Court Opinion

ID: 3612152
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:56:00.38843+00
Date Added: 2024-06-11T14:24:17.809295
License: Public Domain

This judgment, I think, cannot be upheld. The referee finds that, in August, 1858, the plaintiffs sold to the defendant 3,426 2/5 0/6 bushels of rye at seventy-five cents per bushel, amounting in the aggregate to the sum of $2,567.77. The sale was effected through one Sayles, a grain broker, who, as such broker, was authorized by the plaintiffs to sell. At the time of making the sale the defendant did not know who was the owner of the rye, but before any part of the same was delivered he knew that the plaintiffs were the owners thereof; and, in fact, the rye was delivered directly to the defendant by the plaintiffs' bargemen, from the barge in which it was brought to the city. The delivery was on the 30th of August, and four days afterwards, upon the plaintiffs demanding the purchase price for the rye, the defendant refused to pay, assigning, as a reason for such refusal, that he had paid Sayles, the broker; and he never, in fact, paid them any part of the purchase-money. The referee found that, prior to the demand of payment by the plaintiff, the defendant paid to Sayles, the broker, the sum of $2,578.60 for the rye, being the purchase price; that there was a custom or usage of trade in the city of New York, when grain is sold by brokers, for the brokers to have the bill for the grain sold by them made out in the name of the brokers, and *Page 424 
for the brokers to collect the money for the grain sold from the purchaser, when the seller resides out of the city of New York, and that the defendant paid Sayles according to this usage, and is not indebted to the plaintiffs in any sum of money whatever, and is entitled to judgment. Judgment was accordingly given, dismissing the plaintiffs' complaint with costs.
The plaintiffs sold and actually delivered the rye in question to the defendant. They were not paid the purchase price; the defendant resisting payment on the ground that he had paid to a third party. This he could not lawfully do, unless the payment was to one authorized to receive the money for the plaintiffs. Sayles, the party to whom the money was paid to, was not so authorized. It is found by the referee that his sole authority was to sell, and that simply as broker. This did not include or embrace any right to receive the price, where, as in this case, the principal was known. It is a well settled rule of law that an authority to a broker to sell does not authorize him to sell in his own name, or receive the price when the principal is known to the purchaser. The authority to sell gave Sayles no right to treat the rye as his own property, make out a bill therefor in his own name, collect the money or receipt for its payment. He was employed to sell the particular cargo of grain, as a broker, and a sale being made, his duty, office and function was at an end. A broker for sale is a mere negotiator or middle man between the seller and purchaser. His duty, in general, is ended and he has fulfilled his contract when he has found a purchaser and brought the parties together; and is then entitled to his commissions, whether the property is actually delivered and money paid or not. As a broker for sale, then, Sayles had no authority to receive payment; and a payment made to him was not a payment to the plaintiffs; nor did it operate to discharge the defendant from liability to the latter. A principal is only bound by the authorized acts of his agent. Sayles was the special agent of the plaintiffs to sell merely — indeed, a broker, as such, is never but a special agent — and whoever deals with an agent constituted *Page 425 
for a special purpose deals at his peril when the agent passes the precise limits of his power.
But the referee rested his judgment solely upon a custom or usage which he found to exist in the city of New York, that when grain is sold by a broker, for the broker to have the bill for grain sold by him made out in his own name, and for him to collect the money from the purchaser where the seller resides out of the city of New York. The plaintiffs resided in the city of Albany, and the defendant, having paid Sayles, in accordance with this usage, for the rye, was given judgment.
It is obvious that the rights of the plaintiffs cannot be controlled or affected by a local usage in a particular trade, found by the referee. The usage is invalid, and has no binding force upon the plaintiffs, for various reasons. It being the law of the State, that a broker in general (and that is all that Sayles was in this case), has no authority to sell in his own name, and therefore no authority to receive payment for goods sold by him, a local custom like that found by the referee to exist in the city of New York was void. Such a usage, if sanctioned, would be to overthrow the law in the city of New York. If it prevails there, as the referee has found, it cannot be allowed to control the settled and acknowledged law of the State. Again, the pretended usage is void, as not general, being confined to certain persons in New York, unreasonable and against public policy. This view of it is well put by the dissenting judge in the court below. "The proposition," he says, "that persons engaged in a particular trade at a particular place, can, by the custom or usage adopted and regulated by themselves, create a power beyond what is actually conferred, or necessarily implied, depriving an owner of his property, the possession of which he had not parted with, seems to me so fraught with mischief, as well as unsoundness, as to require only its announcement to meet with repudiation." But, finally, the usage being local, its existence must be clearly proved to have been known to the plaintiffs at the time. This is not found by the referee, and so far from its being the fact, the *Page 426 
plaintiffs showed affirmatively that they understood the usage to be precisely the reverse. So that the usage, if valid (which I think it is not), did not bind the plaintiffs.
I am for a reversal of the judgment.
Judgment reversed. *Page 427