Planters' Lumber Co. v. Sibley

• Citation: 130 Miss. 26,93 So. 440
• Decision Date: 09 October 1922
• Docket Number: 22618
• Parties: PLANTERS' LUMBER CO. v. SIBLEY
• Court: United States State Supreme Court of Mississippi

93 So. 440

130 Miss. 26

PLANTERS' LUMBER CO. v. SIBLEY

No. 22618

Supreme Court of Mississippi

October 9, 1922

APPEAL from circuit court of Sunflower county, HON. S. F. DAVIS Judge.

Action by the Planters' Lumber Company against Mrs. Nancy Sibley, administratrix. From the judgment rendered after judgment against the defendant by default was set aside, plaintiff appeals. Reversed and remanded.

Judgment reversed, and cause remanded.

George Butler, for appellant.

Under all the authorities the burden of proof was on appellee to show two things: (a) The fact of Schultz's agency; and (b) The extent of the agent's authority.

In 31 Cyc, the rule is laid down as follows: "Burden of Proof. In General. Fact of Agency. Agency is a fact the burden of proving which rests upon the party affirming its existence and the rule is equally applicable to one who would relieve himself from personal liability on the ground of agency and to one who would charge another as principal with the act of an alleged agent."

On page 1644, the rule is laid down as follows: "Extent of Authority. In General. Not only does the burden of proof as to the fact of agency rest with one who seeks to charge another as principal with the acts of an alleged agent, but the burden also rests with him to prove the extent of the agency; in other words, the burden is upon him to show that the act or acts of the agent were within the scope of his authority."

This is in line with the authority quoted in our original brief from 21 R. C. L. 905. Second; appellee makes the point that if appellant shipped the lumber and received the benefits accruing under the alleged contract, it is estopped to repudiate Schulte's authority. In other words, it is claimed that appellant by accepting the benefits of the contract ratified the unauthorized act of Schultz.

As supporting this proposition appellee quotes from 21 R. C. L. 923. However, in that same work at page 928, in discussing the question of ratification it is said: "In any case, however, in order to constitute a ratification there must be an acceptance of the result of the act with intent to ratify and with full knowledge of all of the material circumstances."

This is the universal rule. In Meyer v. Baldwin, 52 Miss. 263, it is said: "The third instruction for plaintiff below is plainly wrong. It tells the jury that the receipt by a principal of the fruits of an unauthorized act of an agent is a ratification. Clearly not without full knowledge by the principal. Story on Agency, section 253, Note 1.

The case of Odd Fellows Benefit Association v. Smith, 101 Miss. 332, expressly held that the Benefit Association is not to be deemed to have ratified the unauthorized acts of its agents in collecting past due assessments, though there was a general custom for the agents to collect such past due assessments, in the absence of a showing that the general officers knew of and acquiesced in the unauthorized act of the agent.

"A party relying on a ratification of the unauthorized act of an agent has the burden of proving it. To meet the burden it is necessary to show that the ratification was made under such circumstances as to be binding on the principal, especially to see to it that all material facts were made known to him, or, as is sometimes stated, to see to it that there was an adoption, of the act by the principal with full knowledge of what had been done in his name and on his behalf." 31 Cyc. 1647.

Appellee wholly failed to meet this burden, in fact, the record shows without contradiction, that appellant did not know of the existence of the alleged contract, until several months after the account became due and after it had repeatedly demanded of appellee payment of the balance.

Chapman & Johnson and Flowers & Brown, for appellee.

The power of a court to set aside or vacate default judgments is largely a discretionary one. Only in extreme cases involving an arbitrary abuse of this discretion will such orders be reversed by the appellate court. On the other hand, the universal sentiment is in favor of the trial on the merits. Few if any cases can be produced where default judgments have been reinstated on appeal.

The courts possess and exercise a very large discretion in vacating judgments by default, for permitting a defense to be made on the merits. No rule can be laid down which would be applicable in all the states. . . . In deciding upon the question of diligence, the action of the court will be reviewed only in extreme cases; involving an abuse of the discretion vested in the court." 2 Freeman on Judgments, section 541.

This record does not reflect an abuse of discretion on the part of the trial court in setting aside the order. If there is any particular doctrine accepted by this court dealing with matters of this sort it is that all doubt should be resolved in favor of a trial on the merits. Southwestern Surety Company v. Treadwell, 113 Miss. 189, 74 So. 143.

Shultz was the agent of the plaintiff clothed with apparent authority to make a contract of this nature. In the very authority quoted by counsel for appellant, section 81, 21 R. C. L. 904, it is said that: "The principal is bound by all the acts of his agent within the scope of the authority which he has held him out to the world to possess. If an act done by an agent is within the general scope of the authority with which he has been clothed, it matter not that it is directly contrary to the instructions of the principal; the latter will nevertheless be liable;" and in 21 R. C. L. 907, section 48, it is further said: "Where a principal has by his voluntary act, placed an agent in such a situation that a person of ordinary prudence, conversant with business usages and the nature of the particular business, is justified in presuming that such agent has authority to perform a particular act, and therefore deals with the agent, the principal is estopped as against such third person from denying the agent's authority."

The case of Becker Co. v. Clardy, 96 Miss. 301, 51 So. 211, is not at all in point. There it was expressly shown that Clardy had notice of the limitations on the agent's authority. In fact after the order was given, he, Clardy, wired the principal asking that the agent's contract be confirmed. This it refused to do. It is said in the opinion in that case that "Stannion (the agent) had no authority, express or implied, to make an absolute contract of sale. In addition Clardy had notice of the limitations on Stan nion's authority." Bank v. Gwin Lewis Grocery Company, 123 Miss. 443, 86 So. 275; Grunner Lbr. Co. v. Algonquin Lbr. Co., 123 Miss. 157, 85 So. 191, is also easily distinguished from the case at bar. In that case it will be observed that the order was acknowledged by the Algonquin Lumber Company in a letter to the company and its counterterms accepted by the president of the company. We fully appreciate the general rule announced in that case to the effect that a person dealing with an agent of another must know the limitations of authority upon the power of the agent. But it is also there stated that this rule is qualified where there are elements of estoppel. In other words when one has by his voluntary act placed an agent in such a situation that a person familiar with the nature of the particular business is justified in presuming that such an agent has authority to perform a particular act, and thereafter deals with the agent, the principal is bound.

It must be borne in mind here that this is not a case where the principal is denying the existence of any contract growing out of the dealings with its agent. This case is distinguishable from that class of cases wherein the agent takes an order and his principal refuses to accept it or to ship the goods. In most cases this question comes up on a suit by the purchaser for failure to ship merchandise or material ordered through the agent. Here we have the lumber company actually suing on the contract made by the agent. This is not an action brought to charge the principal with liability for an unauthorized act of the agent. The principal in bringing this suit expressly ratified the acts of the agent, Shultz, in selling the material. The only question for decision here is the term of this sale. We are confronted with the express admission that Shultz had authority to sell the material and he did sell it. The original bill of sale or order as it is termed, alleged to have been taken by Shultz on one of the company's printed forms was offered in evidence. R. 105, et seq. This document does not show that it is subject to confirmation by the lumber company. It seems to be very peculiarly worded. It has in bold letters and figures at the very top of it "Estimate No. 204" "sold to J. N. Sibley, Rome,...