Crane Co. v. Park Const. Co.

• Decision Date: 05 May 1969
• Citation: 356 Mass. 13,247 N.E.2d 591
• Parties: CRANE CO. v. PARK CONSTRUCTION CO., Inc., et al.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 591

247 N.E.2d 591

356 Mass. 13

CRANE CO. v. PARK CONSTRUCTION CO., Inc., et al.

Supreme Judicial Court of Massachusetts, Middlesex.

Argued April 8, 1969.

Decided May 5, 1969.

James A. O'Donovan, Somerville, for plaintiff.

Jerrold A. Olanoff, Boston (Sally A. Corwin, Boston, with him), for Park Const. Co., Inc., and another.

Before WILKINS, C.J., and SPALDING, CUTTER, KIRK and SPIEGEL, JJ.

CUTTER, Justice.

Park Construction Co., Inc. (Park) became general contractor in February, 1963, for an addition to a public school. Crane Co. (Crane) furnished two boilers to Alfred L. Butler, a heating, ventilating, and air conditioning subcontractor. Crane now seeks to recover the price of the boilers ($8,750) owed to it as a claim against Park's PAYMENT bond. See G.L. c. 149, § 29, as amended through St.1962, c. 696; see later amendment by St.1964, c. 609, §§ 4--5. By final decree the bill was dismissed. The facts are stated upon the basis of the trial judge's report of material facts, except as otherwise indicated. The evidence is reported.

Butler negotiated for the boilers with Frank Bresnihan, Crane's agent in the Boston area. Bresnihan 'solicited business on hehalf of Crane * * * (gave service to) Crane's customers and received Butler's order * * * for the Crane boilers and did everything that would be beneficial to Crane in the Boston area.' Butler had known Bresnihan 'for many years as the agent for Crane.' The evidence shows that a representative of Park had dealt with him previously.

The boilers were installed in the school during July, 1963. Butler in July 'requisitioned $11,000 from Park for the boilers.' Park on August 24 or 26, 1963, paid Butler's July requisition, including $11,000 for the boilers, after Butler had furnished Park certificates from all Butler's suppliers that they had been paid for items in Butler's June requisition.

On August 26, Butler sent Park its requisition for work performed during August. Park, before making payment, requested certificates from Butler's suppliers that 'they had been paid from the money requisitioned in July.' On September 20, Butler made out a check for $8,750 to Crane and delivered it to Bresnihan. He told Bresnihan that he could not be paid by Park unless he had a certificate from Crane that Crane had been paid for the boilers. Bresnihan gave such a certificate ¹ to Butler. After receiving the certificate Park paid Butler $17,453.70.

Thereafter Bulter's check to Crane was dishonored for lack of sufficient funds in Butler's bank account. Crane, which notified Park of this, has never been paid for the boilers.

The trial judge concluded that Bresnihan, 'because of his activities as an agent had the apparent authority to issue a certificate on Crane's behalf' and 'to accept the check' for Crane. 'Bresnihan knew that Park was relying on Crane's certificate and would not have made the payment ot Butler' without it.

1. The trial judge's findings and conclusions concerning Bresnihan's relationship to Crane were justified by the evidence. Bresnihan testified that he was Crane's representative for eastern Massachusetts. His 'duties were to get specifications, to take jobs over and quote them * * * on occasion (to) take care of service * * * and to do anything else that would be beneficial to * * * Crane * * * in this area.' He had a commission sales agreement with Crane. ² Although it was 'usual' to have payments by customers 'sent directly to * * * Crane,' this 'wasn't wholly adhered to,' as in this case. Bresnihan took Butler's check thinking that he was helping Crane by 'getting * * * payment on an invoice * * * about 60 days old.' He first communicated to Crane the facts about the certificate he had signed when Crane told him Butler's check had been dishonored.

Bresnihan, as a matter of good customer relations, went to the jobsite once to discuss a problem concerning the boilers' tubes. His duties for Crane 'would vary somewhat depending on the job. Both Crane and * * * (he) were trying to promote Crane and * * * were both willing to do whatever * * * (they) thought would be the best for * * * Crane.' In a deposition by a general credit manager of Crane, Bresnihan was described as 'our Pacific Steel Boiler Agent.' During November and December, 1963, Bresnihan, at Crane's request, tried to obtain payment of the sum owed to Crane by Butler. Park and Butler both knew that Bresnihan represented many firms as sales representative in the Boston area.

It has been said 'that an agent who solicits orders and sends them to his principal to be filled has no implied authority to receive payment for the goods.' See Sacks v. Martin Equip. Co., 333 Mass. 274, 280, 130 N.E.2d 547, 550. See also Clark v. Murphy, 164 Mass. 490, 491, 41 N.E. 674; Boice-Perrine Co. v. Kelley, 243 Mass. 327, 330--331, 137 N.E. 731; Aluminum Prod. Co. v. Regal Apparel Co., 296 Mass. 84, 88, 4 N.E.2d 1003; Restatement 2d: Agency, § 70 (and see § 62). In the Boice-Perrine Co. case, the rule set out above was stated. There, however, on 'slender' evidence, it was held that ratification of a selling agent's unauthorized act in accepting payment could be inferred if it was not immediately disaffirmed by the principal. Rugg, C.J., went on to say: 'Prompt disavowal of such act is imperative because the inference of authority flows readily from the trust reposed by a principal in his agent. Harm to the victim of such unauthorized conduct of an agent may be repaired or mitigated by immediate knowledge of the denial of responsibility by the principal.' No such disavowal of Bresnihan's act by Crane was here shown, although there was prompt notice of the dishonor of Butler's check. Cf. Pampegian v. Richmond, 319 Mass. 216, 218--219, 65 N.E.2d 316, 163 A.L.R. 1206, which, however, did not involve a selling agent.

The scope of Bresnihan's actual authority is somewhat ambiguous. There was evidence which justified the conclusion that Bresnihan did more than act as a sales solicitor for Crane. The trial judge could give weight to the testimony that Bresnihan provided some service, that he actually appeared as Crane's representative at the jobsite, that there was not always strict adherence to the contract between Crane and Bresnihan, and that Crane accepted...