Claflin & Co. v. Continental Jersey Works

Simmons, Justice.

1. The errors assigned in the 5th to 18th (inclusive) grounds of the motion for a new trial go to the refusal of the court to give in charge to the jury certain principles of the law of agency which bear upon the question of the extent of Lichtenstein’s authority. The requests may embody sound law; but it is immaterial whether they do or not. Where an agent’s authority is conferred and defined in writing, the scope or extent of such authority is a question for determination by the court. Mechem on Agency, §104; 1 Thompson on Trials, §1370; Berwick v. Horsfall, 29 L. J. C. P. 193; Dobbins v. Etowah, etc. Co. 75 Ga. 238, 243; Pollock v. Cohen, 32 Ohio St. 514. As said by this court in the case above cited : “That it was the duty of the court to construe both the charter and the letter of attorney, and to determine the extent of power conferred by both and each of them upon the agent, we think is a plain proposition. Taken alone, and without proof of other circumstances to which it was necessary to resort to clear ambiguities Or to explain doubtful intention, there was nothing for the jury to find. The question was purely and simply one of law, to which it was the exclusive right and duty of the judge to respond.” In requesting charges upon the extent and nature of a general agency, there seems to have been an attempt by the plaintiffs in error to enlarge the authority of Lichtenstein beyond the limits of his power, or at least to establish the construction that the instrument created a general agency. If there was any such efiort,' the court did not err in defeating it. It is not allowable, by the adduction of extrinsic oral evidence, to add to the powers expressly given in the writing. The authority must be proved by the instrument itself. Neal v. Patten, 40 Ga. 363. The very purpose of a power of attorney is to prescribe and publish the limits within which the agent shall act, so as not to leave him to the-uncertainty of memory, and those who deal with him to the risk of misrepresentation or misconception as to the extent of his authority. To confer express authority is to withhold implied authority. There can be no parol enlargement of a written authority. "Wharton on Agency, §225; Mechem on Agency, §306; Reese v. Medlock, 27 Tex. 120, s. c. 84 Am. Dec. 611; Batty v. Carswell, 1 Am. L. C. 687, notes; Pollock v. Cohen, 32 Ohio St. 514.

Besides, the power of t attorney was relied upon throughout the whole transaction. The plaintiffs in error believed Lichtenstein’s acts to be within the letter of his authority, having taken the advice of counsel in reference thereto, so that they cannot claim to have been misled by any appearance of authority other than that which the writing gives.

2. Bid the court err in holding as matter of law that Lichstenstein exceeded his authority when he delivered the goods in dispute to the plaintiffs in error ? We will look first at the character of that delivery. The contention of the plaintiffs in error is two-fold. They say, first, that Weisbein, the principal, obtained 'credit and bought goods from them upon the faith of certain representations made by him which afterwards proved to be false;. that their agents, upon discovering the fraud3-went to Lichtenstein and demanded a return of the goods thus fraudulently procured ; that there were returned to them all the goods which they could identify'as having been sold by them to Weisbein, and to make up the balance of their claims, other goods were delivered to them by Liehstentem; that of the goods taken by Claflin & Co. about two thirds had been identified as having come from that house, and of those taken by Jaffray & Co. about one half had come from the latter; and they now insist that, as to these portions of the goods at least, they should not be held liable, because Weisbein’s title to them was avoided ab initio by their rescission of the sale. There can be no doubt that the agent violated his duty in admitting, upon an ex parte representation, that his principal had committed such wholesale fraud, especially when he knew so little of the latter’s concerns as to be totally surprised on hearing of the outstanding indebtedness, and when he professed to have the intention of continuing the business. An agent cannot deny his principal’s title. Code, §2188. ,It cannot be said that the power of attorney was intended to or did confer the extraordinary authority of consenting to the rescission of past sales to the principal, in the latter’s absence and by reason of his fraud. See Bradford v. Bush, 10 Ala. 386.

But it may be said that such.consent was not necessary ; that the defrauded vendors had the right to pursue and take their goods wherever they found them, notwithstanding it was the agent’s duty, as custodian of the property, to maintain the possession thereof. There would be more force in this, if these creditors had proceeded as for their own goods alone. A party cannot renounce a contract and at the same time get a benefit under it. Thus the rescinder cannot sue, or take security, for the price, and at the same time follow the goods. Bank of Beloit v. Beale, 34 N. Y. 473; Cobb v. Hatfield, 46 N. Y. 533; Joslin v. Cowee, 52 N. Y. 90; Thurston v. Blanchard, 33 Am. Dec. 705, notes; Loyd v. Brewster, 4 Paige Ch. 537, s. c. 21 Am. Dec. 88, and notes; Grant v. Law, 29 Wisc. 99; Bridgeford & Co. v. Adams, 45 Ark. 136; 2 Parsons on Contracts, p. 813, 922, notes; 1 Benj. on Sales, p. 569, note; 2 Warvelle on Vendors, 878.

3. The seeond contention of the plaintiffs in error is, that if the attempted rescission was futile, still the transfer of the goods to them by Lichtenstein was valid, because he had authority under the power of attorney to pay the debts of his principal, and, in lack of money, he could pay in goods. This payment theory is more consistent with the facts of the case than the other one of rescission. It is apparent from the answers that the first intention of the agents of the plaintiffs in error was to rescind the sales and simply retake their goods; but finding that this would leave a considerable balance of their claims undischarged, they acted as if the sales were to be confirmed, and demanded payment of both the matured and the maturing indebtedness therefor. Lichtenstein acceded to their demands, and in settlement with Claflin & Co. delivered to their agent goods aggregating about $14,000 in value,' after making certain discounts amounting to 24 per cent, from the cost prices as marked on the goods by Weisbein. To the agent of Jafiray & Co. were given goods in value near $8,000, after making similar discounts amounting to 9 per cent. It does not appear how much, if any, of the indebtedness to Jafiray & Co. was matured at the time payment was demanded. But it does appear that of the indebtedness to Claflin & Co. only about $3,000 was then due, leaving about $11,000 on which the time of credit had not expired. It cannot well be disputed that Lichtenstein had no authority to anticipate and accelerate the payment of this $11,000, especially when he swears in his answer that he expected to continue the business. It is nowhere alleged that the amount owing to Jafiray & Co. was due, but all the circumstances indicate that it was not due, when Lichtenstein delivered the goods to their agent. This therefore was also an unauthorized payment. Beals v. Allen, 18 Johns. 363; Hampton v. Matthews, 14 Penn. St. 105. The writing in question expressly states its object to be a continuation of the business during the principal’s absence. Nothing could be more foreign to this object than to surrender a large part of the stock in trade at the demand of creditors whose debts were mostly immature. That was clearly against the interests of the business and in excess of the agent’s authority.

But the acts of an agent are valid to the extent that they are within his authority. So the question arises whether the payment of some $3,000 of matured indebtedness to Claflin & Co. can be upheld. Lichtenstein was authorized “to collect all money or moneys due to me and give proper receipts and acquittances therefor, and to pay all bills due by me to others for goods, merchandise or otherwise.” A formal power of attorney, being executed with deliberation, is subject to a strict construction. The general terms are restricted to consistency with the controlling purpose, and do not extend the authority beyond the special powers expressly delegated. Rossiter v. Rossiter, 8 Wend. 494, s. c. 24 Am. Dec. 62; Reese v. Medlock, 27 Tex. 120, s. c. 84 Am. Dec. 611; Holtsinger v. National Bank, 6 Abb. Pr. 292; Ferreira v. Depew, 17 How. Pr. 418; Hogg v. Snaith, 1 Taunt. 347; Atwood v. Munnings, 7 B. & C. 278; Esdaile v. LaNauze, 1 Y. & C. 394; North River Bank v. Aymar, 3 Hill, 262; Stainer v. Tyson, Id. 279; Batty v. Carswell, 1 Am. L. C. 687, notes; St. John v. Redmond, 9 Port. (Ala.) 428; Scarborough v. Reynolds, 12 Ala. 252; Dearing v. Lightfoot, 16 Ala. 29; Rogers v. Cruger, 7 Johns. 557; Delafield v. Illinois, 26 Wend. 192; Story on Agency, §§21, 62-68; Wharton on Agency, §222; Ewell’s Evans on Agency, p. 204 et seq.; Mechem on Agency, §306; Verdell v. Ketchum, 52 Ga. 139; Pollock v. Cohen, 32 Ohio St. 514. Now the writing in the present case expressly states its object to be a continuation of the business during the -principal’s absence. Lichtenstein was entrusted with the possession and management of the business for that purpose. This required him to take care of and not sacrifice the goods. His authority embraced using them so as to 'realize some profit to his principal, but not paying even matured claims in goods discounted 24 per cent, from the “cost price” marked upon them by the principal.

The word “pay” sometimes has a wide sense which includes payment in other things than money. Anderson’s Dict’y Law, “Payment”; Foley v. Mason, 6 Md. 37. Yet it is believed that the ordinary meaning of the word in commercial usage is the more restricted one of payment in money. Parsons on Mercantile Law, p. 80. “ The term payment, in its legal import, means the full satisfaction of a debt by money, not by an exchange or compromise, or an accord and satisfaction, and it is only where the words used in connection with it plainly manifest a different intention, that the legal import of the term can he rejected.” Manice v. R. R., 3 Duer (N. Y.) 426. Besides the power here is not simply to pay claims or demands, but to pay dills. So, if it were to be conceded that the word “pay” is ambiguous, this can hardly be said of the expression “pay bills,” which implies the use of money. Abbott’s Law Dictionary, “Bill,” III. The fact that the code, §2864, in treating of the law of payment, allows an agent to take payment in property other than money, gives no support to the contention that he can make payment in the same way, without express authority to do so. This forms an exception to the well-settled rule, that where an agent is given power in general terms to do an act, he is restricted in the manner of performing it to that which is usual in the course of business. Wiltshire v. Sims, 1 Camp. 258; Taylor v. Robinson, 14 Cal. 396; 2 Kent Com. p. 622; Story on Ag. Especially is this true of an authority created by writing where a strict interpretation is proper. If Weisbein had meant to give Lichtenstein a power so exceptional, it is fair to suppose that he would have plainly so expressed himself in making a formal declaration of the limits within which the agent was to act..

But it is sought to justify the acts of Lichtenstein on the ground of their being called for by an unforeseen emergency, and the court was asked to charge the jury on that subject. There was no error in refusing so to do. The authorities cited on this point are wholly inapplicable to a case like the present. Most of them refer to the powers of the master of a ship in prosecuting a foreign voyage, where it becomes impossible to do the precise thing for which the voyage was undertaken. Moreover, in all these cases the question has come up as between principal and agent. The latter was allowed to defend on the ground that when it became impossible without his fault to perform the thing for which he was employed, and thereupon he in good faith did the best he could, he should not be held liable to the principal for failing to do exactly what was intended. The only case found which is at all like the present was where the general superintendent of a mining company, upon the business getting embarrassed, borrowed money of a bank and gave a mortgage on the products as security, in order to pay off warrants sued out by the employees for their wages. As between the principal and the bank, it was held that no such authority could be implied from the general powers of the agent, or be justified on the ground of necessity. Hawtyne v. Bourne, 7 M. & W. 595. Whoever deals with an agent with full notice of the extent of his authority must determine at their own risk and peril whether particular acts are within that authority. Stainback v. Read & Co., 11 Grat. 281, s. c. 62 Am. Dec. 648; Hodge v. Combs, 1 Black (66 U. S.), 192; Craighead v. Peterson, 72 N. Y. 279; Story on Agency, §72. And it does not seem a harsh rule to require all transactions, whose effect is to give some creditors of an insolvent an unconscionable preference over the others, to keep within strict legal lines. “ Equality is equity.”

4. During the progress of the case the court held that, under the evidence submitted, “the case would fall within the operation of the principle that where a person mingles his goods with those of another, and is unable to distinguish them, the loss must fall upon him and refused to submit to the jury any other question than those of the value of the whole amount of goods taken by the plaintiffs in error from the store of Weisbein, and of whether interest should be allowed upon that amount or not. This was excepted to pendente lite, and is also assigned as error in the 80th ground of the motion for a new trial. We have collected'numerous authorities upon the “mixing” or “confusion” of goods, and from them deduce the following propositions:

(1) Where one fraudulently, wilfully or wrongfully intermingles his goods with those of another, so that there is no evidence to distinguish the goods of the one from those of the other, he is guilty of a “confusion of goods,” and forfeits all his interest in the mixture to the other party. Cooley on Torts, p. 56; Bigelow on Fraud, p. 575; Lawson Rights Rem. and Pr., vol. 3, p. 2896; Kent’s Com., vol. 2, p. 864; Blackst. Com. vol. 2, p. 405; Story on Bailments, §40; Bishop on Non-Contr. Law, §988; The Idaho, 93 U. S. 575; Ward v. Ayre, Cro. Jac. 366, s. c. 2 Bulstr. 323; Anonymous, Popham, 38; Beach v. Schmultz, 20 Ill. 185; Root v. Bonnema, 22 Wisc. 539; Stephenson v. Little, 10 Mich. 433; Wingate v. Smith, 20 Me. 287; Adams v. Wildes, 107 Mass. 123; Willard v. Rice, 11 Metc. 493; Jewett v. Dringer, 30 N. J. Eq. 291; Diversey v. Johnson, 93 Ill. 547; Ryder v. Hathaway, 21 Pick. 298; 2 Schouler Pers. Prop. p. 41 et seq.; Loomis v. Greene, 7 Me. 325; Jenkins v. Steanka, 19 Wisc. 139. See Code, §3083.

in the case of agents, bailees, executors, administrators and other trustees, all of whom occupy a position of trust or confidence, the rule as to confusion will apply when the mixing is merely negligent or careless. Story on Agency, §205; Story on Bailments, §40; Lupton v. White, 15 Ves. 432; Schouler Pers. Prop. p. 46; Code, §2193. So of mortgagors entrusted with possession. 11 Metc. 493; 107 Mass. 123. So also of a guardian. Hudson v. Hawkins, 79 Ga. 274.

(2) Except as to agents, trustees, etc., as above mentioned, the rule will not apply unless the mixing was sfraudulent, wrongful or wilful, which words as used by [the authorities imply generally an improper motive or 1 purpose. See text books above cited and the following cases: Spence v. Ins. Co., L. R. 3 C. P. 429 (accidental); Hesseltine v. Stockwell, 30 Me. 295; Thome v. Colton, 27 Iowa, 425 (honest); Foster v. Warner, 49 Mich. 641 (regular course of business); Chandler v. LeGraff, 25 Minn. 88; Stone v. Quaal, 36 Minn. 46; Attorney - general v. Fullerton, 2 Ves. & Beames, 263.

(3) The rule will not apply when each owner can be given his identical property. Moore v. Bowman, 47 N. H. 494; Smith v. Sanborn, 6 Gray, 134; Hesseltine v. Stockwell, 30 Me. 237; Robinson v. Holt, 39 N. H. 557; Goff v. Brainerd, 58 Vt. 468; Alley v. Adams, 44 Ala. 609; Holbrook v. Hyde, 1 Vt. 286; Queen v. Wernwag, 97 N. C. 383; Colwill v. Reeves, 2 Camp. 575.

(4) The rule will not apply when the goods, though undistinguishable, are of equal and uniform value, that is, when the mixture is approximately homogeneous. In this case the remedy is division Jn kind of compensation for actual loss. Hesseltine v. Stockwell, 30 Me. 237; Robinson v. Holt, 39 N. H. 557; Wilson v. Nason, 4 Bosw. 155; Stone v. Quaal, 36 Minn. 46; Hart v. Ten Eyck, 2 Johns. Ch. 62, 108; Stephenson v. Little, 10 Mich. 433, dissenting opinion of Campbell, J.; Cooley on Torts, p. 58; McDonald v. Lane, 7 Can. S. C. 462; Attorney-general v. Fullerton, 2 Ves. & Beames, 263; Starr v. Winegar, 3 Hun, 491; May v. Bliss, 22 Vt. 477; Schuleuberg v. Harriman, 21 Wall. 44, (law of Minn.)

It will be seen from these authorities that if one fraudulently, wilfully or wrongfully mixes or confuses his goods with those of another and cannot distinguish his own, he will lose them. If, however, he does it in-h noeently or by mistake, the ruléis different. If in such case he can distinguish them or can show their value or their proportion of value to the whole, he ought in \ equity to be allowed to do so. We think, therefore, that the court erred in not submitting to the jury) whether these goods were mixed wilfully, fraudulently ' or wrongfully. If the jury had found that they were? then the principle announced by the court below would have applied. But if they had found that they were'q mixed innocently or by mistake, with no improper jj motive or purpose, then we do not think it would have!! applied, and the plaintiffs in error would have been en- ) titled to retain the goods which they could distinguish, U or the value thereof; or they would have been entitled H to show, if they could by proper evidence, what pro- r portion of value their goods bore to those purchased j frem Weisbein’s agent.

5. The court also ruled that the right which the plaintiffs in error had to rescind the sale was lost by what in 1-jgal effect was an abandonment of their right of election; and this ruling was excepted to. We are inclined to think that the court went too far in this ruling. It seems to us, from a careful reading of the evidence in this record, that the plaintiffs in error had elected to rescind the contract, but that the election was, by mistake of law, improperly executed by them in the purchase of other goods than their own from Weisbein’s agent to satisfy their claims. We think, therefore, this question also should have been submitted to the jury, and the jury left to say whether or not they elected to rescind, and if so, whether or not they abandoned that election and made a purchase of the goods, and if not abandoned, whether the election was improperly executed by mistake, and if improperly executed, whether it was done by mistake and in good faith. Did they at the time really believe that they were carrying out the rescission of the contract ? We are inclined to think that if they elected to rescind the contract, and in good faith purchased the goods from Weisbein’s agent, while they could not hold the goods so purchased, they would still have the right in equity to insist upon their election . and claim their goods if they could be distinguished, or such a fair proportion of -the goods as they might by evidence show they were entitled to. If, under the law, they were entitled to rescind the contract, and the goods were sold, and they could show by proper evidence the exact propoi’tion in money that their goods bore to those purchased, in our opinion they would be entitled to that proportion. If they could not show the exact proportion, but only an estimated one, and if the estimates could be relied upon with absolute certainty to the extent of considerably more than half, we think they would be entitled to at least half of the amount. This rule would apply to Clailin & Co., because the record shows that the estimate of their goods was seventy-five per cent, of-the whole. The estimate of Jaffray & Co. was not so large, and therefore they would not be entitled to recover so large a proportion as Clailin & Co. upon a mere estimate.

6. There are other errors complained of in the motion for a new trial, but we deem it unnecessary to discuss them, as the questions made therein will not likely arise on the next trial. Many of these grounds complain that the judge in his charge to the jury expressed an opinion upon the evidence. The expressions complained of were not made while charging the jury, but in deciding the questions of law in the case before the charge commenced. Judgment reversed.