Fairbanks, Morse & Co. v. Lake Union Dry Dock & Machine Works
Opinion of the Court
This was an action by Lake Union Dry Dock & Machine Works against Fairbanks, Morse & Co., on a trade acceptance executed by the latter through C. R. Miller, as agent. The authority of Miller to execute the trade acceptance on behalf of Fairbanks, Morse & Go. was the only question at issue in the court below. The court, sitting without a jury, determined that issue in favor of the plaintiff, and gave judgment accordingly. The defendant has appealed therefrom.
Without going into unnecessary detail, the facts are substantially as follows. At the beginning of 1927 the Sterling Steamship Company was indebted to the appellee in the sum of $8,000, with accrued interest, for re
After further conferences between the parties upon receipt of this telegram, and under the advice of counsel representing the appellant, the assumption of the indebtedness of the appellee by the appellant was put in the form of a trade acceptance, at the suggestion of the bank through which the trade acceptance was discounted. About a week later, Kuppler made a report to the home office in Chicago fully informing the appellant of the execution of the trade acceptance and of the reasons and necessity therefor. About three weeks after receipt of this report, representatives of the appellant came to Seattle, and appellee was then notified for the first time that Miller was without authority to execute the trade acceptance. As soon as the vessel arrived at Honolulu, she was libeled by the appellant and sold to satisfy its mortgage. The appellant contends that Miller was a local manager at Seattle, with authority to make contracts or sales in certain territory, where the amounts involved did not exceed $5,000, and to make collections therefor, but was without authority to execute negotiable instruments in behalf of his principal. While the making of sales and collections was no doubt his principal duty, the record shows plainly that he represented the appellant in other matters, such as in making advances in considerable sums from time to time to defray the expenses of the mortgaged vessel on her voyage, in effecting insurance, in looking after charters, and in many other ways. The authority of Thompson is not much discussed in the record, but he was the Pacific Coast manager of the appellant, in charge of all its extensive business west of Salt Lake City, and his authority to protect his employer by taking over or assuming lien claims superior to a mortgage held by his principal would seem to be beyond question. Indeed, the local manager at Seattle had done this on a number of previous occasions where lesser amounts were involved, and had likewise made advances to defray the expenses of the voyage of the mortgaged vessel in amounts exceeding the amount in controversy in order to protect the mortgage lien.
Objection seems to be made, however, to the form of the obligation executed by Miller rather than to his right or authority to assume or take over the lien claim of the appellee at all. But this is not a case where an agent has attempted to borrow money and execute a negotiable instrument for its payment in the name of his principal. It is a case where the agent did what he had a right to do, and simply executed a trade acceptance in lieu of assuming or taking over an obligation in some other way. The discretion conferred on him in an emergency by his superior was very broad. He was under obligation to act promptly, if he acted at all, to save his principal the expense and inconvenience that would necessarily result from a
The judgment is affirmed.
Reference
- Full Case Name
- FAIRBANKS, MORSE & CO. v. LAKE UNION DRY DOCK & MACHINE WORKS
- Status
- Published