and selling merchandise, who will be less faithful in the application of moneys actually in their possession. Practically, the money, when received- by the agent, would be deposited to his own credit, and drawn upon to pay for the cargo when the loading was completed. The. money must be borrowed in advance of the purchase, and some time must elapse before the delivery can be completed. Is the principal to be subject to the hazard both of the hon- ' esty and the solvency of the agent during this period % If a commission of bankruptcy is sued out in the mean time - against the agent, would the principal have a specific lien upon the funds thus borrowed, or would he occupy the position of a creditor simply ? Upon the principles held by the ■ court "below, the course is plain and open, none of these difficulties will arise. I think they are sound. I do not find any authority in the books for the proposition claimed by the appellant, and it would, in my opinion, be a dangerous innovation upon the principles of the law of agency. .
If the custom of Chicago could in any event control the principles of law applicable to similar transactions, it certainly does not in the present case upon the evidence presented. The testimony of the merchants, whose evidence was taken, is uniform, that, in the cases mentioned by them, the money is advanced upon the credit of the parties to the draft and the security of the property purchased. This is exactly what the plaintiff had here. Ho one witness testified to the existence of a custom for the agent to borrow money generally, on the. credit of the party desiring to purchase the cargo, or that would make the principal liable where the draft was not drawn in his name, or upon him, and where the property was not consigned to him.
*466An agreement that this borrowing of money was ratified by the defendant, is drawn from the fact that he telegraphed “ draw as before.” In the July preceding, the agents, Van ' Inwagen & Co., had drawn upon B. S. King, Buffalo, for the cargo then purchased. I do not discover any evidence in the case, or that was offered, which tended to show a knowledge by the defendant that the purchase-money for that cargo was borrowed upon his credit. The transaction, as presented to the defendant, was in all respects the same in form as it would have been if Van Inwagen & Co. had themselves advanced or themselves borrowed the money, and without reference to the credit of the defendant. It cannot therefore amount to a ratification. It would have been hardly allowable that the jury should have given such effect to this dispatch if the defendant had possessed that knowledge. The defendant had, on the 19th of August, written' to Yan Inwagen & Co. that he thought he could" make a different arrangement with Cutler, so that he could draw on him at sight, and thus save interest and get a premium for his draft. For some reason not explained, this arrangement was not perfected, and the defendant therefore telegraphs to his agents, “ Did the schooner load and leave to-day ? Draw as before.” I think this was a simple notification that the proposed arrangement had fallen through, and that the agents should act without reference to it. The jury should have given it no other effect. In whatever form drawn, or from whose funds soever the draft should be taken, the interest to be saved and the premium to be gained, would inure to the benefit of the defendant. All expenses were necessarily to be paid by him, including interest, and a premium on the draft, as well as the savings of interest, would go to its account, in the way of reducing the balance to be paid by him.. .ISTo inference is .therefore to be drawn against the defendant, for these expressions in his letter.
Judgment should be affirmed.
All the judges concurring,
Judgment affirmed.