Johnston v. Milwaukee & Wyoming Investment Co.

• Decision Date: 16 September 1896
• Docket Number: 7367
• Parties: ADDISON B. JOHNSTON ET AL. v. MILWAUKEE & WYOMING INVESTMENT COMPANY
• Court: Nebraska Supreme Court

68 N.W. 383

49 Neb. 68

ADDISON B. JOHNSTON ET AL. v. MILWAUKEE & WYOMING INVESTMENT COMPANY

No. 7367

Supreme Court of Nebraska

September 16, 1896

REHEARING of case reported in 46 Neb. 480.

The facts and issues appear in the opinion and in the former reports of the case in 35 Neb. 554, and 46 Neb. 480.

REVERSED AND REMANDED.

John L Webster, for plaintiffs in error:

Under the seventh, eighth, ninth, and tenth special findings of fact the plaintiff must be held to have ratified the sale of the cattle and judgment should have been entered for the defendants. (Cook v. Tullis, 85 U.S. 332, 18 Wall 332, 21 L.Ed. 933; Hughes v. Ins. Co. of North America, 40 Neb. 627; Starks v. Sikes, 8 Gray [Mass.] 609; Despatch Line v. Bellamy Mfg. Co. 12 N.H. 205; Planters Bank of Mississippi v. Sharp, 4 S. & M. [Miss.] 75; McMahan v. McMahan, 13 Pa. 376; Charles v. State, 11 Ark. 389; United States Express Co. v. Rawson, 106 Ind. 215; Goss v. Stevens, 32 Minn. 472; Ruggles v. Washington County, 3 Mo. 496; Shoninger v. Peabody, 57 Conn. 42; Russ v. Telfener, 57 F. 973; Persons v. McKibben, 5 Ind. 261.)

Failure to return or tender back the money applied by the agent Adams in payment of debts owing by the Milwaukee & Wyoming Investment Company was a ratification of the sale of the cattle. (Perkins v. Boothby, 71 Me. 91; Mayor of Nashville v. Ray, 86 U.S. 468, 19 Wall. 468, 22 L.Ed. 164; Taylor v. Conner, 41 Miss. 722; First Nat. Bank of Las Vegas v. Oberne, 121 Ill. 25; Baer v. Lichten, 24 Ill.App. 311; Thompson v. Peck, 115 Ind. 512; Moriarity v. Stofferan, 89 Ill. 528; Harding v. Parshall, 56 Ill. 219; Nichols v. Shaffer, 63 Mich. 599; First Nat. Bank of Trenton v. Badger Lumber Co. 54 Mo.App. 327.)

Even if the plaintiff should have offered at the trial to refund to defendants the amount of money, the use and benefit of which they have enjoyed, it would be too late to avoid the ratification. (Southern Oil Works v. Jefferson, 70 Tenn. 581.)

The defendants had the right to prove an act of ratification which occurred after the suit was brought. (Gelatt v. Ridge, 117 Mo. 555.)

It was not necessary for the defendant, by supplemental answer, to plead ratification. (Towne v. Sparks, 23 Neb. 142; Merrill v. Wedgwood, 25 Neb. 283; Cool v. Roche, 15 Neb. 25; Blue Valley Bank v. Bane, 20 Neb. 294; Richardson v. Steele, 9 Neb. 483; Long v. Osborn, 59 N.W. 14 [Iowa]; Eadie v. Ashbaugh, 44 Iowa 520.)

J. W. Sparks and George H. Noyes, contra:

The statutes of Wyoming rendered the sale to defendants void. (Holman v. Johnson, 1 Cowp. [Eng.] 343; Timp v. Dockham, 32 Wis. 146; Yates v. Fassett, 5 Den. [N.Y.] 21; Tucker v. Mowrey, 12 Mich. 378; Petrie v. Hannay, 3 T. R. [Eng.] 422; Sowles v. Welden Nat. Bank, 61 Vt. 375; Melchoir v. McCarty, 31 Wis. 252; Brazee v. Bryant, 50 Mich. 136; Winfield v. Dodge, 45 Mich. 355; Dodson v. Harris, 10 Ala. 566; Hauf v. Northwestern Masonic Aid Association, 76 Wis. 450; Poulton v. London & S.W. R. Co. L. R. 2 Q. B. [Eng.] 534; Clark v. Metropolitan Bank, 3 Duer [N.Y.] 241.)

References to questions relating to ratification: Flagg v. Flagg, 39 Neb. 229; Pemigewasset Bank v. Brackett, 4 N.H. 557; Hornfager v. Hornfager, 6 How. Pr. [N.Y.] 13; Hope v. Brinckerhoff, 4 Edw. Ch. [N.Y.] 687; Hoyt v. Sheldon, 4 Abb. Pr. [N.Y.] 59; Ormsbee v. Brown, 50 Barb. [N.Y.] 436; Farwell v. Myers, 59 Mich. 179; Smith v. Phelan, 40 Neb. 765; Kavanaugh v. Brodball, 40 Neb. 875; Marshall v. Bunker, 40 Iowa 121; Campbell v. Williams, 39 Iowa 646; Cassell v. Western Stage Co. 12 Iowa 47; Kingsbury v. Buchanan, 11 Iowa 387; Cary v. Hewitt, 26 Mich. 228; Merrill v. Denton, 73 Mich. 628; Belden v. Laing, 8 Mich. 500; Clark v. West, 23 Mich. 242; Wilson v. Montague, 57 Mich. 638; Bartlett v. Goodwin, 71 Me. 350; Powell v. Henry, 96 Ala. 412; Wittenbrock v. Bellmer, 57 Cal. 12; Read v. Buffum, 79 Cal. 77; Singer v. Schilling, 74 Wis. 369; Lee v. Burnham, 82 Wis. 209; Thacher v. Pray, 113 Mass. 291.

HARRISON, J.

This an action of replevin, was commenced in the district court of Merrick county by the Milwaukee & Wyoming Investment Company, a corporation, to recover the possession of 250 head of cattle. It was claimed that the cattle had been delivered to, and were in the possession of, the defendants in the suit, pursuant to an unauthorized and attempted transfer to them made by a person at the time in charge of the stock ranch of plaintiff in Wyoming. A trial of the issues joined resulted in a verdict and judgment for the defendants. The judgment then rendered, in error proceedings to this court by the plaintiff, was reversed and the cause remanded to the district court, where, in a second trial of the litigated questions, the plaintiff was successful and was accorded a judgment. The case was again removed to this court, this time on behalf of the defendants, and, on hearing, the judgment was reversed and the case ordered remanded. A motion for rehearing was interposed for plaintiff and, on presentation, was sustained, since which action the case has been again submitted for consideration and decision of the questions raised by the petition in error.

In the opinion written when the cause was first submitted to this court a somewhat extended and detailed statement of the facts was inserted (see Milwaukee & Wyoming Investment Co. v. Johnston, 35 Neb. 554, 53 N.W. 475), and it will be unnecessary to restate them here. The decision rendered as the result of the consideration of the questions presented on its second appearance here is reported in 46 Neb. 480, and entitled Johnston v. Milwaukee & Wyoming Investment Co. In the syllabus to the first opinion, Milwaukee & Wyoming Investment Co. v. Johnston, it was stated:

"1. Where a principal empowers an agent to transact business with respect to which there is a well defined and publicly known usage the presumption is, in the absence of facts indicating a different intent, that such authority was conferred in contemplation of such usage, and persons dealing with such agent in good faith will not be bound by limitations upon such usual authority.

"2. But such usage, to bind a principal, must have existed for such a time, and become so widely and generally known, as to warrant the presumption that he had it in view at the time of the appointment of the agent.

"3. The M. & W. I. Co. a Wisconsin corporation owning a cattle ranch in Wyoming, appointed one A. its agent in Wyoming, with limited power, viz. to hire and pay for the necessary help, and pay the current expenses with money remitted on his statement, and to care for and round up the cattle and ship them, when fit for market, to Chicago in care of a particular commission house. In an action of replevin by the company aforesaid against J. & R. to recover cattle claimed by the latter to have been purchased from A. on the ranch aforesaid, held, error to receive evidence on the part of the defendants to prove that, at the time they purchased the cattle from A. it was the custom or usage of managers of cattle companies doing business in Wyoming to sell the cattle from the ranches of such companies, in the absence of any evidence that the plaintiff company had knowledge of such usage. "

And in the body of the opinion appears the following: "Adams was given no authority to ship cattle elsewhere, nor was he authorized to sell or dispose of the cattle at any time or in any way or place. He had specific instructions from the officers of the plaintiff company not to sell any cattle from the ranch. These instructions were verbal, given him at the time of his employment and never modified thereafter. In addition to the above terms of hiring there was no official or corporate action appointing Adams as manager, and no record in the minutes of the company of his employment;" and further: "Since the judgment must be reversed, for reasons stated, it is not deemed necessary to consider the other questions presented."

The headnotes of the opinion in Johnston v. Milwaukee & Wyoming Investment Co. supra, were as follows:

"1. One dealing with the agent of a business corporation, in a matter relating to its business operations and not involving its corporate functions, is not charged with notice of its by-laws.

"2. Therefore, the apparent authority of such agent cannot be extended or restricted by such by-laws in the absence of actual notice thereof.

"3. Where a principal has, by his voluntary act, placed an agent in such a situation that a person of ordinary prudence, conversant with business usages and the nature of the particular business, is justified in presuming that such agent has authority to perform a particular act, and therefore deals with the agent, the principal is estopped, as against such third person, from denying the agent's authority. Whether or not an act is within the scope of the agent's apparent authority is to be determined under the foregoing rule as a question of fact, from all the circumstances of the transaction and the business.

"4. Evidence of such apparent authority is not restricted to proof of general custom, or to proof that the agent had previously performed similar acts to the knowledge of the principal. The nature of the business usage not amounting to a general custom, and the fact, if it exists, that the principal is at a great distance and the agent apparently entirely in charge of the business, may in proper cases be, among other things, elements for consideration."

The conclusions announced here were the results of a consideration of one portion of the trial court's charge to the jury and some special findings submitted to that body. The paragraph of the instructions which was examined was quoted in the body of the opinion. At the close of the opinion it was stated: "It follows that the special findings referred...