Carstens Packing Co. v. Gross

IN BANC.

June 21, 1921, plaintiff brought an action against defendant to recover the sum of $1,582.74, which is claimed to be the balance due it on account for goods, wares, and merchandise sold to defendant. Defendant answered denying any indebtedness except the sum of $47.90, which was the amount of the last purchases made by defendant from plaintiff. Defendant tendered with its answer the sum of $60, which covered the sum of $47.90 and the costs to the date the tender was made, and pleaded payment as his defense. The issues were joined by a reply, and the case was tried to the court without a jury. The court found the facts in favor of defendant, entered judgment in his favor against plaintiff for defendant's costs and disbursements. The account between plaintiff and defendant extended from the first day of January, 1927, to the second day of February, 1928. All of the transactions between them were conducted in behalf of plaintiff by its traveling salesman, who visited defendant at his store in Hood River, Oregon, weekly. All purchases made by defendant from plaintiff were on a cash basis and were paid within 30 days from the date of purchase. Said salesman representing plaintiff not only made the sales but also collected all sums paid by defendant. The controversy arises out of the conduct of plaintiff's salesman in regularly discounting the price of certain articles sold to defendant. The invoice accompanying delivery of the merchandise so sold harmonizes with the price list. When plaintiff's salesman visited defendant the two would go over the invoice and make the deductions in accordance with the sale price, and defendant promptly paid the amount due after said deductions were made. Plaintiff's book showed a balance April 27, 1927. Later plaintiff learned that its said agent had been embezzling its funds. Thereupon it demanded the payment from the defendant of $2,154.17 on December 31, 1927; of $2,278.85 on January 31, 1928; of $2,137.08 on February 20; and of $1,582.74 on May 5, the amount demanded in its complaint. Defendant refused to pay said amount, and this action was instituted to collect. Plaintiff excepted to certain proposed findings and requested other findings. He assigns as errors: first,

"The court erred in finding that between April, 1927, and February, 1928, the plaintiff sold and delivered goods of the agreed value of only $6,915.35 plus $58.14 less a discount of $10.24, and that all was paid except $47.90, and that the tender of $60 made by the defendant after this action was commenced was sufficient to cover the amount due with costs, for the reason that said finding is not sustained by the evidence, and erred in overruling appellant's objection to such finding and in denying its requested finding that the reasonable value of goods so sold is $8,332.43."

Second, the court erred in overruling appellant's objections to the finding that its salesman had apparent authority to sell, that plaintiff was estopped to deny said alleged authority and in denying its request for a contrary finding. Plaintiff states the issues on appeal thus:

"What was the contract between appellant and respondent?

"The question of law involved in this appeal is: — Did appellant's traveling salesman have apparent authority to make a binding contract of sale, or to discount appellant's invoices, and if he had such apparent authority did respondent, under the circumstances, have a right to rely upon it?"

AFFIRMED. REHEARING DENIED. The existence of the agency is not disputed. Plaintiff admits that Schaeffer, who sold its merchandise to defendant and collected therefor, was its agent. The question is, what was the extent of the agent's authority?

Proof of the authority of the agent may be made by the course of dealing between the parties. It is not necessary for the latter to prove that the principal conferred, either in writing or orally, specific authority, if the conduct of the agent is within the scope of his authority as disclosed by the conduct of the parties. One dealing with a corporation must deal with its agents. He has a right to rely upon the apparent scope of the agent's power: Thomas v. Smith-Wagoner Co., 114 Or. 69 (234 P. 814).

"The authority of an agent to bind his principal in contracts made with a third party is measured, not only by the agent's express delegation of power, but also by that which he is held out by the principal as possessing, provided, however, the third party had reason to believe and did believe the agent was acting within and not exceeding his authority, and such party would sustain a loss if the contract was not regarded as that of the principal": Nicholas v. Title Trust Co., 79 Or. 226, 238 (154 P. 391) and authorities there cited.

There is evidence that during all the time defendant was dealing with plaintiff through the agent he had no direct communication from plaintiff regarding his account. There is no evidence that defendant had any knowledge or notice to put him upon inquiry regarding the malfeasance of plaintiff's agent. Instead of mailing to defendant statements of his account from time to time, plaintiff delivered those statements to his agent with instructions to collect. How, then, was defendant to know the agent's authority was restricted as now claimed by plaintiff? The question presented in this action is largely one of fact. There is an abundance of evidence to support all the findings of fact made by the learned trial court. These findings have the effect and force of a verdict by a jury: § 159, O.L.; Leonard v. King,128 Or. 216 (274 P. 116).

The attitude of plaintiff would require the defendant, a stranger to plaintiff, to protect plaintiff against the acts of his own agent. Without some evidence that defendant knew that plaintiff's agent was acting contrary to instructions, defendant was justified in relying on the assumption that the agent was doing what he was authorized to do because the course of dealing between defendant and plaintiff, extending over more than a year, appeared to be approved and authorized by plaintiff. Without some notice or some conduct which would cause defendant to suspect the agent was dishonest with his employer and was not authorized to make the deductions on certain articles, he was under no obligation to make inquiry directly of the principal regarding the extent of the agent's authority. Plaintiff could easily have prevented any loss, so far as defendant is concerned, by mailing to defendant statements of his account during the course of their dealings with each other.

A traveling salesman has such authority as his principal confers upon him or his course of dealing indicates he has to a reasonably prudent person dealing with the principal through the agent. A drummer may have the authority to change prices from the price list, or he may not. That matter depends on the actual authority conferred or the apparent authority. There is no hard and fast rule that limits a drummer to soliciting orders for submission to his principal. The principal may clothe his agent with authority to make prices to meet competition. The course of dealing between the parties may constitute the evidence of the agent's authority to fix prices. There is evidence that defendant would not have purchased the merchandise at the price given on the list of plaintiff, and that the agent for that reason reduced the price. Defendant had a right to believe, when he received the receipt from the agent, had no communication from the principal that indicated his account was not paid in full, that the agent was clothed with the authority to fix the price as well as to sell and collect. The authorities cited by plaintiff limiting a traveling salesman's order to mere solicitations of orders or offers to buy, which must be submitted to his principal for approval or rejection, are not controlling here. Under the facts of the cases cited by plaintiff that principle was properly applied, but in the instant case the course of dealing between the parties indicated to defendant that plaintiff's agent had authority to make prices to meet competition.

We find no error in the record. The judgment is affirmed.

AFFIRMED. REHEARING DENIED.