Merchants' Bank v. Hayes , 14 N.Y. Sup. Ct. 530 ( 1876 )

Mullin, P. J.:

The assumption by the court that Edwards had authority to employ Wilson to make the guards rendered it unnecessary for the plaintiff to submit that'question to the jury, as the jury could do no more for the plaintiff by their verdict, than the court assumed without it.

Edwards having authority to enter into the contract, the price agreed to be paid to Wilson for the guards became the debt of the owner of the stores, and Wilson could sue them and recover the amount due him. But the plaintiff had no such remedy; it must recover, if at all, on the note.

When the case of Green v. Skeel (5 N. Y. S. C. R., 25) was before us, I came to the conclusion, relying upon the head-notes of the case of Coleman v. First National Bank of Elmira (53 N. Y., 388), that when the maker of a note annexed to his name the word agent, that the principal was liable thereon, although his name does not appear in the note or annexed to the signature of the agent. The head-note to which I refer is in these words: “ The rule that parol evidence cannot be given to contradict or vary a written agreement, does not preclude a party who has Contracted with an agent from maintaining an action against the principal, upon parol proof that the contract was in fact made for the principal, although the agency was not declared in the contract, and was not known to such party at the time of making it.”

The action in that case was brought by Coleman to recover the amount of a certificate of deposit he left as a deposit, as he supposed, in defendant’s bank.

When he handed-the certificate to the teller the latter asked him if he wanted interest upon it, and he said he did. The teller thereupon filled up and gave to him a certificate acknowledging the receipt of the amount upon interest, signed L. R. Yan Campen. Yan C. was the president of the bank. Plaintiff could not read, and did not know that it was not the certificate of the bank, nor did he know Yan C., nor had he ever seen him. Plaintiff, upon hearing that Yan C. had signed the certificate, returned it to the bank and demanded a certificate of the bank or the money deposi.'ed; not getting either, he brought the suit against the bank.

Yan C. was the agent of the bank. He did not sign the certificate as agent, but in his own'name. He was unquestionably personally liable.

The law has been, up to this time, well settled that a principal was not bound by the contract of his agent, unless, in the contract itself, or annexed to the signature, it was shown that the contract was made for and on behalf of the principal, whose name was disclosed.

If the defendant was to be charged with the certificate of Yan C., it was not named in it, and was not for that reason liable upon it.

The difficulty in this case, so far as the question of agency was involved, was, that there was nothing to show that Yan C. intended to bind the defendant, and if not, then it was not liable on the certificate.

There are cases in which a principal is liable upon the contract of his agent, although the agent does not disclose the name of his principal at the time, of making the contract, but it is afterward discovered. But in this case the plaintiff knew who the principal was with whom he intended to deal, and with whom it was ultimately held lie did-deal. He knew when he made the deposit all that Yan C. could have told as to who the principal was. The case then was not within the principle that makes liable an undisclosed principal.

The learned judge was doubtless right in holding that, upon the facts proven, the bank was liable irrespective of the question of agency.

I understood the learned judge, in considering the question of agency, to lay down an entirely new rule as to the- liability of a principal for the acts of his agent, and that rule was, that any person not a party to the original contract might recover against the principal upon showing, by parol, that the agent was in fact agent of such alleged principal, and authorized to enter into the contract for him, although the name of the principal was not disclosed in the contract, or by any thing annexed to the signature of the agent.

If it had been the intention of the court thus to decide, it would have overturned a long series of decisions, and especially the case of Dewitt v. Walton (9 N. Y., 571), to which I referred in the opinion of Green v. Skeel (supra), as not having been followed.

A more careful examination of the ease of Coleman v. First National Banks of Elmira, satisfies me that the Court of Appeals did not intend in that case to unsettle the law of principal and agent, as I had been lead to believe from reading the head-note.

The case of Green v. Skeel was rightly decided, nothwithstanding the error as to the principle decided by the Court of Appeals.

. We must, therefore, hold the law to be, that a principal is not bound by the contract of an agent, unless the name of the principal is set forth in the contract, or annexed to the signature of the agent, showing that it was the intention of the agent to contract for and in behalf of his principal. If the contract does not show this important fact the principal is not bound, but the agent may be personally responsible on the contract.

The only remaining question is, has the agent so made the contract as to bind his principals, the widow and heirs of Lawrence Hayes, deceased.

He has annexed to his signature the words, " Attorney for the estate of L. Hayes.” Is this statement equivalent in law, to declaring that he signs the note as attorney for the several persons who constitute the widow and heirs of said Hayes ?

It is said in 1 American Leading Cases, that in order that a principal may be bound upon a written instrument not under seal, it is necessary that his name should appear in some part of the instrument. The rule is, that in suing on a written instrument, such as a promissory note, the whole liability must be made out on the instrument itself, and that parol evidence is not admissible to alter or add. to a written agreement that is made the grounds of the action, and therefore a principal cannot be made liable on a written instrument, or by force of a written agreement, when his name does not appear in the instrument or agreement as a.party to the contract. If the names of the widow and heirs must be disclosed on the face of the instrument in order to subject them to liability, it is not done in this case, aud the plaintiff was rightly nonsuited. In Clinton v. The Hope Insurance Company (45 N. Y., 454), the action was upon a policy of insurance issued by the defendant, " insuring the estate of Daniel Ross ” for one year, on a cotton mill and the machinery therein.

The property had been insured by defendant during the life of Ross, and after his death the widow applied for and obtained the policy in suit, for the benefit of herself and children. Ross died intestate, leaving surviving him a widow and three children.

A contract was entered into between the widow and the guardian of the infants to sell the insured property to the plaintiff, but the conveyance was not made until after the fire.

The objection was taken on the trial, that the widow, as administratrix, did not have, at the issuing of the policy, an insurable interest therein.

The Court of Appeals held that it was not essential to the validity of the policy of insurance that the insured should be named in it, and that the words, the estate of David Ross, used in the policy, were intended to designate the person holding the legal title, and to speak of the property left by a deceased person, including the real property, especially before final settlement of his affairs; and it was also held that the interests both of the administratrix and of the heirs in the insured property were covered by the policy.

It was held in Cruger v. Dougherty (43 N. Y., 107), that an assessment upon certain leases to J. K., and other legal heirs of the late J. K. deceased, or their heirs or assigns, the J. IL first named being dead at the time of the assessment, was void.

The statute under which the assessment was made, directed it to be made upon the person or persons entitled to receive the rents, in the same manner and to the same extent as any personal estate.

In Wheeler v. Anthony (10 Wend., 346), it was held, that where a farm is owned and actually possessed by the widow and heirs of a deceased person, the designation of such owners in a tax-list and warrant for the collection of a common school distinct tax, as the widow and heirs of A. B. deceased, is a sufficient compliance with the directions of the statute, to justify the collector in executing the warrant.

I am unable to understand why the courts should have arrived at such widely different conclusions in the two cases. In both the tax was personal and it would seem that the assessment was either void or valid in both. It seems to me that the principle decided in Clinton v. The Hope Insurance Company, must be confined to contracts of insurance, and cannot be extended beyond them.

If I am right in so holding then this case is left to be governed by the law of principal and agent, and as the defendants are not named in the contract sued upon they are not liable.

The nonsuit was right and the judgment must be affirmed.

Present — Mullin, P. J., Smith and Noxon, JJ.

Judgment affirmed.