Woodworth v. School Dist. No. 2, Stevens County

• Decision Date: 14 August 1916
• Docket Number: 13023.
• Citation: 92 Wash. 456,159 P. 757
• Court: Washington Supreme Court
• Parties: WOODWORTH v. SCHOOL DIST. NO. 2, STEVENS COUNTY, et al.

159 P. 757

92 Wash. 456

WOODWORTH v. SCHOOL DIST. NO. 2, STEVENS COUNTY, et al.

No. 13023.

Supreme Court of Washington

August 14, 1916

Department 2. Appeal from Superior Court, Stevens County; W. H. Jackson Judge.

Separate actions by R. P. Woodworth against School District No. 2 Stevens County, and against Union High School District No. 3. Consolidated for trial. Judgment for defendants, and plaintiff appeals. Reversed and remanded.

Holcomb and Chadwick, JJ., dissenting.

O. C Moore, of Spokane, for appellant.

Howard W. Stull, John B. Slater, J. A. Rochford, and F. Leo Grinstead, all of Colville, for respondents.

MAIN J.

The plaintiff, as assignee for collection of the Self-Winding Clock Company, brought two actions in the superior court for Stevens county, one against school district No. 2, and the other against Union high school district No. 3. The purpose of these actions was to recover the purchase price of certain clocks, and the necessary equipment, which had been furnished to the districts by the Self-Winding Clock Company. After the issues were framed the two actions were consolidated and tried in the superior court as one action. The jury's verdict was in favor of the school districts. From the judgment entered upon this verdict the appeal is prosecuted.

The facts, so far as necessary to an understanding of the questions here presented, may be summarized as follows: The Self-Winding Clock Company was engaged in the manufacture of clocks intended for use in school buildings, and for other similar purposes. The factory and head office of this company was located in Brooklyn, N.Y. On or about April 5, 1910, one J. A. Jansson opened an office in San Francisco, Cal., as the Pacific Coast representative of the clock company. The scope of the power and authority to be exercised by Jansson as such representative was set forth in a typewritten memorandum, delivered to him by the company. In this memorandum he was authorized to have suitable letter head stationery prepared, with his name in the margin as 'Sales Representative of This Company.' It was expressly provided in the memorandum that Jansson should not make any collection of past-due accounts, except upon special written or telegraphic request of the clock company.

In pursuance of the authority given him by this memorandum, Jansson caused letter head stationery to be printed upon which his name appeared as 'Pacific Coast Representative.'

On March 27, 1911, Jansson sold to the school districts above mentioned the clocks and equipment for the purchase price of which this action was brought. The sales were reported to the home office in Brooklyn, N.Y. An acknowledgment from that office was sent direct to the school districts. Some time during the summer of the year 1911, Jansson installed the clocks in the buildings for which they had been purchased. In making the installation, he was authorized to employ labor, and make such local purchases of material as was necessary, and pay for the same. The money thus disbursed was to be reported by Jansson in his semimonthly expense account to the company, and thereupon he would be repaid the money so expended.

On December 9, 1911, school district warrants were issued, payable to Jansson for the cost of the clocks and the installation. On December 11, 1911, these warrants were presented to the county treasurer, and payment was refused for want of funds. Thereafter, the exact date of which does not appear, Jansson sold the warrants to the bank of Colville. The money received upon the warrants was not remitted to the clock company, but was wrongfully converted by Jansson to his own use.

On May 27, 1912, the clock company wrote a letter, addressed to the clerk of one of the school boards, inquiring why the material and labor furnished in connection with the clocks and program system had not been paid for. This was the first communication from the home office to the district, other than the acknowledgment of the receipt of the orders shortly after the contract was made. No answer being received to this letter, on August 28, 1912, another letter was addressed to the district. After this letter had been received, the clock company was informed that the warrants had been issued and delivered to Jansson. The warrants were paid on April 25, 1914. Two months or more prior to this date the actions against the school district had been instituted. Some further mention of the facts will be made in connection with the consideration of the particular points to which they may be pertinent.

There are three general questions for determination: First, did Jansson have apparent authority as agent of the clock company to receive the warrants? second, was there error in the admission of testimony during the trial? and, third, did the trial court err in the instructions given or the requests refused?

I. So far as the school districts were concerned, they were justified in dealing with Jansson within what was the scope of his apparent authority. They had no knowledge of the limitation placed upon his authority by the clock company when he became its Pacific Coast representative. The letter head stationery which Jansson used in corresponding with the districts had his name printed thereon as Pacific Coast representative. Jansson not only had the power to sell clocks and equipment, but the installation was under his direction and supervision. In installing the clocks he was authorized to purchase material and employ labor and pay for the same, which in turn was to be charged to the clock company in his expense account. In the letter written by the clock company on August 28, 1912, fault was found with the district because it had not answered the previous letter, and in this connection it was said:

'Even though you have been in communication with our Mr. Jansson at San Francisco in regard to terms of settlement we think you should in fairness to us, make response direct to this office advising us of your reasons for your long delay in making settlements.'

This letter, even though written after the sales, recognizes the right of the districts to negotiate terms of settlement with Jansson. We think it cannot be held as a matter of law that the school districts were going beyond the scope of Jansson's apparent authority when the warrants were issued and delivered to him. Under the facts stated, the jury had a right to find that Jansson had apparent authority to receive the warrants.

Our attention has been called to the general rule that the collecting power of an agent is limited to his receiving for the debt of his principal that which the law declares to be a legal tender, or which by common consent is considered and treated as money. But in this case the company is in no sense harmed by reason of the fact that the warrants were issued to Jansson, and by him subsequently cashed at the bank. Had he been paid cash instead of being given warrants, he would have had an equal opportunity to embezzle the funds. In addition to this the legal and recognized way of school districts in making payments is by the issuing of warrants. The clock company, in its letter under date of February 5, 1913, which authorized one Mitchell to make collection of the account, requested the district to arrange 'to give Mr. Mitchell a warrant in settlement of this account.'

II. During the trial, one member of the school board, while testifying in behalf of the districts, was permitted, over objection, to testify to certain declarations of Jansson to the effect that he was authorized to receive and receipt for moneys on behalf of his principal, the clock company. In other words, the declarations of Jansson as to the scope of his power and authority were received. This was error. Neither the fact of agency, nor the scope of the agent's authority, can be established by declarations of the alleged agent in the absence of the principal. The fact that the agency may be admitted for one purpose does not make the admissions and declarations of the agent, which are not known to or acquiesced in by the...