Sharp v. Emmet

• Decision Date: 15 February 1840
• Citation: 34 Am.Dec. 554,5 Whart. 288
• Parties: SHARP v. EMMET.
• Court: Pennsylvania Supreme Court

5 Whart. 288

34 Am.Dec. 554

SHARP v. EMMET.

Supreme Court of Pennsylvania.

February 15, 1840

IN ERROR.

1. A factor who remits a bill to his principal in payment of goods sold on his account, and endorses the bill, does not thereby become personally responsible to his principal, if he receives no consideration for guaranteeing, and does not expressly undertake to do so.

2. The receipt of a certain amount per cent. upon sales, for " commission and guaranty," does not create a contract to guarantee the validity of a bill purchased bona fide in the usual course of business and remitted to the principal.

3. Whether evidence shall be given of contradictory statements made by a witness examined on the trial, without first interrogating or advertising the witness proposed to be contradicted, is a matter for the discretion of the Court trying the case; and their decision will not be reviewed in this Court.

4. In an action against a factor to recover the amount of a balance alleged to be due to the principal abroad, and remitted by a bill of exchange, endorsed by the defendant, which was protested for non-payment, where the question was, whether by receiving a certain per centage for " commission and guaranty," the validity of the remittance was guaranteed, it was held, that letters of the defendant to another mercantile person abroad, and accounts sent by the defendant to him, showing his transactions of a similar nature with that other person, were not admissible on the part of the plaintiff--being res inter alios acta.

THIS was a writ of error to the District Court for the City and County of Philadelphia, to remove the record of an action on the case, brought by Henry Emmet against John Sharp, Jun.

The plaintiff was a manufacturer of woollen goods, residing at Halifax, in England, and had consigned certain goods for sale to the defendant, who resided in Philadelphia. The defendant in advance of the sales of these goods, remitted to the plaintiff a bill of exchange, drawn by Jeremiah Thompson, of New York, on Rathbone & Co., of Liverpool, for two hundred and fifty pounds, which was protested for non-acceptance, and afterwards for non-payment. This action was brought to recover the balance of account alleged to be due to the plaintiff; being the amount of this bill, with the charges, and interest.

The declaration was in assumpsit upon the bill of exchange with the general money counts. The defendant pleaded non assumpsit, and payment; and upon these issues the cause came on for trial, before PETTIT, (Pres't) on the 23d of April, 1838, when the plaintiff gave in evidence the correspondence between the parties, the bill of exchange, and protest; and the day-book and ledger of the defendant, to show that he had received the proceeds of sales of the goods.

The defendant produced several witnesses in respect to the character and commercial credit of Thompson, the drawer of the bill; and also upon the point of usage respecting guarantees of sales and remittances. Among the witnesses was one Spackman, who testified that he was one of Thompson's agents for negotiating his bills in Philadelphia; that his credit was good, until the news arrived of Rathbone & Co. having refused to accept his bills; and that he never heard any suspicions or doubts of the goodness of his bills, until then.

The plaintiff, to rebut the testimony of the defendant on this point, produced several witnesses to prove that the credit of Thompson was bad; and that the usage in respect to remittances was different from that alleged on the part of the defendant. In the course of his testimony he called a witness to prove, that in a conversation between himself and Spackman, the witness for the defendant, the latter had heard doubt and suspicion expressed of the goodness of Thompson's bills, some months before the intelligence from Liverpool of the refusal of Rathbone & Co. to accept them. This testimony was objected to by the defendant's counsel, but admitted by the Court; and exception taken.

The plaintiff's counsel further offered in evidence certain letters written by the defendant in the year 1827, to the firm of Halliday, Son & Brooks, of Manchester, in England, with account-sales enclosed; which evidence was objected to on the part of the defendant, but admitted by the Court, who said that one of the points made by the defendant's counsel was, that neither the rate of commission charged by the defendant to the plaintiff, nor the form in which it was charged, imported that he was a guarantor of the remittance; and the evidence might tend to show an interpretation by the defendant of the phrase " commission and guarantee five per cent." as the footing on which he was willing to do such business.--The admission of this testimony was also excepted to.

The nature and substance of the evidence given on the trial, and the points discussed are fully stated in the charge of the learned judge; which was as follows:

" This is an action of assumpsit, brought by Henry Emmet against John Sharp, Jr. The plaintiff is a manufacturer in Yorkshire, England. In and before 1827, he made different consignments of goods to the defendant, a merchant at Philadelphia. Before the 19th of September, 1827, the defendant received certain dry goods by a vessel called the Tobacco Plant, and on that day, remitted to the plaintiff a bill of exchange, dated New York, 15th of September, 1827 drawn by Jeremiah Thompson, in his (J. Thompson's) own favour, on Messrs. Rathbone, Brothers & Co. of Liverpool at sixty days's sight, for two hundred and fifty pounds. It was endorsed in blank by J. Thompson; and then by the defendant, in these words, " Pay to order of H. Emmet J. Sharp, Jr." The bill was remitted in advance of sales of goods, by the Tobacco Plant. On the 26th of October, 1827, the defendant, having heard nothing further from England on the subject, made out his account-sales, in which he charged on the private sales of goods, " five per cent. commission and guarantee:" this was forwarded on the 30th of October, 1827. About that time news reached Philadelphia of the dishonour of Jeremiah Thompson's bills on Liverpool. The bill in question was refused acceptance, and never paid. The defendant having accounted to the plaintiff for all other goods, the question now is, who is to bear the loss of this bill. Much testimony has been offered as elucidating the case, and much ability displayed in argument. It is the duty of the Court to ascertain whether there are any legal principles applicable to the case; and if so, to state them, so that the jury can apply them. I will make such references to the testimony as I proceed, as the cause seems to require.

There is one view of the case, asserted by the plaintiff, in regard to which the defendant agrees, that if the plaintiff is sustained in point of fact, he must recover. As there is no dispute about matter of law here, I will notice it first, and thus prepare the way for what have been treated as the more debateable questions. The plaintiff says, that admitting for a moment, that the defendant was a mere agent to remit a bill, and that his endorsement neither proved nor implied any thing against him, yet that there was not in fact a prudent and judicious performance of his agency. The defendant contends that there was; and on this point there is an issue, which, if with the plaintiff, carries the whole case, no matter what may be the correct view of the rest of the cause. The rule of law is conceded, that the agent is bound to exercise a sound and honest judgment in matters left to his discretion. He must act with reasonable care and prudence, and exercise his judgment after proper inquiry and precautions. If ordinary diligence, that which a prudent man exercises in his own affairs, would have enabled him to learn the discredit of a party to a bill remitted, he will not be discharged from responsibility. The defendant would be bound to show that J. Thompson, whose bill he remitted, was in such credit as to justify the remittance. He has produced William Jones, Samuel Spackman, Richard Oakford, and James Mott, on this point; and he relies on some other testimony.

The plaintiff, to rebut on this point, has produced Henry Cope Wm. Mcllvaine, John A. Brown, Knowles Taylor, R. Willing, J. R. Evans, Benjamin Jackson, R. M. Blackford, Wm. C. Cardwell, and John Cook. The defendant alleges that the commercial world in general trusted J. Thompson; that the commercial community at large had no reason to distrust him; that he, the defendant, had no such notice of any facts as should, in the exercise of ordinary prudence, have put him on his guard; the defendant says, that while commercial men generally yielded full credit, those who doubted were but exceptions; resting, some of them on knowledge peculiar to themselves, and others on mere caprice or fastidiousness, without known grounds. The plaintiff says in reply, that the evidence shows a different state of things; that every New York witness, having no peculiar knowledge, doubted Mr. Thompson's credit; that those who were engaged in business here largely, saw and knew Mr. Thompson's situation, and made no secret of their views. That so far from the commercial world generally having confidence, there was general distrust, and that those who did give credit were the exceptions. The plaintiff refers to two circumstances in support of his views. The first, the price of the bill; second, that it was in advance of sales. If in advance for any object of favouritism or undue partiality to a man in doubtful circumstances, the matter may have weight. If honestly done, to put the principal in funds at an early day, it was not unusual or improper; if bought at lower than the usual rate in market of...