Pacific Guano Co. v. Ellis, 6183
| Decision Date | 30 September 1957 |
| Docket Number | No. 6183,6183 |
| Parties | PACIFIC GUANO COMPANY, a corporation, Appellant. v. George L. ELLIS and Rachael Ellis, his wife, Appellees. |
| Court | Arizona Supreme Court |
Ryley, Carlock & Ralston and Sam P. Applewhite, III, Phoenix, for appellant.
Fennemore, Craig, Allen & McClennen and Philip E. Von Ammon, Phoenix, for appellees.
Pacific Guano Company, a corporation, filed complaint against George L. Ellis and his wife, Rachael Ellis, alleging that defendants in July, 1952, contracted in writing to purchase fertilizer for which defendants refused to pay and prayed for judgment for the purchase price. Defendants counterclaimed in two counts, the first alleging in substance that in June, 1952, the parties entered into a contract whereby plaintiff agreed to sell defendants fertilizer and through its agents apply the same to defendants' cotton crop in quantities adequate for fertilization. This count also alleges that pursuant to the agreement plaintiff applied the fertilizer in such a negligent manner that defendants' crop was damaged and the yield reduced. The second count of the counterclaim is for the same damage but the theory of liability is the breach of an alleged implied covenant to make application of the fertilizer in a workmanlike manner. The reply to the counterclaim consists of a general denial and an allegation that if the crop was damaged, the proximate cause thereof was lack of sufficient irrigation water and the negligence or contributory negligence of defendants in not properly caring for the crop. A jury trial on the issues thus framed resulted in a verdict and judgment on the counterclaims in defendants' favor in the sum of $30,961. Plaintiff appeals and will be referred to herein as the company and the appellees by name or as counterclaimants.
One of the major questions presented is whether the evidence would authorize the jury to return any verdict in favor of Ellis. It is contended by the company that there is no proof of any agreement between the parties whereby it was agreed that the company would apply the fertilizer to Ellis' land and that even if such an agreement had been entered into by the agent of the company, the evidence does not warrant a finding that he had either actual or apparent authority to make the same. On this question of whether the jury could be allowed to find that the agent of the company did make an agreement with Ellis to apply the fertilizer to his land, there was evidence that a Mr. Corbus, a salesman for the company solicited Ellis with the view of selling him the company's product for the purpose of fertilizing his cotton crop. The fertilizer was of a character that was to be applied by injection in the ground alongside the plant with the use of equipment attached to a tractor. Ellis had no equipment that would serve this purpose and had never done any such work. The agent told Ellis there was a man by the name of Crumbaker who did such work and took care of his customers and he (Corbus) would get in touch with him and see that there was a man available to do the work. Corbus quoted Ellis a per acre cost for the fertilizer and its application and Ellis told him to go ahead. Thereafter, Ellis never contacted anyone to perform this service but the evening before the work started a man with a tractor asked permission of Ellis to park his tractor on the land concerned. Another man followed him in a pickup and took him home. Ellis knew neither of these men. The next day the injection work started. The tractor driver and the salesman Corbus were there. Ellis gave no instructions concerning how the work was to be performed. From this evidence the jury was entitled to determine that Corbus, the company's salesman, did agree that the company would perform the service of injecting the fertilizer sold to Ellis.
The company contends that its salesman had no authority to make such a contract that would be binding upon it. There was introduced into evidence a written contract of agency between Corbus and the company. This contract did not expressly authorize the agent to contract for injection nor did it expressly prohibit such an agreement. The company argues that, there being no express authority, the company cannot be bound because the evidence does not warrant a finding of ostensible or apparent authority. This is not exactly correct. In the absence of express authority, for one to be bound by an act of a purported agent, the evidence must be such as to justify a finding there was either actual implied authority or apparent authority. Either of these must be created by some conduct of the principal. The former may be founded on the principal's acquiescence to an agent's course of conduct which justifies the reasonable conclusion that actual authority was given though not in express language. This is implied authority and, if such exists, knowledge by the person dealing with the agent of the course of conduct which creates it is of no importance but knowledge of the principal is essential. There is a distinction between implied authority and apparent authority. Restatement of Law, Agency, section 8(d). If implied authority is found to exist, whether there was apparent authority becomes immaterial. When there is in fact no actual express or implied authority, dependence must be placed upon apparent authority. To bind a principal on the basis of apparent authority the principal's conduct must be such that the law will not permit him to say he did not give the agent the authority. In such instance the person dealing with the agent must have knowledge of the principal's conduct and have been misled thereby. Moore v. Switzer, 78 Colo. 63, 239 P. 874. It is possible but not necessary that actual implied and apparent authority be co-existent. There being no express authority, for the jury to be allowed to find Corbus could bind the company, the evidence must be such as to justify it in determining that the agent possessed such authority by implication. If the evidence is such that...
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