Walker v. Walker

• Decision Date: 30 April 1871
• Citation: 52 Tenn. 425
• Parties: John G. Walker v. Iverson J. Walker.
• Court: Tennessee Supreme Court

52 Tenn. 425

John G. Walker

v.Iverson J. Walker.

Supreme Court of Tennessee.

April Term, 1871.

FROM FAYETTE.

Appeal from Circuit Court refusing new trial. T. J. FLIPPIN, J.No Briefs or names of Counsel furnished Reporter.

FREEMAN, J., delivered the opinion of the Court.

John G. Walker, of North Carolina, the plaintiff, by power of attorney dated September, 1866, appointed the defendant his agent to attend to and settle all his business in Tennessee.

In pursuance of this authority, it appears from the proof in this case, that early in February, 1867, the defendant collected of one Shaw $2,391, paid to a son-in-law $250, as directed, leaving a balance in his hands of $2,141, which was invested in a check, drawn by one Geo. Trotter, on New York. Trotter was a commission merchant in good standing, having unlimited credit at the time, and the confidence of all who knew him.

It appears clearly from the proof, that there was perfect good faith on the part of the agent in all the transactions; of this there can be no doubt. It further clearly appears that he had been directed by plaintiff to send the money by express, but was advised it was safer to remit by check. The check it seems was dated 6th of February, but by failure of mails perhaps, or some cause, did not reach the plaintiff in North Carolina until about the 17th of April. On that day he wrote to defendant, expressing his gratification at his success in collecting the money; on the 13th of April, four days before this letter was written, Trotter failed; the check was sent to New York by plaintiff, protested, and nothing was realized on it.

It is insisted by defendant that the receipt of the check was a ratification of the mode of sending; that Walker should have returned the check at once, and if he did not, he was bound by the mode of remittance.

It further appears, however, that after the money was sent, or date of the letter, the principal wrote to agent that he had heard nothing from him on the subject of his business, and on the 16th the agent, having learned of the failure of Trotter, wrote to principal informing him of the fact, inquiring whether the check had been received, stating that he had sent duplicate of check to New York for collection, and asking instructions from principal what to do with the money when he, the agent, again got possession of it. He says in this letter: “I hope to get the money in my possession again, if you have not already received it. I want you to write me and instruct me what to do with it, this is provided you have not received the money.” He then goes on to excuse his sending the check, by saying he was advised by an experienced lawyer and other friends experienced in such matters to do so.

It is certain that the agent was not authorized to send the money collected, except by express. The rules are thus laid down for responsibility of agents by Mr. Story: “Whenever an agent violates his duties or obligations to his principal, whether it be by exceeding his authority or by positive misconduct, or by negligence or omission in the proper function of his agency, or in any other manner, and any loss or damage thereby falls on his principal, he is responsible therefor, and bound to make full indemnity. The loss or damage need not be directly or immediately caused by the act which is done, or omitted to be done. It will be sufficient if it be fairly attributable to it, as a natural result or just consequence:” Sec. 217 e, p. 259.

It is the primary duty of an agent, whose authority is limited by instructions, to adhere faithfully to those instructions in all cases to which they ought properly to be applied. If he unnecessarily exceeds his commission or risks the property of his principal, he thereby renders himself responsible to his principal for all losses and damages which are the natural consequences of his act. And it will constitute no defense for him, that he intended the act to be a benefit to the principal. Thus, when the principal directed his agent to send him $300 of $50 or $100 bills each, and the agent sent the amount in bills of $5, $10 and $20, which never reached the principal, the agent was held to have deviated from his instructions and to be liable for the loss. “Indeed,” says Mr. Story, “in all such cases the question is not whether the party has acted from good motives and without fraud, but whether he has done his duty and acted according to the confidence reposed in him:” Sec. 192 on Agency, and note 3.

The agent was clearly liable for the wrongful act of sending by mail, and sending a check instead of money or currency.

It is earnestly insisted that the principal had ratified the act, and thereby estopped from recovery for this violation of duty on part of agent.

A ratification, when fairly made, will have the same effect as an original authority has to bind the principal, not only in regard to the agent himself, but in regard to third persons: Story on Ag., s. 244.

But, in order to bind the principal, the ratification of the unauthorized act must have been made with a full knowledge of all the material facts affecting the rights of the principal; and ignorance of such facts, whether it arises from want of inquiry by the principal, and neglect to ascertain the facts, or from other causes, will render an alleged ratification ineffectual and invalid: Combs v. Scott, 12 Allen; Nixon v. Palmer, 8 New York R., 401; or as it is perhaps more accurately laid down in case of Seymour v. Wickoff, 10 New York R., 224. When a principal, upon full knowledge of all the circumstances of the case, deliberately ratifies the act or conduct of an agent who has exceeded his lawful authority, or assumed an unauthorized agency, the principal will be bound thereby as fully as if expressly empowered for such purpose. See 26 Wendell, 192; Owing v. Hall, 9 Peters, 629.

If, however, the material facts be either suppressed or unknown, the ratification is treated as invalid, because founded in mistake or fraud: 10 New York R., 224.

The principle that underlies all these cases, is that the party is bound by deliberate assent, made with all the facts before him necessary to form an opinion, and which would be elements in the formation of his judgment on the question of electing to treat the act done by his agent, though without or contrary to authority, as his own act, and adopting the same. It is the same as making a new contract, and the same elements must enter into it-- that is, the assent must be given with an understanding of the material facts necessary to an intelligent assent to its terms, and if these are suppressed or unknown, there can be no binding assent amounting to such ratification.

It will be seen from statement of facts in this case that the principal, at the time he received the check drawn by Trotter, had no knowledge of the fact that Trotter had become insolvent. The check was...