Junior v. Mercantile Insurance

Morton J. delivered the opinion of the Court. This is an action of assumpsit on a policy of insurance upon the brig — 202 — Joseph for six months. The loss within that time by a peril insured against, and a reasonable notice and offer to abandon, are admitted. The plaintiff procured the insurance to be made in his own name, for whom it might concern, and now alleges that it was made for the account and benefit of himself and three others, each of whom he avers was owner of one quarter part at the time of the loss as well as at the date of the policy. It is agreed by the defendants, that the several persons named in the declaration were interested in the manner alleged, at the time of effecting the insurance ; and the defence is, that the plaintiff and Porter & Greene had sold their parts of the vessel before the loss, and at that time had no insurable inter est in her. Before the loss, John Pedrick, assuming to act as the attorney of the plaintiff and of Porter & Greene, executed a bill of sale purporting to convey their half of the vessel to Bright and Seaver, the owners of the other half. The first inquiry will be whether any thing passed by this instrument. Pedrick’s authority to convey must have been derived either . from the power of attorney of the plaintiff, or from the letter of instructions from the plaintiff and Seaver to Pedrick and Bright of a subsequent date. There is no evidence in the case of any other authority from either of the former owners. Neither of these was executed by Porter & Greene, and the act of Pedrick was wholly unauthorized by them. That the power of attorney, while in force, authorized Pedrick to sell the plaintiff’s quarter, cannot be questioned. But the letter of instructions subsequently written by the plaintiff and Seaver, gave to Pedrick and Bright a joint authority to sell the two quarters of the plaintiff and Seaver. This was inconsistent with the authority before given by the plaintiff to Pedrick alone, and when he received the instructions, he must have understood them as a substitute for the former authority They must therefore be considered a revocation of the power of attorney. The letter of instructions conveyed to Pedrick and Bright a joint authority, which neither of them separately could execute. Co. Litt. 112 b. 181 b; Paley on Principal & Agent, — 203 — 129; First Par. in Sutton v. Cole, 3 Pick. 244.1 The bill of sale was therefore unauthorized. It is manifest, too, that even had there been sufficient authority in the agent, it was not properly executed. The deed ought to have been in the name of the principal, instead of the agent. It is not now the deed of the principal. Paley, 131, 132, 133, and cases there cited. 2 This bill of sale was therefore ineffectual to pass the property of the plaintiff and Porter & Greene ; unless power may be derived from a subsequent ratification. The instrument is not so far void as to be incapable of becoming effectual by the adoption of the principals ; and this ratification may be by implication, as well as by a direct sanction. 3 The receipt by the owner, of the purchase money, would necessarily imply a ratification of the sale ; but to be binding on the principal, the • ratification must be made with a full knowledge of all the circumstances. Paley, 143, 144; Smith v. Cologan, 2 T. R. 189, note; Fenn v. Harrison, 3 T. R. 757. 4 In the case under consideration Pedrick communicated to the plaintiff the fact that he had sold, the price, and the names of the purchasers, and other circumstances attending the sale. The plaintiff expressed no disapprobation, but in applying for — 204 — a renewal of the policy for another term of six months, exPressty stated that the brig was owned by. Seaver and Bright. This could only have been true in consequence of his approbation of the sale by Pedrick. Also, upon the receipt of the bill drawn in payment for his quarter of the brig, he presented it for acceptance and demanded payment of it. These acts are sufficient evidence of a ratification on the part of the plaintiff. The ratification of the sale on the part of Porter & Greene does not so clearly appear. According to the testimony of Pedrick, the money received in part payment for their quarter was placed to their credit and settled in their account. From the language used in his deposition, it does not clearly appear that this settlement was made with the knowledge and assent of Porter & Greene. They did, however, upon the receipt of the bill drawn for the remainder of the price for which their quarter was sold, present it for acceptance and for payment. These circumstances strongly tend to show, and perhaps will warrant the inference, that they assented to and confirmed the sale on their part. But still the question will recur, whether this sale passed any thing to Bright and Seaver. Could Bright, being agent to sell, purchase either for himself or as agent for another ? It is a rule of law well settled, and founded in the clearest principles of justice and sound policy, that the agent of the seller cannot become the purchaser or the agent of the purchaser. These relations are utterly incompatible with each other. Paley, 32; Barker v. Mar. Ins. Co. 2 Mason, 369; Church v. Mar. Ins. Co. 1 Mason, 341.1 The attempt of Bright to become the purchaser of a part of the vessel was a breach of trust on his part, and could not divest the other owners of their interest. Seaver had given to Bright no power to purchase for him, > but had authorized and instructed him with Pedrick to sell his part. This act of Bright was therefore wholly unauthorized. Has Seaver ever adopted it ? After he received information of the purchase, he procured insurance to be effected upon — 205 — the vessel in his name for whom it might concern, for six months, to commence at the expiration of the former policy. It does not appear that he made a statement, or that any was made with his knowledge, of the names of the owners. This insurance might as well be procured by him, being owner of a quarter, as if he was owner of half. Nothing tending to show a ratification can be inferred from this circumstance. And the first opportunity which he has to act decisively upon the subject, he repudiates the contract. Before information of the loss of the vessel reached him, he refused to accept Bright’s bills drawn in payment of the half which he had purchased. To hold this transfer to be valid, would be to compel him to become a purchaser without his consent. Notwithstanding this breach of confidence on the part of Bright, the parties interested might waive all objection to his conduct and ratify his contract. And we have already seen that the acts of the plaintiff and of Porter & Greene have a strong tendency to show such waiver and ratification. But these acts were founded upon a reasonable presumption, that Seaver and Bright were to become joint purchasers and jointly responsible for the purchase money. The refusal of Seaver to adopt the contract and to accept Bright’s bill, produced such an entire change of circumstances as furnished to the plaintiff and to Porter & Greene sufficient reason for disavowing a contract which perhaps before they had intended to adopt. The bill of sale purporting to be a joint contract between the parties passed no property to Bright and Seaver, or either of them, and produced no change in the ownership of the vessel. We are therefore all of opinion, upon the facts disclosed in the case, that Pedrick had no authority to make sale of the half of the brig, that Bright had no legal right to become the purchaser, either for himself or for Seaver, and that these unauthorized acts have never been so ratified as to change the property of the former owners. The interest in the vessel remained the same at the time of the loss that it was at the date of the policy ; and is correctly stated in the first count in the plaintiff’s declaration. Since the commencement of the' action Bright has disavowed it and annulled the authority of the plaintiff to prose — 206 — cute it, so far as that authority was derived from him. He might well prohibit the plaintiff from maintaining the suit for his proportion of the loss ; but the policy was in the name of the plaintiff. The action is brought by him for the benefit of himself and the other owners ; and it would be manifestly unjust that one owner, having received payment for his part of the loss, having compromised with the underwriters, or being unwilling to litigate the claim, should have the power to defeat the legal rights of the others. Bright might well revoke the power which he had given to the plaintiff to prosecute for his benefit, but he could not annul the authority which the other owners had given to sue for them, much less the right which he had to maintain the action in his own name for his own benefit. We are therefore well satisfied, that the plaintiff is entitled to judgment for his own quarter and those of Seaver and Porter & Greene, and the verdict must be amended accordingly.1 April 4th. April 5th. After this opinion was delivered, Fletcher insisted that the declaration was insufficient. The plaintiff, being the agent in a joint contract for four, the action brought by him must be to enforce the whole contract. Besides, there is no count alleging the interest to be in three only, and the counts in which the whole interest is averred to be in some one of the three, are not supported by the evidence. But per Curiam. We were inclined to think the first count sufficient to sustain a judgment for three quarters of the sum insured ; that as it stated correctly the interest of all the parties for whose benefit the suit was originally brought, the revocation by Bright of the authority to prosecute any further on his behalf, ought not to be allowed to prejudice the other parties concerned ; but it is not necessary to determine this, as we are of opinion that judgment may be rendered for the plaintiff upon the other counts. Footnotes [1] See 2nd ed. 245 and notes; 2 Kent’s Comm. (3d ed.) 633, note b, and eases there cited. [2] The rule that an attorney or agent, to bind his principal, must sign the name of the principal, applies only to deeds and not to simple contracts. New England Mar. Ins Co. v. De Wolf, 8 Pick. 56; Andrews v. Estes, 2 Fairfield, 267. See Spencer v. Field, 10 Wendell, 87; Means v. Morrison, l Breese, 172; Minard v. Mead, 7 Wendell, 68; Elwell v. Shaw, 1 Greenl. 339; Stinchfield v. Little, 1 Greenl. 231; Colburn v. Ellenwood, 4 N. Hampsh. R. 102; Jordan v. Trice, 6 Yerger, 479; Magill v. Hinsdale, 6 Connect. R. 464; Hovey v. Magill, 8 Connect. R 680; Berkeley v. Hardy, 8 Dowl. & Ryl. 102; 5 Barn. & Cressw. 355; Pentz v. Stanton, 10 Wendell, 271; Hills v. Bannister, 8 Cowen, 31; Barker v. Mechanics Fire Ins. Co. 3 Wendell, 94; Shelton v. Darling, 2 Connect R. 435; 2 Kent’s Comm. (3d ed.) 631 and note E; Spencer v. Field, 10 Wendell, 87; Montgomery v. Dorion, 7 N. Hampsh. R. 475. [3] See Hanford v. M'Nair, 9 Wendell, 54; Blood v. Goodrich, 9 Wendell, 68; 2 Kent’s Comm. (3d ed.) 614. [4] See Thorndike v. Godfrey, 3 Greenl 429; 2 Kent’s Comm. (3d ed.) 616; Owings v. Hull, 9 Peters, 629; Cunningham v. Bell, 5 Mason, 168; Belly. Cunningham, 3 Peters, 81. [1] See 1 Story’s Comm. Eq. 310 to 312; Rothschild v. Brookman, 2 Dow & Clark, 188; 5 Bligh, N. S. 165; 3 Simon, 153; Crome v. Bullard,2 Cox 253; Lees v. Nuttáll, 1 Russ. & Mylne, 53. [1] See 2 Phillips on Ins. 379.