Co-operative Stores Co. v. Marianna Hotel Co.

Wood, J. (after stating the facts). (1) The answer contained only a general denial of the contract and the indebtedness. It does not raise the issue of the agency of Morris or of his authority to make the contract. The answer did not deny that appellant was a corporation. On the contrary, it expressly admitted that it was a corporation. So the only issue tendered by the answer was as to whether or not there was a contract and an indebtedness. The uncontradicted evidence on the part of the . appellee was to the effect that Morris was the general manager of the appellant and that as such he authorized the contract upon which the suit was instituted. The undisputed evidence also shows that Dudley, as local agent and manager of the appellant, went into possession of the store under the contract and occupied the same for a period of four months and then sold out the business and abandoned its contract. Upon the issues thus made by the pleadings and the undisputed evidence, the instructions of the court were correct. The appellant having tendered no issue as to the authority of its agent to make the contract, it was not entitled to have such issue presented to the jury in its prayers for instructions. In Simon v. Calfee, 80 Ark. 65, 67, we said: “But a corporation can not avail itself of a want of power or lack of authority of its officers to bind it unless the defense is made on such grounds.” See also 6 Thompson on Corporations, sec. 7617. The name “Co-operative Stores” is suggestive of the business that the undisputed evidence shows that appellant was engaged in, that of conducting co-operative stores, and that Morris was the general manager and authorized Dudley, the local manager to enter into the contract with the appellee. Even if the authority of Morris or Dudley had been challenged, and even if it had been shown that they had no express authority to make such contract, still the making of such contract was within the apparent scope of the authority of such agents, and the company would be bound by such contract. (2) In 7 R. C. L., p. 628, it is said: “At the present time the general business of corporations is frequently entrusted to the management of a general manager and it is well recognized that the corporation is bound by the acts of such manager within the apparent scope of his authority.” Again, “the manager or superintendent of a department stands in the same relation to his department as does the general manager or superintendent to the general affairs of the corporation and the corporation is liable for his acts within the apparent scope of his authority.” (3) The appellee having shown that Morris was the general manager of the appellant, and that the contract was made under Ms direction, it will not be presumed that as general manager he made the contract without authority from his company to do so. See Walnut Ridge Merc. Co. v. Cohn, 79 Ark. 338, 345. Moreover, even if it had been shown that Morris and Dudley were without authority to make the contract, nevertheless the undisputed evidence shows that the appellant knew of the lease and accepted the benefits thereof, having transacted its business in the store under the contract for four months, when it sold out to anóther. Under these circumstances the appellant was undoubtedly liable for the indebtedness incurred under this contract. See Arkansas Amusement Co. v. Higgins, 96 Ark. 493. In 7' R. C. L., sec. 667, it is said: “As a general rule if a corporation with knowledge of its agent’s unauthorized act received and enjoys the benefits thereof, it impliedly ratifies the unauthorized act if it is one capable of ratification by parol.” (4) The appellant contends that after the store room was abandoned by appellant the appellee made no effort to lease it, but that the store nevertheless was occupied by appellee’s tenant. The president of the Hotel Company testified that since the appellant vacated the store appellee had received rent for it for the months of October and November, 1915; that it was vacant the balance of the time; that he did not have an opportunity to rent it before the fall season came on. He made no special effort to rent the building until he rented it to the tenant in the fall. On tMs branch of the case the court instructed the jury that if they found from the evidence that the defendant abandoned the store in April, 1915, it would be the duty of the plaintiff to use reasonable diligence to lease the building; that before it can recover, plaintiff must show that it exercised such diligence. The appellant asked the court to instruct the jury that if the store room was used by the Hotel Company, or its lessee with its consent, for any purpose, the duty devolved upon the Hotel Company to show accurately the amount received and the exact use to which the store was put or it could not recover. The court refused this prayer. There was no error in the ruling of the court on this branch of the case. The testimony tended to prove that the appellee rented the building as soon as practicable after appellant vacated the same, and there was no' evidence tending to prove that the building was occupied by the appellee or any one with its consent until it was rented by appellee in the fall for the months of October and November, and appellant got the benefit of a reduction of appellee’s claim for these two months. The judgment is in all things correct, and it is therefore affirmed.