Easton Food Center v. Beatrice Creamery Co., 24550.

• Decision Date: 04 October 1938
• Docket Number: No. 24550.,24550.
• Citation: 119 S.W.2d 987
• Parties: EASTON FOOD CENTER, Inc., v. BEATRICE CREAMERY CO.
• Court: Missouri Court of Appeals

119 S.W.2d 987

EASTON FOOD CENTER, Inc., v. BEATRICE CREAMERY CO.

No. 24550.

St. Louis Court of Appeals. Missouri.

October 4, 1938.

Rehearing Denied October 18, 1938.

Appeal from St. Louis Circuit Court; J. W. McAfee, Judge.

"Not to be published in State Reports."

Action by Easton Food Center, Inc., against the Beatrice Creamery Company for breach of contract in failing to deliver butter to plaintiff. From a judgment for plaintiff, defendant appeals.

Affirmed.

Francis R. Stout, of St. Louis, for appellant.

Edward M. Radloff, of St. Louis, for respondent.

McCULLEN, Judge.

This suit was brought by respondent, hereinafter referred to as plaintiff, against appellant, who will be referred to as defendant, to recover damages for breach of contract. It was originally instituted in a justice of the peace court where there was a judgment for plaintiff. On appeal to the Circuit Court of the City of St. Louis, a jury was waived and there was a trial before the judge sitting as a jury. The court found in favor of plaintiff and against defendant, and rendered judgment for plaintiff in the sum of $676.50. Defendant's motion for a new trial having been overruled, it has duly brought the case to this court by appeal.

At the time of rendering judgment, the court filed a memorandum of the finding of facts and conclusions of law. Defendant, although not agreeing with the result reached by the trial court, concedes that the statement of facts contained in the memorandum filed by the trial court "is both fairly and briefly stated"; and that "the principal point of law to be passed upon by this appellate court is clearly stated therein."

It appears from the evidence that plaintiff, through its president Harry Weinberg, had for some time purchased butter from one of defendant's salesmen named Ben Mahurin. The evidence in behalf of plaintiff was to the effect that an arrangement was made by plaintiff with Mahurin to purchase butter from defendant in various quantities, with the understanding that it was to be delivered in the future as plaintiff might direct. On May 1, 1933, plaintiff purchased from defendant, through defendant's salesman Mahurin, 1,500 pounds of butter at 18½¢ per pound, to be delivered as needed by plaintiff. Plaintiff paid for the butter by a check dated the same date, payable to the order of defendant. The amount of the check was $277.50. It was not disputed that the check was cleared and paid through the First National Bank in St. Louis.

On June 13, 1933, July 31, 1933, and August 22, 1933, plaintiff purchased additional butter from defendant, through its salesman Mahurin, in payment for which plaintiff gave checks, payable to defendant's order, for the full amount of each purchase, either at the time of each purchase or a short time thereafter. The check for the purchase of July 31, 1933 was postdated August 8, 1933. These checks were in amounts of $277.50, $240, and $240, respectively. It is not disputed that said checks, payable to defendant's order, were cleared through the bank and paid. At the time of each purchase of butter, Mahurin gave to plaintiff a written receipt, on a printed form furnished by defendant, showing the amount of butter purchased and the price paid therefor.

Plaintiff's suit is based upon the claim that plaintiff received only 2,700 pounds of the 6,000 pounds of butter which it had purchased from defendant and paid for, leaving 3,300 pounds of butter which defendant never delivered.

Mr. Weinberg, president of plaintiff company, testified that he had a conversation with Mr. Barr of the defendant company in October, 1933, with respect to the balance of the butter due plaintiff; that he demanded delivery of the butter in November or December, 1933, at which time the market value of the butter was 20½¢ per pound, or more, but that defendant refused to deliver said butter.

The evidence on behalf of defendant was to the effect that its salesman Mahurin had no authority to sell its butter for future delivery, and had no authority to sell at less than the market price; that in some instances Mahurin was permitted to sell at less than the market price, but never for a discount greater than a scale established by defendant. It appears from the evidence that a greater discount than said scale of defendant was allowed to plaintiff by Mahurin on the sales in question.

Mr. J. R. Anderson testified on behalf of defendant that he was employed as a salesman for defendant and was a route foreman. He described the system used by defendant in handling the sale of its butter through salesmen, stating that the salesmen took out each morning a certain amount of butter and returned either the cash or a signed ticket for all the butter sold on a particular day. He testified that, under defendant's system of conducting its business, no receipts for deliveries were required by defendant; that it was possible for defendant's salesmen to sell for cash and turn in credit slips to defendant, and that this could be done for an indefinite period of time without defendant learning that its funds were being misapplied. The witness also testified that the checks in question were turned over to defendant's cashier and were never questioned. Mr. Anderson further testified that, in September, 1933, while defendant was investigating Mahurin's transactions, Mahurin having disappeared without having settled his accounts with defendant, the witness asked Mr. Weinberg, plaintiff's president, to let him see the purchase receipts which plaintiff had received from Mahurin; that Weinberg said either that he had not kept them or did not have them there. The witness further testified that, with respect to discounts to customers, defendant's salesmen, on certain purchases, were authorized to give discounts up to one cent per pound, and that certain customers were given larger discounts; that the business being competitive, defendant's salesmen had some discretion in establishing the price of butter, but that no salesman had authority to sell butter for future delivery.

William Grafman testified on behalf of defendant that he was manager of the defendant company; that he discovered that some of defendant's butter had been coming on the market at less than the established price; and that a relative of Weinberg's was handling it; that, on October 4, 1933, the morning after Mahurin had disappeared and after it had been discovered that Mahurin's accounts were not paid up, he, the witness, procured from Mr. Weinberg, plaintiff's president, an affidavit in which Weinberg stated that plaintiff was not indebted to defendant in the sum of $93.75, as shown by defendant's record. On cross-examination, the witness testified that, at the time he obtained Weinberg's affidavit, Weinberg was not advised of Mahurin's defalcation or disappearance; that he, the witness, told Weinberg that defendant was checking its salesmen's accounts, and that the books showed a small balance due defendant from plaintiff; that, when he was told by Weinberg that plaintiff did not owe defendant company any money, he asked Weinberg for an affidavit to that effect, which Weinberg executed and gave to him; that Weinberg said nothing at that time about butter being due plaintiff from defendant.

The defense of defendant was that its salesman Mahurin had no authority to sell butter for future delivery; and that the money given to Mahurin by plaintiff for the butter had been used by Mahurin in paying Mahurin's personal obligations to defendant.

After stating the facts substantially the same as we have presented them, the trial court found that the contracts for the sale and purchase of the butter were entered into by Mahurin, but that Mahurin had no actual authority to bind defendant to the contracts for the sale of butter for future delivery. The court further found, as a matter of law, that Mahurin did not have such apparent authority as would bind defendant to the contracts in question; that defendant had authorized Mahurin to sell and deliver from his truck defendant's produce, but that there was nothing in the transactions prior to the making of the contracts in question that could have led a reasonably prudent business man to believe that Mahurin had authority to make sales of large quantities of butter for future delivery.

In the memorandum filed, the trial judge stated his reasons for rendering judgment in favor of plaintiff, in part as follows: "However, defendant received and has retained the proceeds of the checks given by plaintiff. The general rule is that the one who retains the benefits of an unauthorized contract after knowledge of the facts is bound by the agreement and may not deny the authority of the person who purported to be authorized to make it. Ruggles v. Washington County, 3 Mo. 496, loc. cit. 500; Watson v. Bigelow, 47 Mo. 413; Davis v. Krum, 12 Mo.App. 279; Walker v. Hassler, Mo.App., 240 S.W. 257; Fritsch v. Nat. City Bank, Mo.App., 24 S.W.2d 1066."

Defendant contends that the above-mentioned rule as to ratification does not apply to this case for the reason that knowledge of the facts came to defendant too late for it to be put back in statu quo. In support of its contention, defendant argues that its actions did not constitute a ratification of Mahurin's unauthorized acts; and, inasmuch as ratification by defendant was the only basis upon which the trial judge found against defendant, the judgment should be reversed. Defendant further contends that the trial judge, in the memorandum he filed, based his decision upon the case of First National Bank of Trenton v. Badger Lbr. Co., 54 Mo.App. 327; Id., 60 Mo.App. 255; and points out that said case was expressly overruled in ...