By act of agent. [ 37 ] ·

*unless in the case of an agent contracting on the behalf of gov ernment. (a)(1.)

With respect to the duty and liability of agents in relation to bills and notes, it has been well observed, that an agent employed in negotiating bills of exchange is bound; first to endeavour to procure or order, 2004, value received of him, and place the same to account of the York Building's Company, as per advice from Charles Mildmay; to Mr. Humphrey Bishop, cashier of the York Building's Company, at their house in Winchester Street, London. Accepted per H. Bishop." The bill not having been paid, an action was brought against defendant upon his acceptance; at the trial he proved that the letter of advice was addressed to the Company; and that the bill having been brought to their house, defendant was ordered to accept it, which he did in the same manner as he had accepted other bills. Page, J. directed the jury to find for the plaintiff, which they did accordingly. On motion for a new trial, the court held the direction right; "for the bill on the face of it imported to be drawn on the defendant, and it was accepted by him generally, and not as servant to the Company, to whose account he had no right to charge it until actual payment by himself. And this being an action by an indorsee, it would be of dangerous consequence to trade to admit evidence arising from extrinsic circumstances, as the letter of advice.. And this differed widely from the case of a bill addressed to the master and underwritten by the servant; where undoubtedly the servant would not be liable, but his acceptance would be considered as the act of the master. A bill of exchange is a contract by the custom of merchants, and the whole of that contract must appear in writing. In this case there was nothing in writing to bind the Company, nor could any action be maintained against them upon the bill; for the addition of cashier to defendant's name was only to denote the person with certainty; the direction to whose account to place it was for the use of the drawee only." Judgment for the plain

tiff.

Le Fevre v. Lloyd, 5 Taunt. 749.-1 Marsh. 318. S. C. If a broker, who being employed to sell goods, procures a purchaser, and himself draws a bill on him for the amount payable to the principal, and which is accepted by the purchaser, but dishonoured, the broker, as drawer, is liable to be sued on the bill, by such payee; and by the court, "The broker, by giv ing this bill, put an end to all doubt as to the buyer's responsibility.The vendors, upon receiving it, in consequence of the good opinion of the defendant, dismiss from their minds all care about the solvency of the purchaser."

Goupy v. Harden, 2 Marsh. 454.-Holt," C..N. P. 342. S. C. Bills are drawn by a house in London on a house in Lisbon, and indorsed to A. in London. A. indorses them without any qualification, to B. at Paris.-Held that A. was bound to B. by this indorsement, and could not offer evidence to shew that he was acting merely as B's agent.

(a) Macbeath v. Haldimand, 1 T. R. 172.—Unwin v. Wolseley, id. 674-Myrtle v. Beaver, 1 East. 135.-Rice v. Chute, id. 579.

(1) A like exception in favour of public agents has been repeatedly recognised in the United States. Hodgson v. Dexter, 1 Cranch. 363. Jones v. Le Tombe, 3 Dal. 384. Brown v. Austin, 1 Mass. Rep. 208. Sheffield v. Watson, 3 Caines' Rep. 69. Freeman v. Otis, 9 Mass. Rep. 272.

An agent who makes a contract on behalf of his principal whose name he discloses at the time to the person with whom he contracts, is not personally liable, and there is no difference in this respect between an agent for government and an individual. Rathbon v. Budlong, 15. Johns. Rep. 1. See as to agent indorsing a note for the benefit of his principal, Chalmers, Jones & Co. v. MMurdo. 5 Munf. Rep. 252.

An agent having authority to make notes binding on a company cannot delegate such authority to a sub-agent. Emerson v. Providence Hat Manufacturing Company, 12 Mass. Rep. 237.

[ 38 ]

acceptance; secondly, on refusal to protest for non acceptance; By act of tidy, to advise the remitter of the receipt, acceptance, or pro- agent. testing; and fourthly to advise any third person that is concerned ; all this without any delay (a). Losses occasioned by the fraud r failure of third persons to whom an agent has given credit pursuant to the regular and accustomed practice of trade, are not chargeable upon him (b). And therefore, where the receiver of Lord Plymouth's estate took bills in the country of persons who at the time were reputed to be of credit and substance in order to return the rents in London; the bills were dishonoured and the money lost, and yet the steward was held to be excused (c); and if a trustee appoints rents to be paid to a banker at that time in credit, and the banker afterwards breaks, the trustee is not answerable. And it has been observed that none of these cases are on account of necessity, but because the *persons acted in the usual method of business (d). So in an action for money had and received, the facts were, that the plaintiff had engaged the defendant, as his agent, to receive money due to him from his customers, directing him to remit by the post, a bill for these and other sums due to him. A bill was accordingly remitted to him by the post, but the letter was suppressed, and the money upon the bill received at the banker's by some unknown person, and was not recovered. Lord Kenyon said, "had no direction been given about the mode of remittance, still, this being done in the usual way of transacting business of this nature, I should have held the defendant clearly discharged, from the money received as agent.. It was so determined in Chancery forty years ago (e)." However, it may be collected from a case recently decided in Chancery, that if an agent place his principal's money to his own account with his general banker, without any mark by which it may be specified as belonging to the trust, and the banker fail, the agent will not be excused, because he cannot so deal with his principal's money, as that if the banker's solvency continue, he may be in a condition to treat it as his own, and if insolvency happen, he may escape by considering it as belonging to his principal (f). And a loss occasioned by any unauthorized disposal or adventure of the principal's money, and not prescribed by the usage of business, though intended for his benefit, is chargeable to the agent (g); and therefore where (a) Beawes, 431.-Payley, 4 & 5. 34.

(6) Russell v. Hankey, 6 T. R. 12.-Payley, 37, 8.

(c) Knight v. Lord Plymouth, 3 Atk. 480.

(d) Ex parte Parsons, Ambl. 219. and see 1 Br. Ch. R. 452.-3 Ves. jun. 566-6 Ves. jun. 226. 266.-5 Ves. jun. 331. 839. and see Warwick v. Noakes, Peake Rep. 68.

(e) Peake, Ni. Pri. Cas, 68. Warwick v. Noakes.

(f) 11 Ves. jun. 382. Wren v. Kirton.

(3) Payley, 39.

By act of agent.

A. in London consigned goods to the firm of B. and C. at Hamburg for sale upon a del credere commission, and B, in London made advances to A. to be repaid out of the proceeds, and B. and C. with the proceeds purchase bills for A. which they transmitted to B. in L39] London, specially indorsed to him, and these bills, whilst they

By act of partner.

were in B's hands were dishonoured, it was held that B. and C. must bear the loss (a). On the other hand, in general, whatever profit an agent may derive from dealing with bills, the property of his principal, belonging to his principal, and therefore where the master of a ship in a foreign port, from the state of the exchange, received a premium for a bill drawn upon England on account of the ship, it was held, that this belonged to his owner, although there may have been a usage for masters of ships to appropriate such premiums to their own use (b). Where a person holds bills, as agent for another, and a third person sucs him for the same, he may, by resorting to a Court of Equity, compel the two claimants to litigate the claim, without involving him in the expence of resisting two suits; and a bill of interpleader has been sustained upon bills of exchange, received by the plaintiff as agent, to procure payment for his principal in Scotland, to whom they had been remitted, against an order for goods, pursued in an action of trover by such principal, and also by attachment in Scotland by a creditor of the principal (c).

With respect to a person becoming party to a bill, by the act of his partner, it is observable, that although in general one joint te⚫nant, or person jointly interested with another, in real or personal property, is not capable by himself, of doing any act which may tend to prejudice the other (d); yet by the custom of merchants, long established as law, if one partner draw, accept, or indorse a bill or note, in the name, or as on the behalf of the firm, such act will render all the partners liable to a bona fide holder, although the other partners were ignorant of the transaction, and were even [40] intentionally defrauded by their partner (e). By entering into the

(a) Lucas and others v. Groning and others, 1 Stark, 391.

(b) Diplock v. Blackburn, 3 Campb. 43.-Thompson v. Havelock, 1 Campb. 527.-Payley on Prin. & Agent, 41.-1 Ves. 83.-Chitty's Law of Apprentices, 67, 8, 9.

(c) Stevenson v. Anderson, 2 Ves. &, B. 407.

(d) Offly v. Ward, 1 Lev 234.-Tooker's case, 2 Co. 67.-Lingan 1. Payn, Bridgm. 129.-Bac. Ab. Joint-tenant, H. 3.

(e) See the older cases, Pinkney v. Hall, 1 Salk. 126.-Lord Raym. 175. S. C.-Smith v. Jarves, Lord Raym. 1484.- v. Layfield, 1 Salk. 292. -Anon. Sty. 370.--Harrison v. Jackson, 7 T. R. 207. Anon. 12 Mod. 345. -Lane v. Williams, 2 Vern. 277. Id. 292. S. C. Bac. Ab. Merchant, C.Vin. Ab. Partners, A.-Watson, 195; and the more recent cases, Sheriff v.

partner.

partnership each party reposes confidence in the other, and con- By act of stitutes him his general agent as to all the partnership concerns; and it would be a great impediment to commerce, ifin the orditary transactions of their trade it were necessary that the actual consent of each partner should be obtained, or that it should be ascertained that the transaction was really for the benefit of the frm: bence the act of one, when it has the appearance of being on behalf of the firm, is considered as the act of the rest, and whenever a bill is drawn, accepted, or indorsed, by one of several partners, as on behalf of the firm, during the existence of the partnership, and it gets into the hands of a bona fide holder, the partners are liable to him, though in truth one partner only negotiated the bill for his own peculiar benefit without the consent of his copartners (a), *and this rule prevails, although by the terms of the

Wilkes, 1 East. 48.-Swan v. Steele, 7 East. 210.-Ridley v. Taylor, 13 East. 175-Ex parte Bonbonus, 8 Ves. jun. 542.-Ex parte Gardom, 15 Ves. jun. 236, and see Bayl. 55. 74, 5.-Selw. N. P. 289. But the implied authority of a partner does not enable him to execute deeds in the name of the firm, Ball v. Dansterville, 4 T. R. 313.--Harrison v. Jackson, 7 T. R. -207-Holt, C. N. P. 143. And the decisions are contradictory upon the question, whether one partner can give a guarantee for the debt of a third person, so as to bind the other without his authority. Ex parte Gardom, 15 Vės. jun. 286. acc. Duncan v. Lowndes and another, 3 Campb. 478. contra. An executor who after the death of one of several partners, continues to receive his share for the benefit of infants, is liable on a bill issued by the firm, although his name does not appear in the firm, Wightman v. Townroe and another, 1 M. & S. 412..

(a) Admitted in Sheriff. Wilkes, 1 East. 48.- Decided in Swan v. Steele, 7 East. 210.-3 Smith's Rep. 199. S. C.-Ridley v. Taylor, 13 East 175.Baker v. Charlton, Peake, 80.-Lane v. Williams, 2 Vern. 277. Arden v. Sharpe, 2 Esp. Rep. 524.-Wells v. Masterman, 2 Esp. Rep. 731,-Jacaud v. French, 12 East. 322, 3.; and see Bayl. 55. 74, 5. In the case of Swan kal. v. Steele, 7 East. 210. the facts were these: A. B and C. traded under the firm of A. and B. in the cotton business, C. not being known to the world as a partner; and A. and B. traded as partners alone, under the same firm in the business of grocers; in which latter business they became indebted to D. and gave him their acceptance, which not being able to take up when due, they, in order to provide for it, indorsed in the common firm of A. and B. a bill exchange to D. which they had received in the cotton business, in which C. was interested; but such indorsement was unknown to C. of whom D. the indorsee had no knowledge at the time; and it was decided that such indorsement in the firm common to both partnerships of a bill received by A. and B. in the cotton business, bound C. their secret partner in that business, and that consequently C. was liable to be sued by D. on such indorsement, the latter not knowing of the misapplication of the partnership fund at the time. Lord Ellenborough, C. J. said, "It would be a strange and novel doctrine to hold it necessary for a person receiving a bill of exchange indorsed by one of several partners, to apply to each of the other partners, to know whether he assented to such indorsement, or otherwise that it should be void; there is no doubt, that in the absence of all fraud on the part of the indorsee, such indorsement would bind all the partners. There may be partnerships where none of the existing partners have their names in the firm; third persons may not know who they are; and yet they are all bound by the acts of any of the partners in the name or firm of the partnership.-The distinction is well settled, that

[ * 41 3

By act of partner. * 42 ]

partnership deed, the partners were prohibited from circulating any bills or notes, if the holder were ignorant of that circumstance at the time he received the same; though on proof of such restrictive clause, and that the bill was issued by one partner without the

⚫ if a creditor of one of the partners collude with him to take payment, or security for his individual debt out of the partnership funds, knowing at the time that it is without the consent of the other partner, it is frandulent an void; but if it be taken bonâ fide without such knowledge at time, no subsequently acquired knowledge of the misconduct of the partner in giving such security can disaffirm the act; if the interests of the plaintiffs in the bill were once well vested, no subsequent knowledge that such indorsement was made without the consent of one of the partners, will divest it; and it would be highly inconvenient that it should; because if the plaintiffs had been apprized at the time that the partner who indorsed the bill had no authority to do so, they might have obtained some other security for their demand."

In Ex parte Bonbonus, 8 Ves. jun. 542, the Lord Chancellor Eldon said, "This petition is presented here upon a principle which it is very difficult to maintain; that if a partner for his own accommodation pledges the partnership, as the money comes to the account of the single partner only, the partnership is not bound. I cannot accede to that; I agree, if it is manifest to the persons advancing money that it is upon the separate account, and so that it is against good faith that he should pledge the partnership, then they should shew, that he had authority to bind the partnership. But if it is in the ordinary course of commercial transactions, as upon discount, it would be monstrous to hold that a man borrowing money upon a bill of exchange, pledging the partnership without any knowledge in the bankers that it is a separate transaction, merely because that money is all carried into the books of the individual, therefore the partnership should not be bound. No case has gone that length. It was doubted, whether Hope v. Cust was not carried too far, yet that does not reach this transaction, nor Sheriff v. Wilkes, as to which I agree with Lord Kenyon, that as partners, whether they expressly provide against it in their articles, (as they generally do, though unnecessarily,) or not, do not act with good faith, when pledging the partnership property for the debt of the individual, so it is a fraud in the person taking that pledge for his separate debt. The question of fact, whether this was fair matter of discount, or, being an antecedent, separate, debt of Rogers, the discount was obtained merely for the purpose of paying that debt, by the application of the partnership funds, which question is brought forward by the affidavits, though not by the petition, must lead to farther examination. If the partners are privy, and silent, permitting him to go on dealing in this way, without giving notice, the question will be, whether subsequent approbation is not for this purpose equivalent to previous consent. In Fordyce's case, Lord Thurlow and the judges had a great deal of conversation upon the law; and they doubted upon the danger of placing every man with whom the paper of a partnership is pledged, at the mercy of one of the partners, with reference to the account he may afterwards give of the transaction. There is no doubt, now the law has taken this course, that if under the circumstances the party taking the paper can be considered as being advertized in the nature of the transaction, that it was not intended to be a partnership proceeding, as if it was for an antecedent debt, prima facie, it will not bind them; but it will, if you can shew previous authority, or subsequent approbation; a strong case of subsequent approbation raising an inference of previous positive authority. In many cases of partnership, and different private concerns, it is frequently necessary for the salvation of the partnership that the private demand of one partner should be satisfied at the moment; for the ruin of one partner would spread to the others; who would rather let him liberate himself by dealing with the firm. The nature of the subsequent transactions therefore must be looked to, as well as that at the time."