Walker v. . the Bank of the State of New-York

The following general principles applicable to this case are settled by repeated decision, viz., that where a bill of exchange, payable at a future time, is presented for acceptance, and acceptance is refused, notice must be immediately given to the drawer and endorsers, or they are discharged; that if due notice of non-acceptance is given, the holder may immediately proceed against the drawer and endorsers, without waiting for the maturity of the bill; that any agent, whether it be a bank or an individual, receiving a note or bill from the holder for collection, is responsible for any loss which the holder may sustain on account of any neglect in presenting it or in giving notice of its dishonor; that it is the duty of an agent who receives for collection a bill of exchange, payable at some future time, to use due diligence in presenting the same for acceptance, and if he fail to do so, or fail to give notice in case acceptance is refused, he will be liable. In this case the Bank of the State of New-York received the bill in question, as the agent of the plaintiff, for collection, presented it for acceptance, and gave no notice of its non-acceptance. It follows, therefore, from the principle to which I have referred, that the defendant is liable to the plaintiff for the amount of the bill, unless it was accepted by the drawee. An acceptance of a bill of exchange must be in writing and signed by the acceptor. (1 R.S., 768, § 6.) The only question in the case then is, whether what was written across the face of the bill by Hamilton, the drawee, amounted to an acceptance. It is impossible to contend with any plausibility that the words written by Hamilton upon the bill purport to be an acceptance by him individually, or that they can be considered as affording any evidence that he intended to bind himself personally as acceptor. On the contrary, they most explicitly repel any such conclusion. The words written embrace two distinct things: first, the contract of acceptance, and secondly, the signature of the party who accepts. That *Page 585 signature is "Empire Mills, by E.C. Hamilton, Treas." This is the usual and most appropriate mode of executing a contract by an agent in the name of his principal, and entirely excludes the idea that it was intended as an execution by the agent in his own behalf. The defendant could have no apology for understanding it as a personal acceptance by Hamilton. But it is said that an agent who assumes to execute a contract in the name of another, binds, in all cases, either himself or his principal; that if the principal is not bound the agent is. This raises the only question in the case upon which it is possible to doubt. It is true there has been a series of cases in the courts of this state, where one person had assumed, without authority, to execute a contract in the name of another, in which it has been held that the person assuming to act as agent was himself personally bound by the terms of the contract, precisely as though he had executed it in his own name and for his own benefit. But before we can determine whether the principle of those cases applies to this, we must ascertain their nature and the grounds of the decisions made in them. It will be found upon examination that in every one of these cases it appeared that the agent had no authority in fact to use the name of his principal. There was, therefore, a species of deception practiced in each of those cases; because by assuming to execute as agent, he virtually represented that he had authority from his principal to do so. Upon such a state of facts the agent would be liable in some form of action wherever the common law prevails. In England and in some of the states of the Union he is held liable, not upon the contract itself, but in an action on the case for damages. But in this state, at an early period, the practice was adopted of holding the agent bound by the contract, in the same manner as though made in his own behalf. The mode in which this was made consistent with the general theory of contracts was, to strike out, or to regard as stricken out, all that portion *Page 586 of the signature which the agent had written without authority. This would of course leave the contract with his own name subscribed to it as the contracting party. The rule, therefore, was necessarily limited to written contracts, and to those where the agent had subscribed his own name as well as that of his principal. Dusenbury v. Ellis (3 John. Ca., 70) is one of the earliest cases in which the rule was adopted. Dusenbury had executed a note in this form: "For Peter Sharpe, Gabriel Dusenbury, Attorney." It turned out that Dusenbury had no authority, and a suit was brought against him in a justice's court upon the note. The plaintiff recovered, and, uponcertiorari to the supreme court, the judgment was affirmed. The court there say: "The only question then is whether Dusenbury was not personally responsible as for his own note. On this point we are of opinion that if a person under pretence of authority from another executes a note in his name, he is bound; and the name of the person for whom he assumed to act will be rejected as surplusage. The party who accepts of a note, under such a mistake or imposition, ought to have the same remedy against the attorney who imposes on him, as he would have had against the pretended principal if he had been really bound." In White v. Skinner (13 John., 307), which was a similar case, except that the contract was under seal, PLATT, J., who delivered the opinion of the court, says: "The defendant represented himself and assumed to act as the agent of the directors of the manufacturing company. He is now sued in his private individual capacity; and to exonerate himself he was bound to aver and prove that he had authority to seal for his co-directors." Again he says: "If it does not bind the directors, for whom the defendantrepresented himself as agent, then it is personally obligatory on the defendant alone." These being the cases in which the doctrine in question may be said to have originated, their exposition of the rule may with propriety be assumed to be just; and they unequivocally *Page 587 show that misrepresentation and imposition lie at the foundation of the doctrine. It clearly does not extend to cases where there is no mistake, misrepresentation or deception as to any matter of fact, although for some legal reason the principal may not be bound. One party is presumed to know the law as well as the other, and each contracts at his peril as to the legal effect of what is done. It follows, therefore, that unless Hamilton used the name of the Empire Mills without authority in fact from the corporation, he cannot be held personally bound by the acceptance. The law will not presume this want of authority. Fraud or misrepresentation are always to be proved, and are never presumed. Hence no foundation is laid in this case for treating the acceptance as that of Hamilton individually. But I go farther. Were it expressly proved in this case on the part of the defendant that Hamilton acted without any authority whatever, I hold that the defendant would still be liable. Acting in its capacity as agent, the Bank of the State of New-York had no right to impose upon the plaintiff the burden of litigating with Hamilton the fact of his authority, or the risk of such litigation. The plaintiff was entitled to an explicit and unequivocal acceptance, or a refusal to accept, so that the bank might resort to its remedy against the drawer and endorsers; and the defendant had no right to receive anything short of such an acceptance without giving notice. The judgment of the supreme court must therefore be affirmed.