Okla. Title Co. v. Burrus

• Decision Date: 30 April 1935
• Docket Number: Case Number: 22716
• Parties: OKLAHOMA TITLE CO. et al. v. BURRUS
• Court: Oklahoma Supreme Court

1935 OK 495

44 P.2d 852

172 Okla. 94

OKLAHOMA TITLE CO. et al. v. BURRUS

Case Number: 22716

Supreme Court of Oklahoma

Decided: April 30, 1935

Syllabus

¶0 1. Principal and Agent--Ratification of Acts by Acceptance of Benefits.

Although a party may not have directly authorized an act which was performed, yet, where such party accepts the benefits of the act, it amounts to a ratification, and the party so ratifying the action taken accepts the burdens along with the benefits to be derived.

2. Same.

It is not essential to a ratification that the principal have full knowledge of the conditions attached to the agreement made by one acting as agent without authority, but where the benefits of the unauthorized act are accepted without knowledge, and are retained after having knowledge, or alter the happening of such events as would place a reasonably prudent person on inquiry which would discover full knowledge, ratification is accomplished and the principal is bound.

3. Corporations--Liability of Successor for Debts of Old Corporation.

Where a new corporation is organized for the purpose of succeeding to the business and acquiring the property of an existing corporation, and the new corporation does acquire the business and property of the old corporation without purchasing the same in good faith, and where the stockholders in the two corporations are in effect the same and the other surrounding circumstances are such as to warrant a conclusion that, the new corporation is a mere continuation of the old, the new corporation becomes liable for the debts of the old.

4. New Trial--Ground of Newly Discovered Evidence--Lack of Diligence.

A trial court is justified in denying a motion for a new trial based on the grounds of newly discovered evidence when it appears that the alleged newly discovered evidence was known to or could with reasonable diligence have been secured by the moving party at the time of trial.

5. Principal and Agent -- Pleading of Agent's Contract as That of Principal.

An action by or against a principal on a contract executed through an agent may be pleaded as though performed by the principal without disclosing the fact of agency.

Appeal from District Court, McIntosh County; Harve L. Melton, Judge.

Action by Nina G. Burrus against the Oklahoma Title Company and the Eufaula Abstract Company to obtain money judgment on a promissory note. Judgment for the plaintiff, and defendants appeal. Affirmed.

Carl W. Gust for plaintiff in error Eufaula Abstract Company.

Turner & Turner and H. B. Parris, for plaintiff in error Oklahoma Title Company.

Clark and Jack Nichols, for defendant in error.

BUSBY, J.

¶1 This is an action on a promissory note commenced on the 23rd day of January, 1928, by Nina G. Burrus, as plaintiff, against the Oklahoma Title Company a corporation, as defendant. Subsequently the Eufaula Abstract Company, a corporation, was made a party defendant. Plaintiff in her petition as finally amended sought to recover from the above-named defendants the principal sum of $ 1,276 with interest and attorneys' fees as provided in the note.

¶2 The case was tried to a jury in the trial court, resulting in a verdict and judgment in favor of the plaintiff and against both of the defendants for the amount above stated. Both of the defendants have appealed and appear herein as plaintiffs in error. For the purpose of convenience, we shall refer to the parties as they appeared in the court below.

¶3 The defendants present their appeal on separate petitions in error. Since the liability, if any, of each of the two defendants arises from different legal principles, which, in their application, require that controlling importance be attached to entirely different facts, we shall treat the liability of the two corporations separately.

¶4 We shall first consider the appeal from the standpoint of the Oklahoma Title Company.

¶5 The note in question was made payable on demand to the order of plaintiff. It was executed on May 27, 1927, by T. J. Young, who purported to act in behalf of the Oklahoma 'title Company. He signed the note "Oklahoma Title Co. by T. J. Young, Secy." The plaintiff averred in her petition that this was a renewal note given to take up 'the principal and interest due on a note executed to her by the Oklahoma Title Company on or about the first day of June, 1925. She also alleged that this note, executed in June, 1925, was an extension note given in lieu of a note for $ 1,100 executed and delivered by the Oklahoma Title Company to the plaintiff on the 6th day of June, 1923; that the consideration for the original note was a loan of money for the face amount of the note and that the money loaned had been used by the, Oklahoma Title Company to purchase furniture and equipment to be used in furnishing and equipping its office and that said furniture and equipment was so used. She also asserted, in substance, that the act of the agent or purported agent, T. J. Young, in borrowing the money from her had been previously authorized by the defendant corporation and also that it was subsequently ratified by the defendant corporation.

¶6 Defendant Oklahoma Title Company presented its case in the trial court on the theory that it neither authorized nor ratified the act of T. J. Young in executing the note in question or any of the previous notes and it neither authorized nor ratified his act in boa. rowing money from the plaintiff to be used in purchasing furniture and equipment for its office.

¶7 At the close of the evidence the learned trial judge submitted the issue to the jury on the question of implied ratification only. The jury was advised, in substance, that the evidence was insufficient to show that T. J. Young had been expressly or impliedly authorized to act in behalf of the company in the transactions above mentioned' that it was also insufficient to show an express ratification. The court then advised the jury that "the question for you to determine in the case is whether or not there was an implied ratification of the acts of T. J. Young in borrowing the money, if he did so borrow it, for the purpose of purchasing said furniture and equipment, in such manner as to bind the Oklahoma Title Company for the repayment of said loan."

¶8 Following the above statement of the question, the trial court instructed the jury more specifically on the elements of implied ratification. It is unnecessary to examine the instruction given for the purpose of determining whether or not it was technically correct, since no exception was taken to the same. Defendant Oklahoma Title Company presents its case in this court upon the theory that the evidence was wholly insufficient to support the verdict and judgment. The sufficiency of the evidence was challenged in the proper manner in the trial court.

¶9 An examination of the voluminous record in this case discloses that, while there is sharp conflict in the evidence in some particulars and different conclusions could be drawn therefrom, the evidence amply supports the view that the defendant corporation, Oklahoma Title Company, ratified the acts of its purported agent in borrowing money for the purpose of purchasing furniture and in executing the note in question. It appears that the Oklahoma Title Company had conducted an abstract business in the city of Eufaula for a number of years prior to 1927, when it discontinued its business. Its stockholders were T. E. Bratton (also known as Tom Bratton), Lester Clark: (also known as L. C. Clark), Mrs. Smock, and T. J. Young. It appears that T. J. Young was in active charge of the affairs of the corporation for a long time prior 'to the time it discontinued its business in 1927. In fact, during the time of all the transactions herein concerned, he appears to have been the only person who had anything to do with the management: of the company. No directors' meetings were held between 1913 and 1927. The other stockholders, however, resided in Eufaula and Mr. Bratton, in particular, made the offices of the company his general headquarters, presumably for the purpose of conducting his individual business.

¶10 The testimony shows that in 1923, when the furniture was purchased, there was no money available in the funds of the company for the purpose of purchasing the same and that it could not have been purchased by the company without borrowing money for that purpose. There is testimony in the record showing that T. J. Young, at the time the furniture was purchased, consulted at least two of the other directors concerning the advisability of borrowing money for that purpose, and that his suggestion in that respect met with their approval. The testimony also indicates that during the four years that the company remained in business after the furniture was purchased, the other stockholders and especially Mr. Bratton were frequently around the office and knew that the furniture had been purchased. During all of this time, while the. company was receiving the benefit of the proceeds of the loan, no objection seems to have been made by any of the stockholders, who, it appeared, were also the officers in the corporation and constituted its board of directors.

¶11 The testimony was amply sufficient to show a ratification by the corporation of the act of its managing officer in borrowing the money from the plaintiff and using it for the purpose of purchasing furniture.

¶12 The rule announced by this court in the case of First Nat. Bank of Muskogee v. Clark, 93 Okla. 23, 219 P. 370, is applicable. In that case this court said in paragraphs 1 and 2 of the syllabus:

"Although a party may not have directly authorized an act which was performed, yet, where such party accepts the benefits of the act, it amounts to a ratification, and the party so ratifying the action taken accepts the burdens along with the benefits to be derived.

"It is not essential to a ratification that the principal have full knowledge of the conditions attached

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