Cox v. . Pearce , 112 N.Y. 637 ( 1889 )

The notice given in 1878, by Hosea O. Pearce to Marriott, on the occasion of the application of Marriott to him for an order from Pearce Hall for another cargo of coal, that he had retired from that firm, was, we think, notice to Cox Boyce. It is conceded that Hosea O. Pearce withdrew from the firm of Pearce Hall November 1, 1878, and that the business was continued thereafter under the same firm name by one of the partners in the original firm and two new members associated with him. The only serious question upon the effect of the notice given to Marriott arises upon the point whether he was in law the agent of Cox Boyce, and received the notice in that capacity, so that knowledge of the dissolution communicated to him by the retiring partner of the firm of Pearce Hall, was imputable to Cox Boyce. If the knowledge of Marriott was acquired in the course of his agency, and while engaged in a transaction for Cox Boyce, which made the disclosure to him suitable, and the receiving of such notice was within the scope of his agency, it was, in law, notice to his principals, although never communicated to them. The failure of Marriott to communicate the information, constituted, on the assumption stated, a breach of duty to his principals, but as to Pearce the notice had the same effect as though the duty had been faithfully performed. (Ingalls v. Morgan, 10 N.Y. 178; Story on Agency, § 140, and cases cited.) So, also, on the assumption that Marriott was the agent of Cox Boyce to receive the notice, it is of no consequence that in 1884, when the sale was made which is the subject of this action, he had forgotten it, and it was not present in his mind or recollection. If in 1878 Cox Boyce had actual or constructive notice that Hosea O. Pearce had withdrawn from the firm, it operated once for all as a revocation from that time of any authority to deal with the new firm on the credit of his name, and he could only be bound by new transactions on proof of a fresh authority. The doctrine that notice to an agent before his employment as agent, or notice not acquired in the very transaction which is the subject of investigation, does not bind the principal as a constructive notice, except under certain limitations, is a generally accepted principle in the law of agency. (Distilled Spirits, 11 Wall. 356; Fairfield SavingsBank v. Chase, 72 Me. 226.) But if the principal already had notice, actual or constructive, of a fact material to the new transaction, the new dealing must be judged and the rights of the parties must be determined on the assumption that the fact of which he had prior notice, actual or constructive, was then known to him. In other words, notice to a party, actual or constructive, in a particular transaction, of a fact which exempts a defendant from liability in that transaction, is notice in all subsequent transactions of the same character between the same parties.

The case, in the aspect we are now considering, comes to the question whether Marriott, when he was notified by Pearce in 1878 that he had withdrawn from the firm, was the agent of Cox Boyce in such a sense that notice to him was notice to his principals. Cox Boyce were coal dealers, and Marriott was a coal broker. But while he was not a salesman for, nor an employe of, Cox Boyce in the usual sense, he, nevertheless, was their special representative in procuring orders from Pearce Hall for coal. The orders were frequent. All the sales made by Cox Boyce to Pearce Hall were made through Marriott, and the purchasers, in giving the orders, understood that they related to coal of Cox Boyce. Cox Boyce paid Marriott his commissions, and they employed him to carry the coal sold from their wharf to the factory of Pearce Hall, and paid him for this service. The bills were sent by mail; but in most instances Marriott received the checks of Pearce Hall, and receipted the bills in the name of Cox Boyce, "per George Marriott." It is stated in the case that he received the checks and receipted the bills without previous authority. But he delivered the checks to Cox Boyce, who received them without objection.

Marriott was accustomed to call at the factory of Pearce Hall, from time to time, to solicit orders upon Cox Boyce. Soon after November 1, 1878, he called for that purpose, and then saw Hosea O. Pearce, and stated to him "that he wanted to know if Pearce Hall were ready for another cargo of coal." Pearce replied "that he had retired from the concern and should do no more buying," and referred him to his son, one of the new partners. Marriott, on the same visit, saw the son, and pursuant to a conversation then had with him, Cox Boyce subsequently delivered a cargo of coal. The sale for which this action was brought was made in 1884, six years after through Marriott. We are of opinion that the relation of Marriott to Cox Boyce was such as to charge that firm with the notice given to Marriott in 1878, by Hosea O. Pearce, of his withdrawal from the firm of Pearce Hall. The notice was material to the very negotiation in which Marriott was then engaged, and it was his duty to inform Cox Boyce of the information he received, cause it bewas a material fact bearing upon the question whether they should fill the order then made. Marriott, in his dealings with Pearce Hall, was not acting simply as a broker in the general sense. In receiving orders from Pearce Hall he was acting exclusively in the interest of Cox Boyce, and it was so understood by the vendor and purchaser. Cox Boyce permitted him to exercise powers, limited, it is true, but such as are usually exercised by agents. The occasion called for the notification given by Pearce to Marriott The application for another order was made to the former according to the course of business prior to that time, and good faith required Pearce to make the disclosure, and we think he had a right to assume that it was within the scope of Marriott's agency to receive it in behalf of his principals.

These views lead to a reversal of the order. Judgment reversed, and judgment absolute ordered for the defendants, with costs.

All concur.

Judgment accordingly.