by John Marshall

“ Delprat, as a merchant, and as the agent of the Van Staphorsts. As a merchant, he had a right to draw on effects placed in their hands, independent of contract. The usage of trade allows such drafts to be made on a shipment; and the consigned must pay the bills, if the shipment places funds in his hands to pay them. But as agent, his line of conduct was to be prescribed by contract. We must, therefore, consult the language of the agreement, in order to determine whether it provides for the future connexion between the parties, farther than as regards their characters as principal and agent. ”

“ Money laid out in the purchase of articles on his own account, cannot, with any propriety of language, be denominated money employed in making advances on articles consigned to him. The distinction between money advanced on articles consigned, and money employed in purchases; although the articles may be purchased for the purpose of being consigned; is obvious. Money advanced, is always to another, never to the individual making the advance. This language shows, we think, incontestably, that the article was drawn with a sole view to bills drawn by Mr. Delprat, as agent ”

“ To entitle them to maintain it, the Court must be satisfied that the payment is, in fact, what it professes to be, a payment really for the honour of the endorsees. If the drawees, thus refusing to honour the bill, and thus denying the authority of the drawer, to draw upon them, were bound in good faith to accept or pay as drawees; they will not be permitted to change the relation in which they stand to the parties on the bills, by a wrongful act. They can acquire no rights as the holders of bills, paid, supra protest ”

“ Delprat is to draw for two-thirds of the invoice price of the article, and is himself the judge of the price which may be inserted in the invoice. This power might be safely confided to him, in making advances to others; but might not be trusted to him in his own case. The case shows the Van Staphorsts to have been men of extreme caution. Their letter to Le Roy, Bayard & Co., enclosing their contract with Delprat, shows an unwillingness to commit themselves to him further than was necessary. ”

“ The plaintiffs, therefore, were not bound to accept and pay these drafts, unless they have acted in such a manner as to give the holders of the bills a right to count on their being paid.
It is believed to be a general rule, that an agent with limited powers cannot bind his principal when he transcends his power. It would seem to follow, that a person transacting business with him, on the credit of his principal, is bound to know the extent of his authority. ”

“ There is always an expectation, that the bills will be paid; but this expectation does not constitute a legal right against the drawee. In reference to the present bills, it appears from the testimony, that the defendants actually charged Mr. Delprat a commission for endorsing them, without which, they could not have been advantageously negotiated.
It is said, that the shipments were made in trust to pay these bills, and that the plaintiffs could not take the property free from the trust. Let this be so; but who can enforce the trust? ”

“ It is no answer to this, to say, that the consignor is a debtor to the consignee; and that upon the principle that a consignee can pay his general balance out of goods, which come into his hands, the plaintiffs would make use of the funds, for their own purposes. ”

“ The defendants were agents for a large amount of the stocks of the United States, held by persons in Holland, and which were under the care of the plaintiffs; and they had large transactions for mutual benefit.
In 1818, Mr. Delprat was appointed, by the plaintiffs, their commercial agent, and was recommended to the particular care of the defendants, who were asked to 'facilitate his operations.' The agreement with Mr. Delprat was enclosed to the defendants, for the purpose of showing to them the nature of his agency, and informing them of his powers, and of the credit they had given to him. ”

“ Delprat's credit with the latter, which shows the determination of the former not to approve of advances beyond that credit. In their letter of the 24th of June, 1819, the plaintiffs expressly caution the defendants, should they think proper to remit in Mr. Delprat's bills, the nature of which they are well acquainted with, that they (the defendants,) allow him the same credit that they do other persons, from whom they take bills, in the persuasion of their solidity, and of the reality of the transaction on which the bills are issued. ”

“ Delprat was bound-1. To act for no other persons in procuring consignments, either from himself or from others. 2. To use his utmost efforts, for the benefit of the plaintiffs.
The plaintiffs were bound-1. To facilitate Mr. Delprat's commercial operations, without prejudice to themselves.
The objects of this agreement were, to procure consignments, and that Mr. Delprat should act as the commercial agent of the plaintiffs, generally; and the means of accomplishing them, were to draw bills, to make advances on cargoes, and for which he was also to use the credit opened with the defendants. ”

“ Another point in this case, which is in favour of the defendants, rests on the particular situation of the two houses of trade, formed by the parties to this cause. Whatever may be the law as between strangers, the attempt made by the plaintiffs to throw those bills on the defendants, is a violation of the good faith which had always existed between them. ”

“ He added, 'under all circumstances, I should not feel inclined to withhold from them, any portion of the funds for which the bond was given.'
On the same day, Cornthwaite and Cary called on Williams, who stated the substance of the letter he had written, and read a part of it. One of the firm of Payson & Co. also called on him, and received the same information. Two days afterwards, Cornthwaite and Cary drew on Cooledge & Co., for 2,000 dollars, and paid the bill to Payson & Co. who presented it to Cooledge & Co., by whom it was protested. Payson & Co. sued them as acceptors. ”

“ Marius advice concerning Bills of Exchange, 30, 31. In 1 Lord Raymond, 88, Lord Holt says, 'an acceptor for honour of drawer, is when a stranger, having no effects of drawer, accepts out of respect to the drawer.' The principle there, is that there can be no acceptance supra protest, for the honour of any party, when the acceptor is under any obligation, legal or equitable, as it respects that party to accept generally. This results from the nature of acceptance supra protest. ”

“ Does not the receipt of the proceeds of the property, reimburse the plaintiffs in the payment?
Equity will frequently give a party relief, in effect amounting to a lien, though not in possession of the goods, to have his demand satisfied out of the proceeds of the goods, in preference to any other party. Chitty's Commercial and Maritime Law, 550-1.
The defendants ask the application of this principle to the bills upon which this suit has been instituted. ”

“ As between the plaintiffs and the defendants, were those bills such as should be considered as accepted bills; or bills which the plaintiffs were 'in any ways obliged to accept?'
They were; because they were drawn by Mr. Delprat:--
1. In pursuance of his written authority.
2. If not in pursuance of a general authority, this authority was to be inferred from the general course of business. An authority to draw a bill, is virtually an acceptance of the bill, drawn in conformity to it. 9 Mass. 11. 2 Wheat. 72. ”

“ The mercantile house of the plaintiffs, at Amsterdam, were desirous to extend their business in the United States; and they employed Mr. Delprat, giving him authority to draw upon them, according to particular directions, and with a credit of 40,000 dollars, with the defendants. ”

“ Were the bills in question drawn in conformity with powers and instructions thus limited?
The first bill on the list is for 500 pounds, drawn in favour of J. P. Krafft, on the 23d of May 1822, and endorsed by him to the defendants. The letter of advice, states this bill to be drawn on account of shipments by the Edward, Jason, and May Flower, as by letter of 21st, which is to be charged to account of P. Krafft. The letter of the 21st is not in the record. ”

“ The first undersigned further oblige themselves to open a credit of $40,000, say forty thousand dollars, with Messrs. Le Roy, Bayard & Co. New-York, to be made use of by the second undersigned, in case any advances are required on consignments to be made to the said first undersigned, that credit to be renewed every time by the said first undersigned, after the arrivement of the consigned goods shall have been duly advised by them. ”

“ That duty was to manage their mercantile interest in the United States, 'consisting chiefly in the forming of new solid connexions, and procuring of consignments.' To enable him to perform this duty, he was allowed the faculty to value on them direct, or payable in London, at no shorter date than sixty days sight, for such moneys as he should 'employ, to make advances on the whole or part of cargoes of current articles;' viz. ”

“ The restriction, therefore, might be expressed in the same sentence; and a slight inaccuracy of language was the less to be regarded, because it could produce no possible misunderstanding with respect to the extent of the prohibition. ”

“ Delprat, is to obtain solid consignments from good houses throughout the U.S., and the disposal of the credit opened in his behalf with your house, is exclusively intended to facilitate said business. In this important matter, it will be a point of great security, and as such, eminently satisfactory to us, that our said agent may be able to have recourse in every circumstance, to wise and friendly counsel, and we therefore request you to assist Mr. ”

“ The choice of the articles to be shipped to the first undersigned on their own account, being left to the commercial knowledge of the second undersigned. This authorization will be considered as renewed after the termination of each expedition, viz. ”