Mayrath Co. v. Helgeson

• Decision Date: 11 January 1966
• Docket Number: No. 51919,51919
• Citation: 139 N.W.2d 303,258 Iowa 543
• Parties: MAYRATH COMPANY, Appellant, v. Truman HELGESON, doing business as Helgeson Motor Company, Appellee.
• Court: Iowa Supreme Court

Page 303

139 N.W.2d 303

258 Iowa 543

MAYRATH COMPANY, Appellant, v. Truman HELGESON, doing business as Helgeson Motor Company, Appellee.

No. 51919.

Supreme Court of Iowa.

Jan. 11, 1966.

Weible & Stipp, Forest City, for appellant.

Eugene G. Sarno, Lake Mills, and Westfall, Laird & Burington, Mason City, for appellee.

LARSON, Justice.

This accounting action brought by the Mayrath Company, an Illinois corporation, of Compton, Illinois, against Truman Helgeson, doing business as Helgeson Motor Company, of Lake Mills, Iowa, raises the question of whether a letter addressed to Mr. Les Hein, Mayrath Company, at Compton, enclosing a check for $646.71 'covering complete settlement of our account with you', became an accord and satisfaction when the check made out to the company was deposited to its account and the money never returned to defendant. By stipulation this issue was tried separately to the court, which found for defendant and dismissed plaintiff's petition. Plaintiff appeals.

Claimed as error was the court's determination that the evidence showed Les Hein, a corporation officer and employee, had authority to settle claims due the corporation that there was no fiduciary relationship between plaintiff and defendant generated by their contract which would prevent the application of the doctrine of accord and satisfaction, and that Hein's acceptance of the check under the stated condition was ratified by corporate acceptance of the benefits thereof.

I. Except as to construction of the contract involved, this case is not reviewable de novo, but only to correct errors at law, and if the findings of fact have evidentiary support, viewed in the light most favorable to those findings, we do not attempt to weigh the evidence and cannot interfere with the trial court's findings. Rule 334, Rules of Civil Procedure.

The record discloses that on or about June 3, 1959, plaintiff and defendant entered into a written contract whereby defendant became both a dealer and warehouseman for plaintiff's line of farm machinery and goods. According to plaintiff's petition, goods valued at $248,462.41 were thereafter delivered and charged to defendant. When the contract was terminated by plaintiff in the spring of 1961, defendant was credited with $2,180.32 for payments on account and the value of the goods returned in a total sum of $242,582.92. Plaintiff demanded judgment for the difference of $5,879.49.

The cause of the contract termination was a telephone dispute between the corporation president Mayrath, whose office was in Dallas, Texas, and defendant Helgeson as to the fees and commissions Helgeson was to have for his services as a dealer and warehouseman. The dispute as to the amount due plaintiff thereafter, for the most part, was between defendant and Mr. Hein, who was in charge of collections at the Compton Illinois, plant of the Mayrath Company. Correspondence between Helgeson and Hein covered several months, and on August 8, 1961, Helgeson sent to Mayrath Company at Compton, Illinois, a letter setting forth wherein he differed with the statement of account sent him by Hein, stated his claim for compensation in closing their account, and tendered his check for $646.71 in 'complete settlement of our account with you.' The letter and check were received by Hein and the check was deposited to the Mayrath Company account, which still retains the proceeds of the check.

The trial court found Hein had implied and apparent authority to accept defendant's offer, did so, and there was an accord and satisfaction.

II. It is well settled in this jurisdiction that the authorized acceptance of money offered in satisfaction of a genuinely-disputed claim, if accompanied by acts and declarations which amount to a condition that, if accepted, it is in satisfaction of the claim, amounts to an accord and satisfaction. A party to whom such an offer is made has no alternative but to refuse and return the money, or to accept, and if he accepts on those conditions, his claim is canceled. Olson v. Wilson & Co., 244 Iowa 895, 58 N.W.2d 381; Minnesota & Ontario Paper Co. v. Register & Tribune Co., 205 Iowa 1228, 219 N.W. 321; Schultz v. Farmers' Elevator Co., 174 Iowa 667, 156 N.W. 716.

Appellant does not disagree with that rule, but contends the evidence here was insufficient to support a finding that Hein had authority of any kind to accept the Helgeson offer to compromise and settle this disputed account, or to bind the Mayrath corporation by his deposit of the check in the company account. Appellant correctly contends it was defendant's burden to prove by a preponderance of the evidence that Hein had such authority, actual, implied, apparent or ostensible, in August, 1961. Whitney v. Krasne, 209 Iowa 236, 246, 225 N.W. 245; 1 Am.Jur.2d, p. 306; 2 C.J.S. Agency § 118, pp. 1339, 1340; 19 C.J.S. Corporations § 1064, p. 599. However, it must also concede that usually the nature and extent of the authority of an agent, and whether his acts or contracts are within the scope of his authority, are questions of fact, and that generally agency is to be determined by what the principal said or did, rather than by what the agent said or did. Spencer Concrete Products Co. v. City of Spencer, 254 Iowa 87, 93, 96, 116 N.W.2d 455; Grismore v. Consolidated Products Co., 232 Iowa 328, 344, 5 N.W.2d 646, 651; Hall v. Crow, 240 Iowa 81, 90, 34 N.W.2d 195, 200. Thus, we must examine carefully the evidence of what powers and duties appellant permitted Hein to exercise and which were apparent to appellee during the time of this transaction.

There can be no doubt that Helgeson's letter and check sent to the Mayrath Company at Compton on August 8, 1961, constituted an offer of a genuinely-disputed claim. Whether all items were bona fide, we need not decide. It was an unliquidated claim and the offer of settlement was clearly conditional. Plaintiff's statement of account sent to defendant by Hein showed debits and credits and the balance claimed due. Defendant disputed the credits for 1960 business, stating their difference to be $4,212.52. He further claimed credit for a sum which should have been collected direct by plaintiff amounting to $600.92, and $1,066.05 for loading, unloading, handling expenses, etc. at termination.

III. The liability of the principal for the acts and contracts of his agent is not limited to such acts and contracts of the agent as are expressly authorized, necessarily implied from express authority, or otherwise actually conferred by implication from the acts and conduct of the principal. All such acts and contracts of the agent as are within the apparent scope of the authority conferred on him, are also binding upon the principal. Apparent authority, or ostensible authority to do such acts or to make such contracts, is that which, although not actually granted, has been knowingly permitted by the principal or which he holds the agent out as possessing. Hall v. Crow, supra, 240 Iowa 81, 90, 34 N.W.2d 195, 200; Union Mut. Life Ins. Co. v. Wilkinson, 13 Wall. 222, 80 U.S. 222, 20 L.Ed. 617; 2 C.J.S. Agency 1339, 1340; 2 Am.Jur., Agency, § 101, p. 82; Restatement of the Law, Agency, § 160.

In Hall v. Crow, supra, the court pointed out that it was a jury question as to whether or not a salesman for a seed company was authorized to make representations and warranties for the company.

In 19 C.J.S. Corporations § 1064 at page 599, it is stated: 'As a general rule an officer or agent of the corporation has no power to compromise or settle a claim by or against the corporation, or to release a claim of the corporation against a third person, except to the extent that such power is given to him either expressly or by reasonable implication from the circumstances.'

At 2 C.J.S. Agency § 118, pages 1339 to 1340, it is stated: 'An agent, in order to have power to compromise or settle a claim, must be specially authorized for that purpose, or must have such a broad general authority of management and control that the power arises as an incident to the conduct of his agency in its ordinary manner; * * *.'

In Nertney v. National Fire Ins. Co. of Hartford, Comm., 199 Iowa 1358, 203 N.W. 826, we approved the statement in Union Mut. Life Ins. Co. v. Wilkinson, supra: 'The powers of the agent are, prima facie, coextensive with the business intrusted to his care, and will not be narrowed by limitations not communicated to the persons with whom he deals.'

We said in Spencer Products Co. v. Spencer, supra, 254 Iowa 87, 93, 116 N.W.2d 455, that to bind a corporation, the officer, employee or agent, must be one whose connection with the company is such, or whose employment is of such character, that he impliedly had authority to bind it, and would be likely to inform the corporate officers of the offer and acceptance in its behalf.

Because of what authority is usually delegated to an officer of the corporation or assumed by him, and not objected to by the board, there has been a tendency to imply the powers of a general manager from the office alone to enter into such ordinary contracts as the custom and necesities of the business would justify.

Applying these rules to the evidence produced, the trial court found 'Hein was acting within the apparent scope of his authority', that he was 'the key man' acting for the corporation at Compton, and that the reasonable implications to be drawn from the facts supported the conclusion that Hein was authorized to make this settlement with defendant.

That Hein had a responsible position at the Compton office cannot be denied. None were above him at that office. He appeared to be the general manager of that office, although he did not have that title. Although plaintiff claims he was just the bookkeeper, the name is not important if in fact he was the manager at the Compton office. He was secretary of the corporation and was perhaps a member of the board of directors. He had the confidence of the...