Thrower v. Coble Dairy Products Co-Operative, Inc.

105 S.E.2d 428 (1958) 249 N.C. 109

George THROWER, Trading as Boulevard Supermarket,
v.
COBLE DAIRY PRODUCTS CO-OPERATIVE, Inc.

No. 184.

Supreme Court of North Carolina.

October 29, 1958.

Carpenter & Webb, Charlotte, by William B. Webb, Charlotte, for defendant, appellant.

E. R. Warren, Whitener & Mitchem, Gastonia, by Basil L. Whitener and Wade W. Mitchem, Gastonia, for plaintiff, appellee.

HIGGINS, Justice.

The defendant presents three questions for review: (1) Is the defendant responsible to the plaintiff for the loss caused by Queen's falsification of the invoices? (2) Is the plaintiff barred from recovery by his negligent failure to discover and prevent Queen's fraud? (3) Did the court err in fixing the amount of the recovery?

The evidence is amply sufficient to support the court's findings that Queen was "an employee, agent, and servant of the defendant corporation * * * was acting in the course and scope of his employment in dealing with the plaintiff and the controversy herein involved arises out of the acts of said Queen as agent, servant, and employee." The general rule is that a principal is responsible to third parties for the fraud of its agent while acting within his authority. "It is elementary that the principal is liable for the acts of his agent, whether malicious or negligent and the master for similar acts of his servant, which result in injury to third persons, when the agent or servant is acting within the line of his duty and exercising the functions of his employment." Dickerson v. Atlantic Refining Co., 201 N.C. 90, 159 S.E. 446, 451. "There is no reason that occurs to us why a different rule should be applicable to cases of deceit from what applies to other torts. A corporation can only act through its agents, and must be responsible for their acts. It is of the greatest public importance that it should be so. If a manufacturing and trading corporation is not responsible for the false and fraudulent representations of its agents, those who deal with it will be practically without redress and the corporation can commit fraud with impunity." Peebles v. Patapsco, Guano Co., 77 N.C. 233. The master is liable for the unlawful or negligent acts of his servant if about the master's business, and if doing or attempting to do that which he was employed to do. Snow v. DeButts, 212 N.C. 120, 193 S.E. 224.

The evidence in this case shows the court found the fraud was committed in the sale of defendant's products and in the padding of accounts its agent was authorized to collect. The defendant is liable for plaintiff's loss.

The defendant here contends the plaintiff is barred from recovery by his own negligence in permitting Queen to deposit the invoices in a receptacle in plaintiff's office. This from his brief: "In permitting the practice to continue for that period (2½ years) the plaintiff chose to put his faith and trust in Queen. Such was not a faith and trust solicited by the defendant." The argument is not persuasive. It ignores the fact that Queen was selected and sent out by the defendant as its agent to sell and deliver, and collect for its products. "Where a loss is to be suffered through the misconduct of an agent, it should be borne by those who put it in his power to do the wrong, rather than by a stranger." Virginia-Carolina Joint-Stockland Bank v. Liles, 197 N.C. 413, 149 S.E. 377, 379. There must be reliance on the integrity of men, or else trade or commerce could not prosper. Gray v. Jenkins, 151 N.C. 80, 65 S.E. 644; White Sewing Machine Co. v. Bullock, 161 N.C. 1, 76 S.E. 634. The plaintiff's conduct in trusting Queen does not preclude the recovery.

The defendant challenges the amount found by the court (acting as the jury) to be plaintiff's loss by reason of Queen's fraudulent invoices. In support of its assignment of error No. 18, the defendant offers the following in its brief: "Surely such testimony as that admitted by the court over objection to the effect that his milk bills were `right around $2,500 a month' before Queen's arrest and `around: $1,500' after his arrest, furnishes no such foundation. Apart from its vagueness, this was a clear violation of the best evidence rule." There was also evidence that in the year 1955 the plaintiff had an operating loss of $24,000, and that on a smaller volume in 1956 (during which Queen made deliveries for only one month) the plaintiff showed a profit of $9,000. The evidence was offered without objection. The defendant cannot justly complain of the violation of the best evidence rule. Queen gave the plaintiff carbon copies of all invoices, genuine and spurious. The plaintiff introduced them in evidence, together with the checks that paid them. The evidence is that Queen kept the genuine originals and presumably settled with his employer on the basis of these only. The plaintiff demanded that the defendant produce them. The demand was met with the statement they were not available. It is fair to assume, therefore, the defendant had within its power the means of ascertaining the amount of plaintiff's loss. Not only did defendant fail to produce the original invoices, it failed to offer any evidence. The plaintiff offered the admission of Queen that he raised the tickets from $100 to $125 per week in excess of his actual deliveries.

In case a jury trial is waived, the court's findings of fact are conclusive upon appeal, if there is evidence to support them. Town of Burnsville v. Boone, 231 N.C. 577, 58 S.E.2d 351. "The amount of damages must be established with reasonable, but not with absolute, certainty * * * absolute certainty is not required; it is sufficient if a reasonable basis or computation is afforded, although the result be only approximate; * * *". 25 C.J.S. Damages § 26(c) p. 491. "However, where actual pecuniary damages are sought, there must be evidence of their existence and extent, and some data from which they may be computed." Norwood v. Carter, 242 N.C. 152, 87 S.E.2d 2, 5, 50 A.L.R. 2d 608; Story Parchment Corp. v. Patterson Parchment Paper Co., 282 U.S. 555, 51 S. Ct. 248, 75 L. Ed. 544; Eastman Kodak Co. v. Southern Photo Material Co., 273 U.S. 359, 47 S. Ct. 400, 71 L. Ed. 684.

The evidence furnished sufficient support for the court's finding as to the amount of plaintiff's loss. The findings are sufficient to sustain the judgment. The defendant's assignments do not present error of substance. The judgment is

Affirmed.

PARKER, J., not sitting.