Backman v. Charlestown

42 N.H. 125

• Court: Supreme Court of New Hampshire
• Decided: December 15, 1860
• Status: Published

Opinion

Bellows, J.

It must be regarded as now settled in this state, that the selectmen have the power to authorize the town agents to buy liquor for the supply of liquor agencies upon the ci’edit of the town. Great Falls Bank v. Farmington, 41 N. H. 32. But the great question in this case is upon the effect of the limitation on the power of the agent, as contained in the appointment. And on this point it may -be useful to ascertain the character of his agency; for, if he be regarded as a general agent, persons who deal with him are not bound by any secret instructions, imposing a limitation upon such general authority, unless such limitation is brought to their knowledge. As to special agents, the law is understood to be in some respects different. Stoiy, in his work on Agency (page 19), lays it down, that a special agency properly exists where there is a delegation of authority to do a single act, and a general agency properly exists where there is a delegation of authority to do all acts connected with a particular trade, business or employment; and he instances, as a special agency, a power to execute a particular deed, or buy a particular article of merchandise, and, as a general agency, a power to execute all deeds, sign all contracts, or purchase all goods required in a particular trade, business or employment. This distinction is recognized in Hatch v. Taylor, 10 N. H. 543, by Barker, C. J.; and, also, in 2 Kent’s Com. 620; and in Lobdell v. Bohn, 1 Met. 202; Chit, on Cont. 200-215, and note.

In the case before us, the agent was intrusted with the business of buying and selling spirituous liquors. He was made the town agent for that purpose under the statute, and the business was that of the town, which alone was interested in the profits derived from it, and to which the liquors purchased by him belonged. He was, then, the general agent of the town in the transaction of this business, and, while acting within the general scope of his authority, could bind it. Independent of the express limitations upon his authority set up here, we think he might rightfully pledge the credit of the town for the price of the liquors he purchased. It is true that towns are municipal corporations and of limited powers, but within the range of the powers conferred upon them by the laws, they stand, for aught we can see, upon the same footing as private individuals. So, in respect to this traffic in spirituous liquors, the statute has made it the legitimate business of the town, and imposed upon it the duty of sustaining such agencies, and the selectmen are liable to indictment for neglecting to appoint an agent. State v. Woodbury, 35 N. H. 233. So far, then, as this traffic is lawfully conducted, it must be regarded in the same light as any other lawful business of the town, and the same rales are to be applied in determining the extent of the agent’s authority; and so it must have been regarded in the case of Great Falls Bank v. Farmington, where it was held that the selectmen might bind the town by a promissory note. In the case of Savage v. Rix, 9 N. H. 266, where the defendants were appointed a committee by the town of Dalton to lay out the sum of three hundred dollars to repair a certain road, and, having contracted with the plaintiff to do a part of the work, gave him a note, which was the subject of the suit, the court held (Parker, C. J.) that, as the vote to raise the money was passed July 4, and provided that it should be laid out by September 1 of the same year, it might fairly be implied that they were authorized to make contracts in advance of the collection of the money, and pledge the credit of the town. But it was held that, being appointed to perform a specific service, the power to bind the town by a promissory note was not a necessary incident, and that in this respect they differed from the selectmen, who have powers as' general as any agents the town could appoint, though not, strictly speaking, general agents. In this case the agency was, strictly speaking, special. But it was held that the committee could pledge the credit of the town upon the general principle that the authority to do an act carries with it an authority to use the appropriate measures to accomplish the object proposed. Goodale v. Wheeler, 11 N. H. 424. And it is a well established principle that an authority conferred upon an agent is construed to include all the necessary and usual means of executing it with effect. Story’s Ag., sec. 58, and numerous cases cited; 2 Kent’s Com. 618-832; Story’s Ag., sec. 102.

In the case at bar the agent had power to purchase liquors in the name of the town, and when purchased they clearly became the property of the town. The town furnished no funds to pay for the liquors in this case, and, independent of any specific instructions, it might fairly be inferred, it being the duty of the town to supply the agency with liquors, that the agent would buy on the credit of the town, and pay out of the proceeds of sales made by him. In Perrotin v. Cuculler, 6 Louis. 587, it was decided that an authority to buy a cargo for the principal, includes, as an incident, authority to give notes and draw and negotiate bills on his principal, when he provides no other funds. Cited in Story on Agency, sec. 103. So, authority to superintend the building of a meetinghouse includes authority to contract for the building on the credit of the town. Damon v. Inhabitants of Granby, 2 Pick. 345. So, a power to get a note discounted includes the power to indorse it in the name of the principal. Story’-s Ag., sec. 59. So, an authority to sell a horse implies a power to warrant him. Story’s Ag., sec. 59,102-132; 2 Kent’s Com. 621, 838, and cases cited; 3 T. K. 757; 15 East 45; Helyear v. Hawke, 5 Esp. 72. A power to sell goods includes a power to warrant them. Andrews v. Kneeland, 6 Cow. 354; Hunter v. Jameson, 6 Ired., N. C., 252. So, a power to sell goods includes a power to receive payment. Story’s Ag., sec. 102. An authority to buy goods for the principal, but without furnishing funds to pay, unquestionably implies a power to buy on the credit of the principal. Sprague v. Gillett, 9 Met. 91. A power to sell and convey land, with no restrictions, gives power to convey with warranty. Chit. on Cont. 201-218, note; LeRoy v. Beard, 8 How. U. S. 451; Peter v. Farnsworth, 15 Vt. 155; Tagged v. Stanbury, 2 McLean 543.

Independent of the restrictions, then, our conclusion is that the agency was a general one, and that it was within the scope of the agent’s authority to pledge the credit of the town.

It is quite clear that in the case of a general agent, the party who deals with him is not affected by the instructions which are given to guide him in the execution of his duties, unless they are brought to his knowledge. Having the powers of a general agent conferred upon him, third persons are entitled to deal with and accredit him as such, and may safely assume that he is fully authorized to act for his principal so long as he keeps within the general scope of his authority. If he violates his instructions, he is answerable to his principal for the injury it may cause him, but it can not affect the validity of the contract.

And even though the principal may be innocent of any wrong purpose, yet, having for his own convenience voluntarily placed the agent in a situation of apparent authority, it is rig’ht that he -should suffer rather than innocent third persons, who have confided in the authority which the agent was thus enabled to assume. Chit, on Cont. 199, 215, and cases cited; Story’s Ag., sec. 73; 2 Kent’s Com. 620. And this principle is held to be necessary to prevent fraud, and to encourage confidence in dealing. In the cases of Hatch v. Taylor, 10 N. H. 538, and Towle v. Leavitt, 23 N. H. 374, these views are distinctly recognized.

But'it is contended that the plaintiff is to be charged with notice of the limitation upon the agent’s authority contained in his appointment. If so, it is clear, upon both principle and authority, that the town would not he bound. The inquiry, then, is, whether the plaintiff is to be charged with said notice. By the law of 1855 (ch. 1658, sec. 8), it is provided that every agent shall receive a certificate of his appointment, “ which shall be recorded by the clerk of the city, town or place, together with the rules prescribed for his observance.” And in section 7 of the same act it is provided that the agent “ shall, in the jrarchase and sale of such liquor, conform to such rules and regulations as said mayor and aldermen or selectmen shall prescribe, not inconsistetít with the provisions of this act.”

The effect, then, of these provisions is, that the appointing power shall prescribe rules and regulations both for the purchase ánd sale of liquors by the agent, and have them recorded by the town-clerk. The object of this recoi’d must have been to give notice, not only of the appointment of the agent, but of the rules that were to guide him in the discharge of his duties, both in the purchase and sale of liquors. And we see no reason to doubt the power of the selectmen to withhold from the agent the authority to pledge the credit of the town. In the case of a private individual or corporation, there can be no doubt that such a limitation might be imposed, and we perceive no ground for a different rule in this ease.

It is true that it is the duty of the town to sustain one or more agencies for the purchase and sale of liquors, but there is nothing that requires that the agents should be clothed with authority to use the credit of the town at discretion.

On the contrary, it might well be regarded as expedient that the liquors should all be purchased with cash in hand, and the credit of the town not used at all.

In such case, the want of a sufficient supply would afford neither to the agent or vendor of the goods any legitimate cause of complaint. If, however, the selectmen willfully make their rules so stringent as to defeat the object of the statute, they would be subject to indictment, the same as if they failed to appoint an agent altogether.

The purpose of the record, then, being to give notice to persons interested, of the appointment of the agent, and the rules he is to observe, the question is whether the plaintiff is to be charged with such notice; and we are inclined to think he is. As in the case of the registration of deeds, he is presumed to know the law which requires a record of the appointment and the rules for the observance of the agent; and reasonable diligence would have led him directly to a knowledge of the limitation in the agent’s authority. Under such circumstances, there can be no ground for contending that the instructions were secret, where a public record required by law is duly made. Tripe v. Marcy, 39 N. H. 439; Odlin v. Gove, 41 N. H. 465, and cases cited. So it is held that a purchaser is supposed to have knowledge of the instrument under which the party with whom he contracts, as executor, or trustee, or appointee, derives his power; 1 Story’s Eq., sec. 400 : and whatever is sufficient to put a party upon inquiry is, in equity, good notice. So in Story on Agency, section 72, it is laid down that whenever an authority purports to be derived from a written instrument, or the agent signs a contract “ by procuration,” the other party is bound to take notice that there is such an instrument, and he ought to call for it, and examine and see if it justifies the act of the agent; and this is but a reasonable precaution, for he is put upon inquiry, and if he suffers for want of such inquiry it is his own fault. This goes upon the ground that, having information of the existence of such written authority, he should inquire for it. So where, from the nature of the transaction, a written authority is presupposed, it is the duty of a party dealing with the agent to make inquiries as to the nature and extent of the authority. Story’s Ag., sec. 73, and cases. In the case before us, a written authority is required by law, and the plaintiff is presumed to be aware of it, and is, therefore, put upon inquiry.

Our conclusion then is that when the appointment and limitation of the agent’s authority is duly recorded, a party dealing with him must be deemed to have constructive notice of such limitation.

But it is said that as there was no date to the record it avails nothing, and therefore it stands as if there was no record at the time of the sale.

In reply to this it is urged that apart from this record there is no evidence of any valid appointment, inasmuch as the law requires the appointment to be in writing. However this may be, and whether a person acting under color of an appointment not in writing may be regarded as an agent as to third persons, it is not necessary now to decide; because we are of the opinion that upon well established principles the plaintiff was put upon inquiry as to the authority of the agent, and it does not appear that he has used that reasonable diligence to ascertain the extent of the agent’s power, which the law requires. If nó record was made at all, the plaintiff should have demanded an inspection of the agent’s certificate, as he must be supposed to know that regularly he should have one. Story’s Ag., sec. 72. As no such inquiry is shown to have been made, and it does not even appear that Osgood represented that he had any authority to pledge the credit of the town, it must be deemed that the plaintiff had constructive notice of the limitations upon the agent’s authority. In Odlin v. Gove, before cited, what shall be regarded as reasonable inquiry is a question of fact to be found by the jury upon all the circumstances of the case.

It is urged further by the plaintiff that however this may be, the agent assumed authority to bind the town ; that he purchased the goods which afterward came to the use of the town, and that therefoi’e the town is bound to pay for them ; if, with a knowledge that the goods were so purchased, the town received them and applied them to its own use, this would be a ratification of the purchase.

And the first inquiry on this point is, was there evidence on which it was competent for the jury to find that the liquors came to the use of the town. There is no evidence upon this point prior to the delivery of the entire stock to Osgood’s successor, except the fact that packages of the character described were among the goods at the agency. It is true that the liquor may have been sold and the proceeds paid to the town, but of that there is no proof, and we think it can not be presumed. As to the delivery to Osgood’s successor, the proof is, substantially, that the stock on hand was all delivered to Adams; but the witness is unable to say whether the liquors in question were included or not, though he remembers shortly before they were with the rest of the stock. As to the authority of Adams no question seems to have been made, and a delivery to Mm, for aught we can see, might well be regarded as a delivery to the town. If, then, the goods were delivered by Osgood, as the goods of the town, to Adams, his successor, with knowledge of the way they were bought, and were received and converted to the town’s use, we think the plaintiff might recover of the town in an action for goods sold and delivered. If, however, the town did not receive the goods by virtue of Osgood’s purchase, but actually received them by a purchase from Osgood and a payment to him of the price, it would not be a ratification; but no such evidence is reported, and we are inclined to hold that the evidence upon the question of ratification should have been submitted to the jury, had it been desired by the plaintiff.

We do not, however, decide this point; because the verdict having been taken by consent, and no point made of the matter of ratification, and it being obvious that the jury might legally have found for the defendant, there is no ground for disturbing the verdict. The intimation which the court made as to the instructions that would be given, related, as we are disposed to think, to the original power of the agent to bind the town, and not. to the question of ratification. And the plaintiff having consented to a verdict, it must stand, unless the instructions would have been wrong, or the jury could not legally have found for the defendant.

There must, therefore, be

Judgment on the verdict.