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420



THE CENTRAL LAW JOURNAL.



No. 19



with preferences authorized by the law of the
State where it is made, but prohibited by the
law of the State where the assigned property,
or a portion of it, is situate at the time, the
authorities are quite uniform in holding that
such an assignment will not vest such prop-
erty in the assignee as against an attaching
creditor of the assignor residing in such for-
eign State. Thus where a general assignment
for the benefit of creditors was made
in New York, giving preferences to
creditors, which was authorized in that
State, and a portion of the assigned
property was at the time situated in
New Jersey, where assignments with pref-
erences were prohibited, and subsequently
and before the assignee had come into the
actual possession of such property in the
latter State, it was there taken under a for-
eign attachment at the suit of a creditor of
the assignor and sold ; in a suit by the as-
signee in New York, for a conversion of such
property it was held, that no title to the same
passed to the assignee by virtue of such as-
signment, and that the property was subject
to the attachment.^^ In the case of Bryan v.
Brisbane,^ mpra^ it was held in Missouri,
that an assignment of property for the benefit
of creditors made in Minnesota, containing
preferences in favor of certain creditors
designated therein, and valid there, was not
valid as against an attaching creditor, as to
the assigned property situate in Missouri,
who had taken the property there by virtue
of the attachment, subsequent to the assign-
ment, but before notice thereof. ^^ But see,
where the rule seems to be somewhat qual-
ified, especially, where the assignee has c ome
into the actual possession of assigned prop-
erty in the foreign State before an attach-
ment of the same.^ If an assignment for



^ GuiUander v. Howell, 35 K. J. 657. See also Bryan
y. BriBbane, 26 Mo. 423, 72 Am. Dec. 219; VarDam y.
Camp, 1 Green (N. J.) 326, 26 Am. Dec. 476; More v.
Bonnell, 2 Yroom, 90.

» Supra.

w See also Story'n Confl. L. 5 888; Brown y. Knox, 6
Mo. 806; Thurston V. Rosenfield, 42 Mo. 474; B<>ntley
V. Whittemore, 4 E. C. Green, 462; Zepsey v. Thomp-
son, 1 Gray, 248; Boyd y. Rockford Mills, 7 Gray, 406;
Van Winkle y. Armstrong, 4 Cent. Eep. (N. J. 1886) 53.

« Richardson y. Leayitt, 1 La. An. 430, 45 Am. Dec.
90; United States y. Bank, 8 Robinson, 262; Oliyer y.
Townes, 14 Martin (La.), 93; Dundas y. Bowler, 8
McLean, 897; Bank y. Wood, 14 La. An. 554; Maberry
y. Shisler, 2 Harr. (Del.) 849; Kitchen y. Reinskey 42
Mo. 427.



the benefit of creditors is valid in the State
where made, and embraces choses in action,
an action may be brought and maintained
thereon by the assignee in a foreign State or
country, although the assignment would have
been void if executed there. This would be
in accordance with general principles of
comity.®

§ 5. Statutory Regulations^ when not Ap-
plicable to Foreign Assignments. — In New
York, and various other States, it has been
held that statutes regulating assignments of
personal property for the benefit of creditors
and prescribing the mode of execution
thereof, apply to and regulate such assign-
ments as are made and executed within the
State by citizens thereof, and not to those
made in a foreign State or country in ac-
cordance with its laws. Thus, it has been
held in 'New York, that a voluntary assign-
ment by a debtor residing in Canada, valid
there, and embracing personal property in
New York, where the assignee subsequently
took actual possession of the same, vested
such property in the assignee as against an
attachment at the suit of a creditor of the
assignor, residing in New York, subsequently
issued, and by virtue of which such property
was taken, although the directions of the
statute of New York relating to assignments
for the benefit of creditors, were not observed
in making the assignments. Such regulations
were held to apply to assignments made in
New York, and not to those made in other
States or countries.^ But see, in Pennsyl-

« Fuller y. Stelglitz, 27 Ohio St. 355, 22 Am. Rep.
312; Shortwell v. Jewett, 9 Ohio, 180. See also Hunt
y. Lathrop, 7 R*. I. 58; Hall y. Boardman, 14 N. H. 88;
Bentley y. Whittemore, 19 N. J. Eq. 462; Bullock y.
Taylor, 16 Pick. 885; Martin y. Potter, 11 Gray, 87;
Abraham y. Plestoro, 8 Wend. 588, 20 Am. Dec. 738;
Moore y. Bonnell, 2 Yroom, 90; Thurston y. Rosenfield,
42 Mo. 494.

M Ockerman y. Cross, 54 N. Y. 29. See also Wieder
y. Maddox, 66 Tex. 372, 59 Am. Rep. 617; Hanford y.
Paine, 32 Yt. 443, 78 Am. Dec. 586; Chaffee y. National
Bank, 71 Me. 524, 36 Am. Rep. 845; Butler y. Wendell,
57 Mich. 62, 58 Am. Rep. 329; Train y. Kendall, 137
Mass. 366; Rice y. Courtis, 82 Yt. 460, 78 Am. Dec.
597; Bentley y. Whittemore, 19 N. J. Eq. 462; Wilson
y. Carson, 12 Md. 54. See People y. Smith, 88 N. Y.
576. But see, in Pennsylyania, where a foreign at-
tachment was required to be recorded in the county
where the property was situated, in order be eflecual
against the liens of creditors without actual notice.
Ante, § 3; Phelon y. Barnes, 50 Pa. St. 280; Warner
V. Jaflrey, 96 N. Y. 248. See also Heryey v. Locomotlye
Works, 98 U. S. 664; Hibernian Nat. Bk. y. Lacomb,
84 N. Y. 867, 38 Am. Rep. 518; Smith's Appeal, 104
Pa. St. 881.



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yania, where a foreign attachment was re-
quired to be recorded in the county where the
property was situated, in order to be effect-
ual against the liens of creditors without
actual notice.

§ 6. 7w Case of Involuntary Assignments, —
The general rules relating to assignments,
and the comity of States, before noticed, are
not applicable to involuntary or compulsory
assignments, made under, and by operation
. of, bankrupt or assignment laws. Such as-
signments, by operation of law or compulsory,
do not operate in a foreign State, and the
laws providing therefor have no extraterrito-
rial effect, nor will comity require a foreign
State to give such laws force and effect within
its territorial limits.^ In the case last cited
the court say : '^In America such assignments
are held inoperative upon property, real or
personal, not situated within the territory
over which the laws that make, or compel
the debtor to make them, have dominion, as
are discharges of the debtor, attempted to be
made under them, inoperative as to persons
not resident in the State under whose laws
they are made."^ In such a case the law
operates in rem if at all.^ Such assignments
in one State have no force or effect in other
States or countries, even in respect to citizens
of the former.^

§ 7. Exempt Property. — General assign-
ments for the benefit of creditors must at
least embrace all the property of the assignor
not exempt from execution, without any
reservation to the assignor, except the surplus
remaining after the satisfaction of his debts.^



ss Story's Confi. L. 410-416; Burrell on Assigrnments,
803; Zfpsey v. Thompson, 1 Gray, 248; Hoyt v.
Thompson, 5 N. Y. 320; Holmes v. Riimsen, 20 Johns.
229; Abraham v. Plestro, 3 Wend. 588, 20 Am. Dec.
788; Kelly v. Crapo, 45 N. Y. 86, 41 Barb. 603; Willets
V. Watte, 25 N. Y. 577; Clark v. Booth, 17 How. (U. S.)
822; Odgen v. Saunders, 12 Wheat. (U. S.) 218; Har-
rison V. Sterry, 5 Cranch (U. S.), 289; Wieder v.
Maddox, 66 Tex. 872, 59 Am. Rep. 617.

S8 See also Saunders y. Williams, 5 N. H. 214; Dalton
V. Currier, 40 N. H. 247; Blake v. Williams, 6 Pick.
285, 17 Am. Dec. 872; Paine v. Lester, 44 Conn. 196, 26
Am. Rep. 442; Walters v. Whlllock, 9 Pla. 95, 76 Am.
Dec. 607; Hutchinson y. Peshine, 16 N. J. Eq. 218;
Cook V. Moffat, 5 How. (U. S.) 295.

«7 WilleU V. Waile, 25 N. Y. 577; Hibernian Nat. Bk.
V. Lacombe, 84 N. Y. 867, 88 Am. Rep. 618.

«/d.; Rawn y. Pierce, 110 111. 850, 51 Am. Rep. 691;
Kidden v. Tafte, 48 N. H. 121; Paine v. Lester, 44
Conn. 196, 26 Am. Rep. 442; Johnson y. Hunt, 23
Wend. 87. See Pierce y. O'Brien, 129 Mass. 814, 87
Am. Rep. 860.

» Heafer v. Knell, 81 Md. 554; Grooyer y. Wake-



Exempt property need not be embraced in
the assignment, nor need there be a reserva-
tion of the surplus to the assignor contained
therein, as the law would protect the as-
signor's rights in these respects. But exempt
property may be reserve by the assignment.^
Exemption laws have application to persons
resident in the State in which they exist, and
when an assignment conveys property in that
and another State, it would seem that the
exemption should be measured and governed
by the law of the domicile of the assignor.'^
In various States a general assignment for
the benefit of creditors carries all property of
the debtor, not exempt from execution, and
is presumed to pass such property to the
assignee for the purposes of the trust.

§ 8. Assignment of Real Estate, — It is a
familiar principle of the law that the transfer
of real estate is governed by the law of the
place where it is situated. A deed, mort-
gage or other conveyance or incumbrance of
real estate, made by the owner, must be
executed in conformity with the laws of the
place where it is located ; and this rule ap-
plies to the acknowledgement, and recording
such instruments as well as to their formal
execution.^ This rule of law is equally ap-
plicable to assignments of real estate in trust
for the benefit of creditors of the assignor.
The instrument of assignment must be in
writing and made in confq^mity with the re-
quirements of the law of the State or country
where the property is situated, in respect to
execution, acknowledgment, and recording.
And such assignments, in the various States
of this country, are generally required to be



man, 11 Wend. 187; Goodrich y. Downs, 6 Hill, 488;
Whallon y. Scott, 10 Watts, 239; Mitchell v. Stiles, 18
Pa. St. 366.

»Muhr V. Plnover, 9 Cent. Rep. (Md. 1887) 67;
Burrell on Assignments, 224; Bishop on Insolyent
Debtors, § 179; Dolson y. Kerr, 5 Hun, 643; Dow y.
Plainer, 16 N. Y. 662; Smith y. Mitchell, 12 Mich. 180;
Garnor v. Frederick, 18 Ind. 601.

«i Wilder y. Maddox, 66 Tex. 872, 69 Am. Rep. 372.
See also Bryant v. Young, 21 Ala. 264; Newall y. Hay-
den, 8 Iowa, 148; Helfestien y. Caye, 3 Iowa, 289. On
the subject of exemptions see also, Dolson y. Kerr, 6
Hun, 648; Hickman y. Meisinger, 49 Pa. St. 466;
Baldwin y. Peet, 22 Tex. 708; Farguharson y. McDon-
ald, 2 Heisk. (Tenn.) 404.

a Story's Confl. L. S 428; McCormick y. Sulliyant, 10
Wheat. 192; Goddard y. Sawyer, 9 Allen, 78; Cutter
y. Davenport, 1 Pick. 81; 0:3burn y. Adams, 18 Pick.
246; Donaldson y. Phillips, 18 Pa. St. 170, 68 Am. Deo.
614; Young y. Dowling, 16 111. 497; Meighen y. Strong,
7 Minn. 177.



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in writing, and signed,- acknowledged and
and recorded, like common deeds of convey-
ance of real estate.® G. W. Field.

» Story's Conil. L. §§ 423, 474; D'lvernols v. Leavitt,
4 Sandf. Ch. 262, 28 Barb. 68; Slatory. Carroll, 2 Sandf.
Oh. 578; McGood t. Scales, 9 Wall. 28; Rogers v. Allen,
8 Ohio, 488; Lucas t. Tucker, 17 iDd. 41; Osborn v.
Adams, 18 Pick. 245; Loviofi: v. Pairo, 10 Iowa, 282,
77 Am. Dec. 108; Gardner v. Com. Nat. Bk., 95 111.
298; Hutchinson v. Peshine, supra.



CONTRACT— PRINCIPAL AND AGENT— PAROL
EVIDENCE.



HEFFRON V. POLLARD.



'Supreme Court of TexoM, February 26, 1889,

A written contract, signed by an agent for his prin-
cipal cannot be varied by parol evidence to the effect
that the agent signed it in the name of the principal
for his (the agent's) own benefit and with the inten-
tion to bind himself, in an action upon such contract
against the agent; nor is parol evidence competent to
show that the agent by so signing meant to use it as
his own business name, where the name of the prin-
cipal is that of a real person.

Gaines, J., delivered the opinioQ of the court:
The appellee brought the suit in the court below.
He alleged that the defendant, who is appellant
here, agreed in writing to pay W. H. Pollard &
Co. and one F. W. Hendricks a certain price for
certain pipe, the dimensions of which he described
in bis petition, and that he was the owner of the
claim by assignment from Hendricks, and his
partner, who with himself constituted the firm of
W. H. Pollard & Co.* The substance of the al-
legations in the petition with reference to the
execution of the agreement is that W, H. Pollard
& Co. and F. W, Hendricks "catered into a con-
tract in writing with defendant, the said defendant
BO contracting in the name of John W. Fry, by
which the said Pollard & Co. and the said Hen-
dricks bargained and sold to the said defendant a
large amount of property," etc. There is an
alternative allegation in the petition which the
execution of the contract is set out in substantially
the same language, but which alleges a different
effect as to time of delivery and payment. The
defendant pleaded non est factum. Upon the trial
the plaintiff offered in evidence a contract in
writing, of which the following is a copy : " The
County of Gkilveston^ State of Texas, This agree-
ment, made and entered into by and between
John W. Fry on the one part, and F. W. Hen-
dricks and W. H. Pollard <ft Co. on the other part.
It is hereby understood that the said Jno. W. Fry
shall take all of the 24-inch pipe (concrete), not
exceeding 430 lineal feet, and all of the 18- inch
pipe (concrete), not exceeding 700 lineal feet, at
the following prices, viz. : The 24- inch pipe at
f 1.50 per foot, and the 18-inch pipe at f 1.25 per
foot — the said pipe to be paid for at the above rate,



as used by the said Jno. W. Fry; and that the
said Jno. W. Fry shall not manufacture or use any
other pipe of tlie above quoted sizes until all the
above noted pipe is consumed in the city of Gal-
veston. [Signed] John W. Fry, per Heffron.
W. H. Pollard & Co. F. W. Hendricks.
Witness: N. A. Olcott. W. J. Junker." In
order to prove the execution of the contract so
offered, plaintiff was sworn as a witness, and
testified that ^Hhe written contract was signed
*J.W. Frt, per Heffron,' and that it was so signed
by Heffron for himself and in his presence;'^
meaning in the presence of the plaintiff. He also
testified that he had made diligent search for the
subscribing witnesses, but could not'find them.
The defendant was then placed on the stand by
plaintiff, and testified that he signed the contract,
*'as it purported, *J. W. Fry, per Heffron,' but
that he signed it as the agent of Fry, and not for
himself, and that he had no personal interest in
it." The court thereupon admitted the contract
over the objection of the defendant, and the de-
fendant excepted.

We may treat the case, for the purposes of this
opinion, as if there was sufficient evidence intro-
duced to show that in executing the contract
Heffron used the name of Fry in order to make the
contract for his own benefit. We think the evi-
dence subsequently introduced, though confiicting,
warranted the jury in finding that the plaintiff's
theory of the case was the true one, and it may
be doubted whether this would not have cured
the error of introducing it for want of sufficient
evidence upon that point, if error it were. But
the question presents itself whether in a contract
like this, which is made in the name of a princi-
pal, and which is signed in his name by another
as bis agent, it is competent to show by paid evi-
dence, in order to recover on the written contract
itself, that in signing the agreement the one who
purports to sign as agent signed the name of the
principal for his own benefit, and with the inten-
tion to bind himself. We have been unable to
find any case in which this exact point has been
determined. There are few branches of law that
have given rise to more adjudications than that
of principal and agent, and the cases are especially
numerous in which the liability of the principal
or agent as to third parties is discussed. There
are certain priociples, however, which are well
settled. If the principal be disclosed, and it ap-
pear upon the face of the contract that the agent
does not intend to bind himself, the agent is not
liable. If the principal be not disclosed, it is
universally conceded, as to non-negotiable con-
tracts not under seal, that parol evidence is ad-
missible to show the principal, and to hold him
liable upon a contract made in the name of the
agent for his benefit. This may seem to be an
exception to the rule that parol evidence is not
admissible to vary the terms of a written contract,
but it is not so held. It is said not to vary the
terms of the contract, but to bring in a new party,
whom the law holds bound by reason of his rela-



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tion to the party in whose name it is executed for
bis benefit. In such a case the principal may
either sue or be sued. But a plaintiff cannot sue
both; be must make his election. If, however,
the principal be disclosed, and the face of the
"writing shows that the agent is bound, it is pre-
sumed that the other party has elected in the
contract itself to look to the agent, and the prin-
cipal is not liable upon it. Chandler v. Cox, 64
N. H. 561, was a case in which the principals were
sued upon a contract which was signed by their
agent, but which did not upon its face disclose an
agency. It was, however, a question of fact
whether or not the principals were known to be
such at the time the contract was executed. The
court in an able and elaborate opinion, which re-
views all the authorities, hold that if the principals
were not known when the agreement was signed,
parol evidence was admissible to show the agency
of the signor, and to charge the principal ; but
that if, in point of fact, agency was then disclosed,
such evidence tended to vary the writing, and
could not be admitted. The ground of the ruling
upon the latter point was that if the plaintiff
knew, when the contract was entered into, that it
was made for the benefit of third parties, the
writing showed that they had elected to look to
the agent (principal?) for its performance, and
parol evidence was not admissible to vary the
writing by showing that they did not so elect.
The contract now before us presents a different
case, but we think a stronger one for the defend-
ant. As to the legal effect of this contract upon
its face there can be no doubt. It discloses the
names and relation of all the parties connected
with it. It binds Fry, the principal, and does not
bind Heffron, the agent. If it bad said, in ex-
press terms, that Fry was bound by the contract,
and Heffron not, the meaning, in the light of the
law, wouid not have been more unmistakable.
Can Heffron be held liable upon this written
agreement? Is it permissible, in order to bind
him, to show by parol testimony an intention ex-
actly contrary to that expressed on the face of
the writing, namely, that Heffron was bound by
it, and that Fry was not bound? In our opinion,
this cannot be done without violating a cardinal
rule of evidence. It is very different from the case
of an undisclosed principal. The law makes him
responsible for the act of his agent. The act of
the agent, made for bis benefit, and within the
scope of the authority conferred by him, is his
act. In such a case parol evidence maybe inserted
to show that, by leason of a fact, existing at the
time the contract is made, not known to one of
the parties, there is a third party for whose benefit
it is made who is bound by it. The relation of
principal and agent being unknown to one of the
contracting parties, he could not make an election
at that time, and it is not to be presumed that he
intended to look alone to the agent, should it sub-
sequently appear that the contract was made for
the benefit of another, who has given authority
for its execution. The undisclosed principal may



sue on a contract made for him in the name of bis
agent, and for a similar reason he is liable to be
sued. But we apprehend that if a contract in
writing should expressly declare that if it should
subsequently be disclosed that a party signing had
a principal, such principal should not be bound,,
no evidence would be admitted to show a liability
contrary to such express terms.

But there is another point of view from which
this case must be considered. The effort in the
court below was to show that the defendant as-
sumed the name of Fry in order to make the con-
tract for. his own benefit. We understand the law
to be that when a party for the purpose of tran-
sacting business adopts an assumed name, whether
it be fictitious or the name of another, he is bound
by a contract made in that name. In Trueman v.
Loder, 11 Adol. & E. 589, Lord Denman says:
**Parol evidence is always necessary to show that
the party sued is the person making the contract,
and bound by it. Whether he does so in his own
name, or in that of another, or in a feigned name,,
or whether the contract be signed by his own
hand, or that of agent, are Inquiries not different
in their nature from the question, who is the per-
son who has just ordered goods in a shop?^' In
that case the principal had been engaged in doing
business in the name of his agent, and the con-
tract was signed by the agent in his own name.
See, also, Melledge v. Iron Co., 5 Cush. 158;
Brown v. Parker, 7 Allen, 337. In the present
case, also, the name is not a fictitious one. It is
the name of a real person. But the contract pur-
ports to bind him alone, and upon its face i&
inconsistent with the idea that the defendant in
signing it may have intended to use it for his own
business name. His signature as agent clearly
negatives the conclusion that any such construc-
tion was intended to be put upon it. The inten-
tion of the parties to a written contract must be
derived from the writing itself, where its meaning
is clear. Can it be said that the admission of
parol evidence to show that the contract before
us was made for the benefit of defendant, and was
intended to bind him, does not violate the rule?
We think not. The contract clearly shows the
relation of all the parties to* it— who was to be
bound, and who was not to be bound; and its
legal effect cannot be varied by such evidence.

The rule is further illustrated by the well rec-
ognized rule that although, in case of an undis>
closed principal, the plaintiff may show there was
a principal in order to bind him, yet the agent is
not permitted to prove the same fact in order to
free himself from responsibility. Such a contract
shows clearly upon its face that he is bound, and
the law will not permit him to show the contrary.
To this there is an apparent, but not a real, ex-
ception. The agent may show, in order to relieve
himself from liability upon an apparent written
agreement, which if real would bind himself upon
its face, that it was agreed, when it was signed,
that it should not take effect as a contract, but that
the real contract was an unwritten one, which



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bound ODly bis principal. In otber words, be may
sbow tbat tbe writing was a mere colorable trans-
action, and was understood by tbe parties to be
not a contract at all, and tbat tbe real contract
was not in writing, and bound onl)* bis priticipal.
Rogers v. Hadley, 2 Hurl. & C. 227. So in this
<5a8e we tbink tbat, if it were true that tbe writing
offered in evidence was understood and agreed to
be a mere colorable transaction intended to ob-
scure defendant's real connection witb the con-
tract, and if be really purchased tbe pipe, tbe
plaintiff could have recovered upon tbe real agree-
ment, notwithstanding the apparent contract en-
tered into in writing. If the plaintiff had alleged
and proved a want of authority on part of tbe
defendant to make the contract for Fry, then,
also, be could have maintained bis action against
defendant. But even in that case, according to
what appears to us the better reason and the
weight of authority, his action would have been
not upon the contract itself, but upon tbe implied
warranty or for tbe deceit. Bartlet v. Tucker,
104 Mass. 336; Lander v. Castro, 43 Cal. 497; Hall
V. Crandall, 29 Cal. 567. The defendant testified,
In effect, that be had authority from Fry to make
the agreement for him. Tbe testimony of plaint-
iff Is not necessarily inconsistent with the idea
tbat he did have such authoiity, alibougb in sign-



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