Parr v. Northern Electrical Manufacturing Co.

WiNsnow, J. The contract upon which the plaintiffs claim to recover was made with an assumed agent. There is no legal presumption that an agency exists, in the absence of proof, hence it was necessary for the plaintiffs to prove, not only the fact of agency, but also the fact that the agent’s authority was sufficiently extensive to authorize him to bind the principal by the contract which he assumed to make. This might be done by showing express authority given by the principal to the agent to make such contracts, or by showing that the principal had invested the agent with apparent authority to make such contracts, upon the faith of which apparent au — 286 — thority the plaintiffs acted, or by showing that the principal ratified the act of the agent with full knowledge of the facts. It was not claimed that express authority had been given or that there had been ratification by the principal in the present case, but reliance was placed upon facts which it is claimed show that the defendant had invested Duncan with apparent or implied authority to make the contract. These facts were, in brief, that Duncan was superintendent of the shop; that he had his office in the general office rooms of the company; that he employed men in the shop; that he assumed to make the contract in question; that he gave directions as to the construction of the machine, both personally and by telephone from the company’s office; that he wrote a letter upon the letter head of the company, and signed with the defendant’s corporate name, giving directions as to details. There was an entire absence of direct evidence that any of the defendant’s responsible officers actually had knowledge of Duncan’s dealings with the plaintiffs, except so far as it may be inferred from the written order of November 5th, signed by the treasurer, Mr. Fox, that it was then understood that there had been negotiations by some one with the plaintiffs on the basis of payment at the rate of forty cents per hour. This letter, however, contains a distinct notice to the plaintiffs that the defendant either knew of no contract by which forty cents an hour was to be paid for the machine, or repudiated such a contract if any one had assumed to make it. It appears that this order was received at about the time work was commenced on the machine (whether just before or just after is not established), and that the plaintiffs refused to proceed with the work under it. These are believed to be the only material facts having any bearing upon the question of implied or apparent authority. Upon these' facts the trial court ruled, as matter of law, that authority was shown, and this is really the main question in the case. It will be noted that there was no proof of general — 287 — custom or usage, nor was there any proof that Duncan bad ever assumed to malee such contracts before with the knowledge or approval of the company. The claim is made, in support of the ruling below, that, from the simple fact that Duncan was superintendent of the shop, authority to contract for machinery to be used in the shop might or must be presumed; and Cannon v. Henry, 78 Wis. 167, 47 N. W. 186, Pratt v. Oshkosh M. Co. 89 Wis. 406, 62 N. W. 84, and Roche v. Pennington, 90 Wis. 107, 62 N. W. 946, were relied on in support of this contention. It is well understood that every delegation of power carries with it the authority to do all those things which are reasonably necessary and proper to carry into effect the main powers conferred, and which are not forbidden, and that secret instructions cannot affect such apparent powers to the detriment of third persons who have dealt with the agent on the basis of his apparent authority. Mechem, Agency, §§ 279, 280. The question is whether the power to purchase or contract for the manufacture of important machinery to be used in a shop is, as matter of law, a reasonably necessary and proper incident to the power of a mere shop superintendent. We do not feel that this question can be answered affirmatively. The eases above cited do not sustain the proposition, nor do any cases to which we have been referred. One who bears the title of “general manager” of a business (as in Roche v. Pennington, supra) may be well held to have very large powers. Such a title implies to any mind far more than that of “superintendent” of a shop. We think manufacturers in general would be surprised to learn that their shop superintendents had the power to bind them by purchases of expensive machinery at their will. Possibly it is capable of proof that such is the custom and usage generally, but, as before stated, no such proof was made in this case. We reach the conclusion, as before stated, that the fact that Duncan was the superintendent of defendant’s shop is not sufficient to justify the court in holding, as a matter of law, that — 288 — be had apparent authority to contract for the die in question. But the fact that he was superintendent was of course proper to be shown as bearing on the question of apparent authority, and if it were supplemented by other facts showing the conduct of the principal in the matter, and if such facts, taken together, show that the principal has so conducted his business, either through negligence or by positive acts, in such manner as to justify the belief on the part of a third person of reasonable prudence that the agent has the authority which he has assumed to exercise, and he acts on such belief so inspired, then the principal is bound. McDermott v. Jackson, 97 Wis. 64, 72 N. W. 375. The question whether such a state of facts exists is a question for the jury, unless all the facts be undisputed and the inferences of fact therefrom such that but one conclusion can be reached. It is said in this case that there was no dispute about the facts, and hence that it was a question for the court alone, but we cannot agree with the contention. While there was no serious dispute as to the circumstances, we cannot regard the case as one where the inferences of fact from the circumstances shown were such that reasonable minds could come to but one conclusion, and this is the final test upon such questions. Agen v. Metropolitan L. Ins. Co. 105 Wis. 217, 80 N. W. 1020. This brings us to the rulings of the court excluding evidence offered by the defendant. The plaintiffs having offered proof of circumstances from which they claim that the conclusion should be drawn that the officers of the company either did know or should have known of the acts of Duncan, the defendant offered to. show what Duncan’s powers actually were under his contract; also the fact that the defendant’s officers had no knowledge of Duncan’s assumed contract with the plaintiffs; also the fact that Duncan drew and signed a requisition on the storekeeper of the. company for the die, which stated that it was to cost not exceeding $100. All of — 289 — this testimony -was ruled out. We think these rulings were erroneous. All these facts, if they could he shown, had a hearing on the question whether the defendant had any actual knowledge of Duncan’s assumption of power. It is true that the defendant might he held, even in the absence of actual knowledge, if it were shown that such' lack of knowledge was the result of negligence, and so the fact of lack of actual knowledge would not he controllinghut, inasmuch as the tendency of the plaintiffs’ testimony was to justify an inference of actual knowledge, the defendant was entitled to meet that claim hy showing to the contrary, even though the jury might, in the final outcome, decide that it was negligent in not having such knowledge. It is admitted by the plaintiffs that the contract was that the die should operate satisfactorily. The only meaning which can he logically attributed to this contract is that the machine was to operate satisfactorily to the defendant. There was a serious conflict in the evidence as to whether the die did or could do good work. The respondents seem to claim that, if they could prove by the preponderance of the evidence that the machine in fact did good work, the contract has been fulfilled. This is not the law in this state. When such a contract is made, the article must be, in fact, satisfactory to the purchaser, or he is not bound to take it. His dissatisfaction must not be capricious or mercenary, nor result from a dishonest design to be dissatisfied in any event. It must be real and in good faith, but, if these requirements be satisfied, he is not bound to take the article. Exhaust V. Co. v. C., M. & St. P. R. Co. 66 Wis. 218, 28 N. W. 343; Warder, B. & G. Co. v. Whitish, 77 Wis. 430, 46 N. W. 540. The defendant offered to prove that it was not satisfied with the die, and also asked for an instruction embodying the law substantially as above stated; but both offers were rejected. Both of the rulings were erroneous. The jury found that the die was approved and accepted by — 290 — tbe defendant company. This finding was based largely upon the letter of Mr. Eox, dated June 1, 1901, in which he states, in substance, that if a bill for $100 be rendered it will be paid. The defendant requested an instruction upon this issue to the effect that an acceptance, under the impression that the contract was different from that claimed by the plaintiffs, only operated as a conditional acceptance, and was of no effect if the plaintiffs refused to comply with the condition mentioned. We think this instruction should have been given. There can be no doubt that a conditional acceptance may be made, and that it will not constitute a binding acceptance if the condition be not complied with, and this was the substance of the instruction requested. By the Gourt. — Judgment reversed, and action remanded for a new trial.