Scarborough v. Reynolds

COLLIER, C. J. 1. It is not necessary to advert to the well settled distinction between a general and special agency,as to the obligation of third persons who may deal with an agent, to know the extent of his powers, and how and to what extent they have been limited. [Gaines v. McKinley, 1 Ala. Rep. N. S. 446; Webster v. Seekamp, 4 B. & A. Rep. 352; Fenn v. Harrison, 3 T. Rep. 760; Whitebread v. Tuckett, 15 East’s Rep. 407; Gibson v. Colt, 7 Johns. Rep. 390; Wood v. McCain, 7 Ala. Rep. 800; Munn v. Commission Co. 15 Johns. Rep. 44; Parks v. Turnpike, 4 J. J. Marsh.Rep. 456; Huntington v. Wilder, 6 Verm. Rep. 334; Hayden v. Middlesex Turnpike, 10 Mass. Rep. 397; 2 Kent’s Com. 618, 620; Stackpole v. Arnold, 11 Mass. Rep. 29.]. In the case before us, there is no evidence that the authority indicated by the writing adduced, was in any manner limited.The first question then, which arises, isj did these confer the power on the defendant’s agent to make the note declared on ? In making the note, the fact of agency is assumed, and it was incumbent upon the plaintiff to know the extent and nature of the authority under which Allen acted, and the defendant cannot be charged beyond what it expressly, or by implication imports. [Story on Ag. <§> 72.] Rowers of attorney, it is said, are ordinarily subjected to a construction, and the authority is never extended be-that, which is given in terms, or is necessary and pro* ir carrying the authority so given into full effect. Con-ntly, it has been held, that a power to sell, assign and er stock, will not include a power to pledge it for the agent’s own debt. Nor will a power to bargain and sell land, include authority to grant a license to the purchaser previous to a conveyance, to enter and cut timber upon the land, though done bona fide, with a view to effect the sale. [Story 'on Ag. § 68 to 71, and citations in the notes.] Gerieral language, when used in connection with a particular subject matter, will be presumed to be used in subordination to that matter, and construed and limited accordingly. — 258 — Under the influence of this rule, it has been decided, that an authority to demand and receive all money that might become due to the principal on any account whatsoever, to “ transact all business,” and on payment to give proper receipts and discharges, and in the event of non-payment, to use all lawful means for the recovery, did not authorize the agent to indorse a bill received under the letter of attorney, in the name of the principal, and procure a discount thereof, the words <!all business,” must be construed to be limited to all business necessary for the receipt of the money. So a general letter of attorney to receive from the commissioners of the navy, &c., all salary, wages, &c., and all other money due to the principal, with a general power to receive all demands from all other persons, to appoint substitutes, and to make due acquittances and discharges, has been held not to authorize the agent to negotiate any bills received in payment, or to indorse them in his own name, although there was evidence of a usage among agents of the like sort, to negotiate such bills; for the authority conferred, did not include any any such power of negotiation; and parol evidence is not admissible to control or enlarge the language of a written instrument. It has been also held, that a power of attorney to receive, demand and sue for, all sums of money then due, or thereafter to become due to the principal, in certain countries, and to discharge and compound the same, to execute deeds of land, then or thereafter owned by the principal, in aAbar-ticular State; and to accomplish at his discretion a compete adjustment of all the concerns of the principal in the State of New York, and to do any and every act in his name which he could do in person, does not authorize the agent to give a promissory note in the name of the principal, upon the ground, that making an adjustment of his concerns, did not include any incidental authority to give the note ; for the authority, notwithstanding the general words, was to be construed to be limited to the business referred to in the preceding clauses, and not to include a general authorityto adjust all the other concerns of the principal. Story on Ag. <§. 62 to 68, and citations in notes. See also, Wallace v. The Branch Bank at Mobile, 1 Ala. Rep. N. S. 565; Wood v. McCain, 7 Id. 800; Emerson v. The Providence Man. Co. 12 Mass. R. — 259 — 237; White v. Westport Man. Co. 1 Pick. Rep. 215; Brewster v. Hobart, 15 Id. 302; Atwood v. Mannings, 1 Mann. & Ryl. Rep. 66.] We might add to these citations many others to the same effect, but this is deemed unnecessary, as the most of them will be found referred to in the two cases cited from our own reports. See however, Paley on Ag. 189, et seq. and citations in notes. The special authority conferred upon Allen related to the plantation of the principal, and the interests connected with it, and authorized him to demand and sue for all monies that might be due to the principal from the plaintiff, and from all persons whatsoever, subjecting the principal to suit through the agent. The general terms employed, and the declaration that the principal would abide by all the transactions of the agent, must be construed in reference to the object of the power, the purpose intended, and the special authority granted. Thus limited, as we have seen the rule of construction requires, it is perfectly clear, the letter of attorney does not impart the power to execute a note in the name of the principal. What has been said in respect to the power of attorney, is pertinent to the extracts from the defendants letters. These merely authorized the agent to settle with the plaintiff, with or without a suit, or in such manner, even at a reasonable sacrifice, as he should think proper — observing a prudent discretion. This, in effect, was nothing more than an authori-toUo adjust the accounts between the parties, and to receive of the plaintiff what might be due to the defendant. The authorities cited, very satisfactorily establish, that although the balance might be in favor of the plaintiff, the agent could not, in virtue of the power to settle, make a note for its payment, in the- name of the principal. The agency of a party must first be proved from other evidence than his acts, before it ean be assumed that his acts are binding on the principal. [Scott v. Crane, 1 Conn. Rep. 255; Harrison v. Jackson, 7 T. Rep. 209 , Rex v. Brigg, 3 P. Wms. Rep. 432; Porthouse v. Parker, 1 Camp. Rep. 82; Emerson v. Prov. Man. Co., supra.] We have seen that the evidence of the agent’s authority to bind the defendant, was altogether insufficient, and whether admissible or not, — 260 — the court should thus have charged the jury, as to its legal effect. 2. Watson, in his treatise on the Law of Arbitration and Award, (p. 49, et seq.) says — “An attorney, in an action at law, has a general power to refer, and by entering into a reference will bind his client; and the courts of law have gone so far in holding a party in a cause bound by the reference of his attorney, that he is even bound by a reference of the action entered into by his attorney, when he has expressly desired his attorney not to refer. So an agent duly authorized, may bind his principal in a submission to arbitration, but the agent must be duly authorized; but in exercising the power given to him by his principal, the agent should make the submission in the name of his principal, otherwise the agent will be bound and not the principal.” In Billing’s Law of Awards, (p. 53,) it is said, “ The power of the attorney seems to be confined to the referring the cause (at the trial) at nisi prius only, on the principle, it is presumed, that it is the attorney whom the court recognizes in governing the proceedings, and that the client is bound by the act of the attorney. In any other stage of the proceeding, the attorney would be the mere agent of the principal, and all things which would be deemed necessary to give an agent authority, would be required to authorize an attorney to refer.” Both of these authors admit, that it has been decided that a solicitor in chancery has not the same power to refer as an attorney has at law, and intimate that the distinction is well founded. [Inhab. of Buckland v. Inhab. of Conway, 16 Mass. 396.] We have made these quotations, that it may be seen under what circumstances an attorney at law may assent to the reference of a suit in which his client is a party, and that neither himself nor an agent can submit a controversy'of the party represented by them, unless they have an authority, express or implied. The attorney at law, even though employed by an agent, it is said, represents the principal, and if he enters into a reference at the trial in the primary court, without fraud, an award in other respects unobjectionable, made in obedience thereto, will be sustained. These legal conclusions, however, rest upon reasoning peculiar to such a state of case, and cannot, in the nature of things, have any ap« — 261 — plication to an agent. [Billings on Awards, p. 54.] ■ It follows from what has been said, that an attorney at law, retained to collect a debt, or to institute a suit, cannot, before the action is instituted, submit the matter to arbitration; and to authorize an agent to exercise such a power, it must be expressly conferred or embraced within the authority explicitly granted. The question then, upon this branch of the case is this, did the power of attorney, or letters, directly or incidentally authorize the agent to refer the matters in controversy between the plaintiff and defendant to the arbitrament of third persons? The letter of attorney authorized Allen “ to sue, ask for and demand all sums or moneys due me (defendant), or which may become due, in the hands of Newman Reynolds, and all other persons whatsoever;” and subjected the principal to suit through his agent, as if he was personally present. The first branch of the authority conferred, had reference to the collection of debts which might be due to the principal from •all persons, but from the plaintiff in particular. This contemplated the defendant as a creditor, and the agent as an actor, in obtaining payment, either by demanding it in person, or by legal coercion ; but does not authorize him to take any step by which his principal may be made a debtor. The second branch must either be construed literally, that is, to be subject to the service of process, &c. when a suit is instituted in usual form, or else to be suable as the substitute of his principal in respect to all matters which concern or grow out of his agency. In this view, it is clear that the letter of attorney does not confer the power to submit, at least until after a suit is brought. From the two first extracts from the defendant’s letters, there can be no pretence of authority to submit to arbitration. In the third, he says, if “ you ” can honorably and fairly settle with Reynolds for me out of court, do so, if not, let the court and jury settle. This instruction contemplates a settlement by the personal agency of Allen, and not by a substitute or the arbitrament of persons selected by him and the plaintiff. One who has a bare power or authority from another to do an act, must execute it himself, and cannot delegate it to another, unless such an authority is given him — 262 — by express terms. The power of substitution may however be implied, where it is indispensable by the laws in order to accomplish the end; or it is the ordinary custom of trade; or it is understood by the parties to be the mode in which the particular business would or might be done. Mr. Justice Story, in his treatise on agency, thus briefly sums up the law on this point, as deduced from the decisions, viz: “ The authority is exclusively personal, unless from the express language used, or from the fair presumptions growing out of the particular transaction, or of the usage of trade, a broader power was intended to be conferred on the agent.” <§> 13, 14, 15. If the submission to referees be the delegation of the authority which was deputed to the agent, the general rule we think should be applied, and there is nothing in the present case to bring it within the influence of either of the exceptions. We have seen that an authority to settle an account, or all accounts, without restriction as to the mode of settlement, does not permit the agent to bind his principal by note. Is not a submission to arbitration, and an award consequent upon it, more conclusive of the rights oí the principal, than making a note ? It certainly is, and if, upon authority, the latter is not allowable, we think upon principle, the former cannot be tolerated. Hence we conclude, that the power we are considering does not embrace an authority to submit to arbitration. The letter of the 30th April confers no power, but merely suggests as a prudential measure, whether it would not be better for the agent, whenever he attempted to settle, to do so in the presence of some gentlemen of truth. The letter of the 16th May, merely refers to the advice contained in the preceding, and says that the writer had no objection, if his agent thought it best to settle in some other way — he believed that the plaintiff intended “to wrong” him, and was willing that the agent should exercise a prudent discretion. In the last letter, the defendant repeats what he says he had always said, viz : settle with the plaintiff if you can by exercising a prudent discretion, even at a reasonable sacrifice. If no settlement can be effected, he directs suit to be brought. The letter of May expressed a willingness that — 263 — the agent should disregard the suggestion contained in the letter of April, and both that and tbe one subsequently written authorize him to exercise a prudent discretion, and the latter even authorizes him to submit to a reasonable loss. Every agent with power to settle accounts generally, is invested with reasonable discretion, and the only additional authority is that, which allows him to submit to a reasonable sacrifice. It results, from what has been said, that the several letters last considered, will not support the submission to referees, and that the alternative of the agent, if he could not effect a settlement by the exercise of his own personal efforts, was to institute a suit. 3. Where a writing exists, it is generally the exclusive medium of proving the transaction to which it relates. [3 Phil. Ev. C. &■ H’s Notes, 1208, et seq.] It is incumbent upon the party who objects to the admission of parol proof' because there is written evidence of the same fact, to show that there is such a writing. In the case at bar, one of the arbitrators stated that according to his best recollection, their award (which evidenced the making of the note declaredon) was written out. This was equivalent to the expression of a confident belief of the fact; and although the witness could not positively affirm it, yet according to all analogy, it was quite sufficient in the absence of opposing proof to exclude parol testimony, if it had been otherwise unobjectionable. 4. If the witness could have testified from his own knowledge to the payment of the $400 on the note of the defendant to Flewellen, or if perhaps it appeared that the note had been fully paid off, so as to warrant the presumption of its destruction, then the parol evidence of the credit indorsed would have been admissible. [The P. & M. Bank of Mobile v. Willis & Co. 5 Ala. Rep. 783.] But in the absence of such additional proof, it should have been rejected. The consequence is, that the judgment must be reversed, and the cause remanded.