Wheeler v. McGuire

• Decision Date: 19 December 1888
• Citation: 86 Ala. 398,5 So. 190
• Parties: WHEELER v. MCGUIRE ET AL.
• Court: Alabama Supreme Court

5 So. 190

86 Ala. 398

WHEELER v. MCGUIRE ET AL.

Supreme Court of Alabama

December 19, 1888

Appeal from circuit court, Lawrence county; H. C. SPEAKE, Judge.

Action by McGuire, Scroggins & Co. against Joseph Wheeler, to recover for goods sold. Verdict was rendered for plaintiffs and defendant appeals.

Joseph Wheeler, for appellant.

Simpson & Jones and T. N. McClellan, for appellees.

CLOPTON J.

Appellees seek to recover the price of certain goods, which they allege were sold and delivered to appellant through T. A. Tatham, as his agent. The agency was not disputed, but defendant contends that Tatham was in his employ merely as a clerk, and was not authorized to purchase goods on a credit and bind him. The plaintiffs contend that Tatham was a general agent having authority to transact all of defendant's mercantile business, or was held out by defendant, or permitted to hold himself out, as such, so as to justify the belief that he was clothed with the powers of a general agent. The question mainly controverted by the parties relates to the character of the agency and the extent of his authority.

The general rule is that one who deals with an agent is bound to ascertain the nature and extent of his authority, but in the application of the rule a distinction is observed between general and special agencies. The power to do everything necessary to its accomplishment may be included in a particular agency, so that private instructions as to the particular mode of execution, which are not intended to be communicated and are not communicated to the party with whom the agent may deal, will not be regarded as limitations on his power. But with this qualification a special authority must be strictly pursued. A general agent may exceed his express authority, and the principal, nevertheless, be bound. The scope and character of the business which he is empowered to transact is, as to third persons, the extent and measure of his authority. By his appointment the principal is regarded as saying to the public that he has the authority to transact the business in the usual and customary modes. Secret limitations on his power, or private instructions as to the mode of transacting the business, will not affect the rights of third persons who have no notice of such limitations or instructions. When a general agent transacts the business intrusted to him within the usual and ordinary scope of such business, he acts within the extent of his authority, and the principal is bound, provided the party dealing with the agent acts in good faith, and is not guilty of negligence which proximately contributes to the loss. Coffin Co. v. Stokes, 78 Ala. 372. Third persons, dealing with a person as a general agent, are not acquitted of all duty to inquire and ascertain the character and extent of his agency; but if on inquiry ascertained to be general, actually or apparently, they are not bound to inquire whether there are secret limitations or private instructions, unless they have knowledge of facts which should put them on such inquiry. As to these issues, the burden is on the plaintiffs to establish by proof that Tatham was the general agent of defendant, or that the latter, by acts, conduct, or negligence, justified the belief that he had authority to purchase goods on credit for the store. If these issues be found in favor of plaintiffs, no subsequent misconduct of the agent, misappropriating the goods or otherwise, will affect their rights.

After having given a general charge, which in the main is in accord with the foregoing principles, the court instructed the jury at the instance of the plaintiffs, that if defendant employed Tatham, and put him in charge of his retail store at Wheeler's Station, to conduct his mercantile business, and placed money to his credit in Louisville, Ky., and Nashville, Tenn., and authorized him to use this money, and also that taken in from cash sales, to replenish the stock, and instructed him not to purchase on credit, he was, as to innocent third persons, the general agent of defendant in that business, and had authority to do whatever was usual or customary in conducting the same; and if plaintiffs sold to Tatham, as such agent, the goods for the price of which this suit is brought, their verdict must be for plaintiffs, unless they had notice that Tatham's authority was limited to purchases for cash. In considering the correctness of the instruction, any evidence, if there be such, tending to show that Tatham was apparently clothed with the powers of a general agent, cannot be taken into consideration. The proposition of the charge is that as to third persons the facts recited therein, of themselves, without the aid of extrinsic facts and circumstances, constituted Tatham a general agent, possessing authority to purchase goods on credit. In other words, he was a general agent as to plaintiffs, though they may have known the terms of his employment, including the deposit of money with which to purchase goods, except the instruction not to purchase on credit. The most general powers that may be conferred on an agent are necessarily limited to the business or purpose for which the agency is created. The terms of the employment of Tatham,-"in charge of his retail store at Wheeler's Station to conduct his mercantile business,"-in connection with the limitations on his authority to purchase, limit his powers as a general agent to the transaction of the local mercantile business of defendant. In the matter of buying goods, his power was expressly restricted to the use of money specially deposited for that purpose, and to cash receipts. In appointing Tatham his agent, defendant withheld power to buy and pledge his credit under any circumstances. By the terms of his commission, Tatham may be regarded a general agent to conduct the local business of the store, with special powers to purchase. To construe it otherwise would be to establish the rule that a merchant who furnishes his clerk with funds to...