Russell v. Waterloo Threshing Machine Co.

• Decision Date: 06 March 1908
• Citation: 116 N.W. 611,17 N.D. 248
• Court: North Dakota Supreme Court

116 N.W. 611

17 N.D. 248

W. D. RUSSELL v. WATERLOO THRESHING MACHINE COMPANY

Supreme Court of North Dakota

March 6, 1908

Rehearing denied June 2, 1908.

Appeal from District Court, Grand Forks County; Fisk, J.

Action by W. D. Russell against the Waterloo Threshing Machine Company. Judgment for plaintiff, and defendant appeals.

Affirmed.

W. J Mayer, for appellant.

An agent to take orders for sale of machinery of a certain make cannot bind his principal for the purchase of second hand machinery. Revised Codes 1899, sections 4320, 4321, 4322; Schull v. New Birdsall Co., 86 N.W. 654; J. I. Case T. Machine Co. v. Eichinger, 91 N.W. 82; Fletcher v. Nelson, 6 N.D. 94, 69 N.W. 53; Enc Law, volume 1, pages 990, 1023, 987; Haseltine v. Miller, 43 Maine 177; Beebe v. Equitable Mutual Assn. 40 N.W. 122; Wheeler v. McGuire, 2 L. R. A. 808; Stewart v. Woodward, 50 Vt. 75.

To show ratification of an unauthorized act, there must appear 1. Notice to principal of material particulars. 2. Possession of this information while retaining the benefits. 3. Retention of benefits after full knowledge of material facts without disaffirmance. Revised Codes 1899, section 4315.

Ratification is made only by accepting or retaining benefits with notice. Revised Codes 1899, section 4315; Jewell Nursery Co. v. State, 59 N.W. 1025; 1 Am. & Eng. Enc. Law, 1189, 1190; Owings v. Hull, 9 Pet. 607, 9 L.Ed. 246.

Geo. A. Bangs, for respondent.

Agent's authority is implied by principal's acts. Aldrich, et al, v. Wilmarth, 54 N.W. 811; Griggs v. Seldon, 5 A. 504; Bank of Betavia v. Western R. R. Co., 12 N.E. 433.

If principal ratifies without full knowledge, he cannot complain if misled. Nemier Lbr. Co. v. Moore, 55 Ark. 244; Kelley v. Newberryport & Horse R. R. Co., 141 Mass. 496; Schultz v. Gordan, 32 F. 55; Wheeler v. N.W. Sleigh Co., 39 F. 354. Clark & Skyles on Agency, volume 1, page 266; Tilleny v. Wolverton, 55 N.W. 822.

If the principal, knowing all the facts, so acts as to indicate his approval of the agent's unauthorized conduct, and leads a third party to rely on it, he cannot deny such conduct to the latter's prejudice. Ward v. Williams, 26 Ill. 447; Truesdale v. Ward, 24 Mich. 117; Heyn v. O'Hagan, 60 Mich. 150; Lynn v. Wright, 18 Texas 317; Bergus v. Harris, 47 Vt. 322.

Whether agency is created by conduct is for the jury. Block v. Delucia, 66 A. 769; Boyington v. Von Eten, 35 S.W. 622; Saginaw T. & H. R. Co. v. Chappell, 22 N.W. 278; Ferneau v. Whitford, 39 Mo.App. 311; Hughbanks v. Boston Inv. Co., 60 N.W. 640; Franklin Blank Note Co. v. Mackey, 83 Hun. 511; Patterson v. Bond, 50 Iowa 508; Schlesinger v. Tax M. R. R. C. 87 Mo. 146; McLung Ex'rs. v. Spootwood, 19 Ala. 165.

Where the principal assents to his agent's acts, to the injury of a third party acting upon them, he cannot afterwards deny them. Caffer v. Walters, 9 Kan.App. 291; Matthews v. Fuller, 123 Mass. 446; Hurley v. Watson, 68 Mich. 532; Hanks v. Drake, 49 Barb. 186; Reese v. Medlock, 27 Texas 120; Roundy v. Erspamer, 87 N.W. 1087.

Use of property acquired by the unauthorized acts of agent, ratifies such acts. Pike v. Douglass, 28 Ark. 59; Duncan v. Keanly, 72 Conn. 585; Campbell v. Miller, 84 Ill.App. 208; Hastings v. Bangor House Props., 18 Maine 436; Sartell v. Frost, 122 Mass. 184; Wright v. M. E. Church, 74 N.W. 1015; Scott v. Middleton R. Co., 86 N.Y. 200.

If principal ratifies a part, he ratifies all. Smith v. Smith, 21 P. 4; King v. Franklin Lbr. Co., 83 N.W. 170; Strasser v. Conklin, 11 N.W. 254; Hutchings v. Ladd, 16 Mich. 493; Garner v. Mangan, 93 N.Y. 642; Hall v. Hopper, 64 Neb. 633.

Principal must repudiate promptly. Robbins v. Blanding, 91 N.W. 844; Cram v. Sickel, 51 Neb. 828; Hamlin v. Sears, 82 N.Y. 327; Parris v. Reeve, 23 N.W. 568.

MORGAN, C. J. FISK, J., disqualified. Hon. W. J. KNEESHAW, judge of the seventh judicial district, sitting by request.

OPINION

MORGAN, C. J.

The plaintiff brings this action to recover the purchase price of a gasoline engine and one separator, with attachments, alleged to have been sold by the plaintiff to the defendant company. The answer to the complaint is a general denial. Plaintiff recovered a verdict for $ 1,660.68. A motion for a new trial was made and denied. Defendant appeals from the judgment entered on the verdict.

The facts shown by the record are substantially as follows: One Armstrong was the agent of the defendant, and in charge and had the management of its office and business at Grand Forks. His authority was, as a matter of fact, restricted to taking orders for the purchase of machinery manufactured by the defendant and submitting such orders to the defendant company for approval. He had no authority to make sales, nor to purchase machinery, for the company. During the summer of 1905 he was endeavoring to secure an order for one of the machines manufactured by the defendant from one Hofto, and was in correspondence with the officers of the company at the main office in reference to such order. While such correspondence was going on, Armstrong, it is claimed by the plaintiff, bought a second hand threshing outfit from the plaintiff for the defendant for the sum of $ 1,600. Later this same outfit was sold by one Osland, a salesman in the employ of the defendant, to the aforesaid Hofto, and said sale was reported to the defendant at the home office. Hofto executed notes for the purchase price of this outfit in the sum of $ 1,800, and agreed to pay in cash on the purchase $ 75, or paid it; the agreed price being $ 1,875. The machine was delivered to Hofto by Osland, and the notes were left with one Ryan, who was told to hold them, at Hofto's request, with Osland's consent, until Hofto was satisfied that the machine would work satisfactorily. The notes were drawn in favor of the defendant company, but are still in Ryan's possession, as there seems to be some question as to whether Hofto was satisfied with the machine.

The question in issue in this case is whether Armstrong, the agent who dealt with the plaintiff when purchasing the secondhand separator and engine, was acting on behalf of his company, or independently for himself, or for the plaintiff. It seems to be undisputed that Armstrong did not have actual authority to purchase secondhand machinery; nor did Osland, the other salesman, have actual authority to dispose of secondhand machinery, as agent for the defendant company. Armstrong, however, was in charge and had full control of defendant's office in Grand Forks, and there was no one there who had authority superior to his. Whether he had ostensible authority, and whether Russell was not justified in believing that he had actual authority, presents a very different question; and there is much to be said in favor of applying the doctrine of estoppel as preventing the defendant from now claiming that the agent was without actual authority. However, it is not necessary to rest the case on that question, nor to decide that question. The defendant is estopped on other grounds from now saying that Armstrong was not its agent, with full power to purchase the machine from plaintiff. It had notice of facts that the machine had been purchased from plaintiff, and remained silent for so long a time without repudiating Armstrong's acts that it is presumed that it intended to and did ratify his acts.

On June 26, 1905, Osland made a daily report to the defendant at its home office as follows: "Travelers' Daily Report. Waterloo Threshing Machine Co., Manufacturers of Winneshiek Threshing Machinery, Waterloo, Iowa June 26, 1905. Canvassed with K. O. Hofto. Lives six miles from Grand Forks. Canvassed for threshing machine Nos. 28-48, and self-feeder and Sattley weigher, Flour City engine. Price quoted $ 1,875. Terms: $ 75 cash, $ 900 October 1, 1905, $ 900 October 1, 1906. Sold to him (or them) Russell & Doll secondhand complete outfit. What is his financial standing? About $ 25,000. [Signed] Lars Osland, Traveler." This report was received at the home office at Waterloo, Iowa, on June 29th, as shown by indorsement thereon.

On receipt of this report the company wrote Osland in reference thereto in part as follows: "We note that you have sold to Mr. Hofto the Russell & Doll secondhand complete outfit for $ 1,875. We, of course, are at a loss to know why you have sold somebody's else goods to this customer. We supposed you were working for the Waterloo Threshing Machine Company. Of course, there may be something about this deal that we don't understand; but you should have mentioned that fact in your report. If these people are to take a new machine in the place of that, of course, that is a different proposition; but with no explanation it is rather a hard problem for us to solve. In the future please make mention of these things, so that we will know where we are at all the time, and do not fail to make a complete report of every transaction. * * * We certainly hope, however, that you have not sold somebody's else machine to accommodate them." From previous letters from Armstrong to the company, and answers thereto, it appears that the company was urging Armstrong to procure an order from Hofto for a new outfit manufactured by the company, and Armstrong was strongly asserting in his letters that he would procure such an order. The report of Osland gave the company unequivocal notice that a secondhand rig formerly belonging to Russell & Doll had been sold to Hofto on behalf of the company in place of a new one as promised.

In the above letter to Osland the company did not disaffirm the sale, but gave instructions for more explicit reports in the future. They did not even request more definite facts as to the sale, but seemed to consider the sale as final. From Osland's report, the company was notified that...