Constantine v. Kalamazoo Beet Sugar Co.

Grant, J. (after stating the factsj dissenting). 1. It is due to the defendant to say that the version relied upon by the plaintiff is contradicted by Mr. Henry, its agent. But the question must be determined by the case made by plaintiff’s testimony as above given. Under his -version of it, two contracts were made, — one with Keys ■and Constantine, the other with plaintiff. Plaintiff says he represented Keys and Constantine, and was acting for them as well as for himself, in this interview with defendant’s agent. Defendant sent agents through the country in the vicinity of its factory to obtain contracts. In all, about 1800 were made. All the contracts but three contained the provision absolutely prohibiting its agents from changing ■or altering the terms and conditions thereof after- they were executed and a copy delivered to each party. Under plaintiff’s theory, it would be impossible to make a binding contract of this character. There is not one word of ■evidence in this case tending to show any authority conferred by the board of directors upon Mr. Henry, their agent, to make such changes. On the contrary, there is ■uncontradicted evidence in the contract itself that no such authority was conferred upon him. It would also follow that any of the agents who took any of these contracts had the power to change them. The very purpose of such provisions is to remove all doubt as to the agent’s authority. Plaintiff knew of this provision when he claims to have made the parol change. He is a lawyer. It was incum [486] bent upon him to ascertain whether Mr. Henry had such authority, especially in the face of the express provision,, known to him, that he did not possess it. It was incumbent upon plaintiff to prove the authority. There is no opportunity to apply the doctrine of apparent authority. Authority on the part of an agent to make a contract does not imply the authority on the part of the same agent to change it after he has reported and delivered it to his principal. Even Mr. Henry’s statement to the plaintiff that he had authority would be no evidence of such authority. Mechem, Agency, §§ 706, 716; Dobson v. More, 62 Ill. App. 435; Boynton v. Gaslight Co., 124 Mass. 197; Davis v. Railroad Co., 131 Mass. 258 (41 Am. Rep. 221); Simmons Hardware Co. v. Grocer Co., 64 Mo. App. 677; Stoystown, etc., Road Co. v. Craver, 45 Pa. St. 386; Humboldt Mining Co. v. American Manfg. Co., 10 C. C. A. 415, 62 Fed. 356. The offer to show by Mr. Henry that he had no such authority was erroneously excluded by the court. It is, however, urged that the defendant has had the benefit of this contract, and is therefore estopped to deny the authority of its agent. The complete reply to this is that there is no evidence that the defendant’s directors had any knowledge whatever of this change. They had before them the written contract alone of Keys and Constantine, and had the right to act upon that contract as the measure of their rights and obligations. They had no notice that Keys and Constantine were acting under a subsequent parol agreement, and could not be estopped or bound by any such arrangement until they had knowledge of it. The learned counsel for plaintiff seek to bring the case within cases upon insurance policies, like that of Beebe v. Insurance Co., 93 Mich. 514 (53 N. W. 818, 18 L. R. A. 481, 32 Am. St. Rep. 519). That case did not involve a change in the policy, but a waiver of conditions at the time the policy was given. 2. The contract to indemnify the plaintiff from all loss, by reason of advances he already had made and should [487] thereafter make to Keys and Constantine is an unusual one. It is not within the power of the most general agent of a corporation to make. Such extraordinary power must be proven to have heen expressly conferred or its exercise ratified by the principal. As already stated, the defendant had its 1800 contracts-in its possession, fully determining the rights of all the parties thereto, and on which it was prepared to carry on its business. It is now urged that its agent had the authority to guarantee to indemnify from loss parties who would furnish money to the beet growers to carry out their contracts. There is serious doubt whether the board of directors would have the power to make such contracts. See Lucas v. Transfer Co., 70 Iowa, 541 (30 N. W. 771, 59 Am. Rep. 449); Filon v. Brewing Co., 15 N. Y. Supp. 57; Davis v. Railroad Co., supra. The fact that three of the original contracts contained a provision guaranteeing against loss is no evidence of authority on the part of the agent to make this contract with the plaintiff. There is nothing in the record from which it can be implied that such authority was conferred upon Mr. Henry, or its exercise by him ratified. Other questions are raised, but this disposal of the case renders it unnecessary to determine them. Judgment should be reversed, and new trial ordered. Moore, J. I do not agree with the conclusion reached by Mr. Justice Grant. The growth of sugar beets and the manufacture of beet sugar are comparatively new industries in this State. It is a matter of common knowledge that a beet sugar factory is an expensive plant, and depends upon a crop of sugar beets grown in its vicinity for its successful operation. It is also a matter of common knowledge that the market for a crop of sugar beets depends upon the proximity of a beet sugar factory, and that farmers would not think of growing a crop, as they do ordinary crops, without knowing where it is to be marketed, and approximately at what price. It is also a mat [488] ter of common knowledge that contracts are made for the crop before it is planted, and, to insure a crop in some locations, the corporation itself frequently grows the crop. It follows naturally that, unless the farmer could feel a reasonable degree of assurance that his crop would be profitable, he would not engage in growing it. What is more natural than that the assurance should come from the corporation owning the plant which is to convert the crop into sugar ? I cannot believe it is the exercise of an extraordinary power for the manager of one of these institutions, who, it is fair to presume, has special knowledge of the quantity and quality of the beets which .may be ordinarily grown upon a given acreage, to say to a farmer who never has grown beets that the crop is a profitable one, and the company will gurantee him against loss if he will undertake to grow a crop, and to bind the company by such an agreement, when acted upon. It is difficult to see how the business could go on at all unless the manager and secretary are clothed with power to make such reasonable contracts as will result in the growth of the necessary crop to supply the ordinary needs of the plant. In Whitaker v. Kilroy, 70 Mich. 635 (38 N. W. 606), it is said: ‘ ‘ Mr. Brandon is shown by the testimony for plaintiff to have been the superintendent to do the general work and to keep the books. He is also described as superintendent and manager, and is testified. to have made the contract with Mr. Kilroy on which the charges were all based. It also appeared that Kilroy’s name nowhere appeared on the company’s books as owing it anything. We think that persons dealing with such a corporation for work have a right to get their information from the person whom the corporation has put in charge,- and cannot be required to go elsewhere, and that contracts so made are valid contracts, when relating to the ordinary concerns of such business. And if persons are not sustained in contracting with such superintendents, they can never be safe. They have no means of knowledge except inquiry somewhere, and the person put by the corporation in open charge of the business must have power, as to. third persons, to represent it.” [489] See, also, Ceeder v. Lumber Co., 86 Mich. 541 (49 N. W. 575, 24 Am. St. Rep. 134); Hirschmann v. Railroad, Co., 97 Mich. 384 (56 N. W. 842). The question of the measure of damages, presented by counsel, has been considered by the court. We think the trial judge properly charged the jury in relation thereto. A more troublesome question is whether the minds of Mr. Constantine and Mr. Henry met, so as to constitute, in law, a contract. When this conversation was had (and, for the purposes of the case, it must be assumed that Mr. Constantine’s version is the correct one), Mr. Constantine knew the company had guaranteed Mr. Reitz against loss, and Mr. Henry also knew it; and the .plaintiff refused to go any further with the business unless the parties were indemnified to the extent that Mr. Reitz was, and, upon the assurance of being so indemnified, the further expenditures were made by the plaintiff. We do not think the company can be heard to say, under these circumstances, that no contract was made. The judgment should be affirmed. Hooker, C. J., Montgomery and Carpenter, JJ., concurred with Moore, J.