Scherbenske v. Maier

• Decision Date: 27 August 1955
• Docket Number: No. 7486,7486
• Citation: 71 N.W.2d 770
• Parties: John SCHERBENSKE, Plaintiff and Respondent, v. R. A. MAIER, Gust Noack, and Minnie Maier, Administratrix of the Estate of Charles Maier, Deceased, substituted for defendant, Charles Maier, doing business as Maier Chemical Spray, Defendants and Appellants.
• Court: North Dakota Supreme Court

Page 770

71 N.W.2d 770

John SCHERBENSKE, Plaintiff and Respondent, v. R. A. MAIER, Gust Noack, and Minnie Maier, Administratrix of the Estate of Charles Maier, Deceased, substituted for defendant, Charles Maier, doing business as Maier Chemical Spray, Defendants and Appellants.

No. 7486.

Supreme Court of North Dakota.

Aug. 27, 1955.

Syllabus by the Court.

1. An agency may be shown by circumstances, such as the relation of the parties to each other and their conduct with reference to the subject matter of the contract as well as a previous course of dealing with the subject matter.

2. 'An agent has such authority as the principal actually or ostensibly confers upon him. Actual authority is such as a principal intentionally confers upon the agent or intentionally or by want of ordinary care allows the agent to believe himself to possess. Ostensible authority is such as the principal intentionally or by want of ordinary care causes or allows a third person to believe the agent to possess.' Sec. 3-0202, NDRC 1943.

3. Omission to call or interrogate a witness who possesses peculiar knowledge and would naturally be friendly to the party's contention raises a strong presumption that the testimony, if elicited, would be unfavorable to the party who fails to call or interrogate such witness.

4. Evidence examined and held to sustain the verdict of the jury.

Wm. L. Paulson, Valley City, and Philip L. Scherer, Winthrop, Minn., for appellants.

Roy A. Ployhar, Valley City, for respondent.

GRIMSON, Judge.

The plaintiff in his complaint alleges that he is a sole trader doing business as 'Scherbenske's Store' at Tuttle, North Dakota, and that the defendants were 'associated together' and doing business under the firm name and style of 'Maier Chemical Spray' of Valley City, North Dakota; that on the 8th day of November 1946, plaintiff and defendants entered into an agreement by the terms of which defendants sold and delivered to plaintiff 1,250 gallons of Maier Chemical Spray at $2 per gallon, total cost, $2,500, on which plaintiff was allowed a credit of $125 leaving a balance due of $2,375 for which plaintiff paid the defendants in cash. Plaintiff further alleges that as a part of that agreement the defendants, and each of them, agreed to and with the plaintiff that they would help sell such spray before July 1, 1947, and that in the event that any spray remained unsold at that date they would take that amount back and refund the purchase price at $2 per gallon; that the defendants have failed and refused to comply with their agreement, failed to sell or take back any of such spray, all of which plaintiff still has in his possession. Wherefore, plaintiff demands judgment against the defendants and each of them for $2,375, together with costs.

The defendants specifically deny that they were ever associated together and doing business as 'Maier Chemical Spray' and allege that Charles Maier was the sole owner of said business and make a general denial of all other allegations of the complaint. The case was tried to a jury.

When the plaintiff rested defendants moved for a dismissal of the plaintiff's claim for the failure of proof of the agency, the authority to make the contract and reliance thereon by plaintiff and no showing of damages, which was denied. Defendants then rested without submitting any proof, after which defendants made a motion for a directed verdict upon the same grounds which was denied. The jury returned a verdict for the plaintiff of $2,375 and interest against the defendants. Defendants duty made a motion for judgment notwithstanding the verdict or for a new trial which motion was denied. Defendant, Minnie Maier, Administratrix, appeals from the order denying that motion. The other defendants do not appeal.

The appellant filed numerous specifications of error. As to the lack of evidence the specifications are mainly that the evidence shows no agency or agreement binding the administratrix, Minnie Maier. There also are assignments of error with regard to the admission of evidence and the charge of the court. In the briefs and on argument these specifications are not particularly argued and appellants state the issues to be:

'1. Were the defendants, Gust Noack and R. A. Maier, agents of the defendant, Charles Maier (Minnie Maier, Administratrix of the Estate of Charles Maier, decedent, now substituted in his place and stead as one of the defendants)?

'2. Did the defendants, Gust Noack and R. A. Maier have express or implied authority as agents to make a contract in behalf of the principal to repurchase the goods sold by them to the plaintiff.'

We have carefully considered the specifications set out and have concluded there is no prejudice shown in the rulings or charge of the court.

The undisputed, admissible testimony of the plaintiff shows that Charles Maier was the sole distributor of the Maier Chemical Spray and that he had associated with him as salesmen his son, R. A. Maier and his son-in-law, Gust Noack. Charles Maier died after this action was commenced and Minnie Maier, the administratrix of his estate, was substituted in his place.

In November 1944, the defendants, Charles Maier and Gust Noack came to the plaintiff's place of business, introduced themselves and proceeded to sell some of this spray to the plaintiff. The plaintiff himself was correctly allowed to testify only to the conversation with Noack as to what the agreement was since Maier was dead but those conversations were in Maier's presence. Furthermore, two other witnesses who were present at the time of the conversation testified to what Charles Maier himself had said. All these witnesses testify that Charles Maier and Gust Noack had said the spray was fully guaranteed and that they would help sell it and if it didn't sell they would be glad to take it back. Plaintiff thereupon wrote out a check to 'Maier Chemical Company' for $63 which was endorsed, 'Maier Chemical Spray, Charles Maier, Prop.,' and cashed. Some, but not all, of this spray was sold by the plaintiff. There also seems to have been a $1,400 deal for spray and machinery between them which is not included in this lawsuit.

Then in November 1946, Gust Noack and R. A. Maier, came to plaintiffs place of business and said they were sent out there to see plaintiff about the 1944 purchase of spray and to try to sell him some more. They reported that Charles Maier would like to have come out but couldn't because of being old and feeble. Plaintiff testified that they said Charles Maier sent his regards and that any deal they made with the plaintiff would be agreeable with him. According to plaintiff's testimony Maier and Noack said they would sell the balance of the 1944 batch for him and also what he would now buy; that they were going to make a distributing point out of plaintiff's place for the surrounding territory. Plaintiff quotes R. A. Maier as saying: 'If it don't sell we will get it back and give you back every cent' and that Noack said, 'It is guaranteed in every way that if it don't sell, if we don't move it for you, we will take it back and give you your money back.' The plaintiff thereupon signed an order for the 2,500 gallons of the spray. He was allowed credit on 'the last sale' of $125, leaving a balance of $2,375 for which he gave a check to Maier Chemical Spray for $2,375 which was endorsed by Maier Chemical Spray and cashed. At that time it was also planned that the defendants should conduct experiments in the neighborhood and the plaintiff's brother was engaged to go on with that work. This conversation was verified by four witnesses who were present and heard the conversation by the parties. Later the plaintiff wrote to Charles Maier but received no answer.

Another independent witness, Joe Gertz, testified that Charles Maier and Gust Noack, his son-in-law, sold him some spray in 1938 and that in 1946 or 1947 Charles Maier came to his place and introduced his son, R. A. Maier, and his son-in-law, Gust Noack, and said that they 'were his salesmen out there.' On Nov. 12, 1946 Gertz bought $3,500 worth of spray from R. A. Maier and Gust Noack.

The defendants did not take the witness stand so that all these conversations stand undisputed.

The appellant raises the question of whether Gust Noack and R. A. Maier were agents of the defendant, Charles Maier. Charles Maier participated with Noack in the 1944 deal. Together they made a sale to Joe Gertz in 1938. In 1946 Charles Maier told Joe Gertz that R. A. Maier and Gust Noack were his salesmen, after which they sold more spray to Gertz. Then there are the circumstances of Maier and Noack having the spray for delivery and of receiving the checks in payment which were afterwards endorsed and cashed by the Maier Chemical Spray.

Section 3-0103, NDRC 1943, defines actual and ostensible agency as follows:

'An agency is either actual or ostensible. It is actual when the agent really is employed by the principal. It is ostensible when the principal intentionally or by want of ordinary care causes a third person to believe another to be his agent, who really is not employed by him.'

Of this section in Bernard v. Madsen, 52 N.D. 822, 204 N.W. 196, 200, this Court says:

'Section 6324, C.L.1913 (Now Sec. 3-0103, NDRC 1943), is but a statement of a well established principle of the common law, which, it has been declared, lies at the foundation of the law of agency. Under this statute an ostensible agency exists where the conduct of the supposed agent is consistent with the existence of an agency, and where, in the transaction in issue, the party with whom the supposed agent dealt was...