Canyon State Canners v. Hooks, 5459

• Decision Date: 28 April 1952
• Docket Number: No. 5459,5459
• Citation: 243 P.2d 1023,74 Ariz. 70
• Parties: CANYON STATE CANNERS, Inc., v. HOOKS.
• Court: Arizona Supreme Court

Page 1023

243 P.2d 1023

74 Ariz. 70

CANYON STATE CANNERS, Inc., v. HOOKS.

No. 5459.

Supreme Court of Arizona.

April 28, 1952.

Richey & Herring, of Douglas and Tucson, for appellant.

Wesley E. Polley, of Bisbee, for appellee.

DE CONCINI, Justice.

Appellee, Dan T. Hooks, hereinafter referred to as plaintiff, brought suit against Canyon State Canners, a corporation, appellant herein and defendant below, for breach of an alleged oral contract to sell sweet potatoes to the defendant cannery. A judgment of $800 was returned in favor of the plaintiff who had sued for $2,400. Defendant appeals to this court from that judgment and from the denial of its motion for a new trial.

Plaintiff at the time this action was commenced was a farmer engaged in growing various vegetable crops such as tomatoes, chili, sweet potatoes and corn in the Sulphur Springs valley near Douglas, Arizona. Defendant, an Arizona corporation, was engaged in the canning of various vegetables grown locally by the farmers. The cannery entered into contracts with the farmers of that area to buy their produce for canning. Plaintiff contends that he entered into a verbal contract with defendant for the sale of sweet potatoes to be grown by him, through the defendant's plant manager, Mr. Kermit Day. The defendant failed to accept for delivery to it plaintiff's sweet potatoes; therefore plaintiff contends that since no timely notice of breach was given to him by the defendant the sweet potatoes were spoiled and rendered practically worthless.

The defendant makes five assignments of error which will be discussed in the order presented. Defendant's first assignment of error states that the evidence did not show an actual or an implied agency on the part of Day.

There are two main types of agency, one actual, and the other ostensible or apparent. 1 Mechem on Agency, 2d Ed., 37, sec. 57. The authority of an actual agent can be either express, or implied. If there is evidence that the principal sought to be charged has delegated authority to the supposed agent by oral or written words which authorize him to do a certain act, or series of acts, then the authority of the agent is express. If there is no evidence of express authority, then the next question is whether the agent possesses implied authority. The test of whether implied authority exists is well-stated in 2 C.J.S., Agency, § 23, pp. 1045, 1046, where it is said:

'The relation of agency need not depend upon express appointment and acceptance thereof, but may be, and frequently is, implied from the words and conduct of the parties and the circumstances of the particular case. If, from the facts and circumstances of the particular case, it appears that there was at least an implied intention to create it, the relation may be held to exist, notwithstanding a denial by the alleged principal, and whether or not the parties understood it to be an agency. * * * 'An implied agency must be based on facts for which the principal is responsible; they must, in the absence of estoppel, be such as to imply an intention to create the agency, and the implication must arise from a natural and reasonable, and not from a forced, strained, or distorted, construction of them. They must lead to the reasonable conclusion that mutual assent exists, and be such as naturally lead another to believe in and to rely on the agency. * * *'

If no actual agency is disclosed then the court must search the record to see if the evidence is sufficient to find that the agent had ostensible or apparent authority to bind his principal.

The ostensible agent is one where the principal has intentionally or inadvertently induced third persons to believe that such a person was its agent although no actual or express authority was conferred on him as agent. 2 Am.Jur., Agency, 82, 83, sec. 101. The case of Lois Grunow Memorial Clinic v. Davis, 49 Ariz. 277, 66 P.2d 238 subscribes to that principle.

Mr. Penny, president of the defendant corporation, testified that if any farmer wanted to talk to some member of the cannery about selling sweet potatotes he would send him to Mr. Day, and Day had authority to talk about these matters. The record clearly shows that Mr. Day had either implied authority, and or, apparent authority to contract with plaintiff. There is a conflict in the evidence as to whether Mr. Penny did in fact refer plaintiff to Mr. Day for the purpose of talking about a contract to buy and can sweet potatoes. There is no dispute that Day was the manager of the cannery, and that the business of the cannery was buying and canning the various produce grown in the valley. Plaintiff testified that the defendant supplied him 40,000 potato plants together with other supplies. Defendants admitted they supplied 15,000 plants and other supplies. The procurement and furnishing of these plants by Day as manager is evidence of his authority to deal with sweet potato growers. There was some conflict in the evidence as to Day's authority; however the trial court found in favor of plaintiff, and on such evidence we will not disturb its judgment.

Defendant's second assignment of error is predicated on the theory that since the evidence showed no agency, the authority of Day could not be proved by parties other than the principal. Krug and Franklin, other farmers in the area, testified that they made similar verbal contracts to those of plaintiff. Defendant relies on the case of Brutinel v. Nygren, 17 Ariz. 491, 154 P. 1042, L.R.A.1918F, 713. That case can be distinguished, because here, the evidence did establish an agency independent of the testimony of...