Rosser-Moon Furniture Co. v. Oklahoma State Bank

• Decision Date: 09 March 1943
• Docket Number: 30646.
• Citation: 135 P.2d 336,192 Okla. 169,1943 OK 89
• Parties: ROSSER-MOON FURNITURE CO. v. OKLAHOMA STATE BANK et al.
• Court: Oklahoma Supreme Court

135 P.2d 336

192 Okla. 169, 1943 OK 89

ROSSER-MOON FURNITURE CO. v. OKLAHOMA STATE BANK et al.

No. 30646.

Supreme Court of Oklahoma

March 9, 1943

Syllabus by the Court.

1. "Apparent authority" of an agent is such authority as the principal knowingly permits the agent to assume or which he holds the agent out as possessing.

2. The elements that must be present before a third person can hold the principal for the acts of the agent on the theory of apparent authority are (a) conduct of the principal, (b) reliance thereon by a third person, and (c) change of position by the third person to his detriment.

3. Where an agent has no express authority to endorse and cash checks payable to his principal, but the principal has for a long time knowingly, or under circumstances from which its knowledge could be reasonably inferred, permitted him to do so, the principal is estopped to deny that the agent has such authority as against a third person who, relying upon the apparent authority of the agent, cashed a check payable to the principal and endorsed by the agent.

Appeal from District Court, Pontotoc County; Tal Crawford, Judge.

Action by Rosser-Moon Furniture Company against Oklahoma State Bank and Sam Harris, an individual doing business under trade-name of Harris Hotel, for alleged conversion of check payable to plaintiff. From a judgment for defendants, the plaintiff appeals.

Affirmed.

C. F Green, of Ada, and A. C. Saunders, of Tulsa, for plaintiff in error.

Busby Harrell & Trice, of Ada, and Pryor & Wallace, of Wewoka, for defendants in error.

HURST Justice.

Mrs Foster McSwain, a resident of the city of Ada, delivered to J. T. Brownlee, agent of Rosser-Moon Furniture Company, her check payable to the company, in the sum of $400, in payment of an account. The check was drawn on Oklahoma State Bank, of Ada. Brownlee endorsed the check "Rosser-Moon Fur. Co. by J. T. Brownlee", and procured the endorsement thereon of "Harris Hotel, by Lorene Ogden, Clerk". The hotel cashed the check at the bank for him. Rosser-Moon Furniture Company, as plaintiff, brought this action against the bank and the hotel, alleging that the endorsement of the check by Brownlee was unauthorized and a forgery; that it had never received the $400; and that the bank and hotel had converted the check to their own use. The hotel and bank defended on the ground that Brownlee had the apparent authority to endorse and cash the check, and that plaintiff was estopped to deny his authority. A jury was waived and the trial court heard the evidence and rendered judgment for defendants. Plaintiff appeals.

The sole question presented is whether the evidence is sufficient to justify a finding that the plaintiff permitted Brownlee to exercise such apparent authority as to estop it to deny the authority of Brownlee to endorse and cash the check. It is not here contended, though it was alleged in the answer, that Brownlee had such implied authority.

The evidence shows that plaintiff was engaged in the sale of house furnishings; that its place of business was in Tulsa that Brownlee was its salesman; that for some three years prior to April 7, 1938, the date of issuance of the check in question, he had spent a great deal of time in Ada, and made sales of large quantities of merchandise there; that during this three year period he had full charge of the company's business in Ada, making contracts, overseeing the delivery of the merchandise, and collecting therefor; that in making collections he received cash, checks payable to himself, and checks payable to the company; that he cashed some of the checks and took the cash to Tulsa, and others he sent to Tulsa, endorsing those made payable to himself; that he advised plaintiff that he sometimes cashed checks payable to it and took the proceeds to plaintiff. Brownlee testified that he had neither been expressly authorized to endorse and cash checks payable to the company, nor instructed not to do so. He was asked: "What was the occasion of your cashing checks made payable to the order of Rosser-Moon Furniture Co.?" He answered: "Sometimes I would cash checks to pay for particular merchandise that came in, and sometimes I would cash checks so I could take cash in to them, which they preferred so that they wouldn't have to wait a number of days for it to clear through the banks."

I. G Rosser, president of the company, testified that he personally did not know that Brownlee cashed checks payable to the company, and that Brownlee was not authorized to do so; that Mr. Bass, of Rosser-Moon, took Brownlee to Ada, and that he did not know what the arrangement was between Bass and Brownlee; that Brownlee received a...