Hirschmann v. Iron Range & H.B.R. Co.

• Decision Date: 10 November 1893
• Citation: 56 N.W. 842,97 Mich. 384
• Parties: HIRSCHMANN et al. v. IRON RANGE & H. B. R. CO.
• Court: Michigan Supreme Court

56 N.W. 842

97 Mich. 384

HIRSCHMANN et al. v. IRON RANGE & H. B. R. CO.

Supreme Court of Michigan

November 10, 1893

Error to circuit court, Marquette county; John W. Stone, Judge.

Action by Hannah Hirschmann and another against the Iron Range &amp Huron Bay Railroad Company. Judgment for plaintiffs, and defendant brings error. Affirmed.

Wells, Angell, Boynton & McMillan, (Ashley Pond of counsel,) for appellant.

E. E. Osborn, for appellees.

McGRATH J.

Plaintiffs sue to recover for supplies furnished to parties engaged in the construction of defendant's road, upon the claim that the goods were supplied upon orders given by an alleged agent of the company, one Milo Davis, and upon the company's credit. The plaintiffs had judgment, and defendant appeals.

The principal question arises as to the authority of the agent to bind the company. The defendant company was organized June 30, 1890. The capital stock was fixed at $500,000. Less than $25,000 of the stock was subscribed at the date of the incorporation. Of this amount, C. H. Buhl took $10,000, and his son, $6,000. Henry Stephens became interested, and C. H Buhl was elected president; Henry Stephens, vice president; T. H. Buhl, treasurer; and F. L. Dodge, secretary. James L. Turner was the promoter and organizer of the scheme. On July 26, 1890, an agreement was entered into between the company and Turner, by the terms of which Turner was to build and complete the road, and receive therefor $705,000 in first mortgage bonds, and the further sum of $705,000 in common stock. On the same date, the agreement set forth in the margin ^[1] was entered into between Turner, Buhl, and Stephens. On the 16th of August, 1890, an agreement was entered into "between Wallace Dingman, of the first part, and James M. Turner, for the Iron Range and Huron Bay Railroad Company, of the second part," by the terms of which Dingman was to complete the road, ready for the iron, at prices stated, on or before August 1, 1891. The work was to be done under the supervision of a "chief engineer." In consideration of the premises, James M. Turner was to pay the prices named. This agreement was executed by Wallace Dingman and James M. Turner. Under it, Dingman commenced operations. On November 15, 1890, the prices for certain work were advanced by a short supplemental agreement signed "W. Ding man," and then occurs this clause: "We, the undersigned, agree to the above, provided J. M. Turner concedes and agrees with U.S.C. H. Buhl. Henry Stephens. Witness: D. R. Pierce." Then follows the approval of James M. Turner, dated December 1, 1890. Dingman continued the work, and was paid the regular monthly estimates by the company until the May, 1891, estimate, when the company seems to have undertaken the distribution of the amount of the estimates. In the latter part of August, 1891, Dingman abandoned the contract. Turner says he was but nominally the contractor. Mr. Buhl says that Turner was considered as a man of large means and credit. "He was the originator of the scheme, and we went with him. We left the matter with him from the very first, and he failed to perform his part. We tried to have him continue the exercise of these powers, but he wouldn't do it. We wanted his services, but he failed to do as he agreed." Two letters written by Mr. Buhl to Mr. Turner are submitted,-one dated November 17, 1890, in which the writer says: "Mr. T. H. Hamilton, of Toledo, called upon me to-day with bids for ore dock at Huron bay. Have had some conversation with him in relation to the dock. I find Mr. Davis asked bids for a dock about 50 per cent. longer than we talked about, as I remember. * * * Mr. Pierce, I suppose, has written you we had Mr. Dingman here ready to throw up his job unless we increased pay upon ties and part of the gradings. Mr. Stephens came down. We thought best to do so. Tried to reach you by telegram, but failed to do so." The other is dated January 14, 1891, and says: "Your letter of yesterday reached me. I would like a conference meeting between us,-you and Mr. Stephens. * * * If Mr. Davis could come down, and meet with us, would like to have him do so. No new ore docks will be wanted this year, so no haste in pushing very fast. Please fix time through Mr. D. R. Pierce." Turner met with the directors from time to time, and unquestionably, upon this record, had general authority respecting the construction of this road. Milo Davis was the chief engineer. Turner employed him, and gave him general authority. He says: "I gave the orders to Davis from time to time,-pretty much entirely, the first twelve months. He was our resident man in that locality." Davis was doing the preliminary work, and had some 30 men under his own immediate charge. Davis was examined as a witness for defendant. He says that he did not get his authority from Mr. Turner, entirely; that Turner sent him up there to build the road; that his authority was not limited by either Turner or the company; that he had authority to buy goods to prosecute "my work-that is, the company's work-anywhere I pleased;" and that he bought supplies from Mr. Smith as early as May 13th. The company had an office at Arvon, and one Clark was its bookkeeper there. Clark was under the immediate supervision of Davis.

Plaintiffs testify that in June, 1891, Davis came to them, and directed them to furnish supplies to certain parties, to keep accounts with these parties, to charge the supplies to the company and to send the bills to the company's office; that in June they furnished, to the various parties named by Davis, bills of goods aggregating in value $5,734; that in July they received the company's check for $1,000, and later in July a check from the company for $4,734, in payment of the bills; that after these payments they furnished the goods for the value of which this suit is brought. The company sought to show that these goods were furnished to Dingman and his subcontractors, and that the credit was given to Dingman, but there is no testimony which can be fairly said to tend to show that the goods were furnished on Dingman's credit. Plaintiffs positively deny any dealings with Dingman, or any conversation with him respecting the matter. Several of the parties to whom the goods were furnished testified that they were directed by Davis to get the goods from plaintiffs, and they deny that any credit was asked for by them, or given them by plaintiffs. One of the items sued for is goods furnished Archibald Campbell, aggregating in value $3,686.98. Campbell testifies that he was at the time engaged in building two miles of defendant's road under a contract with the company entered into by Davis. This witness produced a statement of account furnished him by J. M. Clark, the company's bookkeeper, having this caption: "A. Campbell, In Account with I. R. & H. B. R. R. Co." In this account, aggregating $9,575.62 of like debits, the witness is charged with two items of goods furnished by plaintiffs,-one of $300, and one of $696.72. Other witnesses were sworn, who had procured goods from plaintiffs by direction of Davis, who testified that they were employed by Davis directly, and had no contract with Dingman. It was shown that Davis had ordered goods from one J. B. Smith, and that the company afterwards paid an account to J. B. Smith for supplies amounting to $832.30. The defendant claims that Davis was specially authorized to buy supplies from Smith for the railroad July 10, 1891; but Davis testifies that he bought supplies from Smith in May, and Smith says he sent a bill every month to the company at Arvon. However that may be, the transaction bears upon the scope and range of Davis' employment and duties. The authority to purchase tools and supplies generally tended to show power to use and employ them. Mr. Turner says that about the middle of July he was present at a meeting in Detroit. He thinks the directors were present. "Mr. Buhl, Mr. Stephens, Milo Davis, and I were present." Mr. Davis reported the amounts due to various parties. That on that occasion this particular account was discussed, and Turner desired to pay but a portion of it, but Davis there said that the goods had been ordered by him, and, in order to be able to continue to get supplies, the account must be paid; and it was arranged to pay $1,000 of the amount then, and to send the balance later in the month. Other accounts were spoken of by Davis in the same way. Mr. Buhl then said that, if that was true, the accounts must be paid. Plaintiffs received the first check, of $1,000, at the hands of Davis. They objected, saying that the payment was insufficient on an account so large as theirs. They afterwards manifested some uneasiness about their account, and wrote to the company. On July 29, 1891, "D. R. Pierce, for I. R. & H. B. R. R. Co.," telegraphed to plaintiffs as follows: "Remittance to you and Mrs. Muck to-morrow. See letter." On July 31, 1891, Pierce again telegraphed to plaintiffs, as follows: "See Milo Davis, who will pay June account." Upon receipt of this telegram, Mr. Johnson, one of the plaintiffs, and Muck, another creditor, went together to Arvon, and saw Davis, who gave Johnson the check for $4,734. Davis then said: "'Now, Mr. Johnson, you are satisfied that the company has accepted your account?' I told him, yes, if they paid me, of course, I was satisfied. He says, 'We can have some more goods?' I says, 'Yes, sir; you can."' Johnson says, further: "I went to Detroit about September 1st, and saw Mr. Buhl. I asked Mr. Buhl about our account, and he said he didn't know in what shape matters were up there; they were having some trouble to find out. In reply to my inquiry, he said, 'Mr. Johnson, we had a man up there,-our agent, Mr. Milo Davis,-a man I had perfect...