Harvel's, Inc. v. Eggleston , 268 N.C. 388 ( 1966 )

150 S.E.2d 786 (1966) 268 N.C. 388

HARVEL'S, INC.
v.
Frank L. EGGLESTON.

No. 455.

Supreme Court of North Carolina.

November 2, 1966.

Booe, Mitchell & Goodson, by William S. Mitchell, Winston-Salem, for plaintiff appellee.

Block, Meyland & Lloyd, by A. L. Meyland and Henry H. Isaacson, Greensboro, for defendant appellant.

SHARP, Justice.

The testimony of Mr. Harvel, plaintiff's president and manager, that defendant told him he had a monthly income of $32,500.00, and was well able to pay for the furniture he had ordered, was admitted over defendant's objection and exception. He assigns its admission as error, contending that Harvel's testimony, together with the cross-examination which resulted from defendant's contradiction of it, presented him to the jury as a rich man, able to indulge an extravagant daughter, and that such testimony was fatal to his defense.

Certainly, standing alone, evidence that an individual is financially able to make a specified purchase is not evidence tending to show that he made it. Ordinarily, a party's financial ability to respond in damages, or to pay an alleged debt, is totally irrelevant to the issue of liability; and the admission of evidence tending to establish such ability is held to be prejudicial, except in cases warranting an award of punitive damages. See Modern Electric Company v. Dennis, 259 N.C. 354, 130 S.E.2d 547; Edwards v. Southern States Finance Company, 196 N.C. 462, 146 S.E. 89; Shepard v. W. T. Mason Lumber Co., 166 N.C. 130, 81 S.E. 1064. Here, however, the testimony that defendant told plaintiff he had a specified monthly income was not offered to establish defendant's financial worth. Defendant's production of his bankbook and representation that he had a monthly income of $32,500.00 was intended to induce plaintiff to extend him credit. The incident was an integral part of the negotiations which culminated in the contract in suit. Ordinary business prudence would have required plaintiff to ascertain defendant's financial condition before undertaking his commission to furnish Mrs. Carter's house according to her taste, and to make it a showplace. When defendant denied the contract upon which plaintiff sues, plaintiff was entitled to show the relevant circumstances and negotiations which resulted in the alleged agreement. Other evidence pertaining to defendant's financial worth was elicited without objection, and defendant testified that his annual income was less than $20,000.00.

Defendant also assigns as error the refusal of the court to strike testimony by Mrs. Carter that defendant, in April 1965, intended to marry Lucy and that he had told his daughter they would occupy a certain bedroom in the new house. Counsel's basis for the motion to strike the first statement was, "How does she know what he intended?"—a question directed to the court. Mrs. Carter answered by saying that defendant had told her. The basis of the motion to strike the second statement was that it was not responsive to the question. Notwithstanding, defendant's denial that he ever told Mrs. Carter he was giving her a home and furnishing it for her made this evidence relevant to the inquiry. Furthermore, in view of the other testimony relating to Lucy and defendant's separation from his second wife which was admitted without objection, it cannot reasonably be asserted that these two items prejudiced defendant's defense. Mrs. Carter testified, without objection, that defendant was separated from his second wife, who had not been friendly with her; that he was going to marry Lucy who, along with defendant, had visited her for a week during the first of April when they had all been happy in the new house; and that his purpose in buying Mrs. Carter a house was to enable him and Lucy to visit her and all his grandchildren together. Mrs. Carter had seven children. Six by a former marriage were in the custody of her first husband. She also testified, without objection, that it was after defendant had given Lucy a "Stingray" (Corvette automobile) that he gave her permission to buy the pool table for her husband. Defendant did object, however, to questions put to him on cross-examination which suggested that Lucy had expressed a desire for a Corvette when she saw one in front of plaintiff's store when she accompanied defendant on one of his trips there while plaintiff was furnishing the house. Defendant had denied many of the conversations which Mr. Harvel testified he had had with him, and he was indefinite as to the number of times he went to plaintiff's store. The questions with reference to the Corvette were an attempt by plaintiff's counsel to refresh defendant's recollection as to one of the visits he had made to plaintiff's store. The court was careful to instruct the jury that this evidence related "only to the circumstances under which the defendant is alleged to have contacted and dealt with Mr. Harvel with relation to the matters set forth in the complaint." The evidence was competent for that purpose.

The second question which defendant discusses in his brief is whether the court submitted improper issues to the jury. Defendant excepted to the court's issues, but he did not include in his case on appeal those which he had proposed. Neither does he, in his brief, suggest the proper issues. The ultimate question posed in this action is, "In what amount, if any, is the defendant indebted to the plaintiff?" Obviously, however, the disputed facts upon which plaintiff's right to recover depends could not be resolved upon that one issue. Yates v. Body Co., 258 N.C. 16, 128 S.E.2d 11. The detailed issues which the court submitted brought into focus each defense which defendant had alleged and allowed him to present his contentions fully. The court is not required to adopt any particular form of issues; it is only required that those which are submitted embrace all the essential questions in controversy. O'Briant v. O'Briant, 239 N.C. 101, 79 S.E.2d 252. Defendant's assignment of error relating to the issues is not sustained.

The third question presented— did his Honor err in charging the jury that the burden of proof upon the third issue was upon defendant?—is answered NO. It is often said that it behooves one who deals with a purported agent to ascertain correctly two things: (1) that he actually is an agent, and (2) the extent of his authority. Edgewood Knoll Apartments v. Braswell, 239 N.C. 560, 80 S.E.2d 653. Wherever the existence of the relationship of principal and agent is denied, the burden of proof is upon the party asserting the existence of the relationship. 3 Am.Jur.2d, Agency § 348 (1962). Once the existence of the agency and the extent of the authority is established, however, the burden devolves upon the principal to show that he thereafter terminated the agency or limited the authority—and this is true whether the agency be general or special. Morpul Research Corporation v. Westover Hardware Co., 263 N.C. 718, 140 S.E.2d 416; Morris Plan Industrial Bank v. Howell, 200 N.C. 637, 158 S.E. 203. See 3 Am.Jur.2d, Agency § 349 (1962). Here, the jury's answers to the first two issues established Mrs. Carter's authority to purchase from plaintiff such furniture as she should select for her house. The burden then passed to defendant to show that he thereafter limited her authority and notified plaintiff of the limitation.

"In an action against a principal for the purchase price of goods sold and delivered to his agent, the seller has the burden of proving the authority of the agent to bind the principal; but after such authority has been sufficiently proved or admitted, the principal has the burden of proving that the authority had been limited or revoked and that the limitation or revocation had been brought to the attention of the seller." 3 C.J.S. Agency § 317(2) (1936), p. 261.

It is noted, however, that the judge placed the burden of proof upon the sixth issue on plaintiff. We perceive no material difference between these two issues, both of which were answered against defendant.

Our consideration of this case was rendered more laborious by appellant's failure to comply with Rule 28 of the Rules of Practice in the Supreme Court of North Carolina. His brief contains no reference to the exceptions upon which the assignments of error discussed therein were based, and no reference to the printed pages of the transcript on which those exceptions appear. Notwithstanding, we have considered each assignment of error brought forward and discussed in defendant's brief. Each is overruled.

In the trial, we find

No error.