Washington Cedar & Fir Products Co. v. Elliott

The trial court directed a verdict for the plaintiff on the theory that the only question in the case was as to the proper construction of the plaintiff's telegram of June 10th; that this was a question of law for the court; and that the telegram, when properly construed, did not authorize the defendant to make the check payable to Phillips' order.

We think the trial court erred in not taking into account the question whether the plaintiff had, by its conduct, interpreted in the light of the surrounding circumstances known to it, conferred upon Phillips an apparent authority to accept a check drawn to his own order. In his capacity as a salesman on commission, Phillips had no authority to accept payment for goods sold; but in demanding and receiving this check Phillips was no longer acting under his original limited authority as a salesman. He was acting under a special authority given him for that purpose, which evidently authorized him not only to take the check into his own hands, but to deal with it in some way for the purpose of protecting the plaintiff against a second protest for lack of funds. It was obvious that he might do this in any one of three ways: by cashing the check and remitting the proceeds to his principal, by promptly depositing it in bank to the credit of his principal, or by having it certified and then mailing it to his principal. The plaintiff could have limited Phillips' authority to the last named method of dealing with the check. It did not do so. The defendant was not directed by the telegram of June 10th to make a duplicate check, or to have the check certified, or to make it to the order of the plaintiff; but simply to make a new check and deliver it to Phillips. The defendant has complied literally with that direction, and it is found that in so doing he acted in good faith. As we said in Romeo v. Martucci, 72 Conn. 504, 516, 45 A. 1, 99: "``Whether or not a principal is bound by the acts of his agent, when dealing with a third person who does not know the extent of his authority, depends, not so much on the actual authority given or intended to be given by the principal, as upon the question, what did such third person, dealing with the agent, believe and have a right to believe as to the agent's authority, from the acts of the principal.'. . . The apparent authority of the agent which thus binds the principal, beyond that actually conferred, must always be deduced from authorized acts of the agent, and from surrounding facts with a knowledge of which the principal is chargeable, and not from the acts of the agent himself in excess of his authority and of which the principal had no notice."

Under this rule, the declaration of Phillips that it made no difference whether the check was drawn to his order or to the order of the plaintiff, was not admissible for the purpose of proving the extent of his apparent authority.

Upon the admissible evidence there was a fair question for the jury whether the plaintiff had, intentionally or not, clothed Phillips with such an apparent authority to accept payment for the shingles by a check drawn to his own order, that a man of ordinary prudence acting in good faith might reasonably rely on that appearance of authority.

There is error and a new trial is ordered.

In this opinion the other judges concurred.