Andersen Coal Mining Co. v. Sloan, Howell & Co.

Opinion by Henderson, J., It is very clear that the contract out of which this action arises was made by the agent of the defendant in the course of the business of the company, which was the purchase and sale of coal. The plaintiff did not know the consignee except through the shipping instructions given by the defendant and offered to bill the coal to the defendant or to the Hughes-Hatch Coal Company if the defendant would guarantee the account. This the defendant agreed to do according, to the plaintiff’s testimony and thereupon the letter of December 7, 1905, was forwarded by the defendant’s sales* manager ordering the coal to be shipped to the Hughes-Hatch Company and guaranteeing the account. It is now said by the defendant that its agent exceeded his authority in making the guaranty and that it is not bound for its fulfillment. Conceding, however, that the agent was not authorized to give the warranty as an inducement to bring about the sale there was a question of ratification to be submitted to the jury arising out of the evidence introduced. The defendant desired to have the plaintiff send the coal to a company, as to the solvency of which it had no knowledge and as part of the transaction and presumably an inducement thereto this guaranty was given. The sale was to be profitable to the defendant as well as to the plaintiff and if the former did not authorize the sales manager to make the guaranty and did not intend to be bound thereby it was its plain duty to promptly [329] notify the plaintiff to that effect in order that the latter might take such steps as were expedient to protect itself by refusing to make the shipment or instituting such proceeding as might be adopted to recover the price. The sales manager had unquestioned authority to transact such matters as the purchase and sale of coal and the plaintiff might easily be misled as to the extent of his authority. It was the duty of the defendant, therefore, to disclaim the act of its agent as soon as informed of the fact. It was said by Gibson, J., in Bredin v. Dubarry, 14 S & R. 27, to be “undisputable that a principal who neglects promptly to disavow an act of his agent by which the latter has transcended his authority makes the act his own. He is bound to disavow it the first moment the fact comes to his knowledge.” Of like import is Valentine v. Packer, 5 Pa. 333. In Kelsey v. Natl. Bank, 69 Pa. 426, the cashier of the bank had offered a reward for the apprehension of thieves who had robbed the bank. The question of the authority of the cashier ex officio to offer the reward was not determined but it was held that even if he had no authority the bank was hable for the reward if the offer was acquiesced in and ratified by the directors and in that connection the court stated that “the law is well settled that a principal who neglects promptly to disavow an act of his agent by which the latter has transcended his authority makes the act his own.” The same conclusion was reached in Schrack v. McKnight, 84 Pa. 26. Where the principal has been informed of what has been done he must dissent and give notice to that effect within a reasonable time and his failure so to do will raise a presumption of assent and ratification: Bank of Pa. v. Reed, 1 W. & S. 101; Berger’s Appeal, 96 Pa. 443. After such acquiescence by silence in an act done under an assumed authority in the course of the business of an agent the principal cannot afterward be heard to repudiate such act on the ground that it was done without authority. This principle is expressed in a maxim of the law. And this applies as well to corporations as to individuals: Gordon [330] v. Preston, 1 Watts 385; Bank of Penna. v. Reed, 1 W. & S. 101; Kelsey v. Natl. Bank, 69 Pa. 426. A jury might conclude from the evidence offered that the principal part of this shipment of coal was made after the president of the company had knowledge of the order for the coal and the accompanying guaranty given by the sales manager. This notice to the executive head of the corporation and the officer in charge of its business affected the corporation and imposed on it the duty to disavow the act of its agent if in excess of his authority if the corporation did not intend to be bound. Letters from the defendant were also introduced which tended to show that it recognized its responsibility for the bill when the plaintiff was urging a settlement of the account and in one of them a request was made for delay to enable the defendant to collect from the Hughes-Hatch Company. It is contended however that the defendant did disclaim the act of its agent by means of a letter addressed to the plaintiff dated February 10, 1906, in which reference is made to the demand of the plaintiff for settlement of the Hughes-Hatch bill in which letter the defendant states “We must disclaim any responsibility for this account inasmuch as you billed the coal direct.” This it will be observed does not refer to the guaranty on which the plaintiff relies but puts the defendant’s exemption from liability on the fact that the coal was shipped directly to the consignee and riot charged to the defendant. That is not on its face a repudiation of the act of the agent and if it were, it could not have been held by the court to have been sufficient in time, for the last shipment was December 20, 1905, and this letter was nearly two months later and some weeks after the president of the defendant company knew the terms-under which the plaintiff shipped the coal. It was then too late for the plaintiff to protect itself as against the consignee by refusing to fill the order and even if the disclaimer had been expressly directed to the act of the agent we think the question would be one for the jury whether it had been given within a reasonable time under the circumstances. [331] Moreover, more than a month after the coal was shipped and apparently after the president of the defendant had seen the guaranty the defendant sent a bill to the plaintiff for its commissions on the sale and this was evidence of ratification of the act of the agent. The company could not claim the benefit of part of the contract and repudiate the other part where the whole was involved in a single transaction. The cases cited by the learned counsel for the defendant are those in which the act done was outside of the scope of the objects of the corporation or where' there was no evidence of ratification and do not aid the appellant in maintaining the defense relied on. The point is made that the plaintiff did not use due diligence in attempting to collect the claim but the jury has found for the plaintiff on this point and there is evidence which required its submission. Indeed, it is shown that the defendant undertook to collect the debt and made diligent effort in that direction but failed. The assignments are numerous but it is unnecessary to refer to them seriatim. The letter containing the guaranty was properly admitted as the evidence tended to show that whether the agent had express authority to make the guaranty or not there was an acquiescence in, and ratification of, his act by the defendant. The records offered in evidence by the plaintiff in the cases against Hatch are not presented and we are unable to say whether they were relevant or not. They were admitted on the offer to show the act of the defendant in endeavoring to collect the debt from the Hughes-Hatch Company and were presumably pertinent to that inquiry. In order to obtain the judgment of this court on the question the records should have been printed. The case was submitted in a charge which fairly presented the facts and stated the legal propositions involved and we do not find any error which requires reversal. The judgment is affirmed.