George D. Putnam & Co. v. French & Moore

The opinion of the court was delivered by Veazey, J. It appears from the auditor’s report that the plaintiffs are merchants in Boston, and the defendants are merchants residing and doing business in Hartford, Yermont. The goods in question were sold by the plaintiffs to the defendants through one Allen, who was in the employ of the plaintiffs as a “ travelling salesman,” and who made the contract of sale at Hartford, representing that he was a partner in the plaintiff firm. One of the terms of the contract was that the defendants might and should pay Allen for the goods at Hartford, when he should come around on his next trip in about three months. This was a substantial part of the contract to the defendants, as it was a matter of inconvenience and expense to them to pay in Boston. It was the custom in Hartford and vicinity either to pay the travelling salesman, or remit to the firm. The defendants paid this salesman, Allen, in accordance with the contract in good faith. The plaintiffs now seek to recover the amount of the bill again on the ground that Allen was not authorized or permitted to make collections. This restriction was not known to the defendants. [405] It is laid down by Judge Story and other writers on the law of agency, and is established by an unbroken line of authority, that the contract of an agent binds a principal in all cases, not only where the agent is acting within the scope of his usual employment, but where he is held out to the public, or to the other party, as having competent authority, although he has in the particular instance, exceeded or violated his instructions, and acted without authority. And this on the principle, that, where one of two innocent parties is to .suffer, he ought to suffer, who misled the other into the contract, by holding out the agent as competent to act, and as enjoying his confidence. Story on Agency, s. 448. Allen, being sent out by the plaintiffs as their travelling salesman, clearly had apparent authority, not only to take an order, but to make terms of payment as to time and place, to the extent at least of what was customary and not extraordinary. The defendants had a right to rely upon Allen’s making a truthful report of the terms of sale, and to suppose that the goods were sent pursuant to the contract as made. He was not their agent. The plaintiffs, having taken the benefit of their agent’s contract, which was one within his apparent authority, cannot be allowed to avoid some of its terms for the reason that he did not disclose them fully. It is just that they should suffer for his dishonesty in this respect, rather than the defendants. It is further insisted by the plaintiffs’ counsel that the defendants were charged with notice, that they must pay the plaintiffs and not Allen by reason of the words “ payable at office,” written on their bill rendered, when the last invoice was sent. The defendants did not see those words. Therefore, they ■ had no notice in fact. Should they be held chargeable with notice ? The plaintiffs sent that bill without any letter, when the goods were sent, which was three months before the time of payment agreed upon. The defendants examined it as to items charged, and amount of same, and filed it away — never noticing those words; and when Allen came around at about the time he was to come for the pay by the terms of the sale, they paid him the balance due — supposing all the while that he was, as he claimed to be, a member of the firm. [406] In view of the obscure manner' in which those words were written on the bill-head; and of the circumstances under which and the purposes for which, in other respects, that bill was sent, and of the terms of the contract as to whom and when and where payment was to be made, we do not think the defendants were guilty of such negligence in not seeing those words as to be chargeable with notice which they did not in fact have. It was a matter which the plaintiffs might easily have made plain. They saw fit to undertake to give the notice in an obscure way, which was likely to be ineffectual. It turned out so, and they should bear the consequences. Judgment affirmed.