American Car & Foundry Co. v. Alexandria Water Co.

Opinion by Mr. Justice Elkin, The pivotal point in the decision of this case is the authority of the district manager, Lowery, to accept the three negotiable notes, and the collateral judgment note in full satisfaction and payment of the balance due by the contracting firm on account of pipe and other materials furnished for the construction of the water plant. If the plaintiff company clothed its district manager with thegeneral power to superintend the manufacture and sale of these materials, together with the right to enter into contracts in the name of the company, fixing prices and terms of payment, including the authority to employ sales agents to transact business generally throughout the state or [550] elsewhere under his direction, he would be a general agent within the meaning of tb e law in that branch of the business over which he exercised supervision. If these facts were established by competent testimony, it is clear the district manager would have powers coextensive with the business intrusted to his care. Unfortunately, in the trial of the case in the court below it seems to have been assumed that he had all of these powers and the evidence offered is so meager as not to enable this court in reviewing the case to determine what his general powers were. The first assignment of error raises the question whether on cross-examination it was proper for the defendant to show the general authority of the district manager who was offered as a witness for plaintiff, to prove the execution of the contract relied on to sustain the lien. It was proper to ask on cross-examination any question which related to the authority of the district manager to enter into the particular contract in question, and for this purpose it was clearly competent to ask whether the contract was made and concluded by him without any correspondence with the home office during the progress of the negotiations or in reference to the execution of the contract. All of these facts would tend to show that in the execution of this particular contract the district manager had the authority to bind the plaintiff company. The ratification of the contract thus made, the furnishing of the materials in accordance with the terms thereof and the acceptance of part payment of the price agreed upon, conclusively show the authority of the district manager to execute the contract and fix the terms of payment. Every fact pertaining to this contract could be properly developed on cross-examination, because the plaintiff had offered this witness for the purpose of proviug the contract. It was clear error, however, to permit the defendant on cross-examination to go further and attempt to establish the general authority of the district manager. This should be done by affirmative testimony. It may be that upon a new trial of the case such facts may be shown as would warrant a jury in finding as a fact that it was within the general scope of his authority to accept the notes in payment of the claim. The fact of agency and the scope of the authority of an agent are questions for the court where the authority is [551] created by an instrument in writing, but where such authority is to be implied from the conduct of the parties, or where the agency is to be established by witnesses, the fact and scope of the agency are for the jury: Singer Manufacturing Company v. Christian, 211 Pa. 534. It may be conceded as a general rule that ívhen a corporation intrusts a principal officer or manager with the general supervision of a particular branch of its business it clothes such officer or manager with the authority of a general agent coextensive with the business intrusted to his care, and that private instructions limiting his ostensible powers will not protect the corporation from liability for the acts of the agent done within the scope of his ostensible authority, although the specific act may be in excess of private instructions: Adams Express Company v. Schlessinger, 75 Pa. 256; Anderson v. National Surety Company, 196 Pa. 288. The difficulty about the present case is that the evidence produced at the trial did not clearly show the kind and character of the business intrusted to the supervision of the district manager, the manner in which it was conducted and the scope of the authority exercised by him. This could have been shown by calling as a witness an officer of the company who had knowledge of the facts, or by the district manager himself, or by proving such facts in the conduct of the business generally as to show an implied authority to do the particular act relied on to defeat a recovery in this case. The ninth, tenth, eleventh and twelfth assignments of error relate to the refusal of the court to admit the testimony of Lowery, the district manager, in reference to the notes which it was alleged were taken in payment of the claim, and in refusing to admit certain correspondence between the treasurer of the company at the home office in St. Louis and the district manager at Berwick. It was competent for the plaintiff to show in rebuttal what these notes were taken for and what disposition was made of them. The district manager should have been permitted to testify that he did not receive these notes in payment of the claim, but with the understanding' that they would be forwarded to the home office for approval or rejection by the company. This was the exact issue of fact in the case. The witnesses for defendant testified in positive terms that the notes had been executed and delivered to the district [552] manager in full payment and satisfaction of the claim, and it was certainly competent for him to testify that this was not the agreement between the parties. There being a conflict of testimony, it was for the jury to determine the fact. I do not agree, however, that in this connection it was competent to offer in evidence the letters which passed between the district manager and the treasurer of the company. These were private communications between the officers of the plaintiff company about which the other parties to this controversy had no knowledge, and their rights could not be prejudiced by these private communications and the court properly refused to admit them in evidence. It was competent, however, for the district manager to testify as to the verbal agreement between himself, Mandeville and Davis at the time it was agreed to accept the notes. It was also proper for him to testify to the fact that he had received them and forwarded them to the home office at St. Louis, and that the notes were returned to him rejected. He should also have been permitted to testify what he did with the notes after they had been returned to him. .All of these facts were in corroboration of his testimony that the notes were not taken in payment of the claim, but only as additional and collateral security for the same. The contention of the appellant that it was the duty of the appellee to first affirmatively prove the agency and the scope of the authority of the district manager before offering any testimony relating to the execution of the notes, and other matters incidental thereto, may be conceded to be the better practice, but this is not an imperative requirement. The order of evidence to be given in such a case is within the discretion of the court: Telephone & Supply Company v. Thompson, 112 Pa. 118. After a careful consideration of this case we have concluded that when the facts as to the scope of the agencjq somewhat irregularly shown at the trial in the court below, and upon which theory the case was tried, are properly established when the case again comes up for trial, it will be a question for the jury to determine whether, under the general scope of his authority, the general manager could bind his principal in making the alleged contract to accept the notes in payment of the claim. In so holding we are not unmindful of the general rule that all sales, whether of real or personal prop [553] erty, by an agent appointed generally to sell, must be for a consideration in money, and such an. agent cannot bind his principal by receiving payments in bonds, notes or other paper ; or that an agent to collect and receive payment can receive nothing but money in satisfaction of the claim. This general rule is freely conceded, but in our judgment its application to the facts of the present case is unwarranted. Here the district manager was intrusted with the supervision, control and management of a large plant belonging to the plaintiff company. Under his direction all the materials are manufactured, and by his authority they were sold. He employed agents to make sale of the manufactured materials^ and executed contracts in the name of the company without authorization from any other or higher source. He determined prices at which the materials were sold and fixed the terms of payment. Indeed, so far as the record shows, he exercised absolute authority in these respects. When the contract was first entered into, so far as the facts of the present record disclose his authority, he might have agreed to accept notes in payment of the claim, and, if he had done so, there can be no question that under the general scope of his authority his act would have been binding on his principal. If he had authority to make such a contract in the first instance, why may he not exercise a similar power after the materials have been furnished and the balance remains unpaid ? ' However, all of these things depend upon the general scope of his authority, and this is a question for the jury to determine. The first, ninth, tenth, eleventh and twelfth assignments of error, except as to the admission of the correspondence between the treasurer and the district manager, which correspondence for reasons hereinbefore stated cannot be admitted in evidence, are sustained. The remaining assignments are overruled. Judgment reversed and a venire facias de novo awarded.