Lutz v. Van Heynigen Brokerage Co.

75 So. 284, 199 Ala. 620, 1917 Ala. LEXIS 250

• Court: Supreme Court of Alabama
• Decided: April 26, 1917
• Status: Published

Opinion

McCLELLAN, J.

The appellant and the appellee were the . respective parties plaintiff and defendant in the court below. The verdict and judgment for the defendant was immediately consequent upon the action of the court in giving the general affirmative charge for the defendant at its request.

The plaintiff (appellant) would fix liability on the defendant (appellee) in consequence of a charter party for the schooner Goldfield executed, as will later appear, to the plaintiff as charterer. The first three counts of the complaint proceed on the theory that the defendant bound itself by the contract or charter — was the obligor therein — and are, hence, counts on the cork-tract. The fourth count declares on the breach of a warranty by the defendant, in that, contrary to the defendant’s assumption, the defendant was not authorized as agent of the owners of the vessel to engage as, through the charter party of November 2, 1914, it purported to do for the owners of the vessel.

(1-5) On and prior to the 18th of October, 1914, the schooner Goldfield was owned by the following tenants in common, in the respective proportions noted just after their names: Captain Erb, forty-seven sixty-fourths; Van Henigen Brokerage Company, five sixty-fourths; E. K Ladd, two sixty-fourths: George Dunlap, one sixty-fourth; Wrightson, five sixty-fourths; Eolf, etc,. Chandlery, three sixty-fourths; and Martin, one sixty-fourth. The plaintiff was a lumber merchant, and to serve his trade he chartered vessels to carry lumber to various ports. His authorized agent, Diaz, represented him in negotiating and executing the charter of November 2, 1914, of the schooner Goldfield. The appellee was a ship broker at Mobile. To state an unescapable conclusion of fact and law, John A. Merritt & Co., of Pensacola, also engaged in that character of brokerage, represented the appellee in the negotiation and execution of the charter party in question. Captain Erb, who owned, as appears, a controlling interest in the schooner, died on October 18, 1914, leaving a -widow and three minor children. Some months after the execution of the charter party and an addenda made thereto by an agreement of the appellee and appellant, the fact was recognized that the charter party, executed after Captain Erb’s death, was ineffectual to bind the vessel, Erb’s estate having the controlling interest therein. The vessel was, hence, not made available to the charterer. The right to control the vessel’s employment and service was in Captain Erb up to his death, and that seems to have been the recognized practice.—The Orleans v. Phoebus, 11 Peters (U. S.) 175, 183, 9 L. Ed. 677; 36 Cyc. pp. 31, 32. The effort of the widow of Erb to authorize the appellee to create obligations through the charter of the vessel to the appellant was vain, wholly ineffectual. If an agent in the execution of a contract “disclose his principal, make it appear on the face of the paper that it is the contract of the principal, and sign it as agent, of course the principal is bound, the undertaking “being within the agency, and the agent is not. On the other Land, if a principal is not disclosed on the face of the paper, and the party signing describes himself as agent, trustee, or the like, without more (italics supplied), it is the obligation alone of the party whose name is set to the paper, the superadded word or words being mere descriptio personae to be disregarded as surplusage, and evidence cannot be received to show that he was, in fact, the agent or trustee or the like of an undisclosed principal, * * * and the obligation was that of such other person. And again, if the paper discloses the names of two parties, either of whom may be the obligor, and it is doubtful from the whole instrument-which of the two is intended to be bound, and the signer describes himself as agent, * * * parol evidence is admissible to show that it is the obligation of the party named in but not signing the paper.”—Richmond Machine Works v. Moragne, 119 Ala. 80, 24 South. 834, and cases therein cited; Roney v. Winter, 37 Ala. 277. Where the only suggestion that the signator is acting in a representative capacity exists in the use, after the signature only, of the words “agent,” “trustee,” or the like, the contract is regarded, prima facie, as imposing a personal liability on -the signator alone, and the words stated, following the signature, are regarded as descriptio personae only.—Richmond Machine Works v. Moragne, supra; Briel v. Bank, 172 Ala. 475, 55 South. 808. Of course, in such circumstances the other party may implead the signator for a breach of the contract; the contract, under such circjimtances, being on its face the obligation of the signator only.—Lazarus v. Shearer, 2 Ala. 718, 726. “When it is doubtful from the face of a contract, not. under seal, whether it was intended to operate as a personal engagement of the party signing, or to impose an obligation upon some third person as his principal, parol evidence is admissible to show the true character of the transaction.”—May v. Hewitt, 33 Ala. 161, 166. “If the name of the principal appears in the instrument, and it is evident from the writing, as a whole, that the intention was that the principal, and not the agent, was the person to be bound, the principal alone will be bound, if the agent had authority to make the agreement” (italics supplied).—Roney v. Winter, supra.

(6) We do not understand the text in 2 C. J. pp. 819-821, to affirm anything to the contrary on this particular point, viz. that the principal’s identity may be as effectively disclosed by description that actually informs the person with whom he deals of his principal’s identity as by giving the individual names of those having a joint interest. It was very well said in Waddell v. Mordecai, 3 Hill (S. C.) 22, that it could not be perceived wherein the necessity lay “of the agent naming, specifically and severally, every one of a class or company of his principals, who are usually designated among men of business by some descriptive terms.” The Massachusetts Court, in Lyons v. Williams, 71 Mass. (5 Gray) 557, said on this point: “But it is said that the names of these corporations are not stated. This is true; but they are capable of being made certain by proper inquiry, and the plaintiff was content to take a contract thus generally designating the parties with whom the liability was to rest for the safe and proper conveyance of the goods.”

The Michigan Court, in Mercer v. Leihy, 139 Mich. 447, 454, 102 N. W. 982, 974, pertinently observed: “We are of the opinion that the statement, frequently found, that the agent, to avoid personal liability, must disclose the name of his principal, is due to the fact that such is, in the nature of things, the natural and ordinary, and many times the only convenient and practicable, way of identifying him. The important information to be given to the purchaser is that the auctioneer is an agent, acting for a principal whom he discloses, and it would seem that the accurate giving of his principal’s name is not indispensable where other means of clearly pointing out and identifying him are adopted.”

We think the doctrine is sound which permits and gives appropriate effect to the disclosure of the identity of the principal by description as well as by name, as where the agent makes a contract for the owners of a named vessel.—1 Mechem, § 1412; Waddell v. Mordecai, supra; Lyon v. Williams, supra. The court in Ye Seng Co. v. Corbitt (D. C.) 9 Fed. 423, 426, 141 C. C. A. 337—a case approvingly cited in Swayne & Hoyt v. Barsch, 226 Fed. 584—entertained a different conclusion; a conclusion that seems to have been attained on the erroneous notion that there was no authority for the view that has been stated.

(7) In Ware v. Morgan, 67 Ala. 461, 468, this court said: “An agent having in fact no authority, and yet assuming to bind his principal, incurs a personal liability. If, with knowledge of the want of authority, he represents himself as leaving [having] it to one ignorant of the facts, and dealing on the faith of the representation, he is guilty of deliberate fraud, and of his liability for the resulting injury there is no doubt. And if not having authority, yet with an honest belief that he has it, he deals with another, he is liable for the resulting injury. The difference in the two classes of cases is in the degree of moral wrong only, and not in the degree of injury to the other contracting party relying on his representation. The true principle on which the liability of an agent for an authorized [unauthorized] contract rests is that he has been guilty of a wrong, or omission, depriving the party dealing with him of the benefit of the liability of the principal for which he contracts.—Smoot v. Ilbery, 10 Mees. & Wels. 1. When he is guilty of no wrong or omission, when there is a full and honest disclosure of the nature and extent of his authority, when the party dealing with him has all the knowledge and information which the agent possesses, there is no liability resting on him, though his act or contract proves to be ultra vires.—Jefts v. York, 10 Cush. [Mass.] 392; Newman v. Sylvester, 42 Ind. 106.”

This decision, as appears, was founded in the main upon Jefts v. York, and Newman v. Sylvester, which was, in its turn, based upon Jefts v. York; and Jefts v. York was rested, in this respect, by Chief Justice Shaw on Smoot v. Ilbery. The manifest effect of our decision in Ware v. Morgan, following the other cases, was to exclude the recognition of the remedy by an action against the psuedo agent on his implied warranty that he was authorized to contract for his identified principal. In Jefts v. York it seems to have been in the mind of the court that where the agent tacitly represents himself as being authorized to engage for another, when in fact he is not so authorized, his fault, is in the nature of a false warranty; but, notwithstanding this-statement, it was held that the party’s remedy is by an action in tort. There are respectable authorities for the view, pronounced in more recent times, that recognizes the right .of the contracting party, who has been disappointed by the failure of the ostensible agent to possess authority to bind his ostensible principal, to sue the ostensible agent for a breach of his implied warranty of authority to engage- for his disclosed principal.—1 Mechem, § 1398; LeRoy v. Jacobsky, 136 N. C. 443, 48 S. E. 796, 67 L. R. A. 977; 31 Cyc. pp. 1545-1547; Patterson v. Lippincott, 47 N. J. Law, 457, 1 Atl. 506, 54 Am. Rep. 178; Seeberger v. McCormick, 178 Ill. 404, 416-419, 53 S. E. 340; Oliver v. Morawetz, 97 Wis. 332, 72 N. W. 877, among others. Mechem points out that the Massachusetts court, from which we have Long ,v. Colburn, 11 Mass. 97, 6 Am. Dec. 160, and Ballou v. Talbot, 16 Mass. 461, 8 Am. Dec. 146—both noted by this court in Roney v. Winter, supra — has more recently manifested a disposition to recognize the propriety of the remedy through an action against the agent for a breach of his implied warranty, citing Railroad Co. v. Richardson, 135 Mass. 473. This court, in Lazarus v. Shearer, took account of the argument pressing the proposition in that case and said, in effect, that if the facts warranted the contention the argument would be entitled to great consideration. While appreciating the impressive support that the contrary view has in texts and decisions in this country, we do not feel justified at this late day in altering the very clear doctrine set forth, as quoted, in our case of Ware v. Morgan. The soundness of its doctrine was recognized in Schloss v. McIntyre, 147 Ala. 557, 41 South. 11. It results from an application of the doctrine of Ware v. Morgan that the court did not err to plaintiff’s prejudice in striking count 4.

(8-11) On the face of the charter party two parties are named; one, an aggregation of persons having joint interests in the subject-matter, being efficiently described. The instrument does not fall within the class of cases where the only reference to agency is afforded by the use of the words “agent,” “trustee,” or the like, “without more,” after the signature of the paper.—Moragne’s Case, supra. The instrument in its first part, describing the parties thereto, asserts the representative character of the appellee, and in its concluding paragraph expresses an unequivocal obligation' on the part of the “vessel and owners” to Merritt & Co. for commissions on the -“gross amount of this charter and demurrage,” regardless of whether the vessel was “lost or not lost, charter canceled or uncanceled.” The instrument also contains these provisions: “To the true and faithful performance of all and every of the foregoing agreements, we, the said parties, do hereby bind ourselves, our heirs, executors, administrators and assigns, each to the other, in the penal sum of the estimated amount of freight.”

Whether, in view of the signature of the instrument, by the otherwise ostensible agent, in the name of the agent and not in the name of the ostensible principal, the last-quoted provisions of the charter import obligations assumed by the appellee individually, is doubtful; and parol evidence was admissible to discover the true intent of the parties. The court’s action in admitting evidence of the circumstances surrounding the parties to this engagement, including the fact that the defendant had an interest in the vessel, of a previous similar contract of charter of this vessel, together with the instrument itself and of the acts of the parties with respect to the recognition and observance of the obligations thereof, and evidence of a universal, general custom in respect of the general acceptance in the trade of a particular intent imported by such equivocal provisions of charter contracts, was justified, to the end that the mentioned uncertainty might be removed, and the true intent of the parties discovered:—Moragne’s Case, supra; 9 Ency. of Evi. pp. 370-382, 405-409; M. & E. Ry. Co. v. Kolb, 73 Ala. 396, 401, 402, 49 Am. Rep. 54; Metcalf v. Williams, 104 U. S. 93, 98, 99, 26 L. Ed. 665. While it is the province of the court to construe written contracts, where the meaning is to be collected from the writing without the aid of evidence aliunde, yet where the meaning, the intent of the parties, depends upon the ascertainment of facts aliunde the instrument, this “admixture of parol with written evidence draws the whole to the jury,” requires the submission of the issue to, the deduction of the inference of fact by, the jury.—Sewall v. Henry, 9 Ala. 24, 31; Holman v. Crane, 16 Ala. 570, 580; Boykin v. Bank, 72 Ala. 262, 269, 47 Am. Rep. 408.

(12) The plaintiff’s case, under the first three counts, depended upon the establishment of the defendant’s direct, individual relation of an obligor to the contract. In giving the general affirmative charge for the defendant the court took from the jury the decision of the issue indicated. It was, under the evidence, for the jury to decide whether the parties (not one of them only) contemplated and intended that the defendant individually should assume obligations under the instrument; whether the common intent was that the defendant should add its personal assurance of a faithful performance of the contract. It was the office of the parol evidence to remove the doubt, and it was the. jury’s function to decide the issue.

(13) The seventh count of the amended complaint proceeds on the theory that the defendant undertook, as agent, to effect, the charter party in question without having at the time authority from the owners of a majority of the interests in the vessel to contract for the charter thereof. The demurrer to this count was overruled. Separately to this count, as well as to those counts which declare upon a contract made by the defendant as obligor, the defendant filed plea A. The report of the appeal will contain this plea. It would seem to be clear that the pith of the plea presefited no defense to the counts on the contract, though it does contain an averment contradictory of the allegation in these counts that the defendant was an immediate obligor therein. As referred to the seventh count, the plea possessed these faults: In its failure to aver that the plaintiff knew, at the time, that the defendant’s agency was limited to representing only those joint owners who held, in the aggregate, less than a majority of the interests in the vessel, or that the estate of Erb held the controlling interest therein, or that the widow of Erb was the sole next of kin and distributee of the deceased. On the facts averred it could not be said that the plaintiff’s contracting can be attributed to his own mistaken judgment with respect to the defendant’s authority.—Ware v. Morgan, supra.

It appears from the evidence that the inquiry of fact, whether the plaintiff was so fully advised or knew of the status of the ownership of this vessel existing at the time this contract was made as to warrant the conclusion that he (pláintiff) engaged with defendant in a representative capacity in reliance upon the plaintiff’s own judgment of the defendant’s authority, was a matter of inference and deduction which it was necessary to submit to the jury.

The judgment is reversed, and the cause is remanded.

Reversed and remanded.

Anderson, C. J., and Sayre and Gardner, JJ., concur.