Lovett, Hart & Phipps Co. v. Sullivan

Lathrop, J. This is an action of contract upon a written guaranty, addressed to the plaintiff corporation, dated August 16, 1893, and reading as follows: “Please deliver my son, George F. Sullivan, such goods as he may order, from time to time, and I will guarantee payment for same. This agreement good until cancelled by me in writing. The goods to be charged to George F. Sullivan.” This paper was signed “Jeremiah Sullivan by John Sullivan.” At the trial in the Superior Court, the judge directed a verdict for the defendant, and reported the case for our determination. It appears from the testimony at the trial in the Superior Court that the guaranty in question was in the handwriting of one Phipps, the treasurer of the plaintiff corporation; that he gave it to an agent to have it signed; and that the agent returned it to him signed; that after the guaranty was signed the plaintiff had no oral or written communications with the defendant; and that the guaranty had not been cancelled. The treasurer testified that he had not heard of any limitations or restrictions placed upon John Sullivan’s authority to sign the guaranty for his father; that before the guaranty was signed, George F. Sullivan had dealt with the plaintiff, but no credit had been given him; that George F. Sullivan did a good deal of business with the plaintiff between August 26, 1893, and August 15,1903, probably to an amount of $1,500 a year ; that [536] George F. Sullivan went into bankruptcy in the fall of 1903, and was then indebted to the plaintiff, for goods sold in 1902 and 1903. It was admitted that George F. Sullivan was born in May, 1873, and was therefore a minor when the guaranty was signed. The only testimony introduced to show that John Sullivan was authorized to sign the defendant’s name, was that of John Sullivan, who was called by the plaintiff as a witness. He testified that the defendant authorized him to sign his, the defendant’s, name to a guaranty, to last during the minority of his brother, George F. Sullivan, whereby the plaintiff would be guaranteed payment by the defendant for all goods sold George F. Sullivan during his minority, and that when he signed his father’s name he did it without reading the paper very carefully. There is no evidence in the case to show that John Sullivan was the general agent of the defendant. So far as the evidence discloses he was a special agent only, with limited authority; and the law is well settled in this Commonwealth that a person dealing with a special agent is bound to inquire and ascertain the extent of his authority. Snow v. Perry, 9 Pick. 539. Murdock v. Mills, 11 Met. 5,15. Harrison v. City Ins. Co. 9 Allen, 231, 233. Stollenwerck v. Thacher, 115 Mass. 224, 227. Brown v. Henry, 172 Mass. 559, 566. The cases of Locke v. Stearns, 1 Met. 560, and Haskell v. Starbird, 152 Mass. 117, relied upon by the plaintiff, differ so essentially in their facts from those in the case at bar that they have no bearing upon the question before us. Locke v. Stearns was an action of trespass upon the case in the nature of deceit. One of the members of a firm sold as and for linseed meal a mixture of linseed meal and teelseed meal, manufactured by the firm. It was held that all the members of the firm were liable, and that they were also liable for a sale made by their foreman acting within the scope of his authority. In Haskell v. Starbird, it was held that false and fraudulent representations made by an agent, general or special, employed to sell land, rendered his principal liable in an action of tort for deceit. See also Weeks v. Currier, 172 Mass. 53, 55. Of course a person who has derived a benefit through the fraud of his agent [537] cannot keep the fruits of the bargain, thus ratifying the fraud, without being liable in an action for deceit. See Bennett v. Judson, 21 N. Y. 238. J. A. Kerns, for the plaintiff. C. R. Cummings, for the defendant was not called upon. Judgment for the defendant.