Hearne v. Keene — 18 N.Y. Super. Ct. 579

Majority

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Anastasia L. Hearne, (Administratrix of Patrick L. Hearne, deceased,) Plaintiff and Appellant, v. Laura Keene, Defendant and Respondent.

Headnote

1. A merely voluntary payment by a party, though for the benefit of another, creates no right of action against the- latter unless the latter acquiesces in or adopts the act.

2. But if such a payment is made by request of the agent for the defendant, the latter is liable for the money, provided such agent had either a general or special authority to borrow.

3. Where the- authority of an agent was general in respect to a particular business, (the management of a theatre), carried on by the defendant, and it appeared' that, .according to the habit and course of business, his agency embraced the receipt and disbursement of the moneys of the theatre, and the raising of money to carry it on when required: Held, that the defendant is liable for money paid by the request of such agent for the rent of the theatre in which her business was carried on, and for which she was liable a» lessee.

(B'efore Hoffman, Slosson and Woodrüff, J. J.)

Heard, November 9th;

decided, December 31st, 1859.

Appeal from judgment for the defendant on the decision of Murray Hoffman, Jr., Esq., Referee.

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The action was brought to recover the sum of $400 and. interest paid by the plaintiff, Patrick L. Hearne, to the owner of the Metropolitan Theatre for the rent thereof for one week, while it was in the use and occupation of the defendant, under a hiring at that rent, payable weekly.

The money is alleged to have been paid by the plaintiff at the defendant’s request. The proof showed, without contradiction, that it was paid by the plaintiff and for the defendant’s benefit, but the defendant claimed that it was either a voluntary payment for which no recovery could be had, or it was an advance to one John S. Lutz on the credit of the latter, and that Lutz had no authority to borrow money for the defendant. The report and decision of the Eeferee was, so far as it is material to state, as follows:

“ That on the 24th of December, 1855, the plaintiff paid to the owner of the Metropolitan Theatre the sum of four hundred dollars, being rent then due by the defendant, who was lessee of the theatre.

“That this payment was made at the request of John S. Lutz, who was at the time the agent of the defendant, for sundry purposes, and the agent of the theatre, receiving and paying out moneys.

“ That this advance was not made by the plaintiff exclusively or chiefly on the credit of the defendant.

“ That there is not sufficient evidence to clearly establish the fact that said agent was authorized to borrow in the defendant’s name or engage her credit, either generally or on this particular occasion; and that there is no such clear and distinct evidence of her assent to and acquiescence in this transaction, with knowledge of the circumstances, as that such authority may be inferred or a ratification implied.

“ That there is no clear and distinct evidence that the defendant knew of the application to the plaintiff, or to any one, to make this payment for her or on her credit, or that the same had been made by the plaintiff before the commencement of this suit.

“ That the existence of an authority in the agent to borrow money in the defendant’s name and engage her credit, is not to be inferred from the nature of the agent’s duties and the fact that .the money was paid to the use of the principal.

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“ That, in. view of the circumstances under which the money was advanced, the plaintiff is to be held to strict proof of the agent’s authority.

“ That the facts established by the evidence are not sufficient to render the defendant liable.

“That the defendant is entitled to judgment.”

The evidence upon which the plaintiff relied, and which he claimed to entitle him to judgment, is chiefly recited in the opinion of the Court.

Judgment having been entered for the defendant upon the decision of the Referee, the plaintiff appealed to the General Term.

Pending the appeal the plaintiff died, and an order was made continuing the action in the name of his administratrix, Anastatia L. Hearne.

M. Campbell, for plaintiff, (appellant.)

I. The Referee erred in not finding that the defendant was bound by the act of Lutz as her agent.

It clearly appears from the testimony of John S. Lutz that Lutz was the agent of the defendant for all business purposes relating to the theatre. E. L. Hearne swears that a part of Lutz’s business was to raise whatever money was required for the theatre. Lutz nowhere denies this.

It is also undisputed that the identical $400, for which this suit is brought, was paid by the plaintiff to the agent of John La Earge for the rent of the defendant’s theatre, at the request of' the defendant’s agent, Lutz.

This $400 E. L. Hearne paid for the plaintiff to defendant’s lessor. Lutz says that he does not remember telling plaintiff that this money was for the theatre. Plaintiff swears he did tell him so; and E. L. Hearne swears he gave Lutz the receipt after he had paid it, which Lutz does not deny.

The rule is well settled, that an agent, for-a particular purpose, has authority to do all necessary or proper acts for the accomplishment of the end. (Story on Agency, § 60.)

Besides, the evidence of Lutz shows that he was the defendant’s general agent for all business purposes. (Anderson v. Conley, 21 Wend., 279 .)

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. II. The Referee found, as a question of fact, that the plaintiff made this loan at the request of Lutz, defendant’s agent, and on the credit of the defendant; but that there was not sufficient evidence that sffid agent was authorized to borrow in defendant’s name, &c. '

Lutz swears, “Iam her agent to this time for all business purposes.” E. L. Hearne swears that 'Lutz was defendant’s agent= for “ raising whatever money was required.” Neither Lutz nor the defendant deny this. The evidence is direct, explicit and uncontradicted. Lutz was the .defendant’s general agent. (2 Kent, 9 ed., p. 835.)

Therefore we say the Referee erred in finding, as a matter of fact, that there was not sufficient evidence of the authority of Lutz to borrow for the defendant, and as a matter of law that the defendant was not liable.

Lutz was the defendant’s agent for paying the rent, 'and for all business purposes. Plaintiff paid it at Lutz’s request for the defendant, which: Lutz had notice of. This was notice to the defendant. (Story on Agency, § 140.)

III. The' Referee erred in finding, as a conclusion of law, “ that the existence of an authority in the agent to borrow money in the defendant’s name, is not to be inferred from.the nature of the agent’s duties, and the fact that the money was paid to the use of the principal.”

The only way to ascertain an agent’s authority is- from the nature of his duties and employment, in the absence of specific evidence. (Paley on Agency, by Lloyd, pp. 189, 207; Story on Agency, §§ 55, 56, 58, 83; 2 Kent, 9 ed., p. 832.)

In this case there is direct and positive evidence, wholly uncontradicted or impeached, that Lutz was ■ the defendant’s: agent for raising money -for the theatre.

IV. It appears that the money sued for was used to pay the second week’s rent of the defendant’s theatre in 1855; the defendant must have known this; she does not offer herself to swear she did not; she never repudiated the loan; and, after the lapse of four years, the Court is bound to presume, in the absence of proof to the contrary, that she ratified the act of her agent Lutz for her benefit.

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1 ‘ Where the unauthorized act is apparently for the benefit of the'principal, a very slight matter will serve to make out a ratification.” (Commercial Bank of Buffalo v. Warren, 15 N. Y. R., 579 ; Tradesmen's Bank v. Astor, 11 Wend., 87 .)

“ Silence-always affords a strong presumption of ratification.” (Story on Contracts, § 161, and cases cited.)

Y. The report of the Referee, and the judgment thereon, was clearly against evidence, and the conclusions of law from the evidence were erroneous and should be set aside, and a new trial ordered.

William D. Booth, for defendant, (respondent.)

I. The evidence showed that the loan was not made to the defendant, but to Lutz, on his sole responsibility and credit.

II. The evidence failed to show that Lutz had authority to borrow money for the defendant. His being her agent for matters connected with the theatre did not import this authority. It was not “ within the ordinary scope of the business.” (1 Parsons on Contracts, 41, n. f.)

To the powers of a general agent there is this restriction, he cannot borrow money for his principal. (Hawtayne v. Bourne, 7 M. & W., 595; Dunlap’s Paley on Ag., §192, and notes.)

IH. The money having been borrowed without the authority of the defendant, she is not liable for it. The fact that it was paid in discharge of her debt', does not affect the question. (Davidson v. Stanley, 2 Mann. & Grang., 721; Jacques v. Todd, 3 Wend., 94 .)

She has neither authorized nor ratified the act. (7 M. & W. 595, supra; 5 J. R., 176; 11 Wend., 87 ; 6 Hill, 318 ; Pentz v. Stanton, 10 Wend., 271 .)

Nor is any authority to borrow implied in the nature of Lutz’s agency.

IY. The report of the Referee is as conclusive on the questions of fact as a verdict of a jury. (Foster v. Colman, 1 E. D. Smith R., 85; Schwart v. Taylor, 7 How. Pr. R., 251; Durkee v. Mott, 8 Barb., 423 ; Woodin v. Foster, 16 id., 146; Watkins v. Stevens, 4 id., 168; Green v. Brown, 3 id., 119; Van Sleenburgh v. Hoffman, 15 id., 28; Spencer v. Utica & Schen. R. R. Co., 5 id., 337; Leach v. Kelsey, 7 id., 466.)

A right to recover, by action, money paid to the use of another can only arise where the plaintiff has paid it under some legal obligation or necessity to do so, or has done it at the request of the defendant. A mere voluntary payment by a party, though for the benefit of another, creates no right of action against him, unless the latter acquiesces in or adopts the act.

The plaintiff in the present case was under no legal obligation or necessity to make the payment in question. He made it, not at the personal request of the defendant, but of her agent; yet, if the agent had authority to make such a request, in other words, to borrow the money on her credit, she is answerable in this action.

The Referee has not found whether, when Lutz, the agent, applied to the plaintiff for the money, he told the plaintiff it was for Miss Keene, the defendant. The plaintiff swears he did do so, and Lutz swears he did not, but he subsequently qualifies his assertion by saying that he did not remember saying what he borrowed the money for, though he was prepared to swear that he did not borrow it expressly for that purpose, (f. e., the use of the theatre.) I shall assume that the plaintiff’s recollection on this point was the most reliable, especially as he adds that Lutz promised to pay him out of the receipts of the theatre of the following week, and that he loaned the money in consequence of that assurance, knowing him to be the agent of the defendant in matters connected with the theatre, and Lutz does not contradict this latter statement. This disposes also of the question whether the money was loaned on the individual security of Lutz only. On this evidence, it clearly was not.

What, then, was the nature and extent of this man’s authority ? Was it sufficient to cover this transaction?

That there was any express authority or power conferred on Lutz by the defendant to borrow money on her credit, is not pretended. If any existed, it was as incidental to his general authority.

The witness, Ed. L. Hearne, (the plaintiff’s brother,) through whom this loan was effected, was the defendant’s counsel in effecting the lease of the theatre, and employed as her counsel by Lutz. He swears that he knew him to be her agent in all matters relating to her payments and receipts connected with the

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theatre; that his business was to receive moneys at the office and disburse them, and raise whatever money was required; that he knows it was his business to raise money when required, and that he knew this as counsel to the theatre and from conversations with him. Lutz himself does not contradict the statement of Ed. L. Hearne. He swears that he had been the agent of Miss Keene from the time she took the theatre; that he was her agent for business purposes all the time she was lessee of the theatre; that he attended to all the money business of the theatre, paid out money and received it; and that he was her agent up to the time of the trial for all business purposes. It appears that the rent was payable weekly in advance. Punctual payment was a condition of-the continuance of the lease, and the defendant was personally bound to pay it; and it is not unreasonable to hold that if Lutz was the defendant’s agent for “ all the money business of the theatre,” “for all business purposes” whatever, he had the right, in virtue of such agency, to raise money, on the credit of his principal, to meet such payments, if short of funds.

Incidental powers may be deduced from the character of the agency, (Story on Ag., § 100;) and where that is as broad as this is, and necessarily involving the duty of seeing the rent promptly paid each week in advance, I see nothing unreasonable in holding that he has power, as incidental to his general authority, to anticipate, if necessary, a week’s receipts and borrow money to meet the rent on the credit of the theatre.

It is a material consideration that the defendant got the full benefit of the loan—it having been applied in payment of the rent, for which she was legally liable.

This bears on the question of authority.

In Bolton v. Hillersden, (1 Lord Raymond, 224,) Lord Holt held that if a master has never intrusted a servant to charge him by signing of notes in the master’s name, yet if the money for which the note is signed comes to the use of the master, such note will bind the master.

In Davidson v. Stanley, (2 Mann. & Grang., 721,) while the Court held that a general agent had no power as such to draw and indorse bills in the name of his principal, they approved the charge of the Judge who tried the cause, (Rolfe, B.,) and who, among other propositions, told the jury that such authority

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might be circumstantial only, as where the principal profited by the transaction. In that case the money does not appear to have gone to the use of the principal. “ The fact of articles purchased having come to the use of the master,” says Paley, (Paley on Agency, under head of “implied authority,”) “is prima facie sufficient to make him liable, and he can only discharge himself by showing either that the credit was really given to the servant, or that he always gave the servant ready money to pay for the articles bought, and had not, therefore, authorized him to buy on credit.”

There is another consideration which is of great weight with me. The defendant is eventually liable for this money. If Lutz has to pay it, then she is liable over to him, notwithstanding he borrowed it of the plaintiff. His having borrowed it, puts him in no worse position in respect to his right of reclamation on his principal, than though he had himself advanced it out of his own pocket in a case of necessity. The nature of his agency required him to attend to the payment of the rent as well as all other disbursements. The defendant then being ultimately liable, why should the plaintiff be turned over to an action against the agent, which would render another action necessary in order to reach the principal ?

In Pentz v. Stanton, ( 10 Wend., 271 ,) it was held that though the defendant was not liable on a bill of exchange drawn by his agent on the purchase of goods for the defendant’s use, by reason of his name not appearing on the bill, yet he was liable under the common counts, though there was no evidence that the name of the defendant had been disclosed at the time of the purchase. The plaintiff knew that he was selling to an agent for some one, as the bill was signed by the party in his own name as agent, and though the jury did not pass on the question of whether the goods were sold exclusively on the credit of the agent and the bill or not; yet the Court considered it would not be unreasonable “ to hold that the plaintiff did not rely exclusively on the agent’s credit," but had regard to the eventual liability of the principal, whoever he might be, if it should become necessary to resort to him, and they held that even if the plaintiff should fail in the action against the principal, on the ground that the credit was given exclusively to the agent; still, as the agent could, if

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obliged to pay the debt himself, recover it back from his principal as money paid to his-use, there was no legal objection to a recovery against him in this action on the common countsand the Court refused to disturb the verdict, which was for the plaintiff.

The equity is all with the plaintiff. He advanced his money, without consideration, to preserve the defendant’s lease, and to discharge a debt for which she was legally liable, and she has had the benefit of the payment, and ought in good conscience to pay it.

There must be a new trial, costs to abide event.

Ordered accordingly.