Mundorff v. Wickersham

/The opinion of the court was delivered, January 3d 1870, by Sharswood, J. — If an agent obtains possession of the property of another, by making a stipulation or condition which he was not authorized to make, the principal must either return the property, or, if he receives it, it must be subject to the condition upon which [89] it was parted with by the former owner. This proposition is founded upon a principle which pervades the law in all its branches: Qui sentit eommodum, sentiré debet et onus. The books are full of striking illustrations of it, and more especially in cases growing out of the relation of principal and agent. Thus, where a party adopts a contract which was entered into without his authority, he must adopt it altogether. He cannot ratify that part which is beneficial to himself and reject- the remainder: he must take the benefit to be derived from the transaction oum onere: Broom’s Legal Maxims 632; Hovil v. Pack, 7 East 164; Coleman v. Stark, 1 Oregon 115. In the familiar case of the sale of a horse by a servant, who, without authority, warrants the soundness of the animal; the master having received the price enhanced by the warranty, even though ignorant of it, is responsible: Nelyear v. Hawke, 5 Esp. 72; Alexander v. Gibson, 2 Campb. 555; Williamson v. Canaday, 3 Iredell 349. Where the agent of the insured, in effecting an insurance, makes a false and unauthorized representation, the policy is void. Where one of two innocent persons must suffer by the fraud or negligence of a third, whichever of the two has accredited him, ought to bear the loss: Fitzherbert v. Mather, 1 T. R. 12. The holder of a note is responsible for representations made by a broker employed to sell it, though contrary to his instructions: Lobdell v. Baker, 1 Metcalf 193. A principal who sues to enforce a contract, is bound by the representations made by his agent, in order to induce the opposite party to make it: Bennett v. Judson, 21 N. Y. 238; Elwell v. Chamberlain, 4 Bosw. 320; 31 N. Y. 611; so a debtor cannot have the benefit of á compromise and release, effected by his agent, without adopting all the representations made by the agent to the creditors, in negotiating it: Crans v. Hunter, 28 N. Y. 389. If an agent borrows money for his principal, and procures another to become surety, and the surety afterwards pays the debt, the principal is answerable to the surety: Higgins v. Dillinger, 22 Miss. 397. There is a very strong case in Barber v. Britton, 26 Verm. 112, where the defendant sent a servant to employ the plaintiff, who was a physician, to visit a boy who had been injured in their service, and directed him to tell the plaintiff that they would pay for the first visit. The servant neglected to mention this, and employed the plaintiff generally. He attended the boy until he recovered, and the defendants were held liable for his whole bill. Many of these cases are put upon an implied authority, but the more reasonable ground, as it seems to me, is, that the party having enjoyed a benefit, must take it cum onere. The defendant in this case received a note signed by the plaintiff, which was delivered to the defendant’s agent, upon the faith of an undertaking that he would protect it at maturity. He has [90] enjoyed the benefit of tbe transaction. He used tbe note in bis business, and doubtless received- tbe proceeds of its discount. Tbe plaintiff bas been obliged to pay it at maturity, as bis possession of tbe note with tbe defendant’s endorsement proves, at least primá facie. He is now seeking to enforce tbe contract evidenced by tbe receipt. Why shall not tbe defendant bear tbe burden of the transaction, as be bas received tbe benefit ? If tbe note was not an accommodation note, but founded on value; if tbe plaintiff did owe tbe defendant the amount of it, and tbe defendant was not bound to protect it at maturity, then there was a palpable fraud committed by tbe plaintiff, in requiring tbe agent to sign such a receipt, and this would be a full defence to tbe action. Judgment reversed, and procedendo awarded.