Austin-Western Road Mach. Co. v. Commercial State Bank

• Decision Date: 05 November 1923
• Docket Number: No. 14349.,14349.
• Citation: 255 S.W. 585
• Parties: AUSTIN-WESTERN ROAD MACHINERY CO. v. COMMERCIAL STATE BANK.
• Court: Missouri Court of Appeals

255 S.W. 585

AUSTIN-WESTERN ROAD MACHINERY CO. v. COMMERCIAL STATE BANK.

No. 14349.

Kansas City Court of Appeals, Missouri.

November 5, 1923.

Appeal from Circuit Court, Adair County; James A. Cooley, Judge.

"Not to be officially published."

Action by the Austin-Western Road Machinery Company against the Commercial State Bank. From a judgment for defendant, plaintiff appeals. Reversed and remanded.

W. F. Frank and Chas. E. Murrell, both of Kirksville, for appellant.

Higbee & Mills, of Lancaster, for respondent.

TRIMBLE, P. J.

Plaintiff, a road machinery company of Chicago, sued the Commercial Bank of Kirksville, Mo., to recover the sum of $1,066.50, the amount of a warrant issued by the city of Kirksville to the plaintiff in payment of a road oiler purchased by the city from plaintiffs which defendant is alleged to have converted.

The city warrant in question was issued August 1, 1921. The sale of the road oiler to the city had been effected through plaintiff's sales agent, W. P. Bryson; who thereupon took the warrant to the Commercial State Bank and there indorsed upon it the plaintiff's name by him as agent, and received in exchange for it a draft payable to him. What he did with it, whether he remitted to the plaintiff the amount of the draft less his commission, is nowhere disclosed by the record. The evidence in the record, to the effect that Bryson remitted to the plaintiff the amount of the draft less his commission and that plaintiff accepted it, refers to another warrant and not to the one in controversy.

The defense was that Bryson, for a long period of time, had been engaged in the practice of accepting warrants, checks, drafts, etc., payable to plaintiff for machinery Bold by him as agent, and of indorsing and cashing the same with the knowledge and acquiescence of the plaintiff, and that Bryson was authorized to collect for machinery cold by him and to indorse the paper issued therefor that the warrant in question was taken for machinery sold to the city by him, and that, in the line of his duty and within the scope of his authority, and following his custom of many years' standing, which was well known to, and approved and ratified by, plaintiff, he indorsed the warrant and Presented it to defendant, and the same was paid to him,

There was a further plea that, by reason of the long course of conduct in holding out Bryson as authorized and as being vested with apparent authority to indorse plaintiff's name, it was estoppel to deny his authority.

Upon a trial being had, the jury found for defendant, whereupon the plaintiff appealed.

For a little over 11 years, with the exception of nearly two years during the war, Bryson had been selling road machinery as plaintiff's agent. During this time and up to July 1, 1917, the territory he had been operating in was Iowa, but thereafter he was not connected with the company for two years and then he began operating in twelve counties in the northeastern part of Missouri. Plaintiff appears to make some distinction between Bryson's agency contract while in Iowa and his contract while is Missouri, but no difference appears in the record; and, since the Iowa agency contract was in plaintiff's possession, yet was not introduced, we cannot assume or infer there was any difference, especially as the two contracts for 1920 and 1921, which were introduced in evidence, show they are upon a regular form of printed blank agency contract. In plaintiff's brief it is stated that Bryson in Iowa was sales manager, while in Missouri he was a local salesman. But the evidence is that he was selling machinery in Iowa, and, while he had a number of people working under him over whom he had supervision, this is not of itself sufficient to show that his authority to indorse and cash checks, warrants, or drafts given in payment for machinery sold by him was any more extensive than in the contracts that were introduced. Besides, the objection to Bryson's evidence as to the authority he had was not based upon any difference in contracts, nor was any difference asserted, but when Bryson was asked as to his habit of indorsing checks or warrants payable to the company, which he received during the time of his employment, no objection in form was made, plaintiff merely requesting that "that question be limited to his contracts in Missouri." However, the question was not as to what his authority under the contract actually was, but what he in fact did in reference to the custom of indorsing and cashing warrants payable to the company. Since the law is that there is no implied authority in a selling agent to indorse his principal's name on paper payable to the principal and received by the agent on settlements for sales, if the plaintiff would seek to avoid the effect of the agent's known and acquiesced-in custom of indorsing them, by showing that the contract then authorized him to do this, the plaintiff should have introduced such contract. There is no intimation that there was any difference in the contracts, and that there is any difference is negatived by the instructions given by the plaintiff's assistant general manager to Bryson, relative to the course to be pursued when receiving a draft payable to the company, that he should "use his own judgment" in taking them and cashing them.

The evidence discloses that the defendant bank had no knowledge of previous indorsements made by Bryson, nor of the course pursued in that regard by him with the knowledge of his principal; hence the defense of estoppel, based upon a holding out of Bryson with apparent authority to indorse drafts and warrants, cannot be maintained, since there can be no estoppel by a holding out, unless the other party has been misled thereby to his hurt or disadvantage. Maxey v. Heckethorn, 44 Ill. 437; Rawson v. Curtiss, 19 Ill. 456; Heffernan v. Boteler, 87 Mo. App. 316, 321.

But while the defense of estoppel on the ground of holding out Bryson as an agent clothed with apparent authority is not sustained because of the bank's lack of knowledge thereof, still that does not prevent the other defense from prevailing, namely, that he had actual authority to indorse checks and warrants, although made payable to the company, provided the evidence is sufficient for that purpose.

As to whether Bryson in fact had actual authority, we think that is not to be flatly and conclusively determined from the written contract existing between them, but rather from what Bryson actually did and was allowed to do, through a long course of time, with the knowledge and acquiescence of the plaintiff. Of course, in the absence of any other circumstances to the contrary, the written contract is the final arbiter of the power possessed by the agent; but if, without regard to what the parties actually did thereunder, a written contract must conclusively determine the powers with which an agent is invested, then it would he indeed an easy matter to limit and absolutely fix those powers in writing and then allow him elastic powers in fact, which could be made available whenever it was advantageous to the principal to do so. and repudiated whenever it was to the principal's interest to do that.

Aside from the notice which the law introduced as to a selling agent's lack of authority to indorse his principal's name on paper payable to it and received in a sale by the agent, the defendant bank did not know that the agent was without such authority. By this we merely mean to say that defendant did not actually know what the terms of the agent's written contract were.

The agency contracts which were introduced in evidence being the same, a reference to the terms of...