Glor v. Kelly

Spring, J.: The plaintiffs were copartners in the business of manufacturing barrels in the city of Buffalo. In July, 1896, they established a branch factory at Lewiston in Niagara county. This manufactory — 618 — was in a shop owned by one Carney. The plaintiffs and Carney entered into an arrangement whereby they were to ship stock to their order, which was to be received by Carney, put together into barrels, and to be sold by him, and the profits, if any, were to be divided equally between them. The title to the stock and barrels, however, was to remain in the plaintiffs until sold, and Carney was to act as the agent of the plaintiffs. This project was carried out and the plaintiffs furnished a man to assist Carney. The latter sold 1,230 of these barrels to James H. Kelly, now deceased, and the proof tends to show that Kelly had in some manner settled with Carney for these barrels, and that the latter omitted to pay over the avails to his principals, the plaintiffs. On December 28, 1896, the plaintiffs wrote to Kelly requesting payment of “ our account, $324.41.” Mr. Kelly replied under date of December 30, 1896 : “ Yours of the 28th to hand. We bought from and settled with Mr. Carney for all the apple barrels we used this season.” The plaintiffs did not again write to Kelly, and during his lifetime made no attempt to enforce the claim against him. They did, however, immediately turn their attention to their agent, Carney. On the day following the letter of Kelly they wrote to Carney as follows : “ Dear Sir.— We just received a letter from J. H. Kelly saying he bought from and settled with yon for all the apple barrels he used this season, and we hope to receive remittance from you for his account by return mail.” In a letter under date of January 8, 1891, Carney replied to the plaintiffs’ letter as follows: “ If Alex did not explain all the Kelly deal I will let you know it in my next letter.” The Alex referred to was an employee of plaintiffs who had assisted Carney at Lewiston, and the letter, therefore, implies that their employee was cognizant of Kelly’s adjustment with Carney, and that it was not a secret arrangement between the two. On the day succeeding the plaintiffs wrote to Carney stating they were ignorant of any deal with Kelly and requesting information, “ as we want to close this up as soon as possible.” On February twenty-eighth Carney wrote to the plaintiffs“ The difference between you and Kelly and I is that you must look to me — 619 — for your pay. I have money ■ coming to me in March and I will settle with you the minute I get it.” The plaintiffs replied on the day following : “ Note what you say regarding Kelly’s account. That will be satisfactory to us. Hope you will settle up this account as soon as you receive money due you, which we trust will be soon.” On March eleventh the plaintiffs again wrote their agent: “We trust that the money you are to receive to pay up Kelly’s account will soon come in, as we ought to have it now, and send it to us and •any other as soon as you can.” And on April sixth they urged him to pay, and asked him to give his note “ for amount due on the Kelly account.” They requested that the note be made due in sixty days, and if, on its maturity, he was unable to meet it in full, they would renew it in part, and added : “ This will give you time and will also help us out now.” On April twenty-third, and again May twenty-sixth, they urged him to pay, adding, however, in the latter letter, that unless he paid they would be “ compelled to look to Kelly.” To summarize the situation disclosed by this correspondence, we find that the barrels were sold to Kelly, who settled with Carney, .■and the plaintiffs were unaware of the adjustment and requested payment from Kelly, who very promptly apprised them of the settlement with Carney. From that time they abandoned any endeavor to pursue Kelly, but devoted their energies to their agent and accepted the adjustment he had made with Kelly. If the plaintiffs ■sought to repudiate the authority of their agent it was incumbent upon them to act fairly with Kelly, and without delay advise him they disavowed the transaction with Carney. As Ohancéllor Kent says in his Commentaries (Vol. 2, *616): “ When the principal is informed of what has been done he must dissent, and give notice of it in a reasonable time; and if he does not, his assent and ratification will be presumed.” They did not seek to discredit the •authority of their agent. After Carney informed them they must look to him for pay, there was no disclaimer of their purpose to do so, but, on the contrary, they were swift to respond on the day succeeding the agent’s letter that this course “ will be satisfactory to us.” Assuming that the agent exceeded his authority in the transaction — 620 — with Kelly, here is a plain ratification of it. This is not an affirmance without knowledge of the facts. They did know that Kelly had settled with their agent, and this information was not based entirely upon Kelly’s letter, but was confirmed by Carney. Their declaration that this was satisfactory to them expressed their purpose to look to Carney, and that course was followed. They made their election, therefore, after understanding the situation, and that election was irrevocable. (Andrews v. Etna Life Ins. Co., 92 N. Y. 596.) The fact that the plaintiffs did not advise Kelly they intended to disregard his settlement with their agent does not aid them. The duty was upon them to speak when confronted with Kelly’s disclaimer of his liability to them. As is said in Mechera. on Agency (§ 153): “ It is a maxim of the law that he who remains silent when in conscience he ought to speak, will be debarred from speaking when in conscience he ought to remain silent, and this rule is of frequent application in determining whether or not an alleged principal has set the seal of his sanction upon a transaction assumed to have been done in his behalf.” If, however, we assume that plaintiffs did not possess full knowledge of the facts before expressing their satisfaction with the explanation of their agent, the information was available to them. If they saw fit to rely upon the knowledge they then had without making further inquiries, they cannot now be heard to question the sufficiency of their information. It is said in Ewell’s Evans on Agency (p. 63) : “ When one individual deliberately, whether with full knowledge or without inquiry, ratifies the act or conduct of another, no question arises respecting the fact of ratification.” But Carney’s letter of January eighth inferentially, at least, implies that Shaw, their employee, knew of this adjustment, and their assent to it was some time after the date of this letter. Presumptively they inquired of Shaw and obtained full information of the acts of their agent. (Whart. Ag. § 65 ; Meehan v. Forrester, 52 N. Y. 277; Hyatt v. Clark, 118 id. 563.) When Shaw was mentioned as possessing knowledge the conclusion seems irresistible that they inquired into the circumstances before stamping Carney’s conduct with their approval. They were responsible for the agency of Carney, and during this correspond — 621 — ence lie was acting as their collecting agent. The letters bristle with facts showing he was receiving money for them. They were not imputing anything discreditable to him, or even complaining of his transaction with Kelly, but they were continuing his authority to represent them. Their relations are in vindication of his conduct. Business men do not in the same breath accuse their agent of dishonesty and peculation, and still retain him in a responsible position, with authority to continue performing the precise trusts out of which the charges arose. Later on the plaintiffs sued the son of Kelly, and upon the discontinuance of the action were advised to present their claims to the •executor of Carney, and there still remains an unadjusted account between these principals and their agent. It is urged that Carney was not in charge, and possessed no authority to receive pay from Kelly. In their proposition to him, which was the basis of the .agreement, they state, “ you to sell the barrels and we to divide the profits equally,” and he was to use the avails of the sales for the payroll. Carney was to sell the goods, pay the help, collect the .accounts, and the profits were to be equally divided, and that arrangement was carried out. In its execution he possessed plenary power. But beyond this there is not an iota of evidence indicating that Kelly knew anything of Carney’s agency. So far as the record shows he bought these goods of Carney individually, and settled with him as owner. That is what his letter to plaintiffs states. “ We bought from, and settled with Mr. Carney,” repudiating any suggestion of the agency of Carney, or that the plaintiffs ever had any demand against him. Of course the method of dealing or payment cannot be proved by this ipse dixit of either Kelly or Carney, but the letter of Kelly is significant in that it shows he quickly resented any claim against him, supplementing it by the statement that he had dealt with Carney, and this explanation was apparently acquiesced in by the plaintiffs. The goods were manufactured and the business carried on in Carney’s shop. There was no sign advertising plaintiffs’ interest in the business. For aught that appears Kelly was entirely ignorant of their relations, and whether he paid in money or not is of no consequence if such be the fact. It is true, as contended by the appellants’ counsel, that payment is an affirma — 622 — tive defense. As the chief actors in the transaction are both dead, its history seems to rest mainly in correspondence, and that largely of the plaintiffs themselves. These letters were received in evidence before plaintiffs closed their case, and as the facts appeared they showed that plaintiffs had ratified the act of their agent. The plaintiffs have waited until both Kelly and Carney are dead, and the latter’s estate probably insolvent, and then attempt to repudiate their acquiescence in the adjustment made. They cannot thus disavow their ratification. The judgment should be affirmed, with costs to the respondents. Adams, P. J., and Laughlin, J., concurred; McLennan and Williams, JJ., dissented.