McMonnies v. Mackay

By the Court,

Sutherland, P. J.

The two important questions in this case were: 1st. Whether McNair should have been debited with the full amount of the notes given by the defendants, for the teas, or only with the amount paid or secured for such notes by way of compromise. 2d. Whether the pledging of certain parcels of the teas to Wilmerding & Mount, by the defendants, was a wrongful conversion of them to their own use, which released McNair from all liability for the subsequent losses on those parcels. The referee found in favor of the plaintiff on both of these questions,

In view of the character and importance of these questions, the findings of fact by the referee are singularly meagre and incomplete. In view of the first questions, there are no findings on the questions of fact, whether the defendants in purchasing the teas disclosed the name of their principal ; whether the notes were taken by the vendors in absolute payment; whether exclusive, credit was given by the vendors to the defendants; whether, when the defendants effected the compromise with the holders of the notes, and the notes were surrendered, and the defendants released and discharged, the holders of the notes knew, or had been informed, that the teas had been bought by the defendants, as the agents or factors of McNair; whether the holders of the notes, with whom the compromise was made, were the original vendors of the teas to whom the notes were given. In the absence of any finding of fact on either of these questions of fact, it is hardly safe, and it is certainly difficult, to decide the first and most important question in the case.

If the defendants at the time of the purchase of the teas, did not disclose their principal, the latter was liable to the vendors of the teas, and remained liable when this action was brought, unless he was discharged from such liability by the compromise and surrender of their notes effected by the. defendants after their insolvency. (Waring v. Faverick, 1 Camp. R. 85. Beebee v. Robert, 12 Wend. 417. Kymer et al. v. Suwereropp, 1 Camp. R. 100.) If at the time of the purchase of the teas the defendants did disclose to the vendors their agency, the notes of the defendants might have been received by the vendors in payment, and if so received, of course the principal never was liable. (Hyde v. Paige, 9 Barb. 150. Pentz v. Stanton, 10 Wend. 275. Waydell v. Luer, 3 Denio, 410.) But if, at the time' of the purchase and giving their notes, the defendants did not disclose their agency, I do not see how the defendants’ notes could have been received in payment by the vendors, as between the vendors and the principal.

Upon looking into the evidence in the case it is quite apparent, I think, that the vendors of the teas dealt with the defendants as principals, and without any knowledge of, or inquiry or information as to their agency. I think, therefore, McNair the principal, was originally liable to the vendors for the price of the teas.

The question then is, whether McNair was not discharged from his liability by the compromise with the holders of the notes and the surrender of the notes, effected by the defendants subsequently. I think he was, even on the facts found by the referee, general as they are, The inference from these facts is, I think, that the defendants effected the compromise and got up their notes, with money and securities of third parties ; that the holders of the notes received the money and securities in full payment and discharge of them. I do not see why the plaintiff in this action should be permitted to claim that this compromise proceeding was not a discharge as to McNair, of all liability for the price of the teas ; particularly as upon looking into the evidence in the case, it appears that the holders of some if not the largest portion of the notes, with whom the compromise was made, were not the original vendors of the teas. It may be that the original vendors had received the full face of a part if not all the notes.

If the vendors of the teas had retained all the notes, and the compromise was effected with them as holders of the notes, and they received money and securities of third parties, from the defendants, in payment and discharge of the notes, the vendors thereby, I think, discharged McNair from all-liability, whether he was known or unknown to them as principal. (Story on Agency, §§ 431, 440.)

The judgment therefore should be reversed and a new trial ordered, on the ground that on the facts proved by him, the referee came to a wrong conclusion on the first and most important question in the case.

Upon the other principal question in the case, whether the pledging of certain parcels of the teas to Wilmerding & Mount was a wrongful conversion &c., it is not necessary to pass. It is fortunate that it is not necessary ; for the findings of fact by the referee in view of this question, are also exceedingly meagre and defective. He should have found more particularly the facts, and circumstances under which the pledge was made : particularly whether the defendants had any lien, and if any to what extent, on the goods pledged, for commissions or advances, or both.

[New York General Term, May 4, 1863.

Sutherland, Ingraham and Clerke, Justices.]

It is plain from the whole case, that it was tried without a proper appreciation by the counsel or the referee of the Importance of certain questions of fact above adverted to.

In my opinion the judgment should be reversed, and a new trial granted, with costs to abide the event of the action.