Ware, Murphy & Co. v. Morgan & Duncan , 67 Ala. 461 ( 1880 )

BRICKELL, C. J.

— 1. In the course of his examination in chief, the witness Duncan stated that while in New York he received a letter from Street, the contents of which he stated, and in which was enclosed exchange for five hundred dollars, to be turned over to the plaintiffs, Ware, Murphy & Co. The plaintiffs objected to the statement because there was no evidence of the genuineness of the letter or of the exchange, neither of which were produced, or an account given for their absence. One of the facts intended to be shown by this evidence was the payment to the plaintiffs by Street of five hundred dollars on account of the purchase of the cotton for future delivery, the losses on which forms the consideration of the note on which the suit is founded. The fact is as capable of proof by oral as written evidence, and of it, without the aid of oral evidence, the exchange, if produced, would be insufficient. The ruléis, that where a writing,.if produced, would not be evidence of the fact to which it relates, parol or oral evidence of the fact will be received. — 1 Brick. Dig. 848, § 631. Besides, it is evident, if the exchange is in existence, that it was in New York without the jurisdiction of the court •and not within the power of the defendants to produce. 1 Whart. Ev. § 130. As to the bill of exchange the evidence was unobjectionable. It may be conceded that if it was intended by proof of the contents of the letter to show the agency of Duncan, and the extent of his authority, that the evidence was inadmissible. The concession would not aid the appellants, for the objection made by them was to the whole evidence — that which was admissible and that which was inadmissible, and could for that reason have been properly overruled. — 1 Brick. Dig. 886, § 1186.

2. The witness Duncan, on his examination in chief, having stated at length all that had passed between him and the plaintiffs in reference to his authority to act for Street, and the purchase of the cotton, was permitted to state that be made a full and honest disclosure as to the extent of his authority, and that be and his partner, Morgan, were not in any way interested or to derive any benefit from the purchase of the cotton. This was objected to, as an expression, not of facts, but of the conclusions of the witness. The general rule invoked by the appellants, that a witness must testify only to facts, and such as fall within his knowledge, can not be doubted. Whether Morgan and Duncan had any interest in, or were to derive any benefit from, the purchase of the cotton, was a fact and not matter of opinion, or a conclusion from fact, unless every matter which may involve a combination of facts is to be termed matter of opinion or conclusion. — Massey v. Walker, 10 Ala. 288. Nor do we think it was exceptionable, after having stated, fully, all that had passed between him and the plaintiffs,- for Duncan to state that he had made a full and honest disclosure as to the extent of his authority. It was no more than the statement that the facts he communicated were all within his knowledge.

3. The defense seems to have been rested wholly on the ground that the note was given for the debt of Street, for which Morgan & Duncan were not liable, and that it was therefore without consideration. A promise, verbal or written, to pay the debt of another, not founded on a precedent liability, or a new consideration, is gratuitous, and can not be enforced.— Underwood v. Lovelace, 61 Ala. 155; Beal v. Ridgeway, 18 Ala. 117. Whether there was a precedent liability resting on either Morgan or Duncan, or on them as partners, to pay the debt, depended upon whether Duncan was without authority, or had exceeded the authority given him by Street, in the transactions with the plaintiffs in reference to the purchase of the cotton. Second, if there was an excess of authority, whether the plaintiffs did not deal with Duncan with full knowledge of it, and solely on the credit of Street. The several instructions given the jury by the Circuit Court, to which exceptions were reserved, are directed to this phase of the case.

4. So far as the instructions announce that there was no liability resting on either Duncan or Morgan, for the payment of the debt, if Duncan did not in his dealings with the plaintiffs exceed his authority, the plaintiffs dealing with him as agent, their correctness can not be doubted. “It is a general rule,” says Ch. Kent, “standing on strong foundations, and pervading every system of jurisprudence, that when an agent is duly constituted, and names his principal, and contracts in his name, and does not exceed his authority, the principal is responsible, and not the agent.” — 2 Kent, 630. The agent having authority, dealing for, and in the name of, the principal, and binding him, there is no ground on which to impose liability upon the agent. If it was imposed, a contract would be made, into which the parties never intended entering.

The instructions proceed further, and assert that if Duncan disclosed to the plaintiffs fully, the nature and extent of bis authority to act for Street, and the plaintiffs, upon their own judgment as to the extent of his authority, dealt with him as the agent of Street, there would be no liability resting on either Duncan or Morgan, or on them jointly, if there was mistake as to the authority of Duncan to bind Street. The liability an agent may incur to those with whom he deals in the capacity of agent without, or in excess of authority, rests “ upon the supposition, that the want of authority is unknown to the other party, or, if known, that the agent undertakes to guarantee a ratification of the act by the principal.” Story’s Agency, § 265. If there was a want of authority in Duncan to venture into the purchase of the cotton for Street, binding him to the hazards of the speculation, there was evidence tending to show that it was as well known to the plaintiffs as to Duncan. That it was- the liability of Street which was contracted for by the plaintiffs, and not- the liability of Duncan, or Morgan & Duncan. Nor was any ratification of the contract by Street contemplated or intended, and it was not of consequence guaranteed by Duncan. The whole case, on the evideuce introduced by the defendant, resolves itself into this simply, that with full knowledge of Duncan’s authority, and upon their own judgment as to its extent, the plaintiffs dealt with Duncan. An agent having in fact no authority, and yet assuming to bind his principal, incurs a personal liability. If, with knowledge of the want of authority, he represents himself as leaving it to one ignorant of the facts, and dealing on the faith of the representation, he is guilty of deliberate fraud, and of his liability for the resulting injury there is no doubt. And if not having authority, yet witíi an honest belief that he has it, he deals with another, he is liable for the resulting injury. The difference in the two classes of cases, is in the degree of moral wrong only,, and not in the degree of injury to the other contracting party relying on his representation. The true principle on which the liability of an agent for an authorized contract, rests is, that he has-been guilty of a wrong, or omission, depriving the party dealing with him of the benefit of the liability of the principal, for which he contracts. — Smoot v. Ilbery, 10 Mees, and Weis. 1. "When he is guilty of no wrong or omission, when there is a full and honest disclosure of the nature and extent of his authority ; when the party dealing with him has all the knowledge and information which the agent possesses, there is no liability resting on him, though his act or contract proves to-be ultra vires.--Jefts v. York, 10 Cush. 302; Newman v. Sylvester, 42 Ind. 106. We do not find any error in the several instructions given by the Circuit Court touching this point. The giving of the note, and promise to pay it, however oft repeated, do not prevent the defendants from insisting upon the want of consideration. Like the note itself they are merely gratuitous, and unless there was a new consideration intervening, or the promise had induced some action on the part of the plaintiffs from which injury to them would follow,, there is in them no element of estoppel — Clemens v. Daggins, 1 Ala. 622; Huckabee v. Albritton, 10 Ala. 657.

5. The instruction requested by the plaintiffs was properly refused, for without explanation, it would have misled, or wasealculated to mislead the jury. The mere existence of a controversy which has not assumed the form of a pending suit, is -not necessarily a sufficient consideration for a contract of compromise. The controversy must have been bona fide, and there must have been some reasonable ground for it. A mere unfounded claim, a party may by the force of threats of litigation be induced to promise to pay, or to compromise by the promise of payment of a sum greater or less than that demanded ; the promise is without consideration, and as incapable of enforcement as the original claim. There ean be no countenance or encouragement given to the assertion of claims parties know to be unfounded, or have no good reason to believe well founded.- Proter v. Miller, 25 Ala. 320; S. C. 30 Ala. 458. The instruction should have referred to the consideration of the jury, the good faith of the plaintiffs in the assertion of the claim against Morgan & Duncan, as well as the inquiry whether there was any reasonable ground for the claim. Without this reference, it was well calculated to mislead, and was was properly refused.

Affirmed.