Hawthorn Coal Corp. v. Blair , 134 Va. 44 ( 1922 )

Sims, J.,

after making the foregoing statement, delivered the following opinion of the court:

1. Did the court err in giving the instruction it did to the jury?

This question must be answered in the affirmative.

By this instruction the court took away from the jury all consideration of the question of whether the plaintiffs knew, at the time they made the contract under which they seek to recover and did the work, that the mine boss, as agent of the defendant, exceeded his authority in agreeing to pay $3.00 per yard for the work. The instruction, in effect, told the jury that if the price was reasonable and the agent did not intend to defraud his principal, but was acting for what he thought was the prineipal’s best interest, the agent could make a contract for, and thereby bind his principal, without authority so to do', and, indeed, directly in violation of his instructions from his principal not to make any such contract, and this although the parties with whom the agent undertakes to contract know at the time' that the agent was acting in excess and in violation of his authority. Such is not the law. To so hold is to destroy all right of legitimate control of one’s own business.

. [2] Of course, in the absence of knowledge, actual or constructive, on the part of parties entering into a contract with a general agent (such as the mine boss was in the instant case with respect to employing labor in and about the mine), of any limitation upon the authority of the agent, the parties may safely rely upon the apparent authority of an agent, incident to the position in which the principal has placed him and holds him out as having, in dealing through him with third persons. But. that is not the situation presented by the instruction aforesaid.

The case must be reversed, and a new trial will be awarded, to be had in accordance with the views above expressed.

Reversed and a new trial granted.