Jones v. Lathrop & Co.

Warner, Judge. This was an action brought by the plaintiff against the defendants as the drawers of five bills of exchange, dated, Savannah, 9th July, 1867, for two hundred pounds each, payable to the order of the plaintiff in London at sixty days after sight, and directed to Robert Hutchison, Liverpool, as the drawee thereof. The defendants pleaded that, in advancing these bills, they acted merely as the factors and agents of the plaintiff in shipping his cotton to Liverpool to be sold there, and that the bills were drawn by them upon the proceeds of the sale of the plaintiff's cotton as his agents, and under his instructions, according to the known and usual custom of the trade in such eases, and not on their own account, and that they had not received any valuable consideration therefor from the plaintiff as the drawers of said bills. It appears from the evidence in the record, that, at the time these bills were drawn, Hutchison, to whom the cotton was shipped and upon whom the bills were drawn, was of good credit and standing as a merchant, but before the bills were presented for payment he became insolvent. The evidence, on the trial, was quite voluminous, much of it being the written correspondence between the parties in relation to the sale of the cotton, and as to the sale of these sterling bills now sued on, which had been delivered to the plaintiff by the defendants. The jury returned a verdict for the defendants. A motion was made for a new trial on the grounds set forth in the record, which was overruled by the Court, and the plaintiff excepted. This action, it will be observed, is brought [409] against the defendants as the drawers of these bills of exchange, and is not brought against them for any neglect of duty as the factors and agents of the plaintiff, and the question is, whether the defendants were liable to the plaintiff as such drawers of the bills of exchange under the evidence disclosed in the record. The general rule of the law is, that the drawer of a bill of exchange is liable for the payment thereof according to its tenor and effect to the payee named therein, and is founded on the theory that the drawer has funds in the hands of the drawee which he sells or assigns to the payee for a valuable consideration. Such is the general presumption of the law. But this original presumption of the law, as between the original contracting parties, may be rebutted and overcome by the facts of the case as between them. What are the facts of this case? The plaintiff had eighty-five bales of cotton, which he desired to have shipped to Liverpool and sold there, and to receive in payment therefor sterling bills, and for that purpose he sent his cotton to the defendants as his factors and agents in the city of Savannah. The cotton was received by the defendants on or about the 28th of January, 1867, who were instructed to ship the same to their correspondent in Liverpool for sale. In obedience to these instructions, the defendants shipped the cotton to Hutchison, their correspondent, who received and sold the same, rendering an account of the sale of the cotton to the defendants, dated, Liverpool, 5th June, 1867. This account of the sale of the cotton rendered by Hutchison is thus stated: “ Account of sale of eighty-five bales cotton, per Sullivan from Savannah, sold by Robert Hutchison for account of J. R. Jones, Esq., per Messrs. J. W. Lathrop & Company.” The cotton was not sold on account of the defendants, but on account of the plaintiff, and the proceeds of the sale was not the property of the defendants, but the property of the plaintiff. To enable the plaintiff to receive the proceeds of the sale of his cotton in the hands of Hutchison, the defendants’ correspondent in Liver [410] pool, these bills were drawn according to the usage and custom of the trade in such cases, and were sterling bills in the commercial sense of that term. The evidence in the record shows that the usage and custom of the trade was to draw sixty days’ bills, as was done in this case by the commission merchant in Savannah shipping the cotton, that it was the custom to put the proceeds of cotton sold at Liverpool to the credit of the merchant shipping, but the accounts at Liverpool showed to whom the cotton belonged, and no person except the merchant shipping the cotton could draw for the proceeds of the sale. thereof who would settle with his principal to whom the cotton belonged ; that the accounts rendered in this case were according to the usage and custom of the trade. These bills, therefore, were, in fact, drawn by the defendants, as the shipping factors and agents of the plaintiff, to enable him to receive the proceeds of his cotton shipped by them to Liverpool, and sold there under his instructions, according to the usage and custom of the trade, and were not drawn by them in favor of the plaintiff for any valuable consideration received by them from him therefor. After these bills were drawn, and the account of sales of the cotton had been rendered to the plaintiff, the same were delivered to him who retained them in his possession nearly three months without objection, and in the meantime corresponded with the defendants as to the best time when to dispose of them at the highest rate of premium, as sterling bills, and finally transmitted the same to them to sell for him as his agents, when, in their judgment, they could realize the highest market value therefor. As late as October 20th, the plaintiff wrote the defendants to purchase for him three barrels of pork, and deduct the price thereof from the sale of the bills of exchange, then in their hands for sale. After the defendants had informed the plaintiff of the failure of Hutchison, he wrote them, on the 8th November, “ The loss of the money will be a terrible blow on me, financially speaking. I feel very blue on the subject. [411] You will please keep me regularly advised of any new developments in the matter, and, for me, see what can be made out of the matter.” Again, on the 23d of November, he wrote them, stating that, “ if, by the 1st of December next} nothing satisfactory is received or heard from Mr. Hutchison, and you see no reasonable chance to make anything out of the bills for the present, or at an early day, to reimburse you for the pork sent to me, I will remit the money to 'you for the pork.” It is quite apparent that, up to that time, the plaintiff did not consider the defendants were personally liable to him as the drawers of these bills, and he then had full knowledge of all the facts. The relation of principal and agent arises whenever one person expressly, or by implication, authorizes another to act for him, or subsequently ratifies the acts of another in his behalf: Code, 2152. The form in which the agent acts is immaterial; if the principal’s name is disclosed, and the agent professes to act for him, it will be held to be the act of the principal: Code, 2169. The plaintiff’s name was disclosed by the defendants as the owner of the cotton, when shipped to Hutchison by them, as the agents of the plaintiff, and the account was rendered as the proceeds of the sale of the plaintiff’s cotton, according to the usage and custom of the trade, and not as the defendants’ cotton. The agent’s authority will be construed to include all necessary and usual means for effectually executing it: Code, 2170. According to the evidence in this case, the drawing these bills by the defendants, as the factors and shipping agents of the plaintiff, was the necessary and usual means to enable them, as such agents, to obtain the proceeds of his cotton in sterling bills. Where the agency is known, and the credit is not expressly given to the agent, he is not personally responsible upon the contract. The question to lohom the credit is given, is a question of fact, to be decided by the jury in each case: Code, 2185. As between the defendants and the plaintiff, their agency in the shipment [412] of his cotton to Liverpool, and the procuring sterling exchange for the proceeds thereof, according to the usual custom of the trade, was well known to him, and the question whether the plaintiff received the bills from them, on their credit, as the drawers thereof, or on the credit of the proceeds of his own cotton, shipped and sold by them in Liverpool, as his agents, was a question to be decided by the jury, under the evidence in the case. "Whatever might have been the liability of the defendants, as the drawers of these bills, if the same had been negotiated and in the hands of a bona fide holder for value, it is not necessary to discuss in this case. The main, controlling question, as presented by the record, is, whether the defendants are personally liable to the plaintiff as the drawers of these bills of exchange, under the facts and circumstances of the case. In' our judgment, they are not, and as there is no material error in the charge of the Court to the jury, or in refusing to charge as requested, and the verdict being right, under the law applicable to the facts of the case, we are of the opinion that the judgment of the Court below should be affirmed. Judgment affirmed. Lochrane, Chief Justice, concurred, but wrote no opinion.