Opinion
Argued April 29, 1890
Decided June 3, 1890
Roger A. Pryor for appellants.
William A. Jenner for respondents.
The principal contention of the appellant on this appeal is that the legal title to the hides in question was not in the respondents.
The court denied a motion to dismiss the complaint made on that ground, and it instructed the jury "that if the hides * * * were bought by Ford or his agents with money furnished to him for that purpose by the plaintiffs, they were plaintiffs' property at the time Ford pledged them.
"That the plaintiffs became the owners of the hides as soon as they were paid for, whether or not Ford used for that purpose the specific proceeds of the drafts drawn upon the plaintiffs, or used such proceeds for his own purposes and made up the amount by substituting other funds for such proceeds."
These propositions stated correctly the law applicable to the case.
To recover in trover there must have been possession of the property by the plaintiffs, or there must be an existing right to take immediate actual possession of it.
Ford's business at Ogden was to purchase hides for the plaintiffs. He had agreed to give them his entire services and engage in no other business or employment. Funds were placed in his possession to enable him to execute and perform that agreement, and if the hides in question were purchased by him in the performance of his contract, and paid for out of moneys furnished to him by the plaintiffs for that purpose, his acts were the plaintiffs' acts, and the delivery to him of the hides was a delivery to the plaintiffs and vested the title and possession in them.
It is a well-settled principle of the law of agency that the agent is but the instrument of the principal, who acts by and through him. An individual assumes the relations, acquires the rights, and incurs the obligations which are the proper results of his acts, equally, whether he does those acts himself or through the medium of another. In either case the thing done is the act of the principal. The hides transferred to the defendants were all procured either from Parsons, Chase Co. or from sources other than that firm. Ford, in violation of his agreement with plaintiffs, became a partner with Parsons, Chase Co., and, to enable them to carry on their business, paid to them the proceeds of drafts he drew upon the plaintiffs. The money thus obtained was paid by plaintiffs to enable Ford to perform his contract with them. The consideration for the advance to Parsons, Chase Co. was the future delivery of hides that would be taken from cattle slaughtered by that firm. The fact that the money thus supplied to Parsons, Chase Co. was first used to purchase cattle which they slaughtered and that the dressed meat was sold by Ford at San Francisco, and the money resulting from such sales again used to enable Parsons, Chase Co. to carry on their business, does not necessarily alter the nature of the transaction between Ford, as plaintiffs' agent, and Parsons, Chase Co. with reference to the hides.
It may be that plaintiffs, if they had been cognizant of these dealings, might have repudiated them and recovered their money from Parsons, Chase Co., but it is equally true that third parties could not do that for them, and if plaintiffs do not complain of that manner of purchasing hides by their agent no one else can. In substance and effect, therefore, there was a sale of the hides by Parsons, Chase Co. to Ford in consideration of advances of money, and upon delivery of the hides, the contract was executed and the title and possession were in the plaintiffs.
The witness Johnston, who was a clerk for Ford after January 1, 1879, and during the whole period in which the hides in question were delivered to Ford, testified as follows: "All the money that was advanced to Parsons, Chase Co. by Ford was advanced to secure the hides that came off the cattle, and the cattle were generally bought by money obtained from Ford Russel."
"During the time I was with Ford he never bought any hides and paid for any hides except with the direct proceeds of drafts drawn upon Edwards Brackett."
As to the hides procured elsewhere than from Parsons, Chase Co., the evidence is of a similar character. Johnston testified as to them as follows: "Ford had two travelers out buying hides and shipping them in. He bought any hides that were offered at Ogden if they were cheap enough. Hides purchased by Ford were very seldom purchased on credit. As a rule, unless they had been previously paid for by advances to the sellers, they were paid for in cash. Ford obtained the money which he paid for hides purchased by drawing drafts on Edwards Brackett, and got the cash at the bank."
It thus appears, without contradiction, that all the money paid for the hides purchased by Ford was furnished by the plaintiffs, and as there was no claim that Ford was purchasing hides for any persons except the plaintiffs, the conclusion was permissible that they were purchased in the performance of his agreement with the plaintiffs. This conclusion is strengthened by the fact that the purchase of all the hides transferred to the defendants was reported by Ford to the plaintiffs in a detailed statement showing the number of each kind, their weight, cost and where purchased, and there appears to be no contradiction of the testimony of Mr. Brackett that the plaintiffs paid for all the hides which Ford reported he had purchased.
After the transfer to the defendants a large quantity of hides were placed in the warehouse by Ford, all of which were paid for by the plaintiffs' money. This evidence, if not absolutely conclusive, certainly permitted the jury, under the instructions of the court, to determine that the title to the hides was in the plaintiffs, and as the court refused to hold as a question of law that the hides were the property of plaintiffs, but allowed the jury to pass upon that question, the defendants had as favorable a ruling on the case as they could possibly have been entitled to.
It would be impossible, upon the evidence, to sustain the claim of the appellants that the title to any of the hides after their delivery to Ford at the warehouse at Ogden was in Parsons, Chase Co., and the contention that the title was in Ford is opposed to well settled principles of the law of agency.
The learned counsel for the appellant has referred us to many cases holding that an agent purchasing property in his own name with trust funds is but a trustee for the principal, whose only remedy is to follow the property in a court of equity and fasten a trust upon it for his own benefit. But those authorities have no application to cases like the one under consideration, where the agent has purchased the very property which his principal authorized him to purchase. Here the act of purchasing is the act of the principal, and the title passes by the contract of sale from the seller to the principal.
None of the other exceptions in the case can be sustained. The title being in the plaintiffs, it was not possible for Ford to convey the same to the defendants unless authorized thereto by the plaintiffs, or unless the plaintiffs had, by words or acts, done that from which third parties would have been justified in believing that Ford had authority to sell the property.
The fundamental principle of the law of personal property is that no person can be divested of his property without his own consent.
Mere possession does not confer a power to sell, and an unauthorized sale, although for a valuable consideration, and to one having no notice that another is the true owner, vests no higher title in the vendee than was possessed by the vendor. ( Covill v. Hill, 4 Den. 323; 2 Kent's Comm. 324.)
While a principal is bound by his agent's acts when he justifies a party dealing with his agent in believing that he has given to the agent authority to do those acts, he is responsible only for that appearance of authority which is caused by himself, and not for that appearance of conformity to the authority which is caused only by the agent.
That is, he is bound equally by the authority he actually gives, and by that which, by his acts, he appears to give.
For the appearance of authority he is responsible only so far as he has caused that appearance. For the appearance of the act the agent alone is responsible. The fundamental proposition is that one man can be bound only by the authorized acts of another. He cannot be charged because another holds a commission from him and falsely asserts that his acts are within it. ( Mechanics' Bank v. N.Y. N.H.R.R. Co., 13 N.Y. 599-634; Bickford v. Menier, 107 id. 490.) Ford had no authority to sell or pledge the hides purchased. The sole purpose of their purchase was to ship them to Boston and sell them in that market. The few instances of sales of small quantities that were unfit to be shipped to the plaintiffs (if known to the defendants) would not have warranted the belief on their part that he had authority generally to dispose of the hides.
His acts in entering into extensive business arrangements at Ogden and elsewhere, and giving himself the appearance of a man engaged in large business enterprises, although doubtless calculated to mislead parties dealing with him, cannot be attributed or charged to the plaintiffs.
They had no knowledge of his violation of the agreement with them in that respect, and these acts of Ford cannot be resorted to to establish a power not included within the line of his commission.
The rule is, that whoever deals with an agent, constituted for a special purpose, deals at his peril when the agent passes the precise limits of his power. ( McCombie v. Davies, 6 East. 538; Saltus v. Everett, 20 Wend. 267; Wooster v. Sherwood, 25 N.Y. 279-287.)
And we find no evidence in the case that would sustain a claim that the plaintiffs had held Ford out to the world as possessing any general authority to dispose of their property.
But the plaintiffs' case does not rest upon this rule of law alone.
We are of the opinion that the defendants had notice that Ford's possession of the hides was as agent for the plaintiffs, and that the hides were the property of the plaintiffs, and if this notice was not explicit, it was at least sufficient to put them upon inquiry as to the existence of a right in conflict with that they sought to acquire.
On the 7th of January, 1879, in response to an inquiry from defendants as to the financial ability of George Ford Co., hide merchants, plaintiffs wrote the defendants as follows:
"Our arrangement with Mr. Ford is, that he is to buy hides to send to us and he is to draw on us for the cost of them. He has been doing this business for a year or more. As he has no capital of his own, he advises us of purchases he makes and draws on us for the money to pay for them."
The court instructed the jury that "If the defendants had knowledge of the fact that Ford was engaged in the business of buying hides for the plaintiffs with money furnished by them and shipping them on their account, the defendants acquired no title to the hides by virtue of Ford's pledge thereof to them."
The defendants had knowledge outside of this letter of the drafts drawn upon plaintiffs by Ford. Some of these drafts had been discounted by them at dates as early as October, 1877, and as late as January 30, 1879. At the time of the transfer, Orth was told by Ford that the hides were all paid for, but were as yet, unfit to be shipped East. That they could not be shipped for four or five weeks, and that in ten days Ford Russell of San Francisco would furnish the funds to repay the loan.
These facts in connection with the plaintiffs' letter were sufficient to put the defendants on inquiry as to the plaintiffs' rights.
They had reason to believe that Ford was not the sole owner of the goods, and that plaintiffs were interested in them. They knew Ford's business was not to sell to plaintiffs, but to buy for them; that the cost of the hides was reported to plaintiffs, who thereupon furnished the money to pay for them; that Ford had no capital, and that the particular hides in question were to be shipped East.
They made no inquiry whatever but relied upon Ford's assertion that he was the owner, and their neglect in that respect is fatal to their claim to be considered bona fide purchasers. ( Williamson v. Brown, 15 N.Y. 354; Wright v. Cabot, 89 id. 570.)
There was no error in the charge of the court upon the subject of notice which I have quoted.
The other exceptions present no vital error and the judgment must be affirmed, with costs.
All concur.
Judgment affirmed.