Robert M. McAlpin and another v. Thomas Cassidy and another, 17 Tex. 449

Wheeler, J. There were two principal questions contested at the trial; 1st, whether Hill was the agent of the plaintiffs - 2nd, whether, as agent, he had authority to receive payment of the debt of his principal in satisfaction of his own individual debts. The decision of the case turned mainly on the latter question; and the verdict and judgment affirm that he had such authority. There is no question that Field was the general agent of the plaintiffs.

He appears to have had authority for soliciting, receiving and forwarding orders upon their house, collecting monies due them, and promoting generally the extension of their business. This appears to have been the general scope of his authority ; and the evidence was, perhaps, sufficient to authorize the jury to conclude that Hill had a like agency and authority. .This however is the utmost, which the evidence respecting his general authority can be claimed to have established.

The question then is, whether it was within the scope of his authority, as such agent, to accept satisfaction of the debt of his principal in the payment of his own debts. And it is clear that, without the consent of his principal, express or implied, it was not.

His authority as a collecting agent, gave him no right to change the security of his principal for the debts, or to make himself the debtor to the principal for the like amount in lieu of the persons who owed the debts, without the consent of the principal, express or implied, to that effect. (Story on Agency, Sec. 413, 99.1 There is no evidence of any express authority, or assent, on the part of the plaintiffs, to' any such arrangement; or of any usage of trade, or of any course of dealing between the parties, from which such authority might be implied.

There is nothing in the evidence to warrant the belief that the agent had authority to receive payment otherwise than in the ordinary mode of business; and that is, ordinarily, to receive it in money only! (Story on Agency, Sec. 98, 99, 181 : Robson v. Watts, 11 Tex. R. 764.) There may be circumstances which will vary this duty. But there are none such in this case. The same general principle pervades all cases of agency, whether general • or special; that is, that the principal is bound by all the acts of his agent within the scope of the authority which he holds Mm out to the world to possess.

But when the agent exceeds the scope of that authority, no act of his is binding on his principal. A general agency properly exists where there is a delegation of authority to do all acts connected with a particular trade, business, or employment. But such an agent can no more bind his principal, when he transcends the scope'1 of his employment, than can a special agent whose authority is limited to a single act. Every agency carries with it, or includes in it, as an incident, all the powers which are necessary, or proper, or usual, as means to effectuate the purposes for which it was created, and none other.

In this respect there is no distinction, whether the authority given to an agent is general or special, express or implied. In each case it embraces the appropriate means to accomplish the desired end ; and is limited to the use of those means.

If the agency arises by implication, from acts done by the agent with the tacit consent or acquiescence of the principal, it is deemed to be limited to acts of a like nature ; if from the general habits of dealing between the parties, it is deemed to be limited to dealings of the same kind : if from the employment of the agent in a particular business it is in like manner, deemed to be limited to that particular business. “ And the authority must be implied from facts -I which have occurred in the course of such employment, and not from mere argument, as to the utility and propriety of the '• agent’s possessing it.

If it arises from an authority to do a “ single or particular act, the agency is limited to the appro- “ priate means to accomplish that very act, and the required “ end : and the implied agency stops there. In short, an implied “ agency is never construed to extend beyond the obvious purpose for which it is apparently created.

The intention of “ the parties, deduced from the nature and circumstances of the particular case, constitutes the ground of every exposition of “ the extent of the authority ; and when that intention cannot “ be clearly discovered, the agency ceases to be recognized or “ implied.” (Story on Agency, Sec. 87.) It is upon this principle that it is held, that an agent employed to receive payment, is not, in general, clothed with authority to compound the debt, or to commute it for something else, as his own debt: but can only receive it in money, unless his particular .employment confers the authority, or it can be implied from the general usage of business, or the habits of dealing between the parties.

This is the.well settled doctrine of the law: and it is obviously founded in reason and justice. The only evidence of an express authority to Hill to collect the debt or receive payment is found in the testimony of Hill himself, to the effect that Field, after collecting a part, placed the balance of the claim in his hands, telling him that he was satisfied that 'Cassidy, one of the defendants, was considerably involved, and authorized him to settle the claim in any way that would be advantageous to the plaintiffs.

It cannot be pretended that this gave the authority claimed for Hill, of using the claim to pay off his own various indebtedness, whenever and however contracted, even if Field had been empowered by the plaintiffs to confer such authority. The attempt seems to have been to justify the assumption of authority by Hill, and the extraordinary mode of settling the debt due the plaintiffs, on the ground that Cassidy was in failing circumstances. But if it were so, the obvious duty of Hill, under the authority from Field, was to take measures to secure the ultimate payment of the debt.

The authority went to that extent and no further ; unless, at least, it were proved that the other disposition made of it was most to the advantage ol the plaintiffs. But the attempt to justify the assumption of authority on that ground, appears to be unfounded in point of fact, as well as in law. The proof is that Cassidy was, at that time, considered solvent; and there is no evidence that his co-defendant, who was jointly liable for the debt, was in failing circumstances.

But it would make no difference as respects the authority of the agent, if both were in failing circumstances and the plaintiffs were in danger of losing their debt; since the mode of settlement adopted was not in accordance with the ordinary mode of business under the circumstances, and there is no evi- \\ e dence of any usage of trade, or business habits of the parties, or any authorization or assent by the plaintiffs, express or implied, to such an arrangement. It was further attempted to prove that Hill was interested in the house of plaintiffs as partner. But in this there was a failure.

The evidence did not warrant the supposition that he was otherwise interested with the plaintiffs, or that they held him out to the world as otherwise interested, than as an agent, in the language of one of the witnesses, collecting and drumming for the plaintiffs. But if it were in proof that he was a partner, the principle, as respects his authority to make such a settlement of a debt due the firm, is the same. A partner is deemed the general and accredited agent of the firm, and is authorized to bind the other members by his acts or contracts which are within the scope and objects of their partnership.

When he exceeds those bounds, his acts are no more binding upon the firm, than are the unauthorized acts of any other agent, binding upon Ms principal. He has no right, in general, to apply the debts due the firm to the payment of his individual debts ; and therefore such payment will not bind the firm.

The charge of the Court, after stating certain principles of the law of agency, with general accuracy, concludes with an application of the law to the case, thus : “ If the jury believe “ from the evidence that the defendants have paid the amounts “ sued for, either to the accredited agents, or the partner of “ the plaintiffs, then they will find for the defendants,” &c. This charge evidently assumes a state of the case more favorable to the defendants than the facts warranted. And the same may be said of instructions given at the instance of the defendants.

But it is unnecessary to enter upon a more particular examination of the rulings of the Court upon the instructions asked by the parties respectively; as the judgment must be reversed upon other grounds. And it only remains to notice the "point reserved in the bills of exceptions, respecting the admission of improper evidence. It clearly was error to admit evidence of the declarations of Hill, made after his agency had ceased, and when they constituted no part of the res gestae, and were but hearsay.

The admission or declaration of an agent binds his principal only when it is made during the continuance of the agency, in regard to a transaction then depending. “ It is because it is a “ verbal act, and part of the res gestae, that it is admissible at “ all; and, therefore, it is not necessary to call the agent him- “ self to prove it; but whenever what he did is admissible in “ evidence, then it is competent to prove what he said about “ the act while he was doing it; and it follows, that where his “ right to act in the particular matter in question had ceased, “ the principal can be no longer affected by his declarations, “ they being mere hearsay.” (1 Greenl.

Sec. 113; Story on Agency, Sec. 134, et seq.) Hill was himself a competent witness, and did, in fact, testify upon the trial; and the declarations which he made, which were deposed to by the witnesses, were clearly inadmissible. It is said by counsel for the appellee that the admission of the testimony did not prejudice the plaintiffs, and is therefore immaterial ; because the jury did not find, in accordance with it, that the entire debt was paid. In such a case as this, it is impossible to say what influence the testimony may have had upon the minds of the jury.

If the case were made out for the defendants, by competent evidence, beyond a question, there might be propriety in holding that the admission of this testimony did not afford a ground for reversing the judgment. For it might then be said that, had the testimony been excluded, the jury could not legally have returned a different verdict. That cannot be said in the present case. Had there been no error in the rulings of the Court upon the trial, the judgment must have been reversed on the ground that the verdict was contrary to the law and the evidence.

There was other evidence improperly admitted, which is also reserved ; but which we need not particularly notice ; as the reason why it ought to to have been excluded will be sufficiently apparent from the view we have taken of the law of the case. We are of opinion that the judgment be reversed and the cause remanded for further proceedings. Reversed and remanded.