Paul v. Grimm

Opinion by

Mb. Justice Gbeen,

In 2 Benjamin on Sales, sec. 1099, note 26, it is thus stated: “ Payment to an agent must be in money. This is the general principle in the absence of express authority to the agent to receive something else than money,” citing a large number of cases.

In the case of Catterall v. Hindle, L. R. 1 C. P. 186, Keating, J., delivering the opinion, said, “ That a broker or agent employed to sell has, prima facie, no authority to receive payment otherwise than in money, according to the usual course of business, has been well established, and it seems equally clear that if, instead of paying money, the debtor writes off a debt due to him from the agent, such a transaction is not payment as against the principal, who is no party to the agreement, though it may have been agreed to by the agent.” Citing several cases.

In Underwood v. Nicholls, 17 C. B. 239 (84 E. C. L. Rep.), the facts were that A, as agent for B, sold wine to C, who paid for it bjr returning to A his own check which C had cashed for him a few days previously and which it appeared had never been presented by C. Held that this was not, as between B and C, payment of C’s debt, although the jury found that the transaction was bona fide. Wells, J., said, “ Prima facie an agent should receive debts for his principal in money. A payment by a check the jury would no doubt find to be a payment in the ordinary course of business. The transaction here merely amounts to the giving back of the agent’s check which in his hands was a piece of waste paper.”

In McCulloch v. McKee, 16 Pa. 289, we held that an agent having authority only to collect a debt, has no right to take a note for the amount of it from the debtor to himself and thus substitute himself as creditor. Chambers, J., delivering the opinion, said, “ Carpenter’s authority by the order to McKee was to pay the money to McCulloch. McCulloch was a special agent to receive the money from McKee, and as such he had not authority to substitute anything else for the money so as to discharge McKee. An agent specially employed to receive payment in money cannot vary from his authority in receiving a.bill.”

Fifth National Bank v. Ashworth, 123 Pa. 212. If a bank receiving a check upon another bank for collection, surrender the check to the drawee and receive a cashier’s check in lieu thereof, its liability to its depositor becomes fixed, as much as if it had received the cash. “ It has no right unless specially authorized to do so to accept anything in lieu of money.” Paxson, J.

In Opie v. Serrill, 6 W. & S. 264, Sergeant, J., delivering the opinion, said, “ An agent undertaking to collect a debt placed in his hands, who releases it and takes from the debtor a new note to himself, does in law receive payment of the debt, and is at once liable to the principal as if he had received the money. . . . He must be considered as having made himself liable for the money he ought to have received.”

In Wilson v. Wilson, 26 Pa. 393, Lewis, C. J., said, “ The primary obligation of an agent whose authority is limited by instructions, is to adhere faithfully to those instructions in all cases to which they ought properly to apply : Story on Agency, sec. 192. He is' in general bound to obey the orders of his principal exactly, if they be imperative and nob discretionary; and in order to make it the duty of a factor to obey an order it is not necessary that it should be given in the form of a command. The expression of a wish by the consignor may fairly be presumed to be an order. ... To justify a departure from instructions where a loss has resulted from such deviation, the case must be brought within some of the recognized exceptions.”

The foregoing authorities are not, and cannot be, controverted, and it is only necessary to show that they are applicable to the present case. The letter of attorney under which the defendant’s intestate sold the plaintiffs’ land authorized him to sell the same, “ for such sum or price and on such terms as to him shall seem meet,.... and to ask, demand, recover and receive all sums of money which shall become due and owing to us by means of such bargain, sale or lease and to take all lawful ways and means for such recovery thereof.” By virtue of the authority thus conferred, the attorney in fact, James L. Thompson, very shortly after the date of the letter of attorney, which was Dee. 23, 1882, sold and conveyed the- coal underneath the land of the plaintiffs, by deed dated Jan. 13, 1883, to one R. C. McCurdy for the sum of “ six thousand dollars lawful money of the United States,” as is recited in the deed. In point of fact the agent instead of requiring money from the purchaser took from him six thousand dollars of bonds of the Westmoreland County Coal & Coke Co. which proved to be utterly worthless and of no value whatever.

The learned court below was of opinion that because the letter of attorney granted authority to the attorney to sell “ on such terms as to him shall seem meet,” it was competent for him to take the bonds in payment of the purchase money instead of money. We cannot assent to that proposition. The word “ terms ” in such a connection in ordinary acceptation means the times and amounts of the payments. If there are any deferred payments, it may also embrace stipulations as to how such payments shall be secured. It certainly does not import that the attorney has license to take anything he pleases as payment whether it has value or not. Nor, we apprehend, does the use of this word authorize the attorney to subvert the rule of law applicable in such cases and substitute for money, which the law implies, specific property of any kind. The court also thought that because the word “ price ” was used it might authorize the acceptance of some other form of payment than money, though the decision was not put upon that ground. As however counsel for the appellees has pressed this ground in the argument, we only stop to say that we regard it as altogether untenable. In the connection in which it is used here we cannot recognize any distinction between it and the word “ sum.”

A point was also suggested by the court, and insisted upon by appellee’s counsel in argument, that this is an action for money had-and received, and therefore nothing can be recovered but money actually received by the defendant. This was not really true even before the practice act of 1887 was passed: Opie v. Serrill, 6 W. & S. 269, in which it was held that the action included all money which the defendant ought to have received. But since assumpsit has become a statutory remedy its scope has been vastly enlarged and without any doubt embraces everything claimed in this action.

The findings of the court below do not inform us as to whether the plaintiffs ever had any knowledge that the bonds in question were taken in payment for their coal, nor whether they ever assented to that kind of payment, but certain it is the bonds were never delivered to the plaintiffs, because they were found among the papers of the attorney after his death. Nor is there any finding or evidence that the bonds were ever tendered to the plaintiffs. If they ever did have any value and had been delivered or tendered to the plaintiffs at the time they were taken in January, 1888, there would have been an opportunity to realize on them at least what thejr were worth in the market. When the attorney chose to keep them in his own possession he is certainly chargeable with the loss which resulted during his retention of them. So far as this record shows he never gave his principals anything for their coal except a few dollars which he paid some of them in 1886 and for which sums he took their releases.

If the attorney had exercised the commonest and most ordinary prudence, and had taken from the purchaser, bonds secured by a mortgage on the property sold, with a suitable agreement as to the removal of the coal, he could doubtless have secured the payment of all the purchase money for his principals, and saved himself from any ulterior liability. But for the courts to sanction the degree of license in dealing with the property rights intrusted to him by his principals, which he practiced in this instance, would be so wide a departure from the law as we understand it that we cannot give it any Sanction. We cannot agree that an attorney in fact with power to sell the lands of his principal for lawful money, may accept as payment the worthless bonds of an insolvent company and thereby discharge himself of all liability to his principals.

All the assignments of error except the fourth and seventh are sustained.

The judgment of the court below is reversed and the record is remitted with instructions to the court below to enter judgment in favor of the several plaintiffs for such sums as are due them after deducting all money payments received by them respectively with costs.

Mr. Justice Williams and Mr. Justice Mitchell dissent.