Navarre Hotel & Importation Co. v. American Appraisal Co.

McLaughlin, J.: In January, 1909, one Gibbs was indebted to the plaintiff, a domestic corporation, in the sum of $1,590, which he was unable to pay. He had in his rooms in the plaintiff’s hotel certain furniture, bric-a-brac, paintings, and other personal property, upon which he offered to give a chattel mortgage to obtain an extension of the time within which payment might [796] be made, and to secure the payment thereof. It was finally agreed between them that Gibbs should transfer such property to his wife, by bill of sale; that she should assume the debt; and give a mortgage upon so much of the property as would secure the payment thereof. The plaintiff had no knowledge of the value of such property and, acting through its attorneys, employed the defendant, a foreign corporation holding itself out as an expert On the subject of appraising personal property, to appraise the property and select so much of it as would secure the plaintiff’s claim and make a written report thereof. It selected certain designated pieces, upon which it placed a value, the aggregate of which amounted to $3,922. In the written report submitted as to such value it stated, “ The prices of these objects are based on a conservative view and should this property ever be sold to dealers or at auction a spirited public will bring twice the amount that our appraisal shows.” For making the appraisal and submitting the report the defendant charged $50, which was paid. The plaintiff, relying upon the report, took a chattel mortgage upon the pieces mentioned therein from Mrs. Gibbs, title in the meantime having been transferred to her, released Mr. Gibbs and extended the time of payment of the: indebtedness for one year. After the execution of the chattel mortgage the plaintiff took the property covered thereby into its possession and retained the same until the extension of the time for payment had expired, when, nothing having been paid, it proceeded, acting through the same attorneys, to sell. Before offering the property for sale, however, the attorneys consulted with the defendant as to the best method to be pursued and were advised that the goods be first advertised at private sale. This was done, but without success, and they were then turned over to a reputable auctioneer to be sold at public auction. This was done, due notice having been given, and the net amount realized upon such sale, upon the,property which had been appraised at $3,922, was $136.97. Action was then brought against Mrs. Gibbs and judgment secured against her for the balance,- upon which execution was issued and returned wholly unsatisfied. Thereupon this action Was brought to recover from the defendant the difference between the amount of the indebtedness and the [797] amount realized on the sale, with interest, on the ground that such loss was due to its negligence in making the appraisal. At the trial the plaintiff established the foregoing facts and also proved by a witness whose'testimony was not questioned that the actual value of the property appraised by the defendant did not exceed $300, and that some of the property which the defendant did not think it necessary to include in what was selected for the plaintiff was subsequently sold for $800. The trial court, at the conclusion of plaintiff’s case, dismissed the complaint on the ground that the plaintiff did not employ the defendant to make the appraisal, and, therefore, it was not in a position to complain of its negligent performance of the contract. It is true the defendant was not employed directly by the plaintiff, but it was through its agent, and the fact that the principal for whom the agent acted was not disclosed at the time the contract of employment was entered into did not release it from liability. It is elementary that a principal is entitled to maintain an action upon a contract not under seal, made by his agent with a third person, although the agency is not disclosed at the time the contract is made. If the agent possesses authority to make a written contract not under seal, and makes it in his own name, the principal, whether known or unknown, may be made liable, and he, in turn, is entitled to the benefit of the contract and may sue thereon. (Nicoll v. Burke, 78 N. Y. 580; Brady v. Nally, 151 id. 258; Henderson, Hull & Co. v. McNally, 48 App. Div. 134; affd. on opinion below, 168 N. Y. 646; Kelly Asphalt Block Co. v. Barber Asphalt Paving Co., 136 App. Div. 22.) Referring to this rule, Judge Andrews, in Briggs v. Partridge (64 N. Y. 357), said: “A principal may be charged upon a written parol executory contract entered into by an agent in his own name, within his authority, although the name of the principal does not appear in the instrument and was not disclosed, and the party dealing with the agent supposed that he was acting for himself, and this doctrine obtains as well in respect to "contracts which are required to be in writing, as to those where a writing is not essential to their validity;” and the presiding justice of this court, in Moore v. Vulcanite Portland Cement Co. (121 App. [798] Div. 667), said: “It is undoubtedly the well-settled general rule that ‘ where an agent enters into a contract as though made for himself, and the existence of a principal is not disclosed, the principal may, as a general rule, enforce the contract.’” There are, however, exceptions to the general rule, one of which is where a personal trust or confidence is reposed by the other party in the agent who contracted in his own name. (1 Am. & Eng. Ency. of Law [2d ed.], 1171.) This rule is predicated upon the right which every one has to select and determine for himself the skill, reputation and ability of the one with whom he contracts. (New York Bank Note Co. v. Hamilton Bank Note Co., 180 N. Y. 280; Arkansas Smelting Co. v. Belden Co., 127 U. S. 379; Winchester v. Howard, 97 Mass. 303.) But there is nothing here to take the case out of the general rule or bring it within any of the exceptions to which my attention has been called. The attorneys who employed the defendant were, concededly, acting for the plaintiff, and there is nothing in the record to show, or . even suggest, that the employment would not 'have been accepted as readily if defendant. had, in fact, known for whom it was to render the service. The employment was not accepted by defendant- by reason of any personal trust or confidence in the attorneys. .The price at which the goods sold at public auction was some evidence to be considered by the jury in arriving at their value. (Campbell v. Woodworth, 20 N. Y. 499; Matter of Johnston, 144 id. 563; Parmenter v. Fitzpatrick, 135 id. 190; Latimer v. Burrows, 163 id. 7.) Besides, the plaintiff proved by other evidence that the total value of the goods did not exceed $300, and that the articles which the defendant failed to include in the list appraised were, subsequent to the appraisal, sold for $800. Defendant, as stated, "offered no evidence. The juiy, therefore, - would have been justified in finding that the loss which the plaintiff sustained was due to - the negligence of the defendant. The judgment appealed from, therefore, is reversed and a new trial ordered, with costs to appellant to abide event. Clarke, Scott and Laughlin, JJ., concurred; Ingraham, P. J., dissented.