Outboard Marine Center v. Little Glasses Corp.

• Decision Date: 17 March 1959
• Docket Number: No. 38298,38298
• Parties: OUTBOARD MARINE CENTER, a partnership composed of Rex Bates and R. A. McDerby, dba Outboard Motor Center, Plaintiff in Error, v. LITTLE GLASSES CORPORATION, Defendant in Error.
• Court: Oklahoma Supreme Court

Page 1101

338 P.2d 1101

1959 OK 40

OUTBOARD MARINE CENTER, a partnership composed of Rex Bates and R. A. McDerby, dba Outboard Motor Center, Plaintiff in Error, v. LITTLE GLASSES CORPORATION, Defendant in Error.

No. 38298.

Supreme Court of Oklahoma.

March 17, 1959.

As Amended May 4, 1959.

Rehearing Denied May 5, 1959.

Syllabus by the Court.

1. It is not essential to the ratification of an agreement that the principal have full knowledge of the conditions attached to the agreement by one acting as his agent without authority, but where the benefits of the unauthorized act are accepted without knowledge and are retained after having knowledge, or after 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 to the extent of benefits received.

2. Record examined and held: Judgment not sustained by the evidence and is contrary to law.

Appeal from the District Court of Marshall County; E. A. Summers, Judge.

Action for money judgment for property sold. From judgment for defendant, plaintiff appeals. Reversed and remanded with directions.

Reuel W. Little, Madill, for plaintiff in error.

Wilson Wallace, Ardmore, for defendant in error.

BERRY, Justice.

Rex Bates and R. A. McDerby, doing business as partners under the trade name 'Outboard Marine Center', hereafter referred to as 'B & M', brought suit against Little Glasses Corporation, hereafter referred to as 'corporation', for $895.45, the purchase price of boat supplies which it alleges it sold to corporation.

This case and Yellow Jacket Boat Company, Inc., v. Little Glasses Corporation, Okl.Sup., 338 P.2d 1101, were consolidated for trial in the lower court. The parties waived a jury and tried the cases to the court. The trial court entered judgment for corporation. B & M filed a motion for new trial and upon same being denied, perfected this appeal.

In 1955 N. J. Barnett, hereafter referred to as 'Barnett', purchased the Little Glasses Resort near Madill, Oklahoma. Corporation was organized for the purpose of operating this resort. At the outset the business done by Little Glasses was renting cabins, operating a cafe, selling fish bait and renting a few boats, which business will hereafter be referred to as 'resort business' in order to distinguish said business from the business of buying and selling boats and boat supplies, which business B & M contends corporation also engaged in at said resort but which last-mentioned business corporation contends its manager, Roy B. Hart, hereafter referred to as 'Hart', engaged in for his sole use and benefit.

Upon corporation being organized, Hart was employed as corporation manager to operate the resort and he was also made Secretary and Treasurer of corporation. In the contract of employment, which was in writing, it was provided that Hart should 'be in general charge of Little Glasses Resort, personally managing same, devoting his best efforts and all necessary time required for the efficient performance of his duties'.

Corporation does not question that Hart had general authority to conduct resort business. It insists, however, that Hart's authority did not extend to buying and selling boats and boat supplies. The trial court sustained corporation's contention in said particular and this appeal resulted.

B & M contends that Hart had corporation's express authority to purchase the boat supplies in controversy and B & M also contends that corporation accepted the benefits of the sales in controversy and having accepted the benefits will not be permitted to deny the agency of Hart who made receipt of the benefits possible. The trial court rejected said contentions.

A short time after Hart entered upon his duties as manager of the resort, which corporation continued to be operated under the name of 'Little Glasses Resort', he, while assuming to act as corporation's agent, negotiated a dealership evidenced by an oral contract with Yellow Jacket Boat Company, Inc., hereafter referred to as 'Yellow Jacket', to sell boats that the latter handled. Yellow Jacket intended to issue the dealership to corporation. As an incident to the boat business, Hart made arrangements with B & M to purchase boat supplies which B & M handled. To further the boat and boat-supply business, Hart made credit arrangements with a bank in Madill and opened a special checking account in his name. The bank did not consider that corporation was involved in said credit arrangements. Hart contends otherwise. Checks were at all times drawn on said special account in payment of boat supplies. The boat supplies in controversy were invoiced to 'Roy Hart--Little Glasses Resort'. The checks drawn on Hart's special account in payment of the said supplies were not honored.

Hart testified that Barnett knew about the boat dealership and the boat-supply arrangement and gave his full and complete approval of said arrangements....