Southern States Equipment Co., Inc. v. Jack Legett Co., Inc.

• Decision Date: 18 January 1980
• Docket Number: No. 10601,10601
• Citation: 379 So.2d 881
• Parties: SOUTHERN STATES EQUIPMENT CO., INC. v. JACK LEGETT COMPANY, INC.
• Court: Court of Appeal of Louisiana — District of US

Page 881

379 So.2d 881

SOUTHERN STATES EQUIPMENT CO., INC. v. JACK LEGETT COMPANY, INC.

No. 10601.

Court of Appeal of Louisiana, Fourth Circuit.

Jan. 18, 1980.

Writ Refused March 21, 1980.

Charles A. Kronlage, Jr., Kronlage, Dittmann & Caswell, New Orleans, for plaintiff-appellant.

Robert E. Winn, Shirley N. Kopsa, Sessions, Fishman, Rosenson, Snellings & Boisfontaine, New Orleans, for defendant-appellee.

Before GARRISON, CHEHARDY and STOULIG, JJ.

STOULIG, Judge.

Plaintiff, Southern States Equipment Co., Inc., (Southern) has appealed from an adverse judgment dismissing its suit to recover the value of an air compressor which was stolen while under lease to and in the possession of defendant, Jack Legett Company Inc., (Legett).

The undisputed facts are the defendant, at various times during the three years preceding the theft leased from the plaintiff movable property which it used in its business of installing street lights and traffic signal lights. Approximately 43 separate rental transactions were involved and in each instance the procedure was practically the same. Legett through its general manager, William J. Krummel, or someone authorized by him would order the equipment by telephone and specify the date and job site for delivery.

Plaintiff would prepare in quadruplicate (2 copies for Lessee and 2 copies for its records) a "Rental Dray Receipt" itemizing the equipment but not the rental price which it required the party receiving the equipment at the job site to sign. Immediately above the signature line, the receipt contained the following printed provision:

THIS IS ON RENT

SUBJECT TO THE USUAL RENTAL TERMS.

"RENT STARTS FROM THE TIME THE EQUIPMENT LEAVES OUR WAREHOUSE AND CONTINUES WITHOUT INTERRUPTION UNTIL IT IS RETURNED TO OUR WAREHOUSE IN AS GOOD CONDITION AS IT IS RECEIVED BY YOU, LESS USUAL WEAR. YOU ARE TO BE RESPONSIBLE FOR ANY LOSS, DAMAGE OR BREAKAGE AND ALL MAINTENANCE WHILE THE EQUIPMENT IS IN YOUR POSSESSION, AND TO SAVE US HARMLESS FROM ALL CLAIMS ARISING THEREFROM."

SOUTHERN STATES EQUIPMENT CO., INC., Per _________ Received by ____________________

_______________________ _______________________ _______________________

Of the 43 dray receipts involved, five were signed by Krummel, thirty-one by R. Bridges (defendant's construction foreman) and the remainder by other employees. The only printed matter on these dray receipts was the above stated liability provision. Krummel testified he never paid any particular attention to the contents of the dray receipt except to check the equipment listed on it. Admittedly plaintiff never personally directed Krummel's attention to this provision of the dray receipt.

In February 1978, Legett leased an air compressor and related accessories from Southern which was delivered to the job site at Caffin and Galvez Streets in New Orleans. The dray receipt was signed on behalf of the defendant by its foreman, Roy Bridges. The equipment was used at this location for one week after which Southern was contacted and instructed to pick up the unit and hold it over the weekend and redeliver it the following Monday morning to a location in Gretna, La., which it did. The following Friday rather than again request Southern to follow the same procedure over the weekend, Legett elected to retain possession and secured the unit to a utility pole with chains and a padlock. Over the weekend the equipment was stolen resulting in this lawsuit to recover its value.

The trial court found that defendant was "generally aware of the language in the delivery receipt as a result of many transactions with plaintiff-lessor"; however, "that said awareness alone did not constitute acceptance or agreement to be bound thereby". It further held that the foreman had no authority express or implied to bind the defendant and that Legett used reasonable care in securing the equipment and therefore was not negligent.

The record amply supports the trial court's conclusion that defendant knew of the liability statement in the dray receipt. It was in bold print and the only printed matter on each of the forty-three receipts left with defendant. Once defendant learned of this provision ¹ by his continued silence and failure to protest or object to its inclusion in the dray receipt, it tacitly consented thereto and cannot now be heard to repudiate its legal effect. C.C. Art. 1817. Knowledge by the principal of the terms imposed coupled with the written acceptance of its employee authorized to act results in a binding obligation.

Unquestionably Bridges was authorized to sign the dray receipt acknowledging delivery of the rented equipment. Did this authorization extend to binding the defendant for loss of the equipment? The trial court felt it did not. We disagree.

On some thirty-one prior occasions Mr. Bridges signed dray receipts containing this identical provision and defendant honored the invoices submitted by plaintiff based upon these receipts. By so doing defendant ratified the actions of this employee and vested in him the apparent authority to act on its behalf in executing the dray receipts with their imposition of liability for loss of equipment. The pattern of conduct followed by the defendant in its series of rental transactions with plaintiff created an implied agency.

In Busby v. Walker, 84 So.2d 304 (La.App. 2d Cir. 1955), the court held:

However, an implied agency is also an actual agency. It is a fact which is to be proved by deductions or conclusions from other facts and circumstances. Such an agency is often established from the words and conduct of the parties and the circumstances of the particular case. It may be implied from prior habits or from a course of dealings of a similar nature between the parties where the agent has repeatedly been permitted to perform similar acts in the past. With respect to third persons, an agency may arise from acts and appearances which lead others to believe that such a relationship has been created, that is, by estoppel, and with respect to such third parties who deal with the agent, the agency may be apparent only and exist because of the...