Citizens' State Bank v. Minnesota Sugar Co.
| Decision Date | 05 June 1925 |
| Docket Number | No. 24541.,24541. |
| Citation | 204 N.W. 45,163 Minn. 378 |
| Parties | CITIZENS' STATE BANK OF GLENVILLE v. MINNESOTA SUGAR CO. |
| Court | Minnesota Supreme Court |
Appeal from District Court, Freeborn County; Norman E. Peterson, Judge.
Action by the Citizens' State Bank of Glenville against the Minnesota Sugar Company. After a verdict for plaintiff, defendant appeals from an order denying an alternative motion for judgment non obstante or a new trial. Order reversed, and judgment entered for defendant.
Odell & Fahey, of Chaska, for appellant.
Meighen, Knudson & Sturtz, of Albert Lea, for respondent.
Plaintiff is a state bank located at Glenville, Minn. Defendant is engaged in manufacturing sugar from sugar beets at Chaska, Minn. The complaint alleges that defendant had a checking account with plaintiff in 1920, and overdrew that account in the sum of $1,009.58. Judgment is demanded for that sum with interest. The answer admits that both plaintiff and defendant are corporations and denies all other allegations of the complaint. The trial resulted in a verdict for plaintiff. Defendant appeals from an order denying its alternative motion for judgment non obstante or a new trial.
Defendant made contracts with farmers by which the farmer agreed to raise sugar beets on a specified quantity of land and sell them to defendant at a specified price, and defendant agreed to buy them at that price and to advance money, as needed, for paying the laborers employed in raising them. Defendant had employes, termed fieldmen, to each of whom a specified territory was assigned. The fieldman arranged with the farmers to grow beets, and looked after and supervised planting, cultivating and harvesting them, and also secured laborers for the farmers as they were needed. When payments were to be made to the laborers, he ascertained from them and the farmer the amounts due and reported these amounts to defendant, who then sent checks for the amounts so reported. Defendant also had employes, termed agriculturalists, who had control over and supervised the fieldmen.
In the early part of 1920, H. H. Dana, one of these agriculturalists, employed one E. L. Miller as fieldman for the territory which included Glenville. Miller opened the account in controversy in his own name. In June, 1920, the account was overdrawn and he gave plaintiff a note of $250, payable in 30 days. In July, 1920, the account was again overdrawn and he gave plaintiff a note for $579.39 to cover this overdraft payable on demand. In October, 1920, Miller left for parts unknown without the knowledge of either plaintiff or defendant and without settling his accounts with either. At the time he left, his account with plaintiff was again overdrawn. This overdraft together with the overdrafts covered by the two notes above mentioned constitute the indebtedness which plaintiff seeks to recover from defendant.
Plaintiff claimed at the trial that this account, although opened by Miller in his own name and he alone had drawn checks against it, was in fact the account of defendant but carried in Miller's name as a matter of convenience to enable him to make prompt payment of wages due laborers; and plaintiff presented testimony to the effect that Miller had so represented at the time he opened the account. The undisputed evidence, however, shows that Miller never had authority, either express or implied, to open an account for or on behalf of defendant either in his own name or otherwise.
Plaintiff also claimed at the trial and claims here that, if Miller had no actual authority to open and carry an account on behalf of defendant, he had apparent authority to do so; that plaintiff was justified in relying upon such apparent authority; and that defendant is estopped from denying liability for the overdraft. Whether this claim can be sustained is the real question presented.
That defendant had no knowledge of the existence of the account nor of Miller's dealings with plaintiff until after Miller had disappeared stands undisputed. Over the objection of defendant, plaintiff was permitted to introduce testimony of statements and representations made by Miller to the effect that it was the custom of defendant to carry checking accounts in local banks in the name of its fieldmen and that he had authority to carry such an account. It has long been settled that the authority of an agent cannot be established by proof of his declarations. It must be established by the declarations, acts or conduct of the principal; or by acts and conduct of the agent known to and acquiesced in by the principal, or performed under such circumstances that the principal was bound to know the powers which his agent was in fact exercising.
The authorities almost unanimously hold that an agent has no power to borrow money on the credit of his principal unless he is expressly authorized to do so, or is...
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