Chamberlain v. the Amalgamated Sugar Co.

• Decision Date: 01 June 1926
• Citation: 247 P. 12,42 Idaho 604
• Parties: DAVID CHAMBERLAIN, Respondent, v. THE AMALGAMATED SUGAR CO., a Corporation, Appellant
• Court: Idaho Supreme Court

247 P. 12

42 Idaho 604

DAVID CHAMBERLAIN, Respondent, v. THE AMALGAMATED SUGAR CO., a Corporation, Appellant

Supreme Court of Idaho

June 1, 1926

APPEAL AND ERROR-PRINCIPAL AND AGENT-IMPLIED AUTHORITY-DECLARATIONS OF AGENT-BURDEN OF PROOF-ASCERTAINMENT OF AGENT'S AUTHORITY - ABSENCE OF RATIFICATION - THEORY OF ESTOPPEL INAPPLICABLE.

1. In action for damages for breach of alleged contract to haul rock, admitting evidence of conversation between defendant's foreman and third parties as to foreman's desire to hire somebody to haul rock was erroneous, and prejudicial.

2. Evidence held insufficient to support verdict for damages for breach of contract to haul rock on theory of implied authority of defendant's quarry foreman to enter into contract.

3. "Implied authority" is that which principal intends his agent to possess, and which is implied from principal's conduct.

4. It is conduct of principal and not of agent that binds principal.

5. Declarations of agent alone are insufficient to prove grant of power exercised by him and to bind his principal to third parties.

6. Burden is on plaintiff alleging contract of hiring entered into with defendant's foreman to show that making of contract was within scope of foreman's authority.

7. Person dealing with an agent must ascertain extent of his authority from principal or some person having motive to tell the truth, and cannot rely on agent's statement or assumption of authority or on presumption of authority.

8. Person contracting with foreman, knowing he had no authority to make written contract, was bound to inquire as to extent of foreman's authority.

9. To constitute ratification, principal must know all material facts relative to unauthorized act.

10. Where corporation, immediately on learning of contract by foreman, repudiated his acts, and refused to become party to contract, it did not ratify foreman's acts.

11. Where person entered into contract with quarry foreman knowing he had no authority to make written contract recovery for breach thereof cannot be had on theory of estoppel because of acting in good faith and in exercise of reasonable prudence and caution.

APPEAL from the District Court of the Sixth Judicial District, for Butte County. Hon. Ralph W. Adair, Judge.

Action for damages for breach of alleged contract of hiring for a definite time. Judgment for plaintiff. Reversed.

Judgment reversed, costs to appellant.

Walters & Parry and J. R. Keenan, for Appellant.

Implied authority is to be inferred only from facts for which the principal is responsible. (Skelly Oil Co. v. Pruitt &amp McCrory, 94 Okla. 232, 221 P. 709; Columbia Mill Co. v. Natl. Bank of Commerce, 52 Minn. 224, 53 N.W. 1061.)

Apparent power of an agent is determined by acts of the principal and not by acts of the agent. (Wierman v. Bay City-Michigan Sugar Co., 142 Mich. 422, 106 N.W. 75; Reinforced Concrete Co. v. Boyes, 180 Mich. 609, 147 N.W. 577; Anderson v. Patten, 157 Iowa 23, 137 N.W. 1050; Brown v. Brown, 96 Ark. 456, 132 S.W. 220; Madill v. Spokane Cattle Loan Co., 39 Idaho 754, 230 P. 45.)

No estoppel arises against principal if third party knows that no authority in fact exists, or should, as a reasonably prudent man, have known that fact as an implication from facts actually known. (In re Thomas, 199 F. 214, 233.)

The party dealing with an agent is bound at his peril to ascertain the extent of agent's authority. (Moore v. Skyles, 33 Mont. 135, 114 Am. St. 801, 82 P. 799, 3 L. R. A., N. S., 136; Swindell v. Latham, 145 N.C. 144, 122 Am. St. 430, 58 S.E. 1010.)

The fact that an agent is required to refer some detail to principal is a fact putting third persons on inquiry as to powers of agent. (Sigel-Campion Livestock Com. Co. v. Ardohain, 71 Colo. 410, 207 P. 82.)

To constitute ratification of agent's unauthorized contract, it is essential that the principal at the time of the acts relied upon as constituting ratification, should have full knowledge of all material facts relative to the unauthorized act, or that someone authorized to represent the principal except the agent have such knowledge. (2 C. J. 476; Columbia Nat. Bank v. Rice, 48 Neb. 428, 67 N.W. 165; Schollay v. Moffitt-West Drug Co., 17 Colo. App. 126, 67 P. 182; T. W. & L. O. Naylor Co. v. Bowman, 39 Idaho 764, 230 P. 347; Blackwell v. Kercheval, 29 Idaho 473, 160 P. 741; Bartlett v. L. Bartlett & Son Co., 116 Wis. 450, 93 N.W. 473.)

A third party may presume that corporate officers have the powers claimed, only when such officers have the general direction of the affairs of the corporation. (Western Investment & Land Co. v. First Nat. Bank, 23 Colo. App. 143, 128 P. 476.)

That the act of an agent of a corporation binds the corporation requires not only the showing of official position but also that the principal has previously so conducted the business as to justify the belief on the part of the third party that the agent has the authority he assumes to exercise and the third party acts upon such belief so inspired. (Ames v. D. J. Murray, 114 Wis. 85, 89 N.W. 836; Langston v. Postal Tel. Cable Co., 6 Ga.App. 833, 65 S.E. 1094; Parr v. Northern Elec. Co., 117 Wis. 278, 93 N.W. 1099.)

Authority of an agent cannot be proved by his own declarations. (Mitchell v. McCollister, 93 Okla. 203, 220 P. 631; Motor Car Sales Co. v. Brown, 115 Kan. 344, 223 P. 309; Cupples v. Stanfield, 35 Idaho 466, 207 P. 326.)

Evidence of representations made by defendant to strangers to action are not admissible to prove that a defendant made similar representations to plaintiff. (1 Jones (Horwitz) on Evidence, 697-698.)

A. S. Dickinson, for Respondent.

The contract of an agent in excess of his authority may be ratified by the principal, and if appellant's agent did exceed his authority, as claimed in this action, the appellant ratified his unauthorized act by permitting the respondent to perform labor and pay for same under the terms of such contract as shown by the evidence. (21 R. C. L., sec. 34, p. 854, and sec. 81, p. 904; Bevercombe v. Denny & Co., 40 Idaho 34, 231 P. 427; Madill & Miller v. Spokane Cattle Loan Co., 39 Idaho 754, 230 P. 45.)

Where a principal by act or conduct has knowingly permitted another to appear to be his agent, either generally or for a particular purpose, he will be estopped to deny such agency to the injury of third persons, who have in good faith and in the exercise of reasonable prudence and caution dealt with such agent on the face of such an appearance, and within the scope of his apparent authority. (Morgan v. Neal, 7 Idaho 629, 97 Am. St. 264, 65 P. 66; Bank of Ukiah v. Mohr, 130 Cal. 268, 62 P. 511; Campbell v. Gowans, 35 Utah 268, 19 Ann. Cas. 660, 100 P. 397, 23 L. R. A., N. S., 414, and note; Nicholas v. Title & Trust Co., 79 Ore. 226, Ann. Cas. 1917A, 1149, 154 P. 391, and note.)

If an act done by an agent is within the general scope of the authority with which he has been clothed by his principal, it matters not that it is directly contrary to the instructions of the principal, who will nevertheless be held liable to a third person who has acted in good faith and with ordinary prudence and caution. (21 R. C. L., sec. 81, p. 904; Lakeshore etc. Railroad Co. v. Foster, 104 Ind. 293, 54 Am. Rep. 319, 4 N.E. 20; Rickards v. Rickards, 98 Md. 136, 103 Am. St. 393, 56 A. 397, 63 L. R. A. 724; Barber v. Britton, 26 Vt. 112, 60 Am. Dec. 301.)

Where the evidence produced is susceptible to having different conclusions drawn from it by reasonable men as to whether, or to what extent an agent's authorized act has been ratified, it is a question for the jury. (Blackwell v. Kercheval, 27 Idaho 537, 149 P. 1060; Horton v. Early, 39 Okla. 99, Ann. Cas. 1915D, 825, 134 P. 436, 47 L. R. A., N. S., 314.)

The authority which a principal holds an agent out as possessing, or which he permits the agent to represent that he possesses, governs mutual rights and liabilities as between the principal and third persons and the principal is estopped to deny such authority. (Hudson v. Carlson, 31 Idaho 196, 170 P. 100; Hammitt v. Virginia Min. Co. , 32 Idaho 245, 181 P. 336.)

BUDGE, J. Wm. E. Lee, Givens and Taylor, JJ., concur.

OPINION

BUDGE, J.

Respondent alleges in his complaint that appellant is a corporation duly authorized to transact business in this state; that on or about April 1, 1922, appellant and respondent entered into an agreement by the terms of which respondent agreed to furnish teams and wagons with which to haul lime rock from appellant's quarry, located near Arco, to the railroad siding near said quarry, and to load the same on cars, the minimum amount to be hauled and loaded to be 100 tons per day for a period of not less than six months, and that appellant contracted and agreed to pay the respondent therefor the sum of 35 [cent] per ton for every ton hauled and loaded; that on April 12, 1922, respondent entered upon the discharge of his duties under the contract and continued to work thereunder until May 22, when appellant wrongfully breached said contract and without cause discharged the respondent and refused to permit him further to proceed thereunder; and damages are prayed for by reason of the breach of the contract.

In its answer appellant admits its corporate capacity and right to do business in this state, but denies specifically that it entered into the contract as alleged in respondent's complaint by the terms of which it was to furnish respondent any definite amount of rock to be hauled per day for any definite period of time; admitting, however, that it did agree to pay to the respondent the sum of 35 [cent] per ton for such rock as he might haul for the appellant; and admitting further that respondent did haul a certain quantity of rock, for which he...