S. F. Hess & Co. v. Heegaard

Mr. Justice Gary delivered the opinion of the Court. The appellant, a corporation, sued the appellee for goods sold and delivered, upon an account substantially undisputed. The defense was a set-off exceeding the demand sued upon. For the purposes of this opinion it is assumed that J. E. Avery was the general western agent of the appellant, and resident of Chicago, where the appellee was in business. Cigarettes were the goods principally dealt in between the parties. The appellant was a manufacturer in Eochester, H. Y., and a fierce competition was raging between it and a monopoly named American Tobacco Company, for the trade of buyers. The American Tobacco Company were offering a special rebate of thirty cents per thousand on cigarettes bought of it, to buyers who would buy of no one else. To induce the appellee to continue buying of the appellant, Avery gave to the appellee this writing: “ Chicago, May 28, 1890. Messrs. W. H. Heegaard & Co., City. Gentlemen :■—We, in consideration of your handling our cigarettes, guarantee that you will receive the rebate of 30 c. pr. M. on all cigarettes you handle manufactured by the Amer. Tob. Co., or its branches, from April 1st, 1890, until April 1st, 1891. Yours truly, J. E. Avery, Gen’l. Agt. S. F. Hess & Co., Eochester, H. Y.” There is no evidence that the home office of the appellant, or any person therewith connected, had any knowledge of that writing until all dealings between the parties had. ceased; nor is there any evidence of any ratification of it, nor of any similar transaction with anybody. The appellant did settle with another customer upon the terms of this writing: “Confidential. May 27th. Messrs. A. Meyer & Co., 141 La Salle Street, Chicago: Gentlemen :—In consideration of the friendship you have extended to us in the fight against the cigarette combine, we hereby authorize you, when you remit to S. F. Hess & Co., to take off, in addition to the regular trade discount of ten per cent and two and one-half off for cash, a special discount also of two and one-half per cent, which arrangement please consider strictly private. Tours, etc., J. E. Aveby, Gen’l Agt. S. F. Hess & Co.” The distinction between the two writings is obvious. The latter contains terms upon which goods sold by appellant might be paid for. It concerned the business of the appellant only, and as a general agent may do for his principal such acts, within the general scope of the business intrusted to the agent, as the principal might do, the terms of sale of the goods were within the authority of the agent. But the first paper was a collateral undertaking to answer for the conduct of a competitor. The consideration or inducement which moves an agent to undertake or bind his principal, does not enlarge the authority to bind. The principle has been often applied to partners. See Bates on Partnership, Sec. 320 et seq. The set-off claimed by, and allowed to, the appellee, was for the rebates that he did not receive from the American Tobacco Company. It is unnecessary to go through the details of the case, as the real question is whether the appellant was bound to make good to the appellee, the rebates, if the American Tobacco Company would not allow them. Holding that the appellant was not bound, the judgment is reversed and the cause remanded.