Stainback v. Read

• Decision Date: 26 May 1854
• Court: Virginia Supreme Court
• Parties: STAINBACK v. READ & Co.

52 Va. 281

STAINBACK v. READ & Co.

Supreme Court of Appeals of Virginia.

May 26, 1854

1. A power of attorney given to an agent to act in the name and on behalf of his principal, in the absence of anything to show a different intention, must be construed as giving authority to act only in the separate individual business of the principal.

2. A power of attorney to draw, endorse and accept bills, and to make and endorse notes, negotiable at a particular bank, in the name of the principal, does not authorize the attorney to draw a bill in the joint names of himself and his principal.

3. Such a power does not authorize the attorney to draw a bill in the name of his principal upon a person having no funds of the principal in his hands. And if such a bill is accepted and paid by the drawee for the accommodation of the drawer, there is no implied obligation of the principal to repay him.

4. Such a power does not authorize the attorney to draw a bill in the name of his principal for the benefit of the attorney; and a party dealing with the attorney, and having the means of knowing that the agent was exceeding his powers in thus drawing the bill for his own benefit, cannot recover of the principal.

This was an action of assumpsit in the Circuit court of Petersburg, brought by C. C. Read & Co. against Littleberry E. Stainback. Upon the trial the plaintiffs introduced in evidence a bill of exchange, which bore date the 14th of December 1842, and was directed to them, whereby they were requested to pay to P. C. & J. D. Osborne &amp Co. one thousand nine hundred and sixty-nine dollars and forty-two cents. The bill was signed by L. E. Stainback, by F. C. Stainback, attorney, and by F. C. Stainback, and was endorsed by the payees and F. C. Stainback; and was paid by the plaintiffs, who charged the amount on their books to F C. Stainback and the defendant; neither of whom had at the date of the bill, any funds in the hands of the plaintiffs.

The plaintiffs also introduced in evidence the power of attorney from L. E. Stainback to F. C. Stainback, set out in the next preceding case. They also offered evidence to prove that up to some time about the beginning of 1842 the defendant and F C. Stainback and another, who died in 1841, were in business in Petersburg as merchants under the name of L. E. Stainback Son & Co. That the defendant is far advanced in life attends to no business, and that F. C. Stainback had the management and settlement of the business of L. E. Stainback, Son & Co. up to the time of his failure in 1843. That L. E. Stainback, Son & Co. and also F. C. Stainback, had an account at the Bank of Virginia in Petersburg in December 1842, and previously, and that L. E. Stainback, Son & Co. were indebted to that bank until 1843. That on the 15th of December 1842 the bill aforesaid was discounted by said bank, and the proceeds passed to the individual credit of F. C. Stainback, the draft not then having been accepted by the plaintiffs. That in managing the bank business of L. E. Stainback, Son & Co. F. C. Stainback frequently endorsed notes and bills last, that he might control the proceeds.

The plaintiffs also introduced two letters, both of them in the handwriting of F. C. Stainback, and addressed to them. One bears date September 21st, 1842, and is signed L. E. Stainback, Son & Co. The only part of it having any bearing on this case is as follows:

" I enclose some paper, for which please send me your notes, payable at Farmville, viz:

My note dated 2d September, at 90 days, favor L. E. S. 1619 48

Do. do. 7th do. do. 1941 67

$ 3561 15

For which be pleased to send me your notes in favor of L. E. Stainback, Son & Co., dated 1st September, at 90 days, for $ 1618 38, and dated 8th September, at 90 days, for $ 1942 77, which will balance. You can use the notes if you wish.

L. E. Stainback, Son & Co. have $15000 to pay on 4th of next month, and I wish to provide myself with paper in time. Your notes you will make payable in Farmville."

The second letter bears date December 15th, 1842, and is signed F. C. Stainback. In it he says, " I have yours of 10th, handing your check for $ 1000. Your draft fell due to day, not on 16th, and I had to alter the date to 15th. I would not have used it if I could have avoided it."

" P. S. The draft of $ 1740 92 is right. We had another discounted to day for about $1900. Will duly take care of them."

The plaintiffs also introduced in evidence certain bills or drafts, one of which was endorsed by L. E. Stainback, by F. C. Stainback attorney, F. C. Stainback, and L. E. Stainback, Son & Co.; and another was signed as the bill on which this action is founded is signed.

The defendant offered evidence to prove that at the date of the power of attorney aforesaid, the defendant was engaged in mercantile business in his own name in Petersburg, F. C. Stainback being a clerk in the defendant's house; and that F. C. Stainback was at that time under age, and engaged in no business on his own account; and that the firm of L. E. Stainback, Son & Co. was formed about 1836 or 1837.

The evidence being through, the defendant moved the court to instruct the jury as follows:

1st. That under the power of attorney given in evidence in this cause, F. C. Stainback had no authority to draw the bill on the plaintiffs, the payment of which constitutes the foundation of this action; and that the drawing of such bill on the plaintiffs, and the payment thereof by them, did not authorize the said plaintiffs to maintain this action against him.

2d. That if they believe from the evidence, that the bill, the payment of which by the plaintiffs constitutes the foundation of this action, was drawn by F. C. Stainback for his own benefit, and the proceeds thereof went to his own use, that it was not authorized by the power of attorney in evidence in this cause, and that it was the duty of all persons dealing with the said F. C. Stainback as attorney, to notice the limitations of his authority, as the same was conferred by the said power, and that he could only bind his principal in such cases and upon such bills as were included in said authority.

3d. That the power of attorney given in evidence in this cause, gave no authority to F. C. Stainback to bind the defendant, by drawing or endorsing bills, & c. for the benefit of F. C. Stainback, nor unless the same were drawn or endorsed for the benefit and in the business of the defendant.

4th. That if the jury believe from all the evidence in the cause, that the object of the defendant in executing the power of attorney in evidence in this cause, was to enable and authorize his son F. C. Stainback the attorney to attend to and transact the bank business of the defendant at the Virginia Bank in Petersburg, the defendant being then a merchant in Petersburg, and the said F. C. Stainback being under age; and that the bill the payment of which by the plaintiffs is the foundation of this suit, was not drawn by the said attorney in the course of attending to and transacting the bank business of the defendant at said bank, but for his own use and accommodation, then the said attorney had no power to bind the defendant by the drawing of the said bill, so as to enable the plaintiffs, on payment thereof, to recover the amount from the defendant.

The court refused to give the first and fourth instruction, and gave the second and third; but qualified the same by further instructing the jury, that the agent F. C. Stainback had the power, under the letter of attorney made evidence in the cause, to draw the bill on which this suit is founded, and subscribe the name of his principal L. E. Stainback thereto, in the manner in which it is done; and that if the jury shall believe that the plaintiffs accepted the same, and paid it at maturity, without notice of, or just cause to suspect, any intended fraud or misapplication of the proceeds thereof from the use or benefit of the principal, that then they ought to find for the plaintiffs, though they may believe it was an accommodation acceptance.

And further, that if the jury shall believe that no fraud or collusion with the agent is chargeable on the plaintiffs then the fact that the said agent executed the bill in the name of his principal L. E. Stainback, designating himself as attorney, is equivalent to a declaration on his part, that he was acting in the business and for the benefit of his principal; and that any misapplication of the proceeds by the...