Deffenbaugh v. Jackson Paper Manufacturing Co.

Grant, C. J. (after stating the facts). 1. Plaintiff relies upon the authority of Mr. Charles Jackson, as the agent of defendant, to make the contract declared upon. If Jackson possessed the power to make it, it is by virtue of his authority as a general agent, or special authority conferred upon him by the proper officers of the company. The contract was not within the scope of a general agent to make. Such an agent is not clothed, by virtue of his agency, with power to contract with an employé for an interest in his principal’s business, or an interest in the profits thereof. See Gore v. Assurance Co., 119 Mich. 136. 2. No special authority was shown. Plaintiff dealt with Jackson alone. He did so at his own risk. He cannot plead ignorance of the law. It was his duty to inquire into the scope of Jackson’s agency. If he chose to trust implicitly to his particular friend, Jackson, the defendant is not responsible or liable for it. Only when the contract had been' reported by Jackson to the company, and approved and ratified by its proper officers, could it be made liable. Potter, the managing director, concluded the ne [245] gotiations so far as lay in his power. He testified that he made the arrangements with Jackson for $1,500, and 40 per cent, of the profits above $5,000, and that Jackson should bring plaintiff, at a salary of $1,200 a year, and his brother, at $700 a year, subject to the approval of the directors. His testimony stands undisputed. The records of the directors’ meeting, made shortly after, confirm it. There is no competent evidence of any other contract. 3. There is no tangible evidence to show ratification. The alleged contract was never brought to the attention of the directors, nor was it brought to the attention of any officer of the company until very nearly the close of the year, and probably not until afterwards. The boobs of account were kept by Gale Jackson, under the direction of his brother Charles. . There is no evidence that any other officer or employé directed the keeping of the accounts. Plaintiff received money from the defendant in excess of his salary to the amount of $258. This was charged against him in his account. This did not tend to show any knowledge on the part of any officer of the company of this alleged agreement. It is no uncommon thing for such employes to receive money in advance of their salaries. No officer of the company was informed that this was for commission. Furthermore, the thing having been done under the direction of Charles Jackson, and he, his brother, and plaintiff being interested, by their own private agreement, in this 40 per cent, of the profits, there would seem to be no justice or propriety in holding that these charges were evidence of ratification, or formed any basis for the application of the doctrine of estoppel. It is also urged that, in several interviews between plaintiff and Mr. Potter, Potter made no disclaimer of liability for this commission. These interviews were had more than a year after the alleged contract was made, and after the year for which suit is brought had expired. This cannot be held evidence of a ratification of the contract. Mr. Potter had no authority to make a contract with the plaintiff or with Jackson for a portion of the [246] profits. If he had no authority to make it, he certainly would have no authority to bind the company by failure to deny it, or even by admitting it. The only contract made by defendant with plaintiff was the one reported by Mr. Potter to' the board of directors, and ratified by it. There is no tangible evidence that any other was made, contemplated, or ratified. Plaintiff may have honestly understood that the defendant agreed to pay him his share of this commission, but there is nothing to show that defendant so understood it, or had any reason for so doing. It is very evident that Jackson, his brother, and plaintiff had a private agreement in regard to this commission, ánd the division of it among themselves. Gale Jackson was a party to it. He was plaintiff’s witness, and he testified: “My arrangement was a private arrangement between my brother and myself. I understood Deffenbaugh’s to be the same. I never made any contract with any one else but my brother Charles.” Gale Jackson’s account was also overdrawn. Would this overpayment be evidence of knowledge that Gale was to receive a commission, and bind the company to pay it ? - Judgment reversed, and new trial ordered. The other Justices concurred.