Voss & Co. v. Robertson, Brown & Co.

B. F. SAFFOLD, J. A line of separation between the respective rights of a principal, and of a third party, to protection against each other on account of the tort of an agent, is not easily defined. One who has clothed his agent with all the apparent muniments of an absolute title, and authorized him to dispose of the property, as sole owner, ought rather to suffer than one whom his conduct has enabled his agent to impose on. On the other hand, immunity to the third person on account of innocence of intention merely, would destroy all rights of property. One who deals with another respecting property, must be charged with the responsibility of that other’s right of authority to dispose of it as he claims to do. An agent to sell has no authority to pledge the goods of his principal, although the property be entrusted to him, and the pledgee be ignorant that he is an agent. — Story on Agency, §§ 224, 78, 437 ; Bott v. McCoy & Johnson, 20 Ala. 578. A bill of lading is rather quasi negotiable than actually so, and consequently is not subject to the rule that the owner of negotiable paper can not protect himself against a tona fide holder for valuable consideration, on the ground that he did not authorize it to be used except — 487 — for some particular purpose. — Pars, on Cont. p. 600, 601, 239; 6 East, 17, 538. [Note by Beportek. — At a subsequent day of the term the appellant’s counsel applied for a rehearing, or at least a modification of the opinion, and filed in support thereof the following argument] : The charges given by the court are in conformity with the above principles. The qualification to the charge ashed by the claimants asserted a correct proposition. Liens at law exist only in cases where the party entitled to them has the possession of the goods ; and if he once part with the possession after the lien attaches, the lien is gone. Lickbarron v. Mason, 6 East, 21-27. It is unnecessary to consider the last charge given at the request of the plaintiffs. The verdict was not affected by it. The judgment is affirmed. The proposition is certainly true, that as between the principal and the agent, or as between the agent and a third person, dealing with the agent with notice of his agency, a power to sell will not authorize a pledge. But this is not a case arising between the principal and the agent, nor is it a ease arising between the principal and a third party, who has dealt with the agent with notice of the agency. Yoss & Co. had no notice that Hayes was an agent, nor was there any circumstance from which they could infer that fact. The bill of lading was in the name of Hayes; the cotton was under his control and in his possession ; everything went to show that he was the owner of it; and Yoss & Co. dealt with him as the owner of the cotton. Therefore, jit is respectfully submitted, that the charge of the court below was erroneous. As between Yoss & Co., and the plaintiffs and Powell, the facts do not show that the question of Hayes’ agency could be raised to the prejudice of Yoss & Co. and to invalidate a transaction they had effected with Hayes in good faith on their part and without notice of any agency. “As a general rule, he who employs an agent shall lose by his fraudulent, negligent or illegal — 488 — act, rather than an innocent person. It is a universal rule, based on principles of policy, propriety and justice, that if a principal puts his agent in a condition to impose on innocent third persons, by apparently pursuing his authority, he shall be bound by his acts."-Dunning & Smith v. Roberts, 35 Barb. p. 463 ; 33 Barb. pp. 17, 18, and cases there cited. The real question in this case, as we respectfully submit, is not what power was intended to be given to the agent, but what power a third person who dealt with the agent had a right to infer he possessed, from his own acts and those of his principal, — 1 Peters (S. C.) Rep. pp. 444, 445 ; 8 How. (U. S.) Rep. p. 384 ; Copeland v. Touchstone, 16 Ala. pp. 333, 334, and authorities there cited. A factor is an agent. — 1 Bouvier, p. 306. By the bill of lading^ the cotton was consigned to appellants. The sale by Murphy & Co. is the same in principle as if it had been made by appellants. It is submitted that the cotton was not pledged to appellants, but that the money advanced was a sale pro tanto to Yoss & Co,, and that, as to the extent of this amount advanced, Voss & Co. stood in the attitude of bona ñde purchasers. In support of this proposition, we particularly refer to the case of Hall v. Hinks et al., 21 Maryland Reports, pp. 416, 417, and authorities there cited. A factor, who is nothing but an agent, deals with goods entrusted to his principal as if they were his own, and all persons to whom he disposes of them may set off or retain the amount of the factor’s indebtedness when an action is brought for the price, either by the factor or his principal, 13 Johnson, p. 9 ; Paley on Agency, 326. The effect of a consignment of goods, generally, is to vest the property in the consignees. — 17 Howard, 107. If Powell consented that Hayes should ship'said cotton to Mobile as his own, and in his own name, consigned' by bill of lading to Voss & Co., and the latter in good faith made advances on it to Hayes, then it is submitted that Powell is estopped by his own act; and if NPowell is estopped, it would follow that his creditors would be. In Gardner & Sayre v. Allen's Executors, 6 Ala. p. 187, — 489 — this court say — “ Where one purchases goods of a factor, under the belief, authorized by the facts of the case, that the latter was the real owner, he may set off a debt due him from the factor, to an action for the purchase-money, brought either by the factor or his principal.” — See, also. Story on Agency, § 420, and authorities there cited. Upon the hypothesis, warranted by the proof, that Powell authorized Hayes to ship the cotton to Voss & Co., and take a bill of lading in his own name, then Powell concealed his name. This was a fraud. In such a case, the purchaser of goods, before they are paid for, may, in an action by the principal, set off a debt due him from the factor, upon the ground that the parties by their conduct having contracted with him in that character, they can not recover against him without allowing the same advantages and equities in his defense that he would have had against the agent. In these cases it is held that it makes no difference whether the sale by the agent is under a del credere commission or not. — 10 Wendell, p. 495, and the cases there cited. If the view that we take of this case is correct, then, it is respectfully submitted, with great deference, that the case of Bott v. McCoy & Johnson, 20 Ala. p. 383, has no application to the real point involved in this case. That case only asserts the principle that the factor is not authorized to pledge the goods of his principal for his own use. But the point we rely upon in this caséis that Powell permitted Hayes to ship the cotton to Voss & Co., who were named in the bill of lading as consignees, upon their paying freight, &c., this bill of lading being taken in the name of Hayes, thereby enabling Hayes to perpetrate a fraud upon Voss & Co., in obtaining from them $1,000 as an advance upon said cotton, and dispose of it as his (Hayes’) own property, and that by this act Powell is estopped from asserting any claim to the proceeds of said cotton against parties who stand in the attitude of purchasers for value, in good faith, without notice,, and that Powell being estopped, his creditors, the appellees, are also estopped. — 490 — For the same reason we respectfully submit that the principle asserted in McCombie v. Davies, 6 East, pp. 540, 541, can have no controlling influence in this case. In McCombie v. Davies, there were no facts tending to show thatMeOombie, as principal, had conferred any authority upon his agent, Coddan, which authorized the latter to pledge the tobacco to Davies. Here the proof shows that such authority was given by Powell to Hayes to deal with the property as his own, and this is shown by the fact that Hayes had taken the bill of lading for the cotton in his own name. Powell having put it in the power of Hayes to perpetrate a fraud upon appellants, in such case the rule is that when one of two innocent persons must suffer by the-fraud of a third, the loss must fall upon him who is in fault. 6 Denio, p. 232 ; 4 Denio, 327 ; Story on Sales, § 313. Upon the face of the proceeding in the transaction with Voss & Co., Hayes was not an agent,'but a principal; there was nothing to show that Hayes was not the owner of the cotton; but, on the contrary, every fact and circumstance went to show that he was the owner of the cotton, for it was shipped in his name in the bill of lading, and he had the bill of lading for it. On the foregoing grounds your petitioners respectfully pray for a re-hearing in said cause, and, the premises considered, that the said judgment rendered at the present term of this honorable court may be set aside and vacated, or that the same may be modified, so far as the $1,000 advanced by Voss & Co, is concerned. The following response was made by— SAFFOLD, J. The declaration which the appellant desires the court to make, is, that the cotton receipt given by the Selma and Meridian Railroad Company to Hayes for thirteen bales of cotton, to be carried to Mobile and delivered to Voss & Co., as consignees, was such evidence of title in Hayes as justified. Voss & Co. in dealing with him as the owner of the cotton. This could only be so in case the cotton receipt was á negotiable instrument. It is not — 491 — so recognized by the commercial law, and we are not authorized to confer upqji it that authority. . A re-hearing is denied.