Johnson v. Ogren (In re Johnson)

• Citation: 102 Minn. 8,112 N.W. 894
• Parties: In re JOHNSON. JOHNSON v. OGREN.
• Decision Date: 12 July 1907
• Court: Minnesota Supreme Court

102 Minn. 8

112 N.W. 894

In re JOHNSON.JOHNSON

v.OGREN.

Supreme Court of Minnesota.

July 12, 1907.

Appeal from District Court, Washington County; F. M. Crosby, Judge.

Presentation of claim of John Ogren against the estate of Alex Johnson. From a judgment of the district court, affirming the judgment of the probate court allowing the claim, Ida Johnson, administratrix, appeals. Affirmed.

Syllabus by the Court

Ratification by a principal of the unauthorized act of his agent must be, as a general rule, with full knowledge of all the facts of the transaction.

He cannot be charged with such knowledge by his failure to inquire of others concerning the acts of his agent; for he may assume, until otherwise advised, that his agent will obey his instructions.

Where, however, the principal receives from his agent the proceeds of the unauthorized act, with a report or account of the transaction, he cannot ignorantly or purposely shut his eyes to means of information within his possession and control, and thereby avail himself of the benefits of the transaction, and then repudiate it. If he so receives and retains the benefits of the transaction, he ratifies it.

Upon the facts set forth in the opinion herein, it is held that the appellant's intestate ratified the unauthorized act of his agent in borrowing money which was used in his principal's business, and that a claim against his estate for the money is not barred by the statute of limitations. Manwaring & Sullivan, for appellant.

F. V. Comfort, for respondent.

START, C. J.

This is an appeal from the judgment of the district court of the county of Washington, affirming the judgment of the probate court of that county allowing the claim of the respondent for money had and received against the estate of Alex Johnson, deceased. The case was tried in the district court without a jury. Findings of fact were made by the trial judge, and as a conclusion of law judgment was directed in favor of the respondent for the sum of $1,357.44, with interest, and judgment was so entered.

The facts found were to the effect following: (1) Alex Johnson died intestate March 20, 1905, and on May 12th next thereafter his widow, the appellant herein, was duly appointed administratrix of his estate. (2) On February 26, 1896, Alex Johnson was doing a mercantile business at Stillwater under the name of the ‘Alex Johnson Store Account,’ which was conducted for him by his brother-in-law and agent, C. G. Ryden, who was authorized to buy and sell all goods connected therewith; but he had no authority to borrow money for use in the business, or to draw checks upon the bank in which Johnson kept his account in payment of indebtedness contracted in such business. (3) There was an arrangement between Johnson and Ryden that whenever Ryden should pay Johnson the amount of money that Johnson had invested in the business, he would transfer it to Ryden. Ryden never paid such amount, and the transfer was never made to him. Such arrangement was known to respondent, Ogren at the time of his making the advancement hereinafter stated. On the 26th day of February, 1896, the respondent, Ogren, had some talk with Ryden about forming a copartnership with him in such business. He was then owing the Alex Johnson Store Account for goods purchased of it the sum of $36.44. Ryden at this time needed money for present use in the business, but did not wish to apply to Johnson to furnish it, which fact Ogren then knew. (4) Ogren agreed to and did advance to Ryden the sum of $2,000 for the purpose of meeting bills, for which he gave to Ogren a receipt, of which the following is a copy: ‘Stillwater, Minn., Feb. 26th, 1896. Received of John Ogren $2,000.00, to be drawed out, if he so desires, when he calls for them, or to apply to a share in the clothing store, now known as the ‘Alex Johnson Store Account.’ [Signed] C. G. Ryden.' Some time after the receipt was executed there was inserted therein by agreement of the parties the words, ‘or interest at the rate of 5 per cent. per annum.’ Ogren demanded from Ryden the payment of the $2,000 within one year after it was received by him. (5) Upon receiving this receipt Ogren gave to Ryden his check, payable to the order of the Alex Johnson Store Account, for $1,963.56, which Ryden deposited in the Lumberman's National Bank, in the city of Stillwater, to the credit of the Alex Johnson Store Account, which thereafter, without the knowledge of Johnson, was used in his business and drawn from the bank upon checks signed by him and used in the payment of bills in connection with the business of the Alex Johnson Store Account, and Ogren was given credit upon the books of the Alex Johnson Store Account for his indebtedness of $36.44. (6) After the receipt was so made and delivered to Ogren, there was paid and indorsed thereon from time to time payments of interest and principal, which were made in part by goods purchased by Ogren from such store on credit. The last payment made and indorsed on the receipt was made on August 29, 1899, being ‘175 interest, and cash $200.’ Part of such payment so indorsed was for goods theretofore purchased by Ogren, and part in cash from the sale of goods from the store. All of such payments were made and indorsed without the knowledge or consent of Johnson. (7) Johnson after August 29, 1899, and before April 11, 1900, sold and delivered to Ogren goods from the store managed by Ryden of the reasonable value of $442.56, which have not been indorsed upon the receipt or applied in payment of the $2,000; but the amount thereof should be applied in part payment thereof. All of the transactions herein stated were duly entered upon the books of the Alex Johnson Store Account, and were at all times subject to the inspection of Alex Johnson. He never authorized such transactions by Ogren and Ryden, and never had any knowledge thereof, and never consented thereto; but, if he had exercised such care and oversight of his business as a person of ordinary prudence should or would have exercised, he would have had full and complete knowledge of every and all of such transactions.

While not so stated in the trial court's conclusion of law, yet a computation shows that the payments of the interest and principal of the $2,000 were allowed, and also the counterclaim for $442.56 was allowed and applied as a payment thereon or offset thereto; for the conclusion of law was a direction that judgment be entered in favor of the respondent, with interest from April 11, 1900, the date of the sale of goods of the value of $442.56 from the store managed by Ryden to respondent, Ogren. The only...