Norfolk Southern Railroad v. Smitherman

Walker, J., after stating the case as above: . The question which the witness, W. I. Myrick, was allowed to answer was incompetent, and should have been excluded. Its admission was clearly prejudicial, and, considering the other testimony in the case, it doubtless controlled the jury in rendering the verdict for the defendant. The witness, S. T. Brown, mentioned in the question and answer, had no authority, express or implied, to surrender possession of the old building to the defendant, or to any one under their direction, nor was any declaration made by him to Myrick, as to what the plaintiff had done about that building, and to the effect that it had been surrendered to the defendants and belonged to them, admissible against the plaintiffs, who were his principal. He had no real or apparent authority to give up his principal’s property, so far as this record shows, and certainly none to declare what the principal had done in the past respecting it. His duty was nothing more' than that of a local passenger and freight agent, and nothing is disclosed to show, nor has it been submitted to the jury and found, that it was more than this. Bank v. Hay, 143 N. C., 326; Brittain v. Westall, 135 N. C., 492; Metal Co. v. R. R., 145 N. C., 293. The plaintiff, as principal, has not ratified what the agent is alleged to have done, nor acquiesced therein, but on the contrary, has denied that the agent had any such authority. “Limitations which are known to a person dealing with an agent are as binding upon such person as they are upon the agent, and he can acquire no rights against the principal by dealing with the agent contrary thereto.” 31 Cyc., 1329. While as between the principal and the agent the scope of the latter’s authority is that authority which is actually conferred upon him by his principal, which may be limited by secret instructions and restrictions, such instructions and restrictions do not affect third persons ignorant thereof, and as between the principal and third persons the mutual rights and liabilities are governed by the apparent scope of the agent’s authority, which is *599 that authority which the principal has held the agent out as possessing, or which he has permitted the agent to represent that he possesses, and which the principal is estopped to deny. The apparent authority, so far as third persons are concerned, is the real authority, and when a third person has ascertained the apparent authority with which the principal has clothed the agent, he is under no further obligation to inquire into the agent’s actual authority. The authority. must, however, have been actually apparent to the third person, who, in order to avail himself of rights thereunder, must have dealt with the agent in reliance thereon, in good faith, and in the exercise of reasonable prudence, in which case the principal will be bound by acts of the agent performed in the usual and customary mode of doing such business, although he may have acted in violation of private instructions, for such acts are within the apparent scope of his authority. An agent cannot, however, enlarge the actual authority by his own acts without some measure of assent or acquiescence on the part of his principal, whose rights and liabilities as to third persons are not affected by any apparent authority which his agent has conferred upon himself simply by his own representations, express or implied. Although these rules are firmly established, their application to particular cases is extremely difficult. The liability of the principal is determined in any particular case, however, not merely by what was the apparent authority of the agent, but by what authority the third person, exercising reasonable care and prudence, was justified in believing that the principal had under the circumstances conferred upon his agent. 31 Cyc., 1331-1335. There is evidence that the defendant had freight in the old building for shipment at the time this action was commenced, and that it was used for the storage of heavy and overflow freight in connection with the new building, which was on the railroad premises not far away. But, however, the fact may be as to the authority of the agent to.surrender the property, his declaration to Myrick, if made, was incompetent to prove it. We have seen that he cannot enlarge his authority by his own declarations, and this Court has 'recently stated that “the authorities in this State are all to the effect that declarations of an agent made after the event, and as mere narrative of a past occurrence, are not competent against the principal.” Johnson v. Ins. Co., 172 N. C., 142, citing Smith v. R. R., 68 N. C., 115; Rumhough v. Improvement Co., 112 N. C., 751; Morgan v. Benefit Society, 167 N. C., 265. The error in admitting this evidence, without other proof extending the authority of the agent beyond its implied or apparent limitation, entitles the plaintiffs to another trial, and it will be so certified. New trial.