1. An authority to an agent to buy cotton in a certain region
and its vicinity and to buy generally from whomsoever the agent,
not his principals, might determine -- one having in view not
merely a single transaction or a number of specified transactions,
but a class of purchasers and a department of business -- makes a
general agency to buy the cotton there, and if the agent, holding
himself out as the general agent, purchase there under his power,
he may bind his principal in violation of special instructions not
communicated to his vendors, and of which they had neither
knowledge nor reason to suspect the existence.
2. Where evidence showed that a region in the South which had
been previously in possession of the rebel army was evacuated by
them, and that the citizens generally had taken the oath of
allegiance or obtained protection papers, the grant of a permit by
a proper Treasury agent to purchase cotton authorized by Treasury
regulations, to be granted only in cases where the country was
within the occupation of the military lines of the United States,
raises at least a
prima facie presumption of the country's
being within such occupation.
3. Where such permits were always in the same form, a printed
one, and on a suit against a party to whom one has been granted the
permit granted to him has not been produced on call, the Treasury
agent who granted it may properly state its contents from his
knowledge and recollection of them.
4. A Treasury permit to a firm to buy cotton authorized them to
buy through their agent.
During the late rebellion, cotton having been an object whose
acquisition was desired by the people of the North, its purchase
within the Confederate lines was resorted to not infrequently by a
certain class of traders from the loyal states. Such trading was
unlawful as trading with an enemy,
Page 76 U. S. 767
and was moreover made void by statute. But trading in a
prescribed form, under certain conditions, within the
insurrectionary region, if the same had been brought within the
lines of the national military occupation, was made lawful by
Treasury regulation if the trading was carried on under a permit
from certain officers of the Treasury Department.
In this state of things, one Shepherd, living in Desha County,
Arkansas, a county in the east of that state and situate on the
Mississippi, some distance below Memphis, Tennessee, made a
purchase of 144 bales of cotton from a person named Maples, living
not far from him, Shepherd professing in what he did to act in the
name of a firm known as Bridge & Co., whose members were living
and trading at Memphis, and which was composed of Butler and Hicox,
with other persons.
At the time of this purchase, Memphis was and had been for a
long term in the quiet occupation of the federal troops.
"The Confederate forces had evacuated Little Rock, the capital
of Arkansas, and all the country south of the Arkansas River and
had fallen back through the southwestern portion of the state to
the Red River and into Texas. There was not an organized force of
Confederates near the village of Red Fork, in Desha County, nor a
Confederate post or force nearer than one hundred and fifty or two
hundred miles from Red Fork. There were very few if any straggling
soldiers in that portion of Arkansas on which Red Fork is situated.
The citizens generally took the oath of allegiance to the United
States, and many, if not most of them, procured what were called
protection papers from the United States."
The cotton bought by Shepherd was bought by him as it lay, he
agreeing to pay for it forty cents a pound as soon as it could be
weighed. Having been weighed, he removed fifty-four bales of it,
but ninety bales were burned before it could be placed in a boat to
be carried up the river. The fifty-four bales removed were got on
board and sent to Bridge & Co., and Maples, the vendor, went to
Memphis to see them. He saw Hicox, who wholly denied Shepherd's
Page 76 U. S. 768
agency, refused to pay anything for the cotton that was lost,
but agreed to pay fifty cents a pound for these fifty-four bales
that had arrived. Maples took this sum, supposing, as he alleged,
that the assertions about Shepherd's want of authority were true,
and only on that account. Seeing Shepherd afterwards, Shepherd
informed him that they were not true, and Butler and Hicox still
denying wholly Shepherd's authority to make the contract and to
bind the firm, and still refusing to pay for the cotton that was
burnt, Maples sued them in the court below to recover the price.
[
Footnote 1]
On the trial it was testified to by one Carleton (under
objection) that at this time he was the Treasury agent, and that he
had issued to the firm of Bridge & Co. a "permit" to purchase
and transmit to market one thousand five hundred bales of cotton
within the lines of federal military occupation, first special
agency. [The admission of his testimony was excepted to, both
because the witness should have produced his official books and
because a permit to Bridge & Co. was none to Shepherd.] This
agency included so much of the states of Alabama, Mississippi,
Arkansas, and Louisiana as was occupied by the national forces
operating from the north. There was a printed form, as it appeared,
invariably used. The defendant below did not produce this permit,
though served with a notice to do so.
The evidence of Shepherd's authority to make the contract for
the defendants and bind them to its performance, so far as it was
direct, was of two kinds. The first and principal was an article of
agreement made on the 16th day of October, A.D. 1863, between
Bridge & Co. and Shepherd, describing him as of Desha County,
Arkansas. The agreement declared its purpose to be
"purchasing R. C. Stone's and such other cotton as said Shepherd
may be able to purchase in said county and vicinity, under the
conditions and restrictions hereinafter set forth."
Having thus declared its purpose, it recited that Bridge &
Co. had furnished to Shepherd
Page 76 U. S. 769
$4,000, and stipulated that they would furnish him such other
money from time to time as might be necessary to purchase said
cotton. By the instrument it was further agreed that Shepherd
should buy the cotton if it could be bought at the price set forth
therein and as much more as he could on the best possible terms,
not paying
an average of more than thirty cents per pound
for middling cotton, and lower in proportion to the grade, to be
delivered at such times and places of shipment as might be agreed
upon. It was further agreed that Shepherd should pay as little as
possible on the cotton until it should be delivered on a boat or
within protection of a gunboat, and that when thus delivered on the
boat and paid for, the property and ownership thereof should vest
exclusively in the said Bridge & Co. except as in the agreement
was provided for his share of the profits. The instrument then
stipulated that Bridge & Co. should ship the cotton to Memphis,
sell it to the best possible advantage, and, after reimbursing
themselves the purchase money, the cost of hauling, shipping,
drayage, commissions &c., should pay Shepherd one-eighth part
of the net profits. It also provided that contracts, shipments,
permits &c., necessary to purchase and get the cotton to
Memphis should be in Shepherd's name, and that Bridge & Co.
might thus use his name when necessary.
The other direct evidence of the agency was supplied by the
testimony of one Martin, a witness for the defendants. He was sent
by them to Arkansas with money and instructions for Shepherd, the
instructions being that he should purchase cotton for the firm, but
was not to agree to pay more than from thirty to thirty-five cents
per pound for it. He might make small advances, but he was
instructed not to pay the balance of the purchase money or make it
payable until the firm should be able to send a boat up the
Arkansas River for the cotton and until it was in their possession,
weighed, and placed on the boat. He was directed to take no risk
for the firm of the destruction of the cotton by incendiaries or in
any other way except to the extent of the money advanced. There was
other indirect evidence of
Page 76 U. S. 770
Shepherd's agency to which it is not necessary now to refer.
Clothed with such powers and under such instructions, he bought
cotton of divers persons (including the one hundred and forty-four
bales bought of Maples) representing himself to be the agent of
Bridge & Co., though not speaking of his written authority or
of any particular instructions.
The evidence being closed, the court charged the jury, and among
other things said as follows:
"What is military occupation is a question of law, to be decided
by the court, and I instruct you that if you believe the testimony
in the case as to the location of federal forces and garrisons in
the region of country where the contract was made, and (as to the
desire of the inhabitants) submitting to the authority of the
government to restore their relations with the government, as
manifested by their taking the oath of allegiance and applying for
and receiving 'protection papers,' then there was such a military
occupation as is contemplated by the laws of Congress referred
to."
"But in addition to this, the special agent of the Treasury
Department, who was authorized to grant permits, exercised judicial
functions in deciding what country was within the lines of military
occupation, and when he granted a permit to buy cotton in a
designated region, the permit itself was a decision by him that the
region so designated was so occupied. When an officer of the
government thus clothed with judicial functions grants a permit in
the exercise of those functions, it would be very unjust to hold
the party receiving the permit and acting under it responsible for
that decision."
"These questions disposed of, the case is resolved into a
question of agency. Now did Shepherd have authority to bind
defendants by that contract?"
"A principal is bound by all that a general agent does within
the scope of the business in which he is employed as such general
agent, and even if such general agent should violate special or
secret instructions given him by his principal and not disclosed to
the party with whom the agent deals, the principal would still be
bound if the agent's acts
Page 76 U. S. 771
were within the scope of the business in which he was employed
and of his general agency."
"However a party dealing with a general agent who seeks to hold
the principal bound for the agent's acts or contracts must show, in
order to recover, that the agent held himself out as general agent
and that in fact he was such general agent."
"If Shepherd held himself out as the general agent of Bridge
& Co., then the defendant is bound by the contract which he
made with the plaintiff for the cotton notwithstanding Shepherd may
have agreed to pay more for the cotton than his principal had
authorized, and if, as general agent for Bridge & Co. to buy
cotton in Desha County, Shepherd was not authorized by Bridge &
Co. to buy cotton except to be delivered on board the boat, and in
violation of their instructions he did buy the plaintiff's cotton,
and agreed to receive and accept delivery of it elsewhere than on
the boat, unless the plaintiff knew of these instructions, the
defendants are bound by the contract which Shepherd made, because
it was within the scope of his general agency just as much as was
the agreement to give for the cotton a larger price than that to
which he was limited by the instructions of Bridge & Co."
"But it is said that the plaintiff agreed to rescind and abandon
the contract made with Shepherd, and made a new contract with the
defendant Hicox by which he sold to Hicox the fifty-four bales of
cotton not burned at fifty cents per pound, and that this
discharges the former contract made with Shepherd. The effect of
the new contract must depend on the circumstances. If the plaintiff
and Hicox came together and made a contract about the fifty-four
bales when all the facts were known to the plaintiff -- that is if
the plaintiff knew that Shepherd had exceeded his authority, and
then made the new contract as proven, this new contract would
discharge the defendant from the former contract between the
plaintiff and Shepherd. But in order that the new contract might
have this effect, the plaintiff must have known all the facts, all
about Shepherd's authority, and if
Page 76 U. S. 772
not thus advised -- if anything known to Hicox which the
plaintiff was entitled to know was not disclosed to him -- he was
not bound by the new contract and the defendant was not discharged
from the old one."
The defendant excepted to the charge upon the following
points:
1. That the written agreement or power of attorney introduced in
evidence by plaintiff established that Shepherd was the general
agent of Bridge & Co.
2. That in granting the permit proved by Carleton, the Treasury
officer exercised judicial functions and decided conclusively that
the region of country to which the permit relates was within the
lines of military occupation, and that as a matter of law, upon the
proof in the case as to the condition of the country, and upon the
permit granted to Bridge & Co., that Desha County was, at the
date of contract, in November, 1863, within the lines of military
occupation of national forces operating from the north.
That the court erred,
3. In the instruction given as to general and special agency,
because the same was not applicable to the proof in the case, was
irrelevant therefore, and calculated to mislead the jury, and also
because, as abstract propositions of law, the instruction upon this
point is erroneous.
4. In that part of the charge which relates to the new contract
between Hicox and the plaintiff, by which Hicox bought the
fifty-four bales of cotton at fifty cents per pound, and which
stated to the jury the effect of the new contract.
Verdict and judgment having gone for the plaintiff, the
defendants brought the case here on the exceptions to the evidence
and to the charge.
MR. JUSTICE STRONG delivered the opinion of the Court.
At the trial it was, of course, incumbent upon the plaintiff to
prove not only the contract of sale, but also that Shepherd,
Page 76 U. S. 773
with whom the contract had been made, had authority to act for
and bind the defendants. Accordingly evidence was submitted to show
that the cotton was purchased by Shepherd when professing to act as
an agent for the defendants. There was hardly any controversy about
this fact, and no questions are now raised respecting the
competency or sufficiency of the proof or the manner in which it
was submitted to the jury. But the authority of Shepherd to make
the contract for the defendants and bind them to its performance
was stoutly denied, and it is now strenuously insisted that the
court erred in the instructions given to the jury respecting the
evidence of his agency. The defendants insist the court erred in
charging that the written agreement between him and Bridge &
Co. constituted him their general agent. We do not find that the
court did thus instruct the jury, though it must be admitted the
charge may have been thus understood. The jury was instructed that
if Shepherd held himself out as the general agent of Bridge &
Co., the defendants were bound by the contract he made with the
plaintiff for the cotton, though in making the contract he
transgressed the instructions he had received, and secret
limitations of his authority, which instructions and limitations
were not revealed to the plaintiff. It is true, as has been
noticed, there was other evidence of a general agency beyond that
which the agreement furnished, but as it was parol evidence, its
force and effect were for the jury, and hence the court could not
rightly have charged that the defendants were bound by the contract
unless the agreement did itself constitute Shepherd a general
agent. But did it not? The distinction between a general and a
special agency is in most cases a plain one. The purpose of the
latter is a single transaction, or a transaction with designated
persons. It does not leave to the agent any discretion as to the
persons with whom he may contract for the principal, if he be
empowered to make more than one contract. Authority to buy for a
principal a single article of merchandise by one contract or to buy
several articles from a person named is a special agency, but
authority to make purchases from any
Page 76 U. S. 774
persons with whom the agent may choose to deal, or to make an
indefinite number of purchases, is a general agency. And it is not
the less a general agency because it does not extend over the whole
business of the principal. A man may have many general agents --
one to buy cotton, another to buy wheat, and another to buy horses.
So he may have a general agent to buy cotton in one neighborhood
and another general agent to buy cotton in another neighborhood.
The distinction between the two kinds of agencies is that the one
is created by power given to do acts of a class and the other by
power given to do individual acts only. Whether, therefore, an
agency is general or special is wholly independent of the question
whether the power to act within the scope of the authority given is
unrestricted or whether it is restrained by instructions or
conditions imposed by the principal relative to the mode of its
exercise. Looking to the agreement between Bridge & Co. and
Shepherd, it cannot be doubted that it created a general agency. It
was a delegation of authority to buy cotton in Desha County and its
vicinity, to buy generally, from whomsoever the agent, not his
principals, might determine. It had in view not merely a single
transaction or a number of specified transactions, which were in
the mind of the principals when the agent was appointed, but a
class of purchases, a department of business. It is true that it
contained guards and restrictions which were intended as
regulations between the parties, but they were secret instructions,
rather than limitations. They were not intended to be communicated
to the parties with whom the agent should deal, and they never were
communicated. It was therefore not error to instruct the jury, as
the court did, that the agency was a general one and that the
defendants were bound by the contract if Shepherd held himself out
as authorized to buy cotton and if the plaintiff had no knowledge
of the instructions respecting the mode in which the agent was
required to act.
It may be remarked here that the reasons urged by the plaintiffs
in error in support of their denial of liability for the
engagements made by Shepherd are that he agreed to
Page 76 U. S. 775
pay forty cents per pound for the plaintiff's cotton; that he
bought the cotton where it lay instead of requiring delivery on
board a steamboat or within the protection of a gunboat, and that
he did not obtain a permit from the government to make the
purchase. The argument is that in the first two particulars he
transcended his powers, and that his authority to buy at all was
conditioned upon his obtaining a permit from the government. All
this, however, is immaterial if it was within the scope of his
authority that he acted. The mode of buying, the price agreed to be
paid, and the antecedent qualifications required of him were
matters between him and his principals. They are not matters in
regard to which one dealing with him was bound to inquire. But even
as between Bridge & Co. and Shepherd, a purchase at forty cents
per pound was not beyond his authority. He was authorized to buy
"on the best possible terms, not paying an
average of more
than thirty cents per pound." This contemplated his agreeing to pay
in some cases above thirty cents. The average was regulated, but no
maximum was fixed. Nor is there anything in the agreement the
forbade his purchasing cotton deliverable at once where it lay,
though not on a boat or in the protection of a gunboat. He was
authorized to purchase deliverable at such times and places of
shipment as might be agreed upon -- that is, deliverable when and
where it might be stipulated between him and the seller. True, he
was to pay as little as possible until the cotton was delivered on
a boat or within the protection of a gunboat, and when thus
delivered, the property in the goods was to vest in the principals,
excepting his share of the profits, but he was not prohibited from
paying the whole price or agreeing to pay the whole price if
insisted on by the vendor. The stipulation respecting the vesting
of ownership was nothing more than a definition of right between
him and his principals, as is manifested by the exception. Nor was
Shepherd bound to procure a permit in his own name. He might have
been had it been necessary, but if under the permit granted by
Bridge & Co. he could purchase as their agent, it was all the
agreement required.
Page 76 U. S. 776
It is further objected to the charge given to the jury
respecting general and special agency that it was not applicable to
the proof in the case, and was therefore irrelevant and calculated
to mislead the jury, and because, as stating abstract questions of
law, the instruction was erroneous. If in truth it was irrelevant,
it was not on that account necessarily erroneous and calculated to
mislead the jury. We are not shown nor do we perceive how the jury
could have been misled by it. They were instructed that in cases of
special agency, one who deals with the agent must inquire into the
extent of his authority, but that a principal is bound by all that
his general agent has done within the scope of the business in
which he was employed, and this though the agent may have violated
special or secret instructions given him but not disclosed to the
party with whom the agent deals. Surely this was correct, and it
was applicable to the evidence in the case. It has been intimated
during the argument that the court should have added that no such
liability can exist to one dealing with an agent with notice that
the particular act of the agent was without authority from the
principal. To this several answers may be made. The exception to
the general rule which it is said the court should have recognized
is implied in what the court did say. Again, there was no request
for any such instruction, and still again, the evidence in the case
did not demand it. There was no pretense that the plaintiff had any
notice of secret instructions given to Shepherd, or of any
limitations upon his authority. Nor was there anything that imposed
upon him the duty of making inquiry for secret instructions or for
restrictions. There were no circumstances that should have awakened
suspicion. The plaintiff was not apprised that the authority was in
writing. The argument is very far-fetched that infers a duty to
inquire whether the agent had private instruction from the fact
that the contract was made in a region that had been in a state of
insurrection.
It is next insisted that the court erred in instructing the jury
that in granting the permit to Bridge & Co. to buy cotton, the
special agent of the Treasury, who was authorized
Page 76 U. S. 777
to grant permits, exercised judicial functions and decided
conclusively that the district of country to which the permit
extended was within the lines of federal military occupation. This
is not, however, quite an accurate statement of what the court did
charge. The judge said, in effect, that the Treasury agent, in
granting the permit, exercised judicial functions, and that
granting it was a decision by him that the region designated in it
was within the lines of military occupation, but he did not say it
was a conclusive decision. He did charge as a matter of law
that
"upon the proof in the case as to the condition of the country,
and upon the permit granted to Bridge & Co., Desha County,
Arkansas, was, at the date of the contract, in November, 1863,
within the lines of the national forces operating from the north,
and that the plaintiff and Shepherd had a right to make the
contract for the sale and purchase of the cotton."
The instruction was not based upon the grant of the permit
alone. There was uncontradicted evidence in the case that before
the permit was granted, the part of the state in which Desha County
is situated had been evacuated by the Confederate forces, who had
retreated toward the Red River and into Texas; that there were no
such forces within from one hundred and fifty to two hundred miles
from Red Fork, in Desha County, and that the military occupation of
the national forces extended over the region. It was also proved
that the citizens generally had taken the oath of allegiance or
obtained protection papers. Coupling these facts, about which there
was no dispute, with the other fact that the Treasury agent had
granted a permit to Bridge & Co. to buy cotton there, the judge
was not in error when he gave the instruction to which exception is
now taken. It may be that the grant of the permit was not
technically a judicial act, but it was an exercise of the Treasury
agent's judgment, and a deduction from the facts known by him, that
the region over which the permit extended was within the military
lines. It is to be presumed that he acted rightly, and as he could
not lawfully grant the permit in the absence of such military
occupation, his grant of it raised a presumption that
Page 76 U. S. 778
the occupation existed. It established at least a
prima
facie case. In
United States v. Weed, [
Footnote 2] this Court said,
"The fact that the proper officers issued these permits for
certain parishes must be taken as evidence that they were properly
issued until the contrary is established."
But a
prima facie case, with nothing to rebut it, is a
case made out. If, then, what amounts to military occupation, the
facts being ascertained, is necessarily a question of law, as must
be conceded, and if there was nothing to rebut the presumption of
fact arising from the grant of the permit and no contradiction or
impeachment of the direct testimony, the court was justified in
declaring as matter of law that Desha County was within the lines
of military occupation from the north and that the contract was not
illegal.
The next objection to the charge may be disposed of in a word.
Indeed, it has not been seriously urged here. That the defendants
cannot set up a new contract, obtained by one of them from the
plaintiff for a sale of part of the cotton, as a discharge from the
contract made for them by Shepherd, if the new contract was
obtained by their own misrepresentations or by their denial of
Shepherd's agency is too plain to need discussion. And yet that
they may must be maintained by them in order to convict the court
below of error in the instructions given respecting the new
contract.
A single exception remains to be considered. It is to the
admission of the testimony of Carleton. He was introduced to prove
that he, as special Treasury agent, had issued a permit to Bridge
& Co., and to prove its contents, notice having been given to
the defendants to produce the permit itself and they having failed
to do so. It is objected first that his official books should have
been produced and that it was incompetent to prove the permit in
any other way. The permit itself would have been the best evidence,
but it was not produced on call, and therefore secondary evidence
was admissible. There are no degrees of such evidence, and the
official books of the Treasury agent, had there been any in
Page 76 U. S. 779
existence, would have been at best but secondary proof, of no
higher order than was the testimony of a witness. There was also no
proof that any such books had been kept, and consequently nothing
to show that there was any better evidence than that which was
offered. Another objection was made against its subject matter. It
was that the permit, of which the proof was offered, was to Bridge
& Co., and not to Shepherd. We do not perceive any merit in
this objection. We have already said that in the agreement between
him and his principals, Shepherd did not undertake to procure a
permit unless it should be necessary to buy cotton and get it to
Memphis, and we do not perceive why a permit to Bridge & Co.
did not enable them to buy through an agent, and render any permit
to their agent unnecessary. For these reasons, the objections urged
against the admission of the testimony of Carleton cannot be
sustained.
Judgment affirmed.
[
Footnote 1]
The writ issued against others in addition to the two defendants
named, but the others were not served with process, and the issue
was joined but between the plaintiff and Maples and Hicox.
[
Footnote 2]
72 U. S. 5 Wall.
73.
