Lockhart v. Watson Hardware Co.

Ethridge, J., delivered the opinion of the court. D. E. Watson, doing business under, the style of Watson Hardware Company, filed a declaration against the appellants, Lockhart and Zachariah, and D. L. Toombs, a nonresident, founded upon an open account for supplies for a plantation bought by R. Y. Smith, manager of the plantation, said account being charged to the appellants and Toombs, a partnership, and O. K.’d by Smith. There Avas a denial of the partnership, and also a denial of Smith’s authority to make the purchases on the account of the appellants. The three defendants in said suit bought a plantation in the state of Arkansas known as the Prairie Hay & Rice Farm in the year 1920. R. Y. Smith was at the time of the purchase and for some time prior thereto manager of the plantation, and he was employed to manage the plantation by the defendants'at a salary of two hundred fifty dollars per month. Under the defendants’ theory and testimony in the case, Smith had authority to manage the plantation, to secure the necessary labor and implements for the same, but was to pay cash therefor, and was authorized to collect certain rents, five hundred dollars for one pasture, and rents for a second pasture, depending upon the number of cattle pastured therein. The defendants placed two thousand dollars on deposit in the bank at Hamburg, Ark., and, arranged with the bank to advance six dollars per bale on the hay for any additional money that might be required in handling the hay. Smith Avas to harvest and bale the hay, and the bank was to handle the sale of the hay. This money Avas placed in the month of July, and the operations begun some time prior to May, 1920. The first item on the charge account was made on the 5th of May, and various articles were charged on different days until the 26th of August. The authority of the bank to deal with Smith is contained in the following letter: [280] “July 15, 1920. “Farmers’ Bank & Trust Company, Hamburg, Arkansas — Dear Sirs: This will be your authority to charge to our account all checks drawn by and signed by Mr. B. V. Smith, and he is authorized to deposit from time to time funds to the credit of our account and to withdraw same. “[Signed] Prairie I-Iay & Rice Farm. “D. L. Toombs, “W. M. Lockhart, “Joe Zachariah, “By W. M. Lockhart.” There was no agreement between the defendants and Watson as to any account to be made by Smith, but Smith told Watson that he had authority to make purchases, and credit was extended on Smith’s statement that he had such authority.as manager to make such purchases. About the 1st of September Watson presented the account to a member of the partnership, who, he testified, made no objection to Smith’s authority to make the account, but stated that the account was larger than he anticipated, and that they would need an extension of from sixty to ninety days in which to pay it. Watson testified that such extension of time was granted; that towards the latter part of the year 1920 he again requested of Mr. Toombs payment of the account, and that Mr. Toombs requested that they be allowed to sign a note for the amount; that a note was prepared, but Avas not signed by the partners, Avhereupon suit was brought. The defendant Lockhart Avas a witness on the trial, put on by the plaintiff as an adverse witness. His testimony shoAvs that the farm Avas to be operated by the defendants on the understanding that the profits and losses would be shared by the defendants in the proportion of the amounts put into the farm; that two of the defendants had a three-eighths interest each, and the other one a two-eighths interest. We think his testimony makes out proof of the partnership. There Avas a peremptory instruction for the plaintiff; both sides having asked for a281 peremptory at the close of the evidence. Judgment was rendered against Lockhart and Zachariah for the amount of the account. No process having been obtained for Toombs, and he not appearing, suit was dismissed as to him. There was evidence for the plaintiff of other parties who testified that Lockhart and Toombs had requested credit and stated that anything that Mr. Smith desired for the farm would be all right to charge to their account. These statements appeared to have been made according to two witnesses representing different firms, but they are denied by the defendant Lockhart, Toomb- not testifying in the case, neither did Smith testify in the case. These requests for credit were not made to Watson, and it does not appear that he had knowledge of them at the time he extended credit to the partnership on the request of S'mith, but relied on Smith’s statement as to Smith’s authority to make the purchases. The law governing the case is that of the state of Arkansas, which state has a more liberal rule in favor of a party who furnishes supplies, etc., to a manager or general agent than we have in Mississippi. It appears to be the law. in that state that a general agent with authority to buy may bind his principal by purchases within the scope of his authority, though in violation of specific instructions of which the seller had no notice. Liddell v. Sahline, 55 Ark. 627, 17 S. W. 705; Three States Lumber Co. v. Moore, 132 Ark. 371, 201 S. W. 508; Jacoway v. Insurance Co., 49 Ark. 320, 5 S. W. 339; Forrester-Duncan Land Co. v. Evatt, 90 Ark. 301, 119 S. W. 282; Brown v. Brown, 96 Ark. 456, 132 S. W. 220. It appears to us that the question of whether or not there was a general agency was a question on the evidence for the jury on the testimony of the defendants. The authority of Smith was limited in its scope according to their testimony; in other words, he was not a general buying and selling agent under this testimony as we understand the law of Arkansas. There is ample evidence [282] in the record for the plaintiff to bring the case within the rules of law of that state, but we think there is enough conflict to require the submission of the issue to the jury. It was therefore error to grant a peremptory instruction for the plaintiff, and the judgment will be reversed, and the cause remanded for a new trial on the issues involved. Reversed and remanded.