
    John D. Clarke, Appellant, v. E. Berri Watt, Doing-Business under the Firm or Trade Name of National Authors Institute, Respondent.
    (Supreme Court, Appellate Term, First Department,
    December, 1913.)
    Contracts — recovery for advertising in a magazine — agency—payment not escaped because of disappearance of agent to whom credit was given.
    Where in an action to recover for advertising defendant’s business in a magazine or paper of plaintiff’s assignor, under a contract with an advertising agent to whom credit was extended, 'but which contract on its face showed that it was. for the benefit of another, it was admitted that plaintiff had not been paid, and the advertisements and the services rendered in connection therewith were solely for defendant’s benefit, plaintiff had a right to assume that there was an undisclosed ' principal other than said agency, which was virtually acting for both parties, and defendant cannot escape payment because credit was given to the agent who disappeared.
    Lehman, J., dissented.
    Appeal by the plaintiff from a judgment of the Municipal Court of the city of New York, borough of Manhattan, third district, entered in favor of the defendant upon a dismissal of the complaint. A jury was sworn, but it was consented that only a question of law was involved which the court should decide.
    Dudley E. Latham, for appellant.
    George Robinson, for respondent.
   Whitaker, J.

This action was brought to recover for fourteen insertions of defendant’s advertisements in the magazine or paper of plaintiff’s assignor, to wit, The Lafayette College,” a weekly publication. It is admitted that the advertisements were inserted, and that neither the plaintiff nor his assignor has been paid. The advertisement advertised defendant’s business and the services rendered in connection therewith were solely for his benefit.

The defense is that the contract was made with the M. B. Kohler Advertising Agency and that the plaintiff’s assignor extended the credit to the H. B. Kohler Advertising Agency and not to the defendant; that the defendant had no dealings with the plaintiff’s assignor.

The contract introduced in evidence does not disclose the name of the defendant, but purports to be made between the plaintiff’s assignor and the “ H. B. Kohler Advertising Agency,” so that it"appears upon its face that it is an agency that is' making the contract. The contract bears upon its face indisputable evidence that the advertising contracted for is for the benefit of some other person than the H. B. Kohler Agency. This being so, the plaintiff’s assignor was entitled to assume that there was an undisclosed principal other than the advertising agency. This contract bears no date. Previous to its execution, however, the H. B. Kohler Agency wrote to plaintiff’s assignor stating that it could give the plaintiff’s assignor a worth - while - contract ’’ for one of its clients, the “ National Authors Institute,’’under which name defendant was doing business. The uncontradicted evidence of Mr. Latham shows that defendant was not ignorant of the employment of plaintiff’s assignor by the Kohler agency and that before the completion of the advertising he requested the full amount of the bill of plaintiff. If the defendant was known to the plaintiff’s assignor to be the principal in the transaction and the Kohler agency his agent, the defendant alone would be liable to plaintiff, unless the plaintiff’s assignor gave credit exclusively to the Kohler agency, in which event, of course, the Kohler agency alone would be liable. Meeker v. Claghorn, 44 N. Y. 349; Foster v. Persch, 68 id. 400.

The defendant having received the full benefit of the advertising, the agent virtually acting for both parties and the agent having disappeared and become irresponsible, it is difficult to see the justice of the rule which allows the real beneficiary to escape payment and deprives the plaintiff of the fruits of his labor simply because he gave credit to the agent instead of the principal. Had the plaintiff’s assignor not known who the real party in interest was, he might have held him legally liable upon discovering him, notwithstanding he had given credit exclusively to the agent. Meeker v. Claghorn, supra; Foster v. Persch, supra. This rule which seems to be harsh and rather unreasonable in its distinction is somewhat modified by the rule recognized in both cases, that the evidence that the credit was given to the agent must be conclusive and it must be shown that the plaintiff intended to look solely to the agent for his pay; and that the plaintiff has the affirmative in establishing this fact. There is no proof in the case that plaintiff charged the work to the Kohler agency, nor is there any affirmative proof that plaintiff gave credit solely to the Kohler agency. There are letters from the plaintiff to the agency, it is true, demanding payment, but they do not indicate, and are not sufficient in our judgment, to establish affirmatively that the plaintiff charged the work to and looked exclusively to the Kohler agency for his pay. As a matter of fact, the uncontradicted evidence of the witness Latham, detailing the conversations with defendant, rather negative such a proposition, and taking the uncontradicted evidence of the witness Latham and the facts disclosed by the record we are of the opinion that the case is fairly within the rule laid down in the case of Foster v. Persch, supra, and that the judgment should be reversed.

Judgment reversed and new trial ordered, with costs to appellant to abide the event.

Page, J., concurs.

Lehman, J. (dissenting).

In my opinion the contract introduced in evidence is not the contract of the defendant made by its agent, but is the individual contract of H. B. Kohler Company. The contract authorizes the plaintiff to insert an advertisement for a term of fifteen weeks. It further provides:

“ This advertisement is to be charged for at the rate of

“ $25. per issue, less fifteen per cent commission. Bills to be rendered monthly payable thirty days.

One copy of every issue containing advertisement must be mailed to H. B. Kohler, Advertising Agency.

‘‘ H. B. Kohler Advertising Agency,
Per C. B. Kohler.”

The complaint alleges that the rate of payment was Twenty-five dollars per week, less 15% commission to said H. B. Kohler Advertising Agency.” We, therefore, have a case where the H. B. Kohler Company makes a contract in its own name, and for a fixed price, including a commission to itself. In my opinion, even though the work was to redound to the advantage of a known client, this contract was a personal contract, made by the Kohler agency in its own name and for its own benefit, and for which the client is no more responsible than for the contract of any other independent contractor.

If, however, these views are incorrect, and the defendant can be considered a disclosed principal, then the judgment should still be affirmed. We have here a contract made by the agent in his own name; bills to be rendered monthly to him, and these bills to be made subject to a reduction of the amount of a commission to him. In addition, the proof shows that bills were actually sent to the agent from December to February, and payment demanded of the agent, while no demand was apparently made upon the defendant until March sixth. This evidence, standing alone, certainly shows exclusive credit to the agent. The only other evidence that I find in the record which could in any way be considered as having any material bearing on this question is the testimony of the witness Latham that on March 6th he said to defendant: “Well, I’d like to have some payment on account.” Defendant then said: “ Well, I understand that Mr. Kohler has not been paying all his advertising bills, and that he has overdrawn his account with me, quite considerable, but I am disposed to further help him out,” and that, after some further conversation, Latham told the defendant that the advertisement was still running in the Lafayette college weekly for him, and after Latham asked defendant for a substantial payment on account the defendant made a memorandum of the amount of the debt on the back of a card.

I do not think that the demand made after Kohler had failed to pay his bills for months, and had left the city, is sufficient to raise any question of fact in this ease. The only reasonable inference is that the plaintiff recognized only the agent, and gave him exclusive credit until the agent proved irresponsible. If, however, conflicting inferences can be drawn from this testimony, then we must affirm the judgment which resolves the conflict in favor of the defendant.

Judgment should be affirmed, with costs.

Judgment reversed and new trial ordered, with costs to appellant to abide event.  