Runkle v. Burnham/Opinion of the Court

1. By not resting on his motion for a nonsuit, and by thereafter offering his own evidence, the defendant waived his motion, and the overruling thereof cannot be assigned for eror here. Railway Co. v. Snyder, 14 Sup. Ct. 756, and authorities there cited.

2. The exceptions taken during the progress of this trial are numerous. We will content ourselves with examining the merits of those which have been specifically assigned as error.

The plaintiff offered in evidence an account, growing out of the purchase and protest of the draft, and kept between Martinez and Burnham, which was objected to on the ground that it was res inter alios.

Runkle, Gilson, Lyles, and Maddison & Co. were parties to the waterworks contract. In order to furnish the $64,000, which was to be deposited with the city of Havana, Martinez bought a draft drawn by an agent of Maddison & Co. on that firm in London. This draft, on being indorsed and guarantied by Martinez, was discounted by Burnham, who forwarded it to London for collection. There it was protested for nonpayment. The result was that Burnham held Martinez and Maddison & Co. on the draft, which was taken supra protest, by Baring Bros., at the request of Burnham. Maddison & Co. thereupon deposited with Burnham, as collateral to secure their obligation on the draft, certain shares of the 'Charnwood Forest Railroad Company.' Inasmuch as Runkle appears, both in the contract sued upon and in the power of attorney upon which the contract is predicated, as the assignee of Maddison & Co., and as standing in their place and stead, we think it clear that the account was not res inter allos as to him. He represented Maddison & Co., and held their rights, and therefore the account was as much admissible against him as it would have been against the firm.

3. For the purpose of showing that the power of attorney under which Mestre acted as the agent of Runkle had been revoked, the defendant offered a series of telegrams addressed to Olcott, the attorney at law of Runkle, in New York, which read as follows:

'Havana, July 23, 1884. To Olcott, 35 Broadway, N. Y.: Telegraph if power is coming to-morrow steamer. Mestre. Martinez.'

'Havana, July 18, 1884. To Olcott, 35 Broadway N. Y.: The powers received are insufficient. It is urgent to send by to-morrow's steamer new Spanish power, in Spanish, from Runkle, Lyles, Gilson, and Maddison & Co., to Martinez, Mestre, confirming the power of March 6th and June 26th, amplifying plifying them specially, to cancel the contract to loan, to accept return of deposit, giving common council liberty of action, and to execute a general release; all well explained. Mestre. Martinez.'

'Havana, July 22, 1884. To Olcott, 35 Broadway, N. Y.: Send, anyhow, first steamer, power according telegram eighteenth. Mestre. Martinez.' 'To Runkle, Lyles, Gilson, care Olcott, 35 Broadway, N. Y.: I urge forward pending powers. I protest against damage delay. Martinez.'

These telegrams were rejected, on the ground that they had not been properly proved. Whether their rejection was warranted is unnecessary to be considered. The telegrams called for a confirmation of the existing power, and not for its revocation. If they had been admitted, they could not have affected the question of the revocation of the power. Their rejection being immaterial to the result, no reversal for error in this particular Wall. 773; Railroad Co. v. Pratt, 22 Wall. Wall. 773; Railroad Co. v. Pratt, 22 wall. 123; Home Ins. Co. v. Baltimore Warehouse Co., 93 U.S. 527; Mining Co. v. Taylor, 100 U.S. 37.

4. Martinez was asked whether, pending the negotiations in Havana for the settlement of the transactions, out of which the present contract grew, he had exacted from Mestre, agent of the defendant, any agreement as to the debt due to Burnham, as a part of the final adjustment. This question was objectd to, on the ground that it was an attempt to show the assumption by parol of an obligation, when such obligation, if it existed, must result from the written contract. We think the objection was untenable. The question was asked the witness, not for the purpose of proving a liability on the written contract, but in order to show the relations existing between the parties at the time the authority given by the power of attorney was acted on. The obligation, of course, must result from the text of the written contract, or by necessary implication therefrom. Testimony, however, was admissible to show the condition of affairs at the time the agent acted, not in order to vary or change the written contract, but to throw light upon the situation. Le Roy v. Beard, 8 How. 451.

5. The numerous other exceptions to the admissibility of evidence found in the record are, we think, not well taken. We have considered them all. The requests for findings made by the defendant upon the whole case, as we have seen, were as follows: 'First, that it does not appear that Mestre had any authority to assume an obligation on the part of the defendant; second, that the contract of August 4, 1884, does not impose any liability upon the defendant.' These requests involved both questions of law and fact, and were refused, and exceptions were reserved to their refusal. The findings of fact made by the court below are binding here, if there be any evidence to support them. St. Louis v. Rutz, 138 U.S. 226, 11 Sup. Ct. 337.

It is contended that there is no evidence to show that the power of attorney, which is relied on, was an existing power at the time the contract was signed by Mestre as Runkle's agent. This position is not supported by the record. True, there is evidence tending to show that Mestre, the agent of Runkle in Havana, requested enlarged powers from Runkle, and there is also evidence tending to show the arrival at Havana, on the day on which the contract was made, of an instrument conferring the enlarged powers which Mestre deemed desirable to justify him in dealing with the city of Havana. There is, however, no evidence that the second power, if received, revoked the power which is in evidence. As to the letter which Runkle wrote to Mestre, and which, it is contended, was a revocation of the power, its contents imply the very reverse. There was certainly no reason why Runkle should have said to Mestre that he 'would like' a particular provision as to the Maddison & Co. liability inserted in the contract, unless the agent had authority to deal with reference to this matter. Indeed, although Runkle and Olcott, his attorney, were both examined, and although they both referred to the alleged new power of attorney, their testimony seems sedulously to avoid any statement that the new power revoked the power of June 25th. If the new power of attorney was sent, and revoked the one relied on here, Runkle or his attorney could have dispelled all doubt by offering it in evidence, or by testifying as to its contents. Their silence must necessarily make against them on the question of revocation. Mansfield, J., in Roe v. Harvey, 4 Burrows, 2487. The doctrine that the production of weaker evidence, when stronger might have been produced, lays the producer open to the suspicion that the stronger evidence would have been to his prejudice was expressly adopted in the case of Clifton v. U.S., 4 How. 242.

This leaves only for consideration the question of whether the power authorized the contract with Burnham, and whether that contract bound Runkle for the debt sued on. It will be observed that the power of attorney expressly designates Runkle as the assignee of Lyles and Gilson, and the 'transferee' of Maddison & Co., and then authorizes the agent 'for me, and in my name, place, and stead, to ask, demand, collect, and receive such sum or sums of money and property of all or any kinds to which, in any capacity aforesaid, I have, or may have, the right or claim or demand, under or in connection with the contracts for the loan and waterworks in the Island of Cuba, made in consequence of the public bidding therefor in the city of Havana, in the Island of Cuba, on the 18th day of March, 1882, * *  * to compound and compromise all such claims as I may have aforesaid, *  *  * and to obtain my release from all liability as one of the contractors in connection with the said loan and waterworks.' The contention is that this power, while it authorized the agent to enforce any demands which Runkle may have had, did not authorize him to assume an obligation on behalf of Runkle. The finding below is that, at the time the power was exercised, it was necessary that the agent, in order to obtain his principal's discharge by the city of Havana, should settle the Martinez-Burnham liability.

In adition to these findings, the face of the power of attorney indicates the necessity of the agent's action in order to carry out the purposes of the power. The power itself states that Runkle is the assignee or 'transferee' of all those who had been parties with him to the waterworks contract. It represents him as the 'transferee' of Maddison & Co., and as entitled to all of Maddison & Co.'s rights. We have seen that Maddison & Co. were bound, with Martinez, to Burnham, on the draft which Burnham had discounted, and which was protested, and that the stock of Maddison & Co. was pledged to secure payment of the draft. A settlement of Runkle's relations, as the assignee of Maddison & Co., necessarily included an adjustment of the debt of Burnham under the very terms of the power of attorney. This power was evidently executed not alone for the purpose of adjusting the waterworks contract with the city of Havana, but also with the object of arranging the debt due to Burnham, back of which was the stock which had been pledged by Maddison & Co., and which belonged to Runkle as their assignee.

We now come to the consideration of the contract itself, which, it is contended, did not justify the conclusion that Runkle had assumed the indebtedness to Burnham. The contract recites the drawing of the draft upon Maddison & Co., the indorsement by Martinez, and the protest. It credits the receipt from the city of Havana of the $64,000, which had been deposited on account of the loan and waterworks contract, and states a balance due on the draft to Burnham. In stating the balance thus due, it 'recognizes' Runkle as the assignee, binds Burnham to place the Charnwood Forest Railroad stock at the disposal of Runkle upon the payment of the debt, and binds him also, in the event of the sale of the stock, and the application of the proceeds thereof to the debt, to pay over to Runkle any balance that might remain. It is insisted that this contract does not make Runkle ultimately liable for any deficiency, and that, therefore, the contract imports no debt on his part. This claim necessarily contradicts the finding of the court below, which is that Runkle had assumed responsibility for the balance, and it also contradicts the contract itself. The stock was not primarily Runkle's, but Maddison & Co.'s. Any dealing with Runkle, and by Runkle, as owner of the stock, and as assignee of Maddison & Co., imported that Runkle had succeeded to the claims of Maddison & Co., and, by fair inference, to all their obligations with reference to this part of the transaction. Indeed, the careful manner in which the contract states the drawing of the draft, its protest, and the transfer by Maddison & Co. to Runkle, seems to have been intended to emphasize the fact that Runkle, in acquiring the rights of Maddison & Co., had put himself in their place and stead. That Runkle was the general assignee of Maddison & Co., and considered himself as not only entitled to their rights, but also as the representative of their obligations in connection with the loan and waterworks contract, results from the terms of the power of attorney, in which he authorizes the agent not only to acquire Maddison & Co.'s rights, but to stipulate for the discharge of their obligation. In other words, the contract, read in connection with the terms of the power of attorney, leaves no doubt that Runkle was dealing and treating in the capacity of a person who was not only entitled to the rights, but was also subject to the liabilities of all the original parties to the loan and waterworks contract. This view is strengthened by the fact that, although Runkle testified on the trial, the assignment from Maddison & Co. to him was not offered in evidence, nor even referred to. The failure to produce it, or to testify in reference to it, when its contents were peculiarly within the knowledge of Runkle, justifies the presumption that its provisions would have been unfavorable to Runkle's position.

Judgment affirmed.