Moore v. Hardaway Contracting Co.

The opinion of the Court was delivered by Mr. Justice Fishburne. ' The plaintiffs recovered judgment against the defendant for the breach of an alleged oral contract, by the terms of which the plaintiffs claim to have rented to the defendant in April, 1937, a certain building in the Town of Chesterfield for the storag-e of trucks and for use as a field office. It is alleged that in violation of the agreement the defendant stored tractors, road equipment, and gasoline therein, used the building as a repair shop, and negligently spilled gasoline in and about the building, as the result of which it was destroyed by fire the same month. It is further alleged that but for such unauthorized use the building would not have been burned and destroyed. The defendant admitted the destruction by fire of the building referred to, but denied the rental agreement and all other material allegations of the complaint. Throughout’ the trial of the case Hardaway Contracting Company maintained that it had no contract with the plaintiffs, express or implied, but entered the premises as a subtenant of one J. H. Spence, an independent hauling contractor with whom it occupied the building, and that any rental agreement plaintiffs may have had was with Spence. *302 The plaintiffs, in accordance with the allegations of the complaint, sought to prove their primary contention that the agreement was made with the defendant alone, through B. E. Benson, its superintendent. They also adopted the theory, and sought to establish it, that the alleged lease was made solely with Haraday Contracting Company through Spence. And testimony was introduced in the effort to show that Spence was the agent of the defendant, and as such authorized to make the contract. The defendant assigns error to the lower Court in refusing its motions for nonsuit, directed verdict, and a new trial, upon the ground that there was no evidence tending to establish the alleged rental agreement. Hardaway Contracting Company was engaged in constructing a highway in Chesterfield County under the direction of its superintendent, B. E. Benson. The excavation on the project and the removal of earth was being done by J. H. Spence, an independent contractor. According to the testimony of the plaintiffs the alleged rental agreement was made in a long distance telephone talk between W. B. Moore, one of the plaintiffs, in Wadesboro, North Carolina, and someone in the Town of Chesterfield, who either said he was Benson,-'acting for the defendant, or that he was Spence, speaking for the Hardaway Contracting Company. Irrespective of the identity of the person talking, the building was leased for a monthly rental of $15.00, and both Spence and Hardaway Contracting Company were occupying it at the time of the fire. The issue in the case is, was it rented to Spence or to Hardaway? They both contend that it was rented to Spence. We may at once dissipate any confusion as to the identity of the person who had the telephonic conversation with the plaintiff, Moore, at Wadesboro. Moore testified that he did not know Benson, had never seen him, and had never heard his voice. Proof of identity rested solely upon Moore’s testimony that the man speaking with him said that his name was Benson. There was a dotal lack of corroboration, direct *303 or circumstantial. On the contrary, the evidence is susceptible of no other reasonable inference than that the person who talked over the telephone with Mr. Moore was J. H. Spence, the independent hauling- contractor. So that the inquiry narrows down to the question whether Spence entered into the agreement or lease of the building for himself, or whether in making the agreement he was acting for the defendant. And this involves the issue of agency. Moore said that the person speaking with him' over the telephone stated that he was renting for Hardaway. Both Benson, the superintendent of the defendant, and Spence, who talked with Moore, denied positively that any relationship of principal and agent existed. Benson stated that Spence was an independent contractor, and was not authorized to act for the defendant in any manner. Spence confirms this, and asserts that he was acting for himself alone in making the rental agreement for the building; that he sub-rented a portion of it to the defendant for a field office, and that the defendant agreed to pay him $7.50 per month for its use. He categorically denied that he told Moore that he was speaking on behalf of Hardaway. The respondents point to certain evidence of Benson as showing that he authorized Spence to negotiate for the renting of the building for the defendant. It is true that Benson said he was “looking for an office in town when he (Spence) told me that he could get that place, and would let me have half of it.” And he further said that he refused to agree to pay one-half of the rent until Spence could definitely learn what the one-half would amount to. But this testimony does not tend to prove any agency to act for or bind the defendant; it clearly is to the contrary. The respondents rely upon several circumstances as corroborative of their contention that Spence was acting as .the agent of the defendant, among these, that Hardaway Contracting Company occupied a portion of the building- for an office and placed some of its road machinery in the building. This is admitted. But these circumstances are entirely *304 consistent with the contention that the defendant occupied the building as a sub-tenant of Spence. Another circumstance is, as shown by the evidence of Spence and Benson, that i-t was agreed between themselves that the defendant would pay the monthly rent and charge Spence’s one-half of the rent against him. As a matter of fact the building was destroyed by fire before the expiration of the first month, and no rent was ever paid. But if it had been paid in the manner adverted to, this circumstance, in the light of the evidence, does not warrant the deduction that the defendant rented the premises. The evidence further shows that Spence as an independent contractor, had been engaged in excavating and hauling in construction work in other projects awarded to Hardaway Contracting Company, and had' never been authorized to lease or rent any building for the use of that firm. Spence says that he rented the building in question from the plaintiffs so that he would have a place where he could store and repair his trucks. And at the time of the fire one or more of his trucks was in the building. He did not have an office in the building. The relation of agency need not depend upon express appointment and acceptance, but may be, and frequently is, implied from the words and conduct of the parties and the circumstances of the particular case. Mortgage & Acceptance Corporation v. Stewart, 142 S. C., 375, 140 S. E., 804. Agency may also be inferred from a customary course of conduct. Guignard Brick Works v. Allen University, 155 S. C., 507, 152 S. E., 707. While agency may not be established by the declarations and conduct of the alleged agent alone, such declarations and conduct may be admissible as circumstances in connection with other evidence tending- to establish agency. Bass v. American Products Export & Import Corporation, 124 S. C., 346, 117 S. E., 594, 30 A. R. R., 168; Watkins v. Atlantic Coast Line R. Co., 97 S. C., 148, 81 S. E., 426, 2 C. J. S., Agency, page 1045, § 23. *305 In our opinion, the evidence in this case is not susceptible of a reasonable inference that an agency, express or implied, existed in regard to this lease between Spence and the defendant. It is true that prior habit or conduct, or course of dealing- between two persons may give rise by implication to the relation of agency between them. But there is an entire absence of evidence tending to establish this in the case here. Nor do we find any evidence from which a reasonable inference might be drawn that ag'ency by estoppel has been shown. The plaintiffs have failed to prove that a rental agreement existed between them and the defendant for the building in question. The general rule is that in the absence of circumstances putting a reasonably prudent man on inquiry ratification cannot be implied as against a principal who is ignorant of the facts. 2 C. J. S., Agency, page 1086, § 42. One of the plaintiffs, W. B. Moore, testified that the person who made the rental agreement with him over the telephone said that he was acting for Hardaway. We can find nothing in the record from which a reasonable inference might be drawn, even if this testimony be accepted as true, —that Spence who actually talked with Moore, had any authority from the defendant to bind it in any agreement. Spence had neither real nor ostensible authority to represent the Hardaway Contracting Company in such a transaction, as shown by the evidence. The respondents also take the position that if Spence rented the building at all, he rented it for the defendant and himself, and consequently they were joint lessees, and that the defendant might be held liable upon this theory. This suggestion was made in the Circuit Court after all of the evidence was in, and when the motion for a directed verdict was being argued; but it was overruled by the trial Judge upon the ground that the whole case had been tried upon the theory that the contract had been entered into by the plaintiffs with the defendant alone. He stated, “I am going *306 to charge this jury on the theory upon which we have been trying this case yesterday and today, that it is based upon a contract, and a breach of a rental contract ,and that breach being accompanied by negligence, bringing about the destruction of the building.” The respondents now in this Court, and for the first time, assert that the defendant might be held liable as a sub-lessee. When, in the course of the trial, the Court construed the cause of action alleged by the plaintiffs to be based upon a breach of contract, counsel for plaintiffs expressed no dissent. And this was the theory upon which the case was tried throughout. Nor did they at any stage of the trial ask leave to amend their complaint to conform to the proof. The appeal must be construed in the light of the general rule that the theory pursued in the trial Court with respect “to the relief sought and grounds therefor,” must be adhered to in the appellate Court. Melette v. Atlantic Coast Line R. Co., 181 S. C, 62, 186 S. E., 545; Wilson v. Southern Ry., Carolina Division, 123 S. C., 399, 115 S. E., 764; Iler v. Jennings, 87 S. C., 87, 68 S. E., 1041; McKittrick v. Greenville Traction Co., 84 S. C., 275, 66 S. E., 289; Cothran v. Knight, 45 S. C., 1, 22 S. E., 596. Respondents now maintain that the cause of action alleged in the complaint sounds in tort, and that while allegations of the contractual relation are woven into the complaint, such allegations are not the gist of the action, but merely preliminary and introductory to the statement of the tort action. As already stated, the cause was tried upon an entirely different theory — that is, upon the theory of ex contractu and not ex delicto. But apart from this, if the question were now an open one, we would feel compelled under the authority of Shaw v. Great Atlantic & Pacific Tea Company, 189 S. C., 437, 1 S. E. (2d), 499, to hold that the complaint in this case states a cause of action in contract and not in tort. *307 April 19, 1940. It is our opinion that the defendant’s motion for a directed verdict should have been granted. Judgment reversed and case remanded for entry of judgment in favor of defendant. Mr. Ci-iiee Justice Bonham, Messrs. Justices Carter and Baker and Mr. Acting Associate Justice T. D. Tide concur.