Eisinger v. E. J. Murphy Co.

Mr. Justice Van Orsdel delivered the opinion of the Court: It is urged that a motion for judgment for a directed verdict, being in the nature of a demurrer to the evidence, admits the validity of the order and forecloses the right of defendant on appeal to challenge the judgment on the ground of his nonliability upon the instrument sued on as matter of law. We are not impressed with this contention. The rule invoked admits the truth of the facts proved, but not matters of law. Hence, defendant’s motion for judgment admitted the competency, of [479] the order as evidence in the case, but not the legal interpretation thereof as affecting his liability. This brings us to the single question, whether or not defendant, in accepting the order, did so personally or as the agent of Lambros and Kanelopoulos. Section 1324 of the District Code [31 Stat. at L. 1398, chap. 854], provides as follows: “Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized, but the mere addition of words describing him as an agent or as filling a representative character without disclosing his principal does not exempt him from personal liability.” The language of the statute is clear and needs no extended interpretation. If the instrument anywhere contains words indicating agency with a disclosure of the principal,' or if the acceptor uses such words after his signature, it is sufficient to put the payee on notice. The name of the party to whom the order is addressed is a material part of the instrument. If the agency is disclosed in the address, as here, the instrument will be held to contain words indicating that the acceptance is not personal, but as agent for the principal named therein. But it is contended that defendant failed to prove his authority as agent, and, therefore, is not entitled to claim exemption from personal liability under this section ¡of the Code. By the great weight of modern authority, no action can be brought against an agent on a contract executed in the name of a principal, even though the agent was without authority; for the reason that the contract was not intended to be the personal contract of the agent. The only remedy against him is on the ground of fraud and deceit, or breach of an implied warranty of authority. As was said in Kent v. Addicks, 60 C. C. A. 660, 126 Fed. 112: “There are authorities which hold that the contract in such a case is that of the agent, against whom a recovery may be directly had; but the prevailing and the better doctrine is that where, as in the present instance, the undertaking on its face is that of the supposed principal, the agent is [480] liable only on tbe implied warranty that he bad tbe right to make it.” Tbe acceptance of tbe order purports to be tbe acceptance of the principals, through defendant as agent, and not tbe personal acceptance of defendant. Hence, under tbe rule laid down in tbe Kent Case, no action lay against defendant on tbe order, irrespective of whether or not be bad authority. Even according to tbe section of tbe Code here under consideration a construction changing tbe above rule in so far as negotiable instruments are concerned, and permitting an action to be maim tained on the instrument itself against tbe agent acting without authority, there is, nevertheless, a presumption that tbe instrument is what it purports to be, — tbe obligation of tbe disclosed principal,- — and tbe burden is upon tbe plaintiff of overcoming this presumption by affirmative proof of tbe want of authority of tbe agent. Tbe judgment is reversed’with costs, and tbe cause remanded for a new trial. Reversed and remanded.