Antrim Lumber Co. v. Oklahoma State Bank
| Citation | 162 P. 723,65 Okla. 25,1916 OK 945 |
| Decision Date | 14 November 1916 |
| Docket Number | 8199. |
| Parties | ANTRIM LUMBER CO. v. OKLAHOMA STATE BANK. |
| Court | Oklahoma Supreme Court |
Rehearing Denied Jan. 30, 1917.
Syllabus by the Court.
Under the evidence of this case, the plaintiff being entitled to an instructed verdict, the failure of the trial court to instruct the jury upon the issues and the law applicable thereto is not reversible error.
If a principal, after he has knowledge that money used in his business was loaned to his agent upon a promissory note to which the agent, without authority, had signed the principal's name, retains the money obtained by means of said note, he thereby ratifies the unauthorized act of the agent, and is liable to the lender upon the note.
Commissioners' Opinion, Division No. 4. Error from District Court, Garfield County; James B. Cullison, Judge.
Action by the Oklahoma State Bank against the Antrim Lumber Company. Judgment for plaintiff, and defendant brings error. Affirmed.
H. G McKeever and Frederick L. Brimi, both of Enid, for plaintiff in error.
Hills & Manatt, of Enid, for defendant in error.
The parties will be referred to as plaintiff and defendant according to their position in the lower court. The defendant is a corporation operating various lumber yards, one of which is located at Enid, Okl. In 1912 J. P. McWilliams was local agent in charge of its Enid yard, with supervision and control of defendant's business at that point, his duties including the collection of moneys due the defendant depositing the same, the drawing of checks in the name of defendant for the payment of the bills and expenses of the defendant, and general supervision of the bank account of the defendant for that yard, but said agent was without authority to borrow money or execute promissory notes in the name of the defendant, or to sign the name of the defendant to any such notes. On March 8, 1912, the said McWilliams, to protect an overdraft of defendant, executed a note to the plaintiff bank, in the sum of $800 due May 8th following, signing the said note, "Antrim Lumber Company, per J. P. McWilliams, G. Mgr." The amount of said note was credited upon the books of the bank to the defendant, Antrim Lumber Company. At the time this note was executed the said J. P. McWilliams was an embezzler, and short in his accounts with the defendant for several thousand dollars, which fact at that time was unknown to defendant, but knowledge of which was ascertained by it very soon thereafter. Subsequently said McWilliams in his own behalf made payments upon said note, reducing it to the sum of $590, for which amount, plus interest and attorney's fees, this suit was instituted. The petition is in the ordinary form, alleging the note to have been executed by the defendant through its general manager, the said J. P. McWilliams. The answer denies that the defendant ever made the note, denies that it received credit by reason of said note, denies the authority of the said McWilliams to make the note for the defendant, and denies that it ratified the note. There is no particular controversy about the facts. It is not contended by the plaintiff that the agent, McWilliams, had any authority to execute the note in the name of the defendant, and it is not controverted by the defendant that upon the making of the note the proceeds were placed upon the books of the bank as a credit to defendant, nor is it claimed that the plaintiff at the time had any knowledge that the said McWilliams was an embezzler and short in his accounts with the defendant. The plaintiff here insists that, as the defendant received and used the entire proceeds of the note, it is thereby better off financially for the full amount of the moneys received than if the loan had not been made, and that the defendant cannot retain the benefits of the transaction and at the same time repudiate the acts of the agent in executing the note; that by retaining and using the money through its agent, the defendant as a matter of law is charged with knowledge, and thereby ratified the transaction and is liable to the lender.
The defendant, on the other hand, contends that as the note was made without any authority from defendant to cover an overdraft which would not have existed except for the embezzlement of McWilliams, that the placing of the amount of the note to the credit of the defendant on the books of the bank, such credit being insufficient to make good the shortage of said McWilliams, was a mere book transaction and does not constitute benefits moving to the defendant.
The case was tried to a jury, and upon the conclusion of the evidence the court advised the jury that the evidence was insufficient to return a verdict for defendant, and directed them to return a verdict for the plaintiff, but concluded by telling the jury that they were not bound by this instruction and might return a different verdict. The defendant's counsel then asked that instructions be given the jury, and permission be granted counsel to argue the case. No instructions were given, but both defendant and plaintiff were permitted by the court to, and did, argue the case to the jury. The failure to give instructions was excepted to by the defendant. This proceeding was error. The court either should have granted a peremptory instruction to return a verdict for the plaintiff, or, if the matter was one to be submitted to the jury, should have instructed the jury upon the issues and the law governing the same, and have submitted the matter for their deliberation in an orderly manner.
However, if the undisputed evidence and the law applicable thereto are such that there was no question of fact for the jury and a verdict, if returned for defendant, would not have been permitted to stand, this error is immaterial. Shawnee National Bank v. Wootten & Potts, 24 Okl. 425, 103 P. 714; Western Union Tel. Co. v. Blackwell Mill & Ele. Co., 24 Okl. 535, 103 P. 717, 138 Am. St. Rep. 893.
Then the question, under the admitted facts, is, Was the plaintiff entitled to an instructed verdict in its favor? This question is to be answered by determining whether or not the defendant, by retaining the proceeds of the note in controversy, is liable to the lender upon the note. It appears to us that a mere statement of the transaction demonstrates clearly that the defendant received the benefit of the note. The case of Merchants' National Bank v. Nichols & Shepard Co., 223 Ill. 41, 79 N.E. 38, 7 L. R. A. (N. S.) 752, cited by defendant in support of its contention to the contrary, is specious, but not sound, against the weight of authority, and this court will not follow it.
The general rule that a principal cannot receive and retain the benefits of a transaction and at the same time deny the authority of the agent by whom it was consummated has been generally followed by the courts. Bank of Lakin v. National Bank of Commerce, 57 Kan. 183, 45 P. 587, and authorities cited; Perkins v. Boothby, 71 Me. 91; First National Bank v. Oberne et al., 121 Ill. 25, 7 N.E. 85; Watson et al. v. Bigelow et al., 47 Mo. 413; McDermott v. Jackson, 97 Wis. 64, 72 N.W. 375; Willis v. St. Paul Sanitation Co. et al., 53 Minn. 370, 55 N.W. 550; Flower v. Commercial Trust Co., 223 F. 318, 138 C. C. A. 580; Kirklin v. Atlas Savings & Loan Ass'n, 107 Ga. 313, 33 S.E. 83; Mundorff v. Wickersham, 63 Pa. 87, 3 Am. Rep. 531; Rosenthal et al. v. Hasberg (Sup.) 84 N.Y.S. 290. Numerous other cases are cited in the brief of counsel, which, in a general way, sustain the doctrine just announced and which are analogous, but not directly in point on the state of facts in this case, among which may be cited: Blakley v. Cochran, 117 Mich. 394, 75 N.W. 940; Ottawa Northern...
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