King v. Rea

• Decision Date: 07 June 1889
• Parties: KING v. REA et al.
• Court: Colorado Supreme Court

21 P. 1084

13 Colo. 69

KING v. REA et al.

Supreme Court of Colorado

June 7, 1889

Commissioners' decision. Appeal from district court, San Miguel county; M B. GERRY, Judge.

This suit was first brought by appellees against the appellant and H. L. King in the county court. Complaint filed October 7 1884, counting on two promissory notes, each for the sum of $500, bearing date May 14, 1884, payable respectively in 3 months and 17 days, and 4 months and 17 days, after date, to William Rea or order, with interest at 10 per cent. per annum, and purporting to have been executed by appellant and H. L. King. H. L. King was not served, and did not appear. The answer of appellant is not set out in the record. A trial was had, resulting in a judgment for plaintiffs for $1,000 interest, and costs. Isaac King perfected an appeal to the district court. In the district court an amended complaint was filed, counting-- First, upon the promissory notes; and, second, alleging that the promissory notes were made and executed by H. L. King as agent for and on behalf of Isaac King; that the consideration of the notes was the purchase of a ranch of 160 acres, and the improvements, by H. L. King for the appellant; that appellant, with full knowledge of all the facts of the purchase and the execution and delivery of the notes, about the 15th of June, 1884, entered into the possession and took control of the property, and ratified and adopted the contract and acts of his agent, and afterwards, with full knowledge of all the facts, promised payment of the notes. Defendant answered the complaint, denying each allegation and for a further defense alleged that on May 14, 1884, while he was absent from the state, plaintiffs induced H. L. King to purchase the property and make the notes signed by himself, and with the name of defendant; that H. L. King had no authority to purchase the property or sign the notes on his behalf; that H. L. King so informed plaintiffs at the time of the transaction; that plaintiffs promised H. L. King to retain possession of the property and notes until defendant returned and was informed of the facts, and that if he did not ratify and confirm the contract it was to be rescinded; that plaintiffs abandoned the possession of the property by delivering the same to H. L. King for defendant before his return, also assigned the notes to William Rea before he was informed of the transaction; that as soon as he was informed of the purchase he declined to approve of it, or accept the property; that he refused to recognize or ratify the notes, or pay them; that he has at all times refused to take the property into his possession, and has not at any time entered into the possession and control of it. For a third defense defendant alleged that after the making and delivery of the notes they were materially altered and changed without his consent. A jury trial was had, and on October 20, 1885, a verdict for plaintiffs was returned for $1,101.65. The subject-matter of sale and purchase was a 160-acre claim on the public domain, of which plaintiffs has the possession, the improvements on the same made and owned by plaintiffs, and some personal property, (logs cut for building, a hay-baler, etc.) The trade was to be consummated by the transfer of the possession of plaintiffs to defendant on his return. ^[1]

Bell & Goudy and C. W. Blackmer, for appellant.

W. H. Gabbert, for appellees.

REED C., ( after stating the facts as above.)

There are numerous errors assigned. The first is that the court erred in permitting plaintiffs to amend their complaint so as to introduce a new cause of action. Whether or not the amended complaint introduced a new cause of action it is unnecessary to determine. It does not appear that any objection was made or exception taken to the filing of the amended complaint; consequently it will not be considered. Several of the assignments may be considered together, as they go to the testimony admitted to establish the agency of H. L. King, his authority to execute and deliver the notes in controversy, and consequently the validity of the notes as against the defendant. That there was not competent evidence sufficient to establish the authority of the agent to execute the notes became apparent to the court in the course of the trial, and by an instruction the court withdrew from the consideration of the jury the testimony in regard to the agency of H. L. King, and placed the right of plaintiffs to recover entirely upon the question of ratification by the defendant. This corrected the errors complained of so far as they could be corrected by the court at that stage of the proceeding, and we cannot say the instruction of the court did not have the full effect intended. Many of the supposed errors in admitting and rejecting testimony were disposed of by the court in the instruction given to the jury, as they arose upon that branch of the case. There were trivial, technical, but unimportant errors upon the trial, not such as could seriously affect or prejudice defendant, as they were on collateral matters, and not material in determining the question of ratification, and we do not find it necessary to further discuss them.

After the court gave the instruction withdrawing from the jury all testimony in regard to the authority of H. L. King to execute the notes on behalf of defendant, and placed the right of recovery entirely upon the ratification by the defendant, no act of the defendant, or evidence of ratification, could validate the unauthorized act of the agent in executing the notes; so that a recovery could have been had upon them as notes of the defendant, unless it should be by evidence of adoption and a promise to pay them. The trial could only proceed upon the original consideration for which the notes were attempted to be given, and the notes, being in evidence, could only be considered as to the amount to be paid and the time of the payments. It is true that 'ratification has a retrospective effect, and is equivalent to a prior command.' Broom, Leg. Max. 866. But in this case it can only be understood as a command to make the purchase at the price fixed, and as to time and terms of payment as they were fixed by the contract.

The questions to be submitted and determined by the jury were: (1) As to the knowledge of the defendant in regard to the transaction as made and entered into on his behalf by his brother, claiming to act as his agent. Whether all the facts necessary to a full understanding came to his knowledge at any time after his return on June 1st, and prior to September 10th. Or, if not fully informed in regard to all the facts, had he not sufficient information, and were not the circumstances such as to afford him an opportunity and require him to obtain the necessary information? The circumstances must have been fully understood by the party before any inference can be drawn from his silence, and they must have been such as not only afforded an opportunity to act or speak, but such as would naturally call for some action from men similarly situated. 1 Greenl. Ev. § 197; Mining Co. v. Bank, 1 Colo. 531; Story, Ag. 256; Corser v. Paul, 41 N.H. 24. (2) Did the defendant, as soon as he had knowledge of the facts of the purchase, within a reasonable time disavow the transaction, and place the parties respectively in the same situation they were previous to the purchase? 'If a party does not disavow the acts of his agent as soon as he can after they come to his knowledge, he makes these acts his own.' 1 Pars. Cont. 51; Mining Co. v. Bank, supra; 1 Greenl. Ev. § 197; Hortons v. Townes, 6 Leigh, 47; Veazie v. Williams, 8 How. 134; Benedict v. Smith, 10 Paige, 126. (3) Did defendant, when informed of the facts, by failing to disavow and rescind the contract, and by his acts, silence, and apparent acquiescence, cause the plaintiffs to change their relation to the property, cause them a loss, prevent the collection of the notes from H. L. King, and estop him (defendant) from denying his liability to pay the consideration of the purchase? 'There is a class of admissions which may be either express or implied from silence or acquiescence which are conclusive. Such are admissions which have been acted upon, or those which have been made to influence the conduct of others, or to derive some advantage to the party, and which, therefore, cannot be denied without a breach of good faith.' Corser v. Paul, supra. 'Where the delay on the part of the principal to disavow the agency will result in loss, and where the transaction may turn out a profit or loss according to circumstances, the principal must disavow the act of the agent within a reasonable time after notice.' Mining Co. v. Bank, supra; Culver v. Ashley, 1 Amer. Lead. Cas. 719, and note; Hortons v. Townes, supra. 'If the principal accept, receive, and hold the proceeds or beneficial results of such a contract, he will be estopped from denying an original authority or a ratification.' 1 Pars. Cont. 50; Johnson v, Smith, 21 Conn. 627.

In order to ascertain whether these propositions were properly submitted to the jury an examination of the instructions becomes necessary, and also of the testimony to a certain extent. There is testimony on the part of defendant to show that at the time of the transaction it was agreed that the plaintiffs were to retain the possession of the property and the notes until after the return of defendant, and that the consummation should depend upon his election. This was partially denied by plaintiffs, but it is conceded that plaintiffs did retain the possession until the 11th day of June; that defendant returned to the vicinity of the ranch, or at least to Montrose, on or prior to June 2d; and that with him came his brother-in-law...