Steele Smith Grocery Co. v. Potthast

Ladd, J. The plaintiff sold and delivered to W. H. Pottbast goods of the value of two hundred and seventeen dollars and sixty-eight cents, in 1895, and in this action recovery is sought on the ground that in making the purchase said Potthast was acting as agent of his father, the 1 defendant. By agreement of the parties the cause was tried as an equity action, and must be so treated here. Harrison v. Palo Alto County, 104 Iowa, 383. The defendant’s liability depends on whether he or his son was owner1 of a stock in trade at Manning at the'time — 415 — the goods were bought by the latter. The theory of the plaintiff is that the defendant was the real owner, and conducting the business through W. H. Potthast as his agent. The stock was originally purchased from one Fritz, February 23, 1895, for two thousand dollars, furnished by the defendant, and a bill of sale was made out in his name at the son’s suggestion. Seven hundred and thirty-six dollars were returned to him, and on July 17, 1895, the son executed to the defendant two notes, of one thousand dollars each, and a mortgage covering the stock, securing their payment, and the mortgagee subsequently became purchaser under foreclosure proceedings. In the meantime W. H. Potthast was in possession apparently as owner, and both he and the defendant testified at the trial that he had borrowed the money, and 2 was in fact the owner. But the defenlant had so often declared otherwise before that time, that we are¡ inclined to- place greater reliance on his previous admissions and sworn statements. To a deputy sheriff, in hearing of another, when making a levy on part of the goods as the property of his son, he declared he was owner of them, and that his son had been his agent while in business there. In a suit by the Wilson-Graham Company against W. H. Potthast, he answered under oath as garnishee: “Q. You swear that W. H. Potthast never owned the stock until you got the mortgage ? A. Yes. Q. The stock was yours until that day ? A. Yes; I sent him two thousand dollars here in Manning to buy the stock of goods for myself, and the boy was not to own the stock. ,On the date of giving the mortgage the boy had no interest in the stock; no, sir.” In a suit by the plaintiff against W. II. Potthast he gave substantially the same answer. He signed minutes of his testimony before the grand jury, stating: “I bought the stock for myself, for my boy to dispose of. There was no mortgage on the goods until I sold my boy the goods and took the mortgage for the same.” True, he attempted to explain these various statements by saying he referred to a — 416 — :time subsequent to tbe foreclosure sale; but bis answers taken >down in shorthand are clear and explicit, and leave no doubt concerning the time to- which he had reference. Evidently 'his interest led him to assert ownership at the time of the levy, and in his ansAvers as garnishee, as evidently for the same reason he now disclaims such ownership. Having pro-mured his discharge as garnishee on the strength of statements then and repeatedly made, it is only fair to credit 'him with then telling the truth. As he lived at Freeport, Ill., and the son was to have all the profits over interest at I per cent, per annum, the method pursued was that of con•venience. As the money was furnished without evidences of indebtedness, the son caused the bill of sale to run to the father, the mortgage was largely in excess of the amount due, and the defendant has thrice emphatically declared on math that he purchased, and was owner of the stock in trade, and that W. II. Potthast merely acted as his agent, we so "hold, and disregard his testimony to the contrary given at .the trial. II. Proof of the admissions and statements of defendant was admissible. Those were not offered as impeaching evidence, but as made by a party to- a suit, against his own 3 interest. Such evidence is substantive in character, although it may incidentally affect credibility. Thorn v. Moore, 21 Iowa, 285; 10 Enc. Pl. & Prac. 317, 327. See Smith v. Dawley, 92 Iowa, 315. When introduced, ‘the defendant had not testified in his own behalf, and he only identified his signature when called by the plaintiff. 'Such proof, when offered then, had no tendency to impeach him as a witness, as, for all that appeared, he might testify in harmony with what he had previously stated under oath. III. The objection to the minutes of evidence given by 'the defendant before the grand jury, and signed by him, was not well taken. Section 5258 of the Code requires minutes to be kept, and “when the evidence is taken it shall be read over to and signed by the witness.” These minutes are 'to be returned with and attached to the indictment, but “shall — 417 — not be open for the inspection of any person except the judge of the court, the county attorney or his assistant or clerk, the. defendant and his counsel, or the assistant or clerk of such counsel.” Section. 52??, Code. While this section 4 might furnish ground for the clerk to refuse the production of the minutes in a civil case, it does not affect their admissibility as evidence when offered. Having been read over to¡ the witness and signed, they may be received as in the nature of admissions 'against the party giving the testimony. ,We know of no rule that would restrict the use of such minutes to cases of perjury. IY. But it is urged that recovery cannot be had in this case because the principal has not been shown to have been unknown. The defendant and his son testified neither had ever mentioned the ownership of the property, and that the 5 son had managed the business in his own name. The goods were sold to him as proprietor .by the plaintiff, and it was admitted that the attorneys of the latter knew nothing of the ownership' by the defendant prior to the time he gave his answers as garnishee. All this time he was a. resident of another state. We think these circumstances sufficient to warrant thp conclusion that the agency of W. H. Potthast was unknown at the time the goods were purchased; and that defendant was the real owner of the stock had not been disclosed. That recovery may be had from an undiscloseAprincipal for goods sold to an agent acting within the scope of his authority is well settled. Thurston v. Mauro, 1 G. Greene, 231; Davison v. Coke Co., 24 Iowa, 419; Young v. Insurance Co., 45 Iowa, 377; Hubbard v. Tenbrook, 124 Pa. Sup., 291 (16 Atl. Rep. 817), 1 Am. & Eng. Enc. Law, 139. But an action had already been begun against the agent for the price of the goods, and it is said that the plaintiff, having elected to charge the agent, cannot 6 maintain this action against the principal. The cases are not in entire harmony on this proposition. In Beymer v. Bonsall, 79 Pa. St. 298, it was held that — 418 — in sucb a case the principal would not be discharged short of satisfaction. In Kingsley v. Davis, 104 Mass. 178, an action prosecuted to judgment against the agent was held a bar to an action against the principal. In Ferry v. Moore, 18 Ill. App. 135, it was adjudged that instituting a suit against the agent after the discovery of the principal was not conclusive evidence of an election to charge the agent only. See Raymond v. Proprietors,, &tc., 2 Metc. (Mass.) 326; Maple v. Railroad Co., 40 Ohio St. 313; Priestly v. Fernic, 3 Hurl & C. 977. As found, the plaintiff was ignorant of the fact that the defendant was principal and W. II. Potthast' acting as agent until long after suit had been brought against the latter. Knowledge of the right to re.cover from the principal is essential, before suit against the agent may be regarded as an election to look to the latter alone for payment. Without knowing wlm the principal was, or the fact of agency, an intelligent election was impossible. To constitute an election, there must be something to indicate an intention, with full knowledge of the facts, to give sole credit to the agent and to abandon all claim against the principal. Wharton Agent, section 472. Nothing was done by the plaintiff, after ascertaining that defendant was principal, tending to show an intention to look to the agent for compensation. V. The several motions of the appellant attacking the record require no attention. The notes in shorthand were 7 duly certified by the trial judge, but the reporter, when he had extended these, instead of copying the certificate, detached it, and pasted it in as a part of his own to the transcript. As this was unauthorized, it did not affect the record as already made, and amounted to nothing less than including the judge’s certificate, instead of a copy, in that of the reporter. While the reporter had no right to detach the certificate, using it was equivalent to making a copy, and the transcript as so1 prepared and certified must be treated as written evidence. Ross v. Loomis, 64 Iowa, 432; Goetz v. Stutsman, 73 Iowa, 693; Burnett v. — 419 — Loughridge, 87 Iowa, 324; Smith v. Wellslager, 105 Iowa, 142. We conclude that judgment should have been entered against tbe defendant. — Reversed.