Anderson v. Adams

• Decision Date: 16 November 1903
• Citation: 74 P. 215,43 Or. 621
• Parties: ANDERSON v. ADAMS. [*]
• Court: Oregon Supreme Court

74 P. 215

43 Or. 621

ANDERSON v. ADAMS. ^[*]

Supreme Court of Oregon

November 16, 1903

Appeal from Circuit Court, Klamath County; Henry L. Benson, Judge.

Action by R.C. Anderson against J.F. Adams. From a judgment for plaintiff, defendant appeals. Affirmed.

This is an action to recover damages from an agent for the breach of an agreement claimed to have been made in excess of his authority. It is alleged in the complaint, in substance: That about February __, 1898, the defendant, representing that he was the authorized agent of one Jesse D. Carr, entered into an oral agreement whereby he leased to plaintiff, until October 15th of that year, 120 acres of land in Klamath county, stipulating to construct all ditches necessary, and furnish water sufficient to irrigate a crop of wheat to be grown thereon, in consideration of which plaintiff agreed to plow the land, sow the grain, properly care for and tend the same, and at threshing time deliver to defendant and Carr, at Brandon Bros.' mill at Merrill, in said county one-fourth of the grain so raised; Carr to have all the straw, and the right to pasture said leased land after the threshing. That, in pursuance of said agreement, and relying upon and believing the representations of the defendant that he was the authorized agent of Carr, and that he had full authority to make said contract, plaintiff entered into possession of said premises, put in the crop, and in all respects fully complied with the terms and conditions of the agreement, so far as he was permitted by the defendant and Carr. That the land so leased is situated in an arid region unproductive without irrigation, which was well known to Carr and the defendant, who, though often requested so to do failed to furnish water to irrigate said land during the season of 1898, by reason whereof said crop dried up and became a total failure. That if water had been furnished sufficient for such irrigation, plaintiff would, after paying all expenses, have realized from his share of the crop $1,185, in which sum he was damaged by the failure of defendant and Carr to keep and perform the conditions of said agreement, no part of which sum has been paid. That Carr, denying the authority of the defendant to make said contract, has repudiated the same, and plaintiff alleges that defendant entered into it in the name of Carr without authority. Judgment is demanded for the sum of $1,185, with interest from February __, 1898, at the rate of 8 per cent. per annum. A demurrer to the complaint on the ground that it did not state facts sufficient to constitute a cause of action, and that two causes were improperly united, having been overruled, an answer was filed, denying the material allegations of the complaint, and, for a further defense, setting out what purports to be a copy of the lease of said premises, prepared by the defendant, but not signed by the parties, wherein it is stipulated that the lessor would furnish water from the Little Klamath Ditch sufficient to irrigate said tract, where practicable. For a second defense it is alleged that the spring and summer season of 1898, in the vicinity of said land, was unusually dry, and the drought such as was not contemplated by either party, and could not have been anticipated or provided against by the exercise of ordinary diligence or foresight, and by reason thereof the water supply of the Little Klamath Ditch receded to such an extent that, excepting a small stream, it ceased to flow therein, and could not be furnished therefrom to irrigate the demised premises during the greater part of the irrigating season, but that defendant, as the agent of Carr, furnished to said land all the water that could or would flow in the ditch; "that there was no source of water supply by which said lands, or any part thereof, could have been irrigated through said Little Klamath Water Ditch, during the irrigating season of the year 1898, and that there was no other source of water supply by which it was practicable to irrigate said lands, or any part thereof, during the irrigating season of said year"; that any failure by Carr or the defendant, as his agent, or otherwise, to furnish more water than was supplied, was caused by the act of God, whereby they were excused. For a third defense it is alleged that on March 27, 1898, Carr, at plaintiff's request, loaned him the sum of $75, which he agreed to repay October 15th of that year, with interest at the rate of 10 per cent. per annum from the date of the loan; that no part thereof has been paid; and that, prior to the commencement of this action, Carr, for a valuable consideration, assigned said claim to the defendant, for the amount of which he prays judgment. The reply having put in issue the allegations of new matter in the answer, a trial was had, resulting in a verdict for plaintiff, assessing his damages at $726.75, and awarding him interest thereon at the rate of 6 per cent. per annum from November 13, 1898, amounting, with the principal, to $901.19; and, judgment having been rendered in accordance therewith, the defendant appeals.

J.W. Hamakar, for appellant.

Austin S. Hammond, for respondent.

MOORE C.J. (after stating the facts).

It is contended by defendant's counsel that the complaint does not state facts sufficient to constitute a cause of action, and that the court erred in overruling the demurrer. It is argued that, as no fraud is alleged in the complaint, an action of deceit cannot be founded thereon, and, inasmuch as the damages sought to be recovered are based upon the contract, and not upon the injury resulting from the defendant's alleged want of authority to enter into the agreement, the action cannot be maintained upon the theory of an implied warranty of such authority. Though there is a conflict of judicial utterance in respect to the form of action against an agent who has honestly, but erroneously, exceeded his authority, it has been held in this state that an agent who makes a contract on behalf of his principal in excess of his authority is, on the repudiation of the agreement by the principal, personally liable thereon, though he made no false representations concerning his authority, and, as he impliedly warranted that he was empowered to make the contract, the action will be construed as in contract, instead of in tort. Cochran v. Baker, 34 Or. 555, 52 P. 520, 56 P. 641. In deciding that case, Mr. Chief Justice Wolverton, speaking for the court, said: "The agent, by undertaking to act for another as his principal, tacitly and impliedly represents himself to be authorized, as a matter of fact, to so act, and becomes liable if it appears that he assumed as true that which he did not know to be so. The reason upon which the liability is founded is that the party dealing with a supposed agent is deprived of any remedy upon the contract against the principal. The contract, though in form that of the principal, is not his in fact, and, of course, is not susceptible of enforcement against him; and, as the loss must fall somewhere, it is but a rule of justice that it should be borne by him whose acts made it possible." Though the agent who has exceeded his authority cannot be sued on the contract itself, as a party thereto, unless it contains apt words to charge him (1 Am. & Eng. Ency. Law [2d Ed.] 1128; Story's Agency [9th Ed.] § 264a; Hall v. Crandall, 29 Cal. 567, 89 Am.Dec. 64), an action may be maintained against him on his implied promise that he had authority to bind the principal ( Farmers' Cooperative Trust Co. v. Floyd [Ohio] 26 N.E. 110, 12 L.R.A. 346, 21 Am.St.Rep. 846). This promise is not a part of the agreement supposed to have been entered into with the principal, but independent thereof, and tantamount to an implied warranty that, if a third party will enter into a contract with the agent on behalf of his principal, he will indemnify such party against any loss that he may sustain, if it shall be ascertained that he does not possess the measure of authority which he assumes. Such warranty being impliedly given, it cannot be said that in enforcing it the court makes a new contract for the agent and a third party. We are satisfied with the rule announced in Cochran v. Baker, supra, and think no error was committed in construing the complaint as an action ex contractu on the implied warranty, or in overruling the demurrer.

The plaintiff having submitted his testimony and rested defendant's counsel moved the court for a judgment of nonsuit, on the ground that the action was for the alleged fraud and deceit of the defendant in falsely representing himself to be the agent of Jesse D. Carr, and that he had failed to produce any evidence to support such allegation; but, the motion having been denied and an exception saved, it is contended that an error was thus committed. It is nowhere alleged in the complaint that the defendant "falsely" represented that he was Carr's agent, and, this being so, we do not think the action is in tort for deceit, but in contract for an alleged breach of the defendant's implied warranty. In an action for deceit, the plaintiff must set out in the complaint the representation, and allege the falsity thereof. 8 Ency.Pl. & Pr. 899. To constitute a fraud by false representations, so as to entitle the plaintiff to relief, three things must concur: (1) There must be a knowingly false representation; (2) the plaintiff must have believed it to be true, relied thereon, and have been deceived thereby; and (3) that such representation was of matter relating to the contract about which the representation was made, which, if true, would have been to plaintiff's advantage, but, being false, caused him damage and injury. Rolfes v. Russel, 5 Or. 400; Grangers' Market Co. v. Vinson, 6 Or. 172; Dunning...