A promise by a merchant's factor that he would write to his
principal to get insurance done does not bind the principal to
insure.
Ware, the executor of Jones, surviving partner of the house of
Farrel & Jones, British merchants, had in the same court, at
June term, 1800, obtained a decree against William Randolph,
administrator
de bonis non with the will annexed of Peyton
Randolph for a large
Page 7 U. S. 504
sum of money, with liberty to William Randolph to file this bill
against Ware for relief in regard to 50 hogsheads of tobacco,
shipped in September, �177 in the ship
Planter, Captain
Cawsey, and consigned to Farrel & Jones, a credit for which had
been claimed, but was by the decree disallowed.
The tobacco never came to the hands of Farrel & Jones,
having been lost at sea without being insured.
The appellant contended that he was entitled to a credit for the
customary insurance price of the tobacco,
viz., �10 per
hogshead with interest.
1. Because, from the usage of the trade between the Virginia
planter and the British merchant, it was the duty of the latter to
have insured the tobacco, and that, having failed so to do, he is
responsible as insurer.
2. Because Thomas Evans, the appellee's agent for soliciting
consignments and managing this business, having promised to get the
insurance done, it is equivalent to the promise of his principals,
Farrel & Jones, and they are responsible for the
consequences.
3. It was contended, that the claim, under all circumstances
disclosed in the record, if not fit to be decreed, according to the
prayer of the bill, appears to be of a nature proper to be decided
in a court of law, in pursuance of an order of the court of equity,
and therefore that the decree should be reversed and an order made
directing a trial at law to ascertain whether the appellee is not
liable to the appellant for the value of the tobacco and interest
from the month of September, 1772, as standing in the place of
insurer thereof.
Page 7 U. S. 509
JOHNSON, J.
I found my opinion in this case upon a single consideration. It
was incumbent on the appellant to show that Evans' neglecting to
comply with his promise to insure, made Farrel & Jones liable.
I think it did not, because it appears that Farrel & Jones did
not generally hold themselves bound to insure shipments of tobacco,
without receiving express instructions to do so. It was therefore
incumbent upon the executors of Randolph to communicate such
instructions to Farrel & Jones. If they confided in the promise
of Evans to give these instructions, it was to their own prejudice.
And although the failure of Evans to do so certainly made him
personally liable to them, yet it could not produce a liability in
Farrel & Jones. So far as Evans was entrusted to do an act
incumbent on the appellant's testator himself to do, he was the
agent of the executors of Randolph and not of Farrel &
Jones.
WASHINGTON, J.
In this case, it appears that a letter was written by Farrel
& Jones, in August, 1770, notifying the executors of Randolph
that they would not make insurance without orders. And it is shown
also that the Randolphs were accustomed to give orders for
insurance whenever they wished to have it made. Whatever then may
be the general usage of the trade, it will not apply to the present
case.
Page 7 U. S. 510
The deposition of Grymes comes in a very questionable shape. It
speaks of things 30 years ago, and in very uncertain language. But
admitting for a moment that it applies to this shipment, Evans had
not authority to bind his principal by a promise to insure. He did
not promise for them, but promised for himself, that he would write
to them to make insurance. This, it is admitted, he did not do. Are
Farrel & Jones liable for his personal engagement?
But the deposition of Grymes is not only uncorroborated, but
opposed by the other evidence in the cause. If the Randolphs relied
upon this supposed engagement of Evans, why did they give their
bond in 1772, nine months after the loss, and long after they had
notice of the loss, for the balance of the account, without
demanding a credit for the lost tobacco? Three accounts current
were sent them for the years 1772, 1773, and 1774, at several
times, and they were requested at each time to examine them, and if
they contained any error, to advise Farrel & Jones of it. By
not doing this, they have given strong evidence that there was no
such agreement with Evans, that there was no error in the accounts,
and that Mr. Grymes must have been mistaken, or that his deposition
refers to some other transaction.
PATERSON, J.
The complainant filed a cross-bill to obtain credit for 50
hogsheads of tobacco, which were shipped on board the
Planter, 17 September, 1771, by Richard and Peyton
Randolph, executors of Wm. Randolph, and consigned to Farrel &
Jones, merchants, at Bristol, in England. The tobacco was not
insured. The
Planter foundered at sea, and the tobacco was
lost. The question is who shall sustain the loss? It is contended
on the part of the representatives of the Randolphs that Farrel
& Jones ought to have insured the tobacco, and not having done
so, they have made themselves liable to the amount, as if it had
been insured. To establish this position, the counsel for the
complainant has taken the following grounds.
1st. From the nature and usage of the trade between the Virginia
planter and the English merchant, it was
Page 7 U. S. 511
the duty of the latter to have insured the tobacco, and failing
so to do, he is responsible as the insurer.
2d. That Thomas Evans, the agent of Farrel & Jones, having
promised to have insurance made, it is equivalent to the promise of
his principals, Farrel & Jones, and they are responsible for
the consequences.
As to the first point, no usage has been proved. And if an usage
did exist, this case was taken out of it; as it appears by the
whole course of correspondence between the parties, that Farrell
& Jones never did insure tobacco without orders, and that the
Randolphs gave them orders to effect insurances on tobacco whenever
they thought it expedient or necessary.
Great stress is laid on the contract, which it is stated was
entered into between the Randolphs and Thomas Evans, the agent of
Farrel & Jones. The contract is founded on the deposition of
Philip Grymes. This deposition is certainly open to the strictures
which have been made upon it by the counsel on the part of the
defendant. It does not appear when and before whom the deposition
was taken. The deposition is
ex parte, for neither the
defendant nor his attorney had an opportunity to cross-examine the
witness. If it was taken at or about the time that the bill was
filed, then it is liable to the objections resulting from the
frailty and uncertainty of memory, and the misconception or
misconstruction of words used in a general conversation, after a
long period of time, exceeding twenty years. Besides, the quantity
of tobacco to be insured was not mentioned in the course of the
conversation, nor does it appear that it was at any time afterwards
communicated to the agent, and unless the quantity was ascertained,
an insurance could not be effected. How this paper, purporting to
be a deposition, became annexed to the bill I have not been able to
discover from the proceedings, and if it be admitted as a piece of
evidence in the cause, its credit is much impaired in consequence
of the observations already made.
The acts of the agent bind the principal, and supposing Evans to
have been the general agent of Farrel
Page 7 U. S. 512
& Jones, it may well be questioned whether his undertaking
to insure is obligatory upon them, as it is manifest from the
correspondence between the Randolphs and Farrel & Jones that
the latter did not insure tobacco without express orders for that
purpose; that the Randolphs wrote to them to insure, when they
deemed an insurance proper. The fair inference is that if Evans
engaged to have an insurance made in this instance by Farrel &
Jones, it was a personal contract on his part which bound himself
and no other and for the performance of which he was responsible in
his private character. Orders for insurance were invariably
transmitted by the Randolphs to Farrel & Jones, and not
communicated to them through the medium of Evans, unless the
present should be considered as an exception. Under such
circumstances, the Randolphs, if they relied on the promise of
Evans, must look to him individually, and not through him to Farrel
& Jones. By this promise, Evans bound himself, and not the
firm.
The house of Farrel & Jones transmitted annually their
accounts to the Randolphs; they did so for the year 1771, after the
loss of the tobacco, which it is admitted was not passed to the
credit of the Randolphs. The bond given for the balance is dated 1
January, 1772, though, from the letter of 4 April, 1772, it was
not, probably, executed till some months after its date. It was
made to bear date 1 January, 1772, that it might correspond with
the accounts rendered, and carry interest from that period. Farrel
& Jones annually rendered regular and stated accounts to the
Randolphs of their mutual dealings in the years 1772, 1773, and
1774, and in a letter of the former to the latter, Farrel &
Jones particularly requested that errors, if any occurred, should
be pointed out, that they might be rectified. But the Randolphs
made no objections -- they made no mention of the tobacco which was
lost, nor did they ever intimate an opinion that Farrel & Jones
were liable for its amount. Why this silence, this acquiescence?
The period of the war we will let pass without animadversion, as no
dealings or communication took place between the parties. Evans
died in 1778. In 1780, Hanson was appointed the agent of Farrel
& Jones. It was never suggested to Hanson that the
Randolphs
Page 7 U. S. 513
or their representatives claimed an allowance for the tobacco;
no intention was manifested to charge Farrel & Jones with it
until an action was commenced on the bond in 1793, or 1794, when,
for the first time, a claim was set up for the tobacco. Mr. Lee has
endeavored to account for this silence and acquiescence, but not in
a satisfactory manner, and it is probable that the Randolphs never
thought of making any demand because they were convinced that they
had no right to do so and that they must sustain the loss
themselves, as they had neglected to order Farrel & Jones to
make the insurance. It was a loss justly imputable to their own
neglect or imprudence, or if not, then they intended to stand their
own insurers.
Farrel & Jones expressed regret whenever they received no
orders to insure, and this flowed from the nature and situation of
their accounts and dealings, for as the Randolphs were indebted to
the firm in a large amount, it became the interest of Farrel &
Jones that the tobacco should be insured, as it was property
intended to be appropriated towards the payment of the debt due to
them. The loss rendered the Randolphs the less able to pay and
increased the risk of Farrel & Jones by diminishing their
security. An insurance, therefore, of the property of the debtor
must have been beneficial and satisfactory to the creditor. But
this insurance, it seems, the house of Farrel & Jones never
thought themselves authorized to make unless they received
immediately from the Randolphs explicit directions for the
purpose.
The charge is stale. The claim comes too late; it is brought
forward after a sleep of near 30 years, during which period the
original parties and their agents have disappeared and are no more.
An acquiescence for such a length of time, and under such
circumstances is too stubborn and inveterate to be surmounted. The
claim was put into oblivion, and there it ought to have remained. A
court of equity should not interpose in a case of this kind, and
therefore the decree pronounced by the circuit court ought to be
affirmed.
CUSHING, J. concurred.
Judgment affirmed.