Opinion
No. 39554.
May 9, 1955.
1. Principal and agent — apparent authority — acts binding principal.
Where the relationship of principal and agent exists, if the principal places his agent in a position where he appears, with reasonable certainty, to be acting for the principal, and his acts are within the apparent scope of his authority, such acts bind the principal.
2. Bills and notes — payment — duty on maker to require production of note.
It is the duty of the maker of a note to require its production before making payment thereon, and if he fails to do so, he pays at his risk, for the note itself, is the only evidence the maker has the right to rely on, and he has the right to refuse payment until actual presentation.
3. Sales — principal and agent — payment to alleged agent — evidence — agency not established.
In replevin action by assignee of conditional sales contract to obtain possession of automobile sold under contract, wherein it appeared that buyer paid balance due on conditional sales contract to seller, who had previously assigned contract, but seller did not pay money over to assignee, evidence that seller had previously received money from other buyers to apply in payment of contracts that he had assigned to assignee, but that he had never considered himself as an agent of assignee and always acted as agent of buyers, was insufficient to show that seller was acting as agent of assignee when he received money, and payment by buyer to seller did not satisfy his obligation under contract.
ON MOTION TO CORRECT JUDGMENTJune 13, 1955 80 So.2d 762
4. Replevin — bonds — liability of surety — depreciation — damage to subject property.
A surety on a replevin bond is responsible for depreciation or damage to subject property. Sec. 2849, Code 1942.
5. Appeal — replevin — reversal by Supreme Court — judgment — depreciation — fixed value of subject property.
Where Trial Court in replevin action fixed value of subject automobile but denied relief, and Supreme Court reversed judgment, defendant and his surety were required to deliver to plaintiff the automobile, with the difference between its value as fixed by Trial Court and its present value, or a sum equal to Trial Court's original determination of value. Sec. 2849, Code 1942.
Headnotes as approved by Lee, J.
APPEAL from the Circuit Court of Hinds County; M.M. McGOWAN, Judge.
Wm. Harold Cox, Jackson, for appellant.
I. The Lower Courts erred in overruling objections to appellee's evidence that the dealer had collected and remitted monies to appellant for other of its customers.
II. The payment by appellee of $915 to Motor Corral did not effect payment of appellant's note amounting to $1,231.92; and appellant was entitled to a judgment for the possession of the automobile by reason of default in the payment of said note, and is entitled to a judgment here on appellee's forthcoming bond therefor. Adler v. Interstate Trust Banking Co., 166 Miss. 215, 146 So. 107; Anderson v. William R. Moore Dry Goods Co., 152 Miss. 312, 119 So. 914; J.B. Colt Co. v. Black, 144 Miss. 515, 110 So. 442; National Cash Register Co. v. Giffin, 192 Miss. 556, 6 So.2d 605; Newcomb v. Home Trust Co., 169 Miss. 883, 151 So. 158; New Home Sewing Machine Co. v. Moody, 189 Miss. 628, 198 So. 550; Pan-American Petroleum Corp. v. Bardwell, 203 Miss. 833, 33 So.2d 451; Railway Express Agency v. Bank of Philadelphia, 168 Miss. 279, 150 So. 525; Sivley v. Williamson, 112 Miss. 276, 72 So. 1008; Tarver v. Lindsey, 161 Miss. 379, 137 So. 93; Tarver v. Sanders Cotton Mill, 187 Miss. 111, 192 So. 17; Union Station Trust Co. v. Bostick, 133 Miss. 627, 98 So. 105; Virginia-Carolina Chemical Co. v. Steen, 99 Miss. 504, 55 So. 47; Weil Bros. v. Keenan, 180 Miss. 697, 178 So. 90; Sec. 115, Code 1942.
Norman B. Gillis, Jr., McComb, for appellee.
I. To establish actual agency, implied by law, evidence of prior transactions between the principal and agent is admissible whether or not a third person seeking to hold the principal liable for an act of the agent has knowledge of such prior transactions. J.H. Hall Co. v. Trapp, 155 Miss. 202, 124 So. 343.
II. It may effectively be created by either of the following: (1) express appointment and acceptance between the parties, or (2) it may be implied from the facts and circumstances of the case, the words and conduct of the parties, their habit and course of dealing, including acquiescence in and ratification of acts by one for whom another has acted. Carson v. Cecil, 192 La. 41, 193 So. 363; City of Greenville v. Washington Am. League Club, 205 S.C. 495, 32 S.E.2d 777; Farmers Natl. Grain Corp. v. Young, 187 Okla. 298, 102 P.2d 180; Ludwig v. Montana Bank Trust Co., 109 Mont. 477, 98 P.2d 377; McCormac v. Goodell (Tex.), 69 S.W.2d 428; Ronconi v. Cook, 107 W. Va. 684, 150 S.E. 4; Ross v. Gossett, 2 Tenn. App. 233; Rubbo v. Hughes, 67 Ohio App. 123, 36 N.E.2d 144; Saffer v. Saffer, 133 Neb. 528, 274 N.W. 479; Smith v. Schuttpelz, 1 Cal.2d 158, 33 P.2d 836; Thomki Corp. v. Miller, 156 Fla. 388, 24 So.2d 48; 2 C.J.S., Agency, Sec. 23(e) p. 1043.
III. Where actual agency exists, liability of the principal for acts of his agent performed within the scope of the authority conferred is based upon principles too well established to require the citation of authority.
IV. Agency by estoppel, on the other hand, also known as ostensible or apparent agency, is a doctrine which renders the principal liable to one who is misled by the conduct of the principal, not because any actual agency exists, but because the principal will not be permitted to deny the relationship. Thus, one who by his own conduct allows another to appear to be his agent must bear the loss resulting to a third party from his dealings with the apparent agent, in that capacity, and in reliance on his supposed authority. Cudahay Bros. v. West Michigan Dock Mkt. Co., 285 Mich. 18, 280 N.W. 93; Herbert v. Langhoff, 185 La. 105, 168 So. 508; McQueeney v. Whiteside County, 286 Ill. App. 345, 2 N.E.2d 853; Tossi v. Northern California Bldg. Loan Assn., 3 Cal.2d 274, 44 P.2d 333; Mechem's Outlines of Agency (4th ed.), p. 54.
V. The distinction thus disclosed is, in this case, a vital element because, as authorities cited herein will reveal, under an allegation of actual agency, evidence of prior transactions between the principal and agent is readily admissible, whether or not such transactions were known to and relied upon by the person injured.
VI. Agency by estoppel is, however, from the very nature of the concept, limited to instances where the third person knew and relied on the conduct of the principal.
VII. To establish implied agency by acts and declarations of the agent, it was not necessary to show defendant's knowledge of such acts. Implied agency is actual agency and the difference between it and express agency is mainly one of method of proof; accordingly, it is immaterial whether or not the third person had knowledge of the circumstances relied upon to establish the existence of the authority. In this respect, implied authority differs from agency by estoppel where there is no real agency, but merely circumstances which estop a person from denying the existence of agency. Dobbs v. Zink, 290 Pa. 243, 138 A. 758.
VIII. The record amply supports the finding of actual agency. Andrews v. Kolsrud (Iowa), 253 N.W. 913; Ubaldini v. C.I.T. Corp., 122 Pa. Sup. 428, 186 A. 198.
IX. A judgment based on estoppel could have been sustained.
APPELLANT IN REPLY.
I. Appellee seeks to have this Court decree the existence of a non-existent agency relationship between appellant and this dealer, and then seeks to have this Court cancel and mark paid the appellant's $1,231.92 note, which even this dealer did not undertake or attempt to do in exchange for appellee's $915 check.
II. There is not a scintilla of evidence in this record to show that this dealer acted as appellant's agent in this unusual transaction. The burden was upon the appellee to show that this dealer was in fact or in law the agent of appellant, but he completely failed to do so. Bradley v. Howell, 161 Miss. 346, 134 So. 843; Cue Oil Co. v. Fornea Oil Co., 208 Miss. 810, 45 So.2d 597; Goff v. Jacobs, 164 Miss. 817, 145 So. 728.
III. The appellee's defense to the suit was that the debt against the automobile in suit had been paid. The plea of payment is an affirmative defense and it was encumbent upon the appellee to have established his plea of payment by a preponderance of all of the evidence. Actually, the preponderance of the evidence in this case shows that this debt was never paid to appellant or its authorized agent, and the judgment of the Court to the contrary is against the overwhelming weight of the evidence in this case. Georgetown Mercantile Co. v. Steen, 155 Miss. 719, 125 So. 120; Germany v. United States Fidelity Guaranty Co., 168 Miss. 854, 152 So. 275; Netterville v. Stevens, 3 Miss. (2 How.) 642; Tabb v. Davis, 202 Miss. 538, 32 So.2d 575; Union Station Trust Co. v. Bostick, 133 Miss. 627, 98 So. 105; A.L.I., Restatement of the Law (Agency), Sec. 71 pp. 166-67.
ON MOTION TO CORRECT JUDGMENT
I. Comes General Contract Corporation, appellant, and shows unto the Court that the appellee bonded the automobile in suit at a valuation of $1,250; that he has continued to use said automobile as a traveling salesman and now has fifty-eight thousand miles on the speedometer of said automobile, and that said automobile has a present fair market value of $750, as will more fully appear by reference to an affidavit of Jack A. Mannebach of his own personal knowledge, after an inspection and appraisal of said vehicle; that the former opinion and judgment of the Court herein made no provision for an award of depreciation against the bond under Section 3087, Code of 1930; that this Court may enter such judgment as the Trial Judge should have entered herein under Chapter 332, Laws of 1950, authorizing the Judge to execute such writ of inquiry without a jury, and Section 1960, Code of 1942, allowing this Court to try such issue of fact, an affidavit of the amount of such depreciation is furnished this Court and attached hereto.
II. Appellant moves the Court to correct its former judgment herein so as to adjudge that appellant is entitled to the immediate possession of one 1953 model Plymouth automobile, Motor No. P24-416573, of the value of $750, and that appellee and his surety be ordered to restore said vehicle to appellant, if to be had, and pay appellant $500 depreciation thereon, or that appellant, and his surety forthwith pay appellant the bonded value of said vehicle in the amount of $1,250, plus all costs as provided by Section 3098, Code of 1930; and if mistaken, that the judgment of this Court be corrected to conform with the requirements of the statute for such order, and that this cause be remanded for the fixation by the Lower Court of the depreciation on said vehicle.
On September 17, 1953, Jesse C. Leggett traded his 1951 Chevrolet car to C.W. Johnston, doing business as Motor Corral at McComb, Mississippi for a 1953 Plymouth car. While Leggett was inclined to pay the difference of $900 in cash, Johnston encouraged him to finance it. This he did with the assurance that he could still pay the same in cash at any time within thirty days. So the conditional sales contract was executed by the parties, and Leggett signed the accompanying note. The papers were endorsed by Johnston, without recourse, assigned to General Contract Corporation, and were promptly forwarded to the Corporation. A few days later, the Corporation, in writing, advised Leggett that it held the paper, evidencing twenty-four payments of $51.33 each, and that the first installment would be due and payable on November 3, 1953. A coupon book was enclosed for utilization in remitting by mail. Upon a consideration of the amount of the finance charges, Leggett, on September 28 went to the Motor Corral to pay off the indebtedness.
For the purpose of complying with this request Johnston telephoned the Jackson office of the Corporation and ascertained that the necessary amount would be $915. Leggett drew a check on his bank in that sum and handed it to Johnston, who dated it and wrote in the Motor Corral, as the payee. He then gave Leggett the car invoice with the notation "Paid in full. Sept. 28, 1953. By C.W. Johnston" written thereon.
Leggett did not reply to the communication which he had received from the Corporation. About November 10, 1953, he received a letter from the Corporation, advising that his first payment was past due. Immediate payment was demanded. He thereupon went promptly to the Jackson office with the paid invoice and his cancelled check. While there, the automobile was seized under a writ of replevin. Leggett later tendered a proper bond, and the automobile was restored to him. Needless to say, Johnston did not remit the money which he collected from Leggett, and sometime later his business failed.
Thus Leggett paid out his money, but the Corporation, to which it should have been paid, did not receive it.
In the county court, in the replevin action brought by the Corporation, the defendant offered evidence to show that the Motor Corral had financed all of its paper through the Corporation; that a sign of the Corporation, advertising its business, was displayed in the office of the Motor Corral; that from March 5 to November 4, 1953, Johnston collected payments from his customers and remitted to the Corporation $13,601.21; and that at one time, the Corporation wrote him a letter, expressing its appreciation for the collection service which he had given on certain accounts. But it also appeared that Johnston, following the payment to him by a customer, would remit his or a cashier's check along with a form, on which he asked that the customer should be credited accordingly. The form contained this express provision: "We have acted as the customer's agent in the acceptance of these payments." Some of this paper was endorsed with recourse. In that case, Johnston had a potential liability, and of course was concerned that such debtors should pay up. The Corporation had never authorized him to collect for it as its agent, and had never paid him anything for such service. When a customer desired to pay off his note, Johnston would ascertain the amount, send it to the Corporation, and the Corporation would then send to him the papers, marked paid.
(Hn 1) Where the relationship of principal and agent exists, if the principal places his agent in a position where he appears, with reasonable certainty, to be acting for the principal, and his acts are within the apparent scope of his authority, obviously such acts bind the principal. Allen v. Moss Tie Co., 157 Miss. 392, 128 So. 351, and authorities too numerous to mention.
But the trouble here is that there was not a scintilla of evidence that Johnston was an agent of the Corporation at the time when he received the check from Leggett. Always theretofore, when he received money from customers to be applied on their notes, he remitted under the distinct understanding that he was doing so as the agent of his customers. He admitted that until this controversy arose, he had never considered himself an agent of the Corporation.
(Hn 2) As was said by this Court in Union Station Trust Co. v. Bostick, 133 Miss. 627, 98 So. 105, "It is the duty of the maker of a note to require its production before making payments thereon, and if he fails to do so he pays at his risk. The note itself is the only evidence the maker has the right to rely upon. He has the right to refuse payment until actual presentation." See also Virginia-Carolina Chemical Co. v. Steen, 99 Miss. 504, 55 So. 47; Sivley v. Williamson, 112 Miss. 276, 72 So. 1008; J.B. Colt Co. v. Black, 144 Miss. 515, 110 So. 442; Anderson v. Moore Dry Goods Co., 152 Miss. 312, 119 So. 914; Adler v. Interstate Trust Banking Co., 166 Miss. 215, 146 So. 107; New Home Sewing Machine Co. v. Moody, 189 Miss. 628, 198 So. 550.
In Ubaldini v. C.I.T. Corp., 186 A. 198, a Pennsylvania case, and Andrew v. Kolsrud, 253 N.W. 913, an Iowa case, largely relied upon by the appellee, the proof of agency was altogether different. In the former, the finance company knew that the motor company kept receipt books. Copies of all receipts were forwarded to the finance company. Its collectors regularly called on the motor company for the purpose of receiving and checking up such payments by examination of the receipt books and would initial the triplicate copies in those books to show that the money was received by the finance company. In other words, the evidence was ample to sustain a finding that the motor company was an implied agent to receive payment of the finance company's notes. In the latter case, the proof showed that the bank knew that Reed Lennon were making collections on the notes and turning the proceeds thus collected over to it. One of the officers of the bank testified that, "We allowed Reed Lennon to go ahead and make collections on the notes sold to the bank." Thus the implied agency was clearly established.
(Hn 3) The judge of the county court, who tried this cause without a jury, found for the defendant, and the circuit court, on appeal, affirmed that judgment. But since the evidence wholly failed to show that Johnston, when he received the money from Leggett, was acting either expressly or impliedly as an agent for the Corporation, it follows that the judgment of the lower court must be reversed and a judgment must be entered here in favor of the appellant.
Reversed and judgment here for the appellant.
McGehee, C.J., and Arrington, Ethridge and Gillespie, JJ., concur.
ON MOTION TO CORRECT JUDGMENT
When the initiatory writ of replevin was served on Leggett, he made bond in the sum of $2,500, with American Bonding Company as surety, conditioned to have the automobile in question before the court on the Second Monday of January 1954 to satisfy the judgment of the court. The county judge, sitting as both judge and jury, fixed the value of the automobile at $1,250, but found for Leggett and ordered that he retain the automobile. If the court had found for General Contract Corporation, it of course would have ordered Leggett to deliver the automobile (describing it) up to the Corporation, or pay the sum of $1,250, the value thereof. Section 2849, Code of 1942.
The cause was reversed by this Court on appeal, and judgment was entered for the appellant here. Now the judgment as entered, ordered that "the appellee, Jesse C. Leggett and American Bonding Company, surety on the appellee, J.C. Leggett's, replevin bond, do immediately restore to General Contract Corporation One (1) 1953 Model Plymouth Automobile, Motor Number P24-416573, if to be had, or its value, to-wit: the sum of $1,250.00," together with costs.
(Hn 4) Under that judgment, the restoration of the automobile and the payment of costs would effect satisfaction. But obviously if the automobile was worth $1,250 in January 1954, it is not worth that much now. Its value has been depreciated from age, and it may have also been damaged. Responsibility of the surety for such elements are, by statute, written into the replevin bond. Section 2849, supra. See also Martin v. Coker, 204 Miss. 576, 37 So.2d 772.
(Hn 5) The judgment should therefore be corrected so as to provide that Jesse J. Leggett and American Bonding Company, his surety, immediately restore to General Contract Corporation the automobile, as above described, and pay the difference between its present value and $1,250, or pay to General Contract Corporation the sum of $1,250, and all costs.
If the appellee and his surety elect, within fifteen days, to restore the automobile instead of paying its originally adjudicated value, then the cause will be remanded to the County Court of the First Judicial District of Hinds County for the sole purpose of determining, on a writ of inquiry, the present reasonable value of the automobile; and after such determination, the automobile shall be delivered up to General Contract Corporation, and the Corporation shall recover of and from Jesse C. Leggett and American Bonding Company, his surety, the difference between the present reasonable value of the automobile and the sum of $1,250.
Motion to correct judgment sustained.
All justices concur.