Citizens' Nat. Bank of Los Angeles, Cal. v. Ariss

• Decision Date: 16 May 1912
• Citation: 68 Wash. 448,123 P. 593
• Court: Washington Supreme Court
• Parties: CITIZENS' NAT. BANK OF LOS ANGELES, CAL., v. ARISS et al.

123 P. 593

68 Wash. 448

CITIZENS' NAT. BANK OF LOS ANGELES, CAL., v. ARISS et al.

Supreme Court of Washington

May 16, 1912

Department 2. Appeal from Superior Court, Pierce County; M. L. Clifford Judge.

Action by the Citizens' National Bank of Los Angeles, Cal against F. W. Ariss and others, copartners under the style of Ariss, Campbell & Gault. From a judgment for plaintiff defendants appeal. Affirmed.

Hastings & Stedman, of Seattle, for appellants.

Raymond J. McMillan and Gross-cup & Morrow, all of Tacoma, for respondent.

ELLIS J.

Action by the plaintiff Citizens' National Bank of Los Angeles Cal., upon a negotiable draft cashed by it reading as follows: '$1,492.30. Los Angeles, Cal., 7-21, 1910. 8,892. Pay to the order of Citizens' Nat. Bank fourteen hundred and ninety-two dollars with exchange value received and charge the same to account of to Pacific Fruit & Produce Co. No. P. F. E. 3591, Tacoma, Wash. C.J. Hicks, Agent. Ariss, Campbell & Gault.' The complaint alleged that the defendants by their agent, C.J. Hicks, thereunto duly authorized, made, and delivered the draft, that the drawee refused payment of which the defendants had notice, and that they on demand refused and still refuse to pay to plaintiff the amount of the draft. A demurrer to the complaint was overruled. The defendants by answer admitted that Hicks drew the draft, denied that he was their agent, and alleged, in substance, as an affirmative defense that Hicks was engaged in the business of selling Southern California fruits; that he offered to sell to the defendants a car load of lemons which he represented as free from frost and scale, and as of designated sizes; that, relying upon these representations, the defendants accepted his offer, and directed him to ship the fruit to the Pacific Fruit & Produce Company, the drawee of the draft at Tacoma. The answer further alleged the existence of a custom at Los Angeles, Tacoma, and Seattle that, when car load lots of citrous fruits were sold, the seller would draw a draft upon the consignee, attach it to the invoice of the shipment, and place it in a bank to be forwarded to and collected from the consignee subject to his inspection of the fruit, the draft being paid by the consignee only if the fruit was accepted as meeting the representations upon which it was sold; that this custom was well known to the parties, and that with the custom in view the defendants directed Hicks to issue the draft in question; that the lemons upon inspection at Tacoma by the consignee and the defendants were found not free from frost and scale, not of specific sizes nor otherwise as represented, and that they were worthless and unsalable; that the consignee refused to accept them, and declined to pay the draft for failure of consideration; and that Hicks had no authority to issue the draft as that of the defendants. The cause was tried to a jury. At the close of the plaintiff's evidence the defendants moved for a nonsuit, which was denied. When all of the evidence was in, each party moved for an instructed verdict. The motion of the defendants was denied, that of the plaintiff was granted, and the court gave judgment against the defendants for the amount of the draft. The defendants' motion for a new trial was overruled, and they have appealed.

The appellants' first contention is that the demurrer to the complaint should have been sustained, because, as they argue, the draft did not on its face purport to be their obligation. There would be force in this contention if Hicks had signed merely, 'C. J. Hicks, Agent,' without disclosing the name of his principals, but he also signed the name of his principals. This is not a case of an undisclosed principal which would preclude evidence of an intention to bind him. Notwithstanding the irregularity of the signature of the principals by the agent, the draft was theirs if they intended that it should be. If he was authorized to make the draft as theirs, they were bound by it. In the absence of evidence to the contract, the signature here in question should be regarded as sufficient to indicate that the agent was acting ministerially only and without intent to bind himself personally. 1 Daniel on Negotiable Instruments (3d Ed.) § 298; Long v. Colburn, 11 Mass. 97, 6 Am. Dec. 160. The authority of the agent to sign negotiable paper for his principal may be proved as in other cases of agency. Rem. & Bal. Code, § 3410. In view of the allegations of the complaint that Hicks was agent for the appellants duly authorized to make the draft for them, the demurrer was properly overruled.

The appellants' principal contention is that Hicks as agent had no authority either apparent or actual to sign their name to or bind them by a bill of exchange. This presents the pivotal issue in the case. In considering this question, it will be necessary to discuss the evidence at some length. The appellants were commission merchants maintaining offices at Seattle and Tacoma, Wash., and at Vancouver, B. C. The evidence shows that Hicks was not engaged in buying and selling fruit on his own account, but exclusively in representing outside buyers in the California market. In the spring of 1910 a member of the defendants' firm, the appellant Campbell, called upon Hicks, who proposed that he for a salary act as agent for the appellants in the purchase of fruit in Southern California. Subsequently in response to a telegraphic request from the appellants, Hicks put his offer in writing as follows: 'Los Angeles, Cal., March 15th, 1910. Ariss, Campbell & Gault, Seattle, Wash.--Gentlemen: Your telegram of this date just received. The proposition I made to Mr. Campbell was that I make the same arrangement with you that now applies to the ten people on my letter head, and that is that you enter into a contract with me to pay me $50 per month for one year. In return for this I will represent you exclusively so far as your territory is concerned, on everything that you buy out of Southern California. I will solicit consignments, endeavor to secure you shipper's accounts, nurse any business arrangements which you may now have, inspect personally, or have a competent man inspect all cars bought for you; in short represent you as fully as if I were representing you alone in this territory, you to pay all telegrams both ways. You can readily understand that with the amount of business I control I am entitled to, and receive more consideration from the shippers than if I merely represented one concern, no matter how large that might be. In addition to the above I shall keep you posted from time to time as to conditions that exist here, and on request from you will gladly give you reliable information on any specific line which you may be interested in. I am sending you in this copy of a letter which I am just getting out to my members. I have had some correspondence with a mutual friend of ours in Seattle, J. H. Allen, Jr., and am convinced that I am making no mistake in...