Anchor Crane & Hoist Service Co. v. Sumrall Personnel Service, Inc.

STOREY, Justice. Sumrall Personnel service, Inc., an employment agency, sued Anchor Crane & Hoist Service Company on an oral contract to pay an employment commission. Trial was before the court and resulted in judgment for the plaintiff Sumrall. The trial court found that defendant contracted to pay 15 percent of an annual $20,000 salary as commission and that defendant had clothed its works manager with apparent authority to make the contract on defendant’s behalf. Anchor Crane’s principal com [654] plaint on appeal is that there is insufficient evidence to support the finding of apparent authority. We hold that the finding is supported by the evidence and therefore affirm. The test in determining the question of apparent authority is whether there is such conduct on the part of the principal as would lead a reasonably prudent person using diligence and discretion to believe that the agent had authority to act for the principal. Chastain v. Cooper & Reed, 152 Tex. 322, 257 S.W.2d 422 (Tex.1953). There is no dispute here that plaintiff referred the employee, an engineer, to defendant or that the employee was hired by defendant. The dispute is whether defendant’s works manager had authority to contract to pay plaintiff a commission for its services. The case turns upon facts supplied by the testimony of three witnesses: Virginia Sumrall, plaintiff’s vice president, Ed Warren, defendant’s works manager and Laura Mays, defendant’s president. Sumrall testified that she telephoned defendant regarding placement of an engineer and was referred to Mays, who in turn referred her to Warren. She had several conversations with Warren and at one time asked him if they paid the applicant’s fees. According to Sumrall, Warren replied that they would pay the fee only if they liked and wanted the applicant. Later, according to Sumrall, Warren called her after interviewing the applicant and asked the amount of the fee. Sumrall quoted a fee of 20 percent of the $20,000 annual salary. Warren considered this excessive and the fee was negotiated to 15 percent payable “one-half up front and the balance in 90 days.” Warren acknowledged discussing the matter on several occasions with Sumrall, but denied that they reached agreement on payment of a commission. He further testified that he had no authority to hire employees. Mays also testified that Warren had no authority to hire employees, and that he did not authorize Warren to agree to pay a commission to Sumrall. With respect to his conversation with Sumrall, he testified: The first conversation I had from her was the call that she initially called Anchor Crane was given to me as responsible for hiring, and I informed her that first off, yes, we were interested in an engineer, but first off Mr. Warren would need to interview the person, that he and I would get together later and discuss the salary and so forth. Mays’ testimony is not necessarily inconsistent with his assertion, and Warren’s, that Warren did not have authority to hire employees. However, this authority is not the one in question in this case. The question is whether Warren was clothed with apparent authority to contract with Sumrall. We conclude that the foregoing facts could lead a reasonably prudent person to believe that Warren was clothed with the authority which he presumed to exercise. We are persuaded in this regard by the fact that Sumrall was directed to Warren by the company’s president, Mays. There is no dispute that Mays knew, at that time, the nature of Sumrall’s business and the purpose of her call, namely, the placing of an engineer employee. Finally, the reasonable conclusion to be drawn from Mays’ statement is that further discussion between him and Sumrall was unnecessary, but, on the contrary, his future consideration of the matter would be limited to discussion with Warren. These facts meet the test of Chastain v. Cooper & Reed, supra and support the trial court’s finding of apparent authority. Defendant contends further, however, that there were no pleadings to support the finding of apparent authority. While plaintiff did not expressly plead that Warren was clothed with apparent authority, such failure is not fatal in light of the fact that Anchor Crane, knowing that plaintiff was relying on Warren’s authority as agent, did not except to the plaintiff’s pleadings nor did it object to the evidence of apparent authority when offered. The issue of apparent authority was therefore tried by consent. See Hennigan v. Harris [655] County, 593 S.W.2d 380 (Tex.Civ.App.—Waco 1979, writ ref’d n. r. e.); La Marque Independent School District v. Thompson, 580 S.W.2d 670 (Tex.Civ.App.—Houston [14th Dist.] 1979, no writ; Bugh v. Word, 424 S.W.2d 274 (Tex.Civ.App.—Austin 1968, writ ref’d n. r. e.). Defendant next contends that there was insufficient evidence to support the court’s finding that the parties had made a contract. We disagree. The testimony of Sumrall and Warren cited above demonstrates that this was a disputed fact issue. The trial court obviously chose to believe Sumrall’s version of the dispute rather than Warren’s. Similarly, we cannot agree that the evidence is insufficient to support the finding that $3,000 was a reasonable commission. Because the court found that the parties made a contract based upon 15 percent of an annual $20,000 salary as related by Sumrall, the finding of reasonableness was unnecessary. Affirmed.