Christensen v. Nielson

• Decision Date: 29 March 1929
• Docket Number: 4753
• Citation: 73 Utah 603,276 P. 645
• Court: Utah Supreme Court
• Parties: CHRISTENSEN v. NIELSON

276 P. 645

73 Utah 603

CHRISTENSEN v. NIELSON

No. 4753

Supreme Court of Utah

March 29, 1929

Appeal from District Court, Seventh District, Sanpete County Dilworth Woolley, Judge.

Action by John W. Christensen against N.S. Nielson. Judgment for plaintiff, and defendant appeals.

REVERSED AND REMANDED FOR NEW TRIAL.

King &amp King, of Salt Lake City, for appellant.

L. R Christensen, of Mount Pleasant, for respondent.

STRAUP, J. CHERRY, C. J., and ELIAS HANSEN, EPHRAIM HANSON, and FOLLAND, JJ., concur.

OPINION

STRAUP, J.

This action was brought by the plaintiff to recover damages from the defendant alleged to have grown out of a contract by the terms of which the plaintiff agreed to sell and deliver 1,700 head of fat lambs to the Hauser Packing Company, a corporation, of Los Angeles, Cal. The contract was executed by the plaintiff as the vendor, and as the party of the first part, and by the Hauser Packing Company by the defendant its agent as the vendee or purchaser, the party of the second part. It was the claim of the plaintiff that Nielson was unauthorized to enter into the contract for and on behalf of the packing company, that the company refused to be bound by the contract or to carry out its terms, and thus the plaintiff sought to hold the defendant liable for damages sustained by him. The case was tried to the court, who on findings made rendered judgment in favor of the plaintiff and against the defendant in the sum of $ 4,700. The defendant appeals.

The sufficiency and certainty of the complaint, the sufficiency of evidence to support the findings, and the sufficiency of the findings to support the judgment, are challenged. The complaint is in three counts. The first and third were either dismissed or eliminated. The case proceeded to trial on the second count. It is somewhat uncertain as to the theory on which the complaint proceeds. The substance of it is: That on or about October 10, 1925, the defendant, in Sanpete county, Utah, where both the defendant and the plaintiff resided, "for a good and valuable consideration promised and agreed" with plaintiff that the defendant "was the agent of the Hauser Packing Co., of Los Angeles, Cal., and that as such agent he was authorized to act for and on behalf of the said company in the purchase of or to contract to purchase lambs for delivery between January 1 and March 1, 1926, and that as such agent he was ready and willing and authorized to contract for the purchase of plaintiff's lambs according to the contract attached" to the complaint and made a part thereof. The contract recites that it is an agreement or contract made and entered into October 10, 1925, "by and between John W. Christensen of Fairview, Utah, party of the first part, and Hauser Packing Co., of Los Angeles, Cal., party of the second part"; that the party of the first part "hereby sells and agrees to deliver on board cars at Fairview, Utah, * * * 1,700 head of fat lambs at fourteen cents per pound between January 1 and March 1, 1926," the lambs to be in good healthy shipping condition and free from foreign matter at the time of weighing, and to be weighed with dry fleece after twelve hours in a dry corral without feed or water, or four per cent shrinkage deducted; the lambs to be selected by the buyer from time to time within the limits of the agreement, and that "an advance of $ 1.00 per head, $ 1,700.00, by the party of the second part is hereby acknowledged as received by the party of the first part, balance of purchase price to be paid on delivery and fulfillment of this contract." The contract is signed by "John W. Christensen, party of the first part," and by "Hauser Packing Co., party of the second part per N.S. Nielson."

It is further alleged that on or about October 15, 1925, the plaintiff placed about 1,950 head of lambs on feed for the purpose of fattening them; that on January 2, 1926, approximately 600 head of lambs were fat and ready to be delivered according to the terms of the contract; that on February 20, 1926, 1,400 head of lambs were fat and ready to be delivered; and that the plaintiff was at all times ready and willing to deliver the lambs according to the contract. Then it is alleged that: "In consideration of the promises, statements and representations made by the defendant, the plaintiff promised and agreed to sell and deliver to the said Hauser Packing Co. 1,700 head of fat lambs to be delivered at Fairview, Utah, at the selection of the buyer between January 1 and March 1 1926, and the defendant purporting to act as agent for said Company promised and agreed to buy 1,700 head of fat lambs from the plaintiff and to receive them as above stated and pay therefor at the rate of fourteen cents per pound." It is further alleged that the defendant, "as plaintiff is informed and believes, was not the agent of the Hauser Packing Co. and had no authority to act for said Company in the purchase of or to contract to purchase lambs for delivery to said Company between January 1 and March 1, 1926, or to make the contract hereto attached"; that "the defendant or the Hauser Packing Co. did not select, receive or pay for said lambs between January 1 and March 1, 1926, or at all, and both the defendant and the said Company refused and neglected to buy, receive or pay for the said lambs according to the agreement entered into between the plaintiff and the defendant acting for the said Company, and because of said acts of defendant plaintiff was obliged to sell said lambs for ten cents per pound, all of which damaged the plaintiff in the sum of $ 5,500.00," for which amount judgment was demanded.

It is urged that the complaint, among other things, is uncertain as to whether the plaintiff attempted to proceed on the theory that the defendant, because unauthorized as alleged to contract for and on behalf of the packing company, became personally liable on the contract as a party thereto and as such suable thereon for its breach, or on the theory that if the defendant was not so personally liable on the contract he was liable for a breach of an implied warranty of authority or in tort to the extent of damages resulting to the plaintiff through misrepresentations of the defendant's authority.

The rule is well settled that if one falsely, whether knowingly or through mistake, assumes to act as agent for another and enters into a contract in his name, or if an agent enters into a contract which is not within the scope of either his actual or apparent authority, and the contract is not ratified by the assumed principal, the agent is personally liable to the other party, in some form of action, for the loss sustained by reason of the wrongful assumption and representation of authority, providing the other party contracting with the assumed agent did not know of his want of authority. 2 Clark & Skyles on the Law of Agency, § 577. But by the great weight of modern authority, an agent cannot be sued or held liable on an unauthorized contract, unless it contains apt words to personally bind him on the contract; and where one pretending to be an agent has contracted as such without authority from his claimed and disclosed principal, the party contracted with may hold the assumed agent responsible for damages, to be measured, not by the contract, but by the injury resulting from the agent's misrepresentation of authority. Notes to cases, Peoples's National Bank v. Dixwell, Ann. Cas. 1915D, 722; annotations to Mendelsohn v. Holton, 42 A.L.R. 1310; 3 Page on Contracts, § 7173; 1 Elliott on Contracts, § 464.

The theory on which this doctrine is founded is stated in the cited texts and cases. While the complaint is somewhat uncertain in the particulars indicated, yet we think fairly interpreted it shows that an action was attempted to be stated on the theory that the defendant, because of his alleged want of authority, himself became liable on the contract. It, however, is clear, and as it is alleged and as shown by the contract itself, the plaintiff contracted, not with the defendant, but with a disclosed principal, the Hauser Packing Company, as the purchaser and vendee of the lambs, and no language or words are contained in the contract whereby the defendant himself became bound by the contract nor is there anything in the contract to indicate any intention that the defendant was to become personally liable on the contract or for any failure or breach to carry out its terms. Its unambiguous language shows an agreement whereby the plaintiff agreed to sell and deliver to the Hauser Packing Company, and the company agreed to buy, the lambs on the terms and conditions stated in the contract. And in the complaint it is alleged that "the plaintiff promised and agreed to sell and deliver to the Hauser Packing Co.," not to the defendant, 1,700 head of fat lambs to be delivered at Fairview, Utah, at the selection of the buyer, the Hauser Packing Company. It, however, is also alleged that in consideration of promises, statements, and representations of the defendant that he as the agent of the Hauser Packing Company was authorized to act for and on behalf of the company, he himself "purporting to act as agent for said Company promised and agreed to buy 1,700 head of fat lambs from the plaintiff and to receive them as above stated and to pay therefor at the rate of fourteen cents per pound"; and that both the company and the defendant failed to select or receive or pay for the lambs, and that both "the defendant and the said Company refused and neglected to buy, receive or pay for the said lambs according to the contract entered into between the plaintiff and the defendant acting for said Company," to the plaintiff's damage in a sum the difference between the contract price and the price at...