Becker Company v. Clardy

• Decision Date: 08 February 1910
• Court: Mississippi Supreme Court
• Parties: BECKER COMPANY v. DANIEL A. CLARDY

51 So. 211

96 Miss. 301

BECKER COMPANY v. DANIEL A. CLARDY

Supreme Court of Mississippi

February 8, 1910

October, 1909

FROM the circuit court of Oktibbeha county, HON. JOHN H. MITCHELL Judge.

Clardy appellee, was plaintiff in the court below; the Becker Company, appellant, a corporation, was defendant there. From a judgment for $ 700, predicated of a peremptory instruction in plaintiff's favor, the defendant appealed to the supreme court. The opinion of the court states the facts.

Reversed and remanded.

A. J. Rose, for appellant.

It is clear that Stanion had no authority to make a binding contract of sale, and when appellee took the first order from Stanion, which was sent to appellant for its approval, and by it rejected, the appellee knew from this fact alone that Stanion could take no orders which were not subject to acceptance or rejection by appellant. When appellee gave his second order on April 4, 1908, he did so with knowledge that his first order for the same kind of soda fountain, with the same specifications, finish, price, and on the same terms, had been previously rejected by appellant. That appellee did know this is shown by his own testimony and by his own telegram which he sent on the day he gave the second order saying "we want you to confirm the contract." Because appellant had refused to accept the first order appellee believed it necessary on the day he gave the second order, to request a confirmation of the drummer's action. Appellee knew that appellant reserved the right to approve or reject the orders taken by its drummer because appellee had knowledge that appellant had refused an order previously given by him to the drummer for exactly the same property under exactly the same circumstances. He then asked for a confirmation of the drummer's action by a telegram to appellant. It is clearly shown by this evidence that appellee had knowledge of the limitations imposed upon the drummer in reference to his power to bind appellant.

The writing was a mere request, or proposal, which was not binding until accepted or acted upon by appellant. McCormick Harvester Mach. Co. v. Richardson (Iowa), 56 N.W. 682.

In Baker v. Kellett, etc., Co., 84 S.W. 661, the defendant's soliciting agent took an order for machinery from plaintiff, which defendant refused to accept, and in an action to recover the difference between the price thereof and what plaintiff had to pay for other machinery, it appeared that the agent had no authority to take an absolute order, but could only take orders subject to defendant's approval. Held, that the plaintiff could not recover without showing that the agent had authority, express or implied, to make absolute contracts of sale, or that defendant held the agent out to him or the general public as having such authority.

In Brown Grocery Co. v. Beckett (Ky.), 57 S.W. 458, the court says: "The general rule is that the acts of an agent bind his principal within the scope of his apparent authority, but that the principal is never bound where the person dealing with the agent knows, or has reason to know, that the agent is exceeding his authority or is perpetrating a fraud on his principal."

In the absence of special authority to bind his principal, the drummer can merely solicit and transmit orders, and the contract of sale does not become complete until the order is accepted by the principal. It has been held that, when the purchaser completes his transaction with the drummer, no binding contract has been made, nor any sale, absolute or conditional, and that the purchaser may countermand the order at any time before the goods are shipped, or the principal may refuse to accept the order; that it is a mere proposal, to be accepted or not as the principal sees fit, and may be withdrawn by the purchaser at any time before its acceptance. See McKindly v. Dunham, 55 Wis. 515, 13 N.W. 485; Bensberg v. Harris, 46 Mo.App. 404; 6 Am. & Eng. Ency. of Law (2d ed.), 227.

The case of Matthews Apparatus Co. v. Renz (Ky.), 61 S.W. 9, is a very similar case. In that case appellant's travelling salesman took from appellee an order for a soda fountain, to be shipped by appellant in the future at a price of $ 1,200. Part of the purchase price was to be satisfied by two old soda fountains to be taken in exchange by appellant at $ 900 and $ 300 in cash on August 15, 1896. This order was given March 17, 1896, describing the property and stating the terms of payment. Within seven days after the giving of the order, appellant, through its salesman, notified appellee that it declined the proposition and would not fill the order. After a correspondence about one month later the appellee filed his suit for damages asserting that the instrument was a binding contract between the parties, alleging its breach by appellant and claiming to have suffered damages to the extent of $ 400 by the alleged breach. The law and facts were submitted to the court without a jury, and, judgment having been rendered for appellee in the sum of $ 200 damages, the case was brought before the court of appeals of Kentucky for review. This latter court held that, in the absence of special authority to bind his principal, the drummer can merely solicit orders, and that the contract of sale does not become complete until the order is accepted by the principal, citing Brown Grocery Co. v. Beckett (Ky.), 57 S.W. 458.

In support of the above view, we cite Scarrett-Comstock Furniture Co. v. Hudspeth (Okla.), 91 P. 843; Gould v. Cates Chair Co., 41 So. 675; Busby v. Y. & M. V. R. R. Co., 90 Miss. 13; Peck v. Frieze, 59 N.W. 600; Mechem, Sales, § 254.

The agent had no apparent authority when he took this order on April 14, 1908. The doctrine of apparent authority can be invoked only by one who has been misled to his detriment by the appearance of authority in an agent with whom he deals, though not existing in fact. Betterson v. Neal (Ala.), 33 So. 39, 40.

Carroll & Magruder, for appellee.

Appellee is entitled to recover in this case for the following reasons: (1) Because the contract for the soda fountain executed by appellant's salesman, Stanion, and appellee, was within the scope of the salesman's authority. (2) Because appellant, by its literature, correspondence and contract blanks, held Stanion out to the world as its salesman and authorized agent. (3) Because appellant, by its course of dealing with appellee, is estopped from denying Stanion's authority. (4) Because appellant ratified the contract executed by its salesman, Stanion, by receiving the payment of $ 100 tendered by appellee as evidence of his intention to fulfill the contract, and retaining the same period for a period of six days, being in full possession of the terms of the contract.

The transaction between appellant company and appellee began during the latter part of March, 1908. Appellant was represented during all negotiation by Stanion. He was supplied with all necessary blanks, contract forms, for the making of contracts. There was nothing said or done by Stanion to put appellee upon inquiry as to the extent of Stanion's authority. Agency does not depend upon the intentions of the parties, nor upon their private agreements. It depends upon the facts and the relations of the parties. The salesman who acts within the scope of his authority is an agent, no matter what may be his secret agreement with his principal.

Independently of the fact that Stanion was acting...