Cox v. Pearce

• Decision Date: 05 March 1889
• Citation: 112 N.Y. 637,20 N.E. 566
• Parties: COX et al. v. PEARCE et al.
• Court: New York Court of Appeals Court of Appeals

112 N.Y. 637

20 N.E. 566

COX et al.

v.PEARCE et al.¹

Court of Appeals of New York.

March 5, 1889.

Appeal from supreme court, general term, Second department.

Action by James S. Cox and John W. Rockwell against Edgar O. Pearce and others, as executors of the will of Hosea O. Pearce, deceased, to recover the price of goods sold to a firm of which the decedent was a member, but who had retired from the firm at the time of the sale. The plaintiffs were successors to the firm of Cox & Boyce. George Marriott was a broker who solicited orders on behalf of the plaintiffs. Judgment was given for plaintiffs, and defendants appeal.

Albert G. McDonald, for appellants.

Leavitt & Keith, for respondents.

ANDREWS, J.

The notice given in 1878 by Hosea O. Pearce to Marriott, on the occasion of the application of Marriott to him for an order from Pearce & Hall for another cargo of coal, that he had retired from that firm, was, we think, notice to Cox & Boyce. It is conceded that Hosea O. Pearce withdrew from the firm of Pearce & Hall, November 1, 1878, and that the business was continued thereafter under the same firm name by one of the partners in the original firm, and two new members associated with him. The only serious question upon the effect of the notice given to Marriott arises upon the point whether he was in law the agent of Cox & Boyce, and received the notice in that capacity, so that knowledge of the dissolution communicated to him by the retiring partner of the firm of Pearce & Hall was imputable to Cox & Boyce. If the knowledge of Marriott was acquired in the course of his agency, and while engaged in a transaction for Cox & Boyce, which made the disclosure to him suitable, and the receiving of such notice was within the scope of his agency, it was in law notice to his principals, although never communicated to them. The failure of Marriott to communicate the information constituted, on the assumption stated, a breach of duty to his principals, but as to Pearce the notice had the same effect as though the duty had been faithfully performed. Ingalls v. Morgan, 10 N. Y. 178; Story, Ag. § 140, and cases cited. So, also, on the assumption that Marriott was the agent of Cox & Boyce to receive the notice, it is of no consequence that, in 1884, when the sale was made which is the subject of this action, he had forgotten it, and it was not present in his mind or recollection. If, in 1878, Cox & Boyce had actual or constructive notice that Hosea O. Pearce had withdrawn from the firm, it operated, once for all, as a revocation from that time of any authority to deal with the new firm on the credit of his name, and he could only be bound by new transactions on proof of a fresh authority. The doctrine that notice to an agent before his employment as agent, or notice not acquired in the very transaction which is the subject of investigation, does not bind the principal as a constructive notice, except under certain limitations, is a generally accepted principle in the law of agency. Distilled Spirits, 11 Wall. 356;Bank v. Chase, 72 Me. 226.

But if the principal already had notice, actual or constructive, of a fact material to the new transaction, the new dealing must be judged, and the rights of the parties must be determined, on the assumption that the fact of which he had prior notice, actual or constructive, was then known to him. In other words, notice to a party, actual or constructive, in a particular transaction, of a fact which exempts a defendant from liability in that transaction, is notice of all subsequent transactions of...