Court Opinion

ID: 5186897
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:30:01.267384+00
Date Added: 2024-06-11T08:26:46.513331
License: Public Domain

Smith, J.:
In Mechem on Agency (§ 558) it is said: “ It is undoubtedly competent for an agent, although fully authorized to bind his principal, to pledge instead his own personal responsibility if he so prefers. The presumption is that the agent intends to hind his principal, but where he expressly charges himself personally, he will he so held.”
In Story on Agency (9th ed., § 261) it is said: “ When a man is known to he acting and contracting merely as the agent of another who is also known as the principal, his acts and contracts, if he possesses full authority for the purpose, will be deemed the acts and contracts of the principal only and will involve no personal responsibility on the part of the agent.”
*444In Whitney v. Wyman (101 U. S. 396) the opinion reads : “ If the contract be unsealed and the meaning clear, it matters not how it is phrased nor how it is signed, whether by the agent for the principal or with the name of the principal by the agent or otherwise. The intent developed is alone material,, and when that is ascertained it is conclusive. Where the principal is disclosed and the agent is known to be acting as such, the latter cannot be made personally liable unless he agreed to be so.”
In 1 American and English Encyclopaedia of Law (2d ed. 1120} the rule is stated : “ The presumption is that an agent always intends-to bind his principal and not himself.” In Johnson v. Smith (21 Conn. 627) it is held : “ Though a person duly authorized as agent, and acting as such may bind himself personally, yet this must be done by language clearly expressive of such an intent.” In Hall v. Lauderdale (46 N. Y. 74) in the opinion of Andrews, J-., it is said : “ When the agency is disclosed and the contract relates to the matter of the agency and is within the authority conferred, the agent will not be personally bound unless upon clear and explicit evidence of an intention to substitute or to superadd his personal liability for or to that of the principal. In case of written agreements executed by an agent, the agent is, in general, personally bound, if the instrument can have no legal operation against the principal.” (See, also, Bank of Genesee v. Patchin Bank, 19 N. Y. 320.) In McDonough v. Templeman (1 H. & J. [Mid.] 156) one Burrows- and Templeman made an agreement in the beginning of which it-was recited that Templeman was acting in behalf, of the George Town Bridge Company and the agreement further read:
“ And the said John Templeman doth agree to pay for each of the said slaves * * * $60* * *. The said sum of $420 to. be paid by the said Jolvn Templemcm unto the said Maurice Jaynes M' Donougk or his order on the said 25th of December next * * *, In witness whereof, the said parties have hereunto set their hands and affixed their seals, the day and year first above written.
“(Signed) EDWD BURROWS,- [l. s.]
“JOHN TEMPLEMAN. [l. s.j ”
The action was brought to enforce a personal liability of Temple-man upon the contract. The Court of Appeals, reversing the judg*445ment of the General Court were of the opinion that Tern pieman acted as agent of the Georgetown Bridge Company and did not by the contract make himself personally liable. (See, also, Town of Hanover v. Eaton, 3 N. H. 38.)
In Field’s Civil Code, section 1256 reads: An agent is responsible to a third person for his acts in the course of his agency in the following cases only : First, when with his consent credit is given to him personally in a transaction ; second, when his principal is not responsible for his acts and he has no right to suppose that his principal is thus responsible ; third, when his acts are wrongful in their nature. While this Civil Code never became part of the statute law of the State, it was intended almost entirely to be a mere codification of the common law, and as such is most valuable as a commentary by its learned author.
The plaintiff’s cashier, to whom the letter was written from which liability is here claimed, swore that he knew that the defendant was acting as broker for various concerns, and that he was handling the paper of Dolge & Son as broker. His testimony that he did not know that the defendant was agent of the firm is a mere quibble.. A broker is nothing more nor less than an agent. (Sibbald v. Bethlehem Iron Co., 83 N. Y. 381.) Moreover, the letter itself by fair import discloses the agency, discloses the principal for whom defendant was acting, and, as if to make it the more clear, states the extent of the discount which defendant was negotiating for his principal. The apparent purpose of this statement is to induce a discount by showing a good customer. After making that statement the defendant proceeds to make the statement upon which his individual liability is claimed to be based, to wit: “ And by chance should any paper you take pass due date, please advise me at once and I will have draft in your hands in three days time for payment.” From this letter then' disclosing his agency and his principal, written confessedly in the prosecution of the agency to one who knew of the agency and who before had negotiated with him as such agent, this single clause is picked out to fasten upon him a personal liability. The balance of the letter was written , in behalf of his-principal. Had he desired to change at this point the character in which he was writing, he would have used words clearly indicating the change and indicating that he was then offering his personal responsibility. *446That a personal responsibility was not understood or relied upon by the plaintiff is apparent from all the subsequent negotiations between, the parties. The letter in reply to the defendant’s letter in no way suggests a reliance upon any personal liability of the defendant. Nor is it the custom of banks to take personal guaranties in this form, and, moreover, the magnitude of the business done for these principals and their high financial standing, as appears from the letters of the plaintiff’s cashier, make it improbable that a-mere broker was assuming to guarantee their paper. If, instead of the agreement made, he had promised within three days’ time to have other paper to take the place of the dishonored paper, it would hardly be contended that he had assumed a personal liability. It seems to us equally clear when he undertakes to have a draft to pay such paper within three days that it is a draft from his principal for which he does not personally vouch. We can find no indications of a “ clearly expressed intent to become personally bound ” which is made by the authorities a condition of personal liability of an agent thus contracting in behalf of his principal.
It is urged, however, that if this be deemed an undertaking of the principal, it is meaningless, because the defendant’s' principals are already liable upon the paper by reason of their indorsement thereon. The obvious, answer to this objection is that the purpose of the undertaking was not to add liability, but to assure the plaintiff that Dolge & Son -would' be prompt to care for any dishonored paper. If Dolge & Son were themselves asking for a line of discount upon their business paper they might naturally add the assurance that if any of the paper was not paid they would within three days’ time furnish the money with which to pay it. If such assurance would be a natural one upon a request from Dolge & Son, it is equally natural upon the request made by their agent.
Within the authorities then this contract, as any other contract, must be construed in the light of the surrounding circumstances. Its construction becomes one, as it is called, of- mixed law and fact. Upon all the circumstances, the court or jury must determine what was the intention of the defendant in writing the letter, and whether the plaintiff relied upon any supposed personal liability assumed. Both offthese elements must be found in order to show a meeting of the minds of the parties which is the essence of a valid contract.
*447The cases cited by the learned counsel for the plaintiff assert no different rule of law. In Mills v. Hunt (20 Wend. 431) the name of the principal was not disclosed. It is there said: “ Even if the agent disclosed the name of his principal, if he signs the written contract in his own name merely, which contract does not upon its face show that he was acting as agent of another, he will be personally bound thereby.” While that was dictum in that case, it does not impair the conclusion here reached because the letter which contained the clause upon which personal liability is predicated disclosed not only the name of the principal but the fact of the representative capacity in which the agent was acting in negotiating these notes. The case of Baltzen v. Nicolay (53 N. Y. 467) was a case of an undisclosed principal, as was also the case of Bush v. Cole (28 N. Y. 261). In the case of The National City Bank of Brooklyn v. Westcott (118 N. Y. 468) an agent was held as an indorser where he had indorsed without anything on the paper to indicate that he had indorsed as an agent and.where there was no evidence of authority to make an indorsement. It was held that there was no implied authority by reason of the agency. In the case of Powers v. McLean (14 App. Div. 92) the agent had contracted in his own name without disclosing his principal, and the rule of law quoted in Mills v. Hunt (supra) was again quoted, but, as above stated, it is inapplicable to the case at bar inasmuch as it appears upon the face of the letter that he was acting for a disclosed principal.
As the conclusion of the trial justice is at variance with the conclusion here reached, the motion for a new trial must prevail.
Adams and Spring, JJ., concurred.; McLennan, J., dissented; Hardin, P. J., not voting.