Perkins v. Boothby

• Citation: 71 Me. 91
• Parties: FORDYCE B. PERKINS v. ANSEL N. BOOTHBY and others.
• Decision Date: 09 March 1880
• Court: Maine Supreme Court

71 Me. 91

FORDYCE B. PERKINS v. ANSEL N. BOOTHBY and others.

Supreme Judicial Court of Maine.

March 9, 1880

THIS was an action of assumpsit upon five promissory notes. The first, dated November 8th, 1875, for $140, payable on demand with interest; second, dated February 3d, 1876, for $250 payable on demand with interest at seven per cent.; third dated September 16th, 1876, for $145, payable on demand with interest; fourth, dated September 22d, 1876, for $900 payable on demand with interest; and fifth, dated January 17th, 1877, for $500, payable on demand with interest.

The action was referred, and the report of the referee makes a part of the case, and " is submitted to the full court to be acted upon with same powers as this court." The plaintiff was allowed to amend his writ by filing a count for money had and received.

Report of referee.--" YORK, ss. Pursuant to the foregoing rule I, the referee therein named, having notified, met and fully heard the parties, and maturely considered their several allegations, and the evidence produced to support the same, am of opinion, and do report accordingly, that the defendants were a joint stock company, organized under a code of by-laws for buying and selling dry goods and groceries for a profit, and for this purpose occupied a store. The directors annually chosen, as provided by the by-laws, had the general charge and control of the business, and in June, 1872, they appointed A. L. Cleaves an agent of the company, whose duty it was to have charge of the store, sell the goods, and from time to time make such purchases of goods as might be necessary in his judgment, subject to the general oversight of the directors. The agent usually purchased the goods upon the credit of the company, sometimes giving a company note therefor, which notes were recognized as binding, and were paid. He had no authority for hiring money upon the credit of the company, or giving the company notes therefor, unless implied from his agency. In a few instances he borrowed money of persons not members for the payment of debts previously contracted for the purchase of goods, for which he gave a company note. These notes, with two exceptions, were paid by the agent, and neither these notes nor the fact of hiring the money came to the knowledge of the directors. In these two exceptions the notes were not fully paid by the agent, and after the company ceased to do business they were presented to and paid by the person appointed to settle its affairs."

" In several instances the agent hired money of some of the directors and members to meet debts falling due for goods purchased, in some cases giving company notes, which loans he repaid without the knowledge of any except the lenders. At or about the dates of the notes in suit, this agent hired of the plaintiff through Silas Perkins, acting as plaintiff's agent, the several sums of money for which said notes are given. Four of the notes were signed and delivered by said Cleaves to the payee while he was acting as agent for the company. The fifth, that for $900, dated September 22, 1876, though signed before was not delivered by Cleaves until after he was discharged from his agency. In making these loans neither Silas Perkins nor his principal, the plaintiff, had any knowledge of any other loans of money obtained for the company by Cleaves, or of the notes given by him in their name, but relied upon his authority as agent. Neither the directors nor the company had any knowledge of these loans or the notes given for them until after they had ceased to do business, and then they repudiated both loans and notes."

" The money for which these notes were given was received by Mr. Cleaves, the company's agent, and by him appropriated to the payment of the debts of the company, contracted for goods previously purchased, but the directors had no knowledge of such loan or appropriation unless knowledge is implied from the fact that it was done by their agent."

" If upon the foregoing statement the plaintiff is entitled to recover upon the four notes only which were delivered by Cleaves during his agency, then he is entitled to judgment for the sum of eleven hundred eighty-three 76-100 dollars ($1183.76) debt; if upon all the notes he is entitled to judgment for twenty-two hundred six 46-100 dollars ($2206.46) debt, or if he is not entitled to recover upon either note and can recover for money received, upon this writ with such amendments as the court may allow, then he is entitled to the latter sum of twenty-two hundred six 46-100 dollars ($2206.46) debt, and in either case to costs of reference, taxed at forty-seven dollars and seventy-two cents ($47.72) and costs of court, to be taxed by the court."

" If the plaintiff is not entitled to recover as above, then judgment is to be entered for the defendants, with costs of reference, taxed at thirteen dollars and ninety-two cents ($13.92) and costs of court, to be taxed by the court.

CHARLES DANFORTH."

R. P. Tapley and J. M. Goodwin, for the plaintiff, cited: Story Agency, c. 5, § 45, c. 6, § § 84, 85, 87, 89, 92, 95, 104; 1 Bell's Com. Law, 478; 1 Addison Contr. § 56; Houghton v. Nash, 64 Me. 477; 1 Addison Contr. 50; 3 Ibid. 513; U. S. Dig. Tit. Money Received, § § 5, 8, 11, and cases cited; Mason v. Waite, 17 Mass. 560; 2 Denio 91; Lewis v. Sawyer, 44 Me. 332; Merchants' Bank v. State Bank, 10 Wall. 604; Angell & Ames Corp. 599, 600.

H. Fairfield, for the defendant, cited: Story Agency, § 119, a; § 69 and note 2; 1 Pars. Notes & Bills, 107; 1 Pars. Contr. 49, 51, note h.; 9 Port. (Ala.) 428; 6 Blackf. (Ind.) 369; 10 Johns. (N. Y.) 114; N. Y. Iron Mine Co. in Error v. First Nat. Bank of Negaunee, opinion S. J. C. of Michigan, October, 1878, reported in Michigan Lawyer for October, 1878, p. 85. The plaintiff lays great stress upon the fact that this money was received by Cleaves and appropriated by him for the payment of goods, which went into our store. But this is not an equity matter, and the question is not, Who received the benefit of the money borrowed? but only, Was Cleaves authorized to borrow money? or, Was the plaintiff justified in believing he had that authority? The manner in which Cleaves appropriated the money, does not change the law of agency.

SYMONDS J.

Upon the facts found by the referee in this case, it must be held that the agent, Cleaves, had no authority to give the notes of the defendant company, in order to procure loans of money. As the notes in suit were given by the agent for that purpose, it would seem that the plaintiff cannot recover upon them.

But it appears by the report of the referee, that, " the money for which these notes were given was received by Mr. Cleaves, the company's agent, and by him appropriated to the payment of the debts of the company, contracted for goods previously purchased." The directors of the company had no knowledge of such loan and appropriation at the time they were made, but by the act of their agent in so applying moneys hired of the plaintiff, certain legal liabilities against the defendants have been discharged. The case presents the question, whether the defendants can knowingly retain the benefit of money so hired and used, and at the same time legally refuse to repay the loans.

In considering this question, it may properly be assumed from the statement of the case, that the agent had no more authority to hire money upon the credit of the company, than he had to effect such loans by issuing the notes of the company therefor; --that the defendants had no knowledge of the loans or the notes, until after they had ceased to do business as a joint stock company, when they repudiated both. Such repudiation, however, was apparently a declaration only not an act. The appropriation by the agent of the loans to the payment of the debts of the company remained effective. The directors did nothing to defeat it. The debts were discharged. The acts of the agent in hiring and in appropriating the money were beyond his authority and without the knowledge of the principals. The only ground of liability is the...