Pilcher & Dillon v. Smith

Stephens, J. (After stating the foregoing facts.) “A ratification may be expressed or implied from the acts or silence of the principal.” Civil Code (1910), § 3591. Where a cotton factor has disobeyed instructions, by refusing to sell cotton belonging to his principal, it is the duty of the principal upon being informed of the fact, either to affirm the act of the principal or to dissent therefrom. “The agent must act within the authority granted to him, reasonably interpreted; if he exceeds or violates his instructions, he does it at his own risk, the principal having the privilege of affirming or dissenting, as his interest may dictate.” Civil Code (1910), § 3576. Silence by one who is under a duty to speak will amount to a ratification. A factor who disobeys his instructions to sell may be considered as having purchased the property himself, and is liable to his principal for the amount for which the property would have sold had the factor obeyed his instructions. The principal can sue him and recover as upon an implied contract of purchase, or upon the theory of money had and received. The factor, under such circumstances, is entitled to retain the property as his own, and, if the market is declining, sell it at the earliest opportunity for his own benefit and thereby minimize his loss. The principal, therefore, upon ascertaining that the factor has violated his instructions to sell is under an imperative duty to speak. He can ratify the failure of his factor to sell as instructed and retain the cotton as his own, or he may dissent from the act of his agent in violating instructions and thereby place himself in the attitude [609] of insisting that the transaction be treated as if the agent had followed instructions and sold the cotton. The agent then is responsible to him as if the agent had been the purchaser. The principal’s conduct, therefore, after he lias been informed of the conduct of the agent, necessarily aifects the agent’s rights in the matter. If the agent has become the purchaser of the cotton, it may be to his interest to sell it upon his own account. If he has not become the purchaser of the cotton, he is only a bailee subject to further-instructions from his principal. The principal’s silence and failure within a reasonable time to repudiate the agent’s act, therefore, necessarily amounts to a ratification of the agent’s act in violating instructions to sell, and he cannot afterwards hold the agent liable for any damage which the principal may have sustained by virtue of the agent’s conduct. The instruction of the court not being in accordance with the rulings herein made, and the jury having found for the defendant principal upon his counterclaim, the court erred in overruling the plaintiff’s motion for a new trial. See, in this connection, Vinson v. Kinney, 30 Ga. App. 731 (119 S. E. 217); Mattehws v. Coe, 49 N. Y. 57; Field v. Farrington, 10 Wall. (U. S.) 141 (19 L. ed. 923); Douglass v. Kraft, 9 Calif. 562; Bray v. Gunn, 53 Ga. 144; McLendon v. Wilson, 52 Ga. 41 (2); Owsly v. Woolhopter, 14 Ga. 124; Palmer v. McNatt, 97 Ga. 435 (25 S. E. 406). Judgment reversed. Jenlcins, P. J., and Bell, J., concur.