Thomson v. Davenport, 9 B. & C. 78 (Exch. 1829) is an early English case discussing the law of agency. The party buying certain goods had stated that he was buying on behalf of a third party, but did not disclose the name. The court holds that the seller may sue those principals for the price of the goods.
The text below is the full text of the decision. There are undoubtedly scanning errors, and most citations are omitted. It is presented here as a convenience to attorneys, and no representation is made as to the accuracy of the text. Before citing this case, confirm the accuracy.
This was a writ of error, brought upon a judgment obtained in the borough court of Liverpool against the plaintiff in error. The plaintiffs below declared for goods sold and delivered. Plea, general issue. Upon the trial before the mayor and bailiffs, assisted by the recorder, a bill of exceptions was tendered to the direction given by the mayor, bailiffs. &c, by the said recorder to the jury. The bill of exceptions stated that one Thos. McKune was produced and examined upon oath as a witness, by the counsel for the plaintiffs, to maintain the issue on their parts. And McKune' stated in evidence that he, McKune, was established in Liverpool as a general Scotch agent, and, amongst others, acted as agent for the defendant, who resided in Dumfries; that in March, 1823, he received from the defendant a letter, containing an order to purchase various goods, and, amongst others, a quantity of glass and earthenware; which letter, with the order, was produced by the plaintiff's attorney, and was read in evidence as follows: "Dumfries, 29th March, 1823. Annexed is a list of goods which you will procure, and ship per Nancy. Memorandum of goods to be shipped: 12 crates of Staffordshire ware, crown window glass, ten square boxes," &c., &c. That he, McKune, provided himself with the goods mentioned in this letter; and that he got the glass and earthenware from the plaintiffs, who were glass and earthenware dealers in Liverpool; that at the time he ordered the glass and earthenware, he saw the plaintiff, Mount ford Fyuney, himself, and, to the best of his recollection, told him that he, McKune, had an order to purchase some goods, and that they were for the same house for whom he had purchased goods from the plaintiffs the preceding year; and he also stated, to the best of his recollection, that " as he was a stranger to the nature of the goods, he hoped that the plaintiff's would let him have the same as before, to save him from blame by his employer;" but he, McKune, did not show the plaintiffs the letter containing the order, nor did he mention the name of any principal; that he then either gave the plaintiff, Mountford Fynney, a copy of the order, or produced to him the original order, that Fynney might himself take a copy; but he rather thought the former was the fact, and that the plaintiff Fynney did not see the original, though he conld not say positively; that the plaintiff accordingly furnished ptocq the *glass and earthenware, the amount of which, deducting the *discount, was 193/. 7s. 8d., but adding the discount, 219/. 10s., and rendered invoices thereof to McKune, headed thus: "Mr. Thomas McKune bought of John and James Davenport" (which was the plaintiffs' firm); that McKune entered the net amount (193/. 7s. 8d.) to the credit of the plaintiffs, in an account with them in his books, and charged the same sum, with the addition of 2 per cent, for the commission, to the debit of the defendant in an account with him, which was according to his invariable course of dealing; and that he sent to the defendant a general invoice of all the goods purchased, comprising the glass and earthenware, but not mentioning the plaintiffs' names; that afterwards, in April, 1823, and before the credit for the goods had expired, McKune became insolvent, though up to the day of his stopping payment he was in good credit, and could have bought goods on trust to the amount of 20,000/.; whereupon the said mavor and bailiffs, by the said recorder, after stating the evidence, told the jury that, from the distance of time that the sale took place, there was some uncertainty in the evidence of McKune as to the precise words used by him to the plaintiffs at the time he gave them the order for the goods: but it appeared to them (the said recorder) upon the evidence, that the name of the defendant as principal was not then communicated or known to the plaintiffs; and directed the jury, that if they were of opinion that the defendant's name as principal was mentioned by McKune to the plaintiffs at the time the order was given, or that the plaintiffs then knew that the defendant was the principal, their verdict ought to be for the defendant; but if they were of opinion that the defendant's name as the principal was not mentioned by McKune to the plaintiffs at the time of the order being given, and that the plaintiffs did not then know that the defendant was the principal, and they did not think upon all the said facts of the case that the plaintiffs, at the time of the order being given, knew who the principal was, so that they then had a power of electing whether they would debit the defendant or McKune, they ought to find a verdict for the plaintiffs; and that, although the plaintiffs at the time of the sale might think that McKune was not bu\ ing the goods upon his own account, yet, if his principal was not communicated or made known to them, that circumstance ought to make no difference in the case. The jury, after finding as a fact, that the letter containing the order was not shown and made known to the plaintiffs, gave their verdict for the plaintiff's below for 219/. 10s. It was contended that the mayor and bailiffs, by the recorder, ought to have directed the jury, that if they were satisfied that Davenport, &c, at the time of the order being given, knew that McKune was buying the goods ns an agent, even though his principal was not communicated or made known to them, they, by afterwards debiting McKune, and so reudering the said invoices, had elected to take him for their debtor, and had precluded themselves from calling on Thomson.
Joy, for the plaintiff in error Davenport & Co., the sellers of these goods, knowing that McKune was an agent, and electing to take Iiim as their debtor, cannot now resort to Thomson. The two following propositions will not be disputed. Where the seller of goods knowing that the buyer, though dealing in his own name, is, in truth, the agent of another, elects to give the credit to such buyer, he cannot *9firn afi-erward8 recover their *value from the principal. On the other hand, if the seller be ignorant, at the time of the sale, that the purchaser is buying for another person, that person may be sued, unless where the seller may have abandoned his right to resort to him. Of these two propositions, the first is absolute; the second conditional. It will be contended that this is an intermediate case, and altogether new. But it clearly falls within the first of the above propositions; or, if it can be said to range between them at all, it is not equidistant, but approximates to the first more clearly than to the second. Or, thirdly, if it were practicable to force it nearer to the second, this case would dearly fall within the condition. Here the sellers were distinctly informed that the buyer was in truth the agent of another, and yet they elected to give credit to such agent. They have, therefore, thus precluded themselves from recovering over against the principal. They choose to treat the agent as their debtor, with ihe full knowledge that the goods were for another. They were so satisfied to have the agent for their debtor, that they did not even ask the name of his principal. It was natural that they should prefer him to a house at Dumfries, the members of which resided out of the reach of the laws of England. It will be said that they could not elect to take him as their debtor, because the name of the principal was not mentioned. Hut that was the fault of the sellers: they did not ask the name. They were told the goods were for a house at Dumfries. There was no attempt at concealment on the part of the buyer. If they had not fully decided, at the time of making that contract, to prefer McKune to any house at Dumfries, they would surely have inquired for what house he was acting. This ominission made their preference of him manifest. They knew not only that McKune was buying for another, but they knew also the description of that other, viz, a house in Dumfries. Beyond this, what was there in the name? Or, if anything worth their knowing, their ignorance of it was solely imputable to their own laches. Caveat venditor. If they wilfully closed their eyes against further light then, they cannot now complain that it was imperfect. But they had abundant information whereon to exercise an election, and by their conduct they have shown that they preferred to take McKune as their debtor. The name of the principal is wholly immaterial, if the sellers, knowing that there is a principal, elect to take the agent as their debtor. If this case, therefore, come nearer to the second proposition, the sellers must be held to have abandoned their rights to resort to the principal. This dotcrine is fully established by Patersou v. Gandasequi, and Addison v. Gandasequi ;(£>) and partially confirmed by Maanss v. Henderson,(c) where it was held to be a sutlicient intimation of the agent's character, that he, in time of war, described a ship as neutral. It is consouant to the general principle of the law merchant, as evinced by its admission in the case of foreign principals. And as, in respect to the difference of courts and the difficulties of executing process, a Scotchman domiciled in Dumfries stands much in the same position as a foreigner, the same rule should hold as to both. In point of law, therefore, this doctrine is consistent with the decisions in analogous cases; in point of *commercial policy, it is expedient; and in r*or1 point of equity between these parties, it is just. L
Patteson, contra.--It is undoubtedly established by the authorities, that if the seller knows that there is a principal, and also who that principal is, and afterwards gives credit to the agent, he thereby makes his election, and abandons his right to resort to the principal. But in this case, the seller did not, either at the time of the sale or at the time when he gave credit to the agent, know the name of the principal; he had not, therefore, the power of making any election. This case, therefore, does not fall within the authorities cited. On the other hand, it is clearly established, that if the seller does not, at the time of the sale, know that the buyer is an agent, he may, when he discovers the fact, sue the principal, although in the meantime he has given credit to the agent. The present is an intermediate case, for here the seller knew at the time of the sale that the buyer was an agent, but did not know for whom he was agent. The seller was not bound to enquire the name of the principal; and therefore this case belongs to the latter, rather than the former class. Tbe seller cannot make his election between the agent and principal until he knows who the principal is; for the election implies a comparison of their individual credit. The right to resort to the principal could be determined only by reason of the seller having exercised an election, and that right was not put an end to in this case, because no election was or could be exercised. Neither is the buyer injured by the seller suing the principal; the credit had not expired when the action had commenced, nor had the buyer settled an}' account with his principal. The buyer, therefore, is not in a worse situation than he was before. Wilson v. Hart.(tf) and Seymour v. I'ychlau^e) show that the rule as to discharging the principal is not to be extended. As to the argument from inconvenience, if an unknown principal is not to be liable when discovered, great inconvenience will follow. The majority of contracts are made by agents who are known to he agents, but the names of their principals are not known. In Moore v. Clement8on(/') it was held, that although a factor sells goods as a principal, yet if, before they are all delivered and before any part of them is paid for, the purchaser is informed that they belong to a third person, in an action by the latter for the price of them the purchaser cannot set off a debt due to him from the factor. Lord EllenBorough there says, "A man who is in the habit of selling the goods of others, may likewise sell goods of his own; and where he sells goods as a principal, with the sanction of the real owner, the purchaser, who is thus led to give him credit, shall on no account afterwards be deprived of his set-off by the intervention of a third person. But here there was express notice to the purchaser, before the contract was completed, that Green in this particular transaction acted only as a factor." In Kaillon v. Hodgson, the sellers gave credit to Smith, Lindsay & Co.; but it wus held they might maintain au action against the defendant, who had had the goods. The defendant here has had the goods, and in justice ought to pay for them, unless the plaintiff has done 'anything to preclude himself from suing, or unless it be shown that by suing the defendants he is altering the rights of other parties, and neither of those things can be shown.
Lord Tenterden, C. J.--I am of opinion that the direction given by the learned recorder in this case was right, and that the verdict wasalso right. I take it to be a general rule, that if a person sells goods (supposing at the time of the contract he is dealing with a principal), but afterwards discovers that the person with whom he has been dealing is not the principal in the transaction, but agent for a third person, though be may, in the meantime, have debited the agent with it, he may afterwards recover the amount from the real principal; subject, however, to this qualification, that the state of the account between the principal and the agent is not altered to the prejudice of the principal. On the other hand, if at the time of the sale, the seller knows, not only that the person who is nominally dealing with him is not principal, but agent, and also knows who the principal really is, and, notwithstanding all that knowledge, chooses to make the agent his debtor, dealing with him and him alone, then, according to the cases of Addison v. Gandasequi. and Paterson v. Gandasequi. the seller cannot afterwards, on the failure of the agent, turn round and charge the principal, having once made his election at the time when he had the power of choosing between the one and the other. The present is a middle case. At the time of the dealing for the goods, the plaintiffs were informed that McKune, who came to them to buy the goods, was dealing for another; that is, that he was an agent, but they were not informed who the principal was. They had not, therefore, at that time, the means of making their election. It is true, that they might, perhaps, have obtained those means if they had made further inquiry, but they made no further inquiry. Not knowing who the principal really was, they had not the power, at that instant, of making their election. That being so, it seems to me that this middle case falls, in substance and effect, within the first proposition which I have mentioned, the case of a person not known to be an agent; and not within the second, where the buyer is not merely known to be agent, but the name of his principal is also known. There may be another case, and that k where a British merchant is buying for a foreigner. According to the universal understanding of merchants, and of all persons in trade, the credit is then considered to be given to the liritish buyer, and not to the foreigner. In this case, the buyer lived at Dumfries; and a question might have been raised for the consideration of the jury, whether, in consequence of their living at Dumfries, it may not have Wen understood among all persons at Liverpool, where there are great dealings with Scotch houses, that the plaintiffs had given credit to McKune only, and not to a person living, though not in a foreign country, yet in that part of the king's dominions which rendered him not amenable to any process of our courts.? But instead of directing the attention of the recorder to any matter of that nature, the point insisted upon by the learned counsel at the trial was, that it ought to have been part of the direction to the jury, that if they were not satisfied the plaintiffs, at the time of the order being given, knew that McKune was buying goods for another, even though his principal might not be made known to them, they, by afterwards debiting McKune, had elected him for their debtor. The point made by the defendant's counsel, therefore, was, that if the plaintiffs knew that McKune was dealing with them as agent, although they did not know the name of the principal, they could not turn round on him. The recorder thought otherwise: he thought that though they did know that McKune was buying as agent, yet, if they did not know who his principal really was, so as to be able to write him down as their debtor, the defendant was liable, and so he left the question to the jury, and I think he did right in so doing. The judgment of the court below must therefore be affirmed.
Bayley, J.--There may be a course of trade by which the seller will be confined to the agent who is buying, and not to be at liberty at all to look to the principal. Generally speaking, that is the case where an agent here buys for a house abroad. There may also have been evidence of a course of trade, applicable to an agent living here acting for a firm resident in Scotland. But that does not appear to have been made a point in this case, and it is not included in the objection which is now made to the charge of the recorder. In my opinion, the direction of the recorder was right; and it was, with the limits I have mentioned, perfectly consistent with the justice of the case. Where a purchase is made b}' an agent, the agent does not, of necessity, so contract as to make himself personally liable; but he may do so. If he does make himself personally liable, it does not follow that the principal may not be liable also, subject to this qualification, that the principal shall not be prejudiced by being made personally liable, if the justice of the case is that he should not be personally liable. If the principal has paid the agent, or if the slate of accounts between the agent here and the principal would make it unjust that the seller should call on the principal, the fact of pnyment, or such a state of accounts, woold be an answer to the action brought by the seller where he had looked to the responsibility of the agent. But the seller, who knows who the principal is, and instead of debiting that principal, debits the agent, is considered, according to the authorities which have been referred to, as consenting to look to the agent only, and is thereby precluded from looking to the principal. But there are cases which establish this position, that although he debits the agent who has contracted in such 8 way as to make himself personally liable, yet, unless the seller does something to exonerate the principal, and to say that he will look to the agent only, he is at liberty to look to the principal when that principal is discovered. In the present case the seller knew that there was a principal; but there is no authority to show that mere knowledge that there is a principal destroys the right of the seller to look to that principal as soon as he knows who that principal is, provided he did not know who he was at the time when the purchase was originally made. It is said that the seller ought to have asked the name of the principal, and charged him with the price of the goods. By omitting to do so he might have lost his right to claim payment from the principal, had the latter paid the agent, or had the state of accounts between the principal and agent been such as to make it unjust that the former should be called upon to make the payment. But in J a case circumstanced as this case is, where it does not appear but that the man who has the goods has not paid for them, what is the justice of the case? That he should pay for them to the seller or to the insolvent agent, or to the estate of the insolvent agent, who has made no payment in respect of these goods? The justice of the case is, as it seems to me, all on one side, namely, that the seller shall be paid, and that the buyer (the principal) shall be the person to pay him, provided he has not paid anybody else. Now, upon the evidence it appears that the defendant had the goods, and has not paid for them, either to McKune or the present plaintiffs, or to anybody else. He will be liable to pay for them, either to the plaintiffs or to McKune's estate. The justice of the case, as it seems to me,- is that he should pay the plaintiffs, who were the sellers, and not any other persons. I am, therefore, of opinion that the direction of the recorder was right.
Littledale, J.--The general principle of law is, that the seller shall have his remedy against the principal, rather than against any other person. Where goods are bought by an agent, who does not at the time disclose that he is acting as agent, the vendor, although he has debited the agent, ma}', upon discovering the principal, resort to him for payment. But if the principal be known to the seller at the time when he makes the contract, and he, with a full knowledge of the principal, chooses to debit the agent, he thereby makes his election, and cannot afterwards charge the principal. Or if, in such case, he debits the principal, he cannot afterwards charge the agent. There is a third case. The seller may, in his invoice and bill of parcels, mention both principal and agent; he may debit A. as a purchaser for goods bought through B., his agent. In that case, he thereby makes his election to charge the principal, and cannot afterwards resort to the agent. The general principle is, that the seller shall have his remedy against the principal, although he may, by electing to take the agent as his debtor, abandon his right against the principal. The present case differs from any of those which I have mentioned. Here the agent purchased the goods in his own name. The name of the principal was not then known to the seller, but it afterwards came to his knowledge. It seems to me to be more consistent with the general principle of law, that the seller shall have his remedy against the principal, rather than against any other person, to hold in this case that the seller, who knew that there was a principal, but did not know who that principal was, may resort to him as soon as he is discovered. Here the agent did not communicate to the seller sufficient information to enable him to debit any other individual. The seller was in the same situation as if, at the time of the contract he had not known that there was any principal besides the person with whom he was dealing, and had afterwards discovered that the goods had been purchased on account of another ; and, in that case, it is clear that he might have charged the principal. It is said that he ought to have ascertained, by inquiry of the agent, who the principal was; but I think he was not bound to make such inquiry, and that by debiting the agent with the price of the goods, he has not precluded himself from resorting to the principal, whose name was not disclosed to him. It might have been made a question whether it was not a defence to this action that the principal resided in Scotland. But this was not a point made at the trial, nor noticed in the bill of exceptions; we cannot, therefore, take it into our consideration. For the reasons already given, I think the plaintiff is entitled to recover.
Parke, J., having been concerned as counsel in the cause, gave no opinion.
Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).
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