Whiteley v. Garrett & Calhoun Inc.

Beck, P. J. (After stating the foregoing facts.) We are of the opinion that the court should have sustained the demurrer to the answer of the defendant 'in the original suit. Clearly no cause of action is set out against M. S. Whiteley, unless it appears from the allegations of the petition that she was indebted in some sum to the defendant or liable to account to it in some manner. There is no contention that she was liable to the defendant in any amount, unless she was bound by the agreement of her agent, J. W. Whiteley, to the effect that the funds standing to her credit and the margins of J. W. Whiteley and J. W. Whiteley Company should be treated as one fund and liable to make good a deficit in the account of J. W. Whiteley, just as his own funds would be liable therefor. Whether this agreement, which is alleged to have been made by J. W. Whiteley with the defendant, was a binding obligation upon M. S. Whiteley depends upon whether the alleged agreement between J. W. Whiteley and the defendant was one made under any authority vested in him as agent. It is alleged in the answer of the defendant that' J. W. Whiteley was manager and general agent of M. S. Whiteley. We take it that these terms are used synonymously here. Granting that the allegations of the answer show that J. W. Whiteley was vested with the widest power that can be ascribed to a general agent, still they fail to [441] show that he was vested with authority to use the funds belonging to M. S. Whiteley for the purposes here indicated. Before he could use the funds of his principal for. his own benefit or to make good any deficit in his deposits or margins with Garrett & Calhoun Inc., it was necessary for him to have express authority to do so. No implied authority from the general agency would authorize him to do it. “The principal is bound by all acts of his agent within the scope of his authority.” Civil Code, § 3593. But, “no agent, however general his powers, has implied authority to pledge the credit of his principal for his own private debt; and if he undertake to do so, it is clear duty of the party dealing with h im to make inquiry as to his authority.” Wickham v. Morehouse, 16 Fed. 324. “Under a power of attorney, authorizing the attorney to act in every species of business wherein the principal may be concerned or interested in the United States, Held, notwithstanding the broad terms of the power, the attorney is not authorized to pledge the property of his principal to secure the individual debt of the attorney.” Hewes v. Doddridge, 1 Rob. 143. 2 C. J. 581 et seq., and cases cited. It will be observed that in the answer of the defendant it is alleged that there was a long course of dealings between the defendant and J. W. Whiteley in conformity to the agreement alleged, as to the use of any balance of fund standing in the name of M. S. Whiteley; but notice to M. S. Whiteley of this agreement and ratification by her is not shown. Wherefore we conclude that the defendant in its answer shows no right to a recovery or an accounting as against M. S. Whiteley; and it necessarily folloAVs that the defendant presented no claim against her which would authorize the court to make her a party to the case over her objection. The demurrer should have been sustained. Judgment reversed. All the Justices concur.