Williams v. Texas Co.

24 S.E.2d 873, 202 S.C. 333, 1943 S.C. LEXIS 36

• Court: Supreme Court of South Carolina
• Decided: March 12, 1943
• Docket: 15514
• Status: Published

Opinions

The majority opinion of the Court was delivered by

Mr. Associate Justice Baker:

I find myself unable to concur in the opinion of Mr. Justice Fishburne to the effect that the Circuit Judge should have granted the respondent’s motion for a direction of verdict on the ground that the evidence is insufficient to show the authority of the agent, Dowdle, to make the contract upon which the appellant relies. Because of the recognized ability of Mr. Justice Fishburne and the confidence in his views which his opinions always impel, I am reluctant to express a dissent in this case; but after a most painstaking study of the record, I am unable to reach any other conclusion than that the appellant made out a prima facie case that entitled him to go to the jury. In this light, the appellant’s exceptions in my view include reversible error which should result in the granting of a new trial.

Paragraphs two, three, four and six of the' complaint of the appellant allege:

“2. During the month of February, 1937, the plaintiff was employed as agent for the defendant for the purpose of purchasing for the sum of thirty-five hundred dollars ($3,-500.00) a filling station site owned by W. P. Clark at the southwest corner of Park and Front Streets in the Town of Mullins, South Carolina. The plaintiff, however, under the terms of his employment was given the option of acquiring the property either for the defendant or for himself, and in the event that the plaintiff acquired the property for himself the defendant agreed to enter into a lease contract with the plaintiff, whereby the defendant would lease the property under its standard form of lease at a rental of at least ninety dollars ($90.00) per month, provided the plaintiff would remodel the filling station at his own expense in conformity with plans and specifications prepared and furnished plaintiff by the defendant. (Emphasis added.)

“3. Pursuant to plaintiff’s employment as above stated, he entered into negotiations with W. P. Clark for the purpose of acquiring the filling station site above mentioned, and he induced the said W. P. Clark to agree to accept thir ty-five hundred dollars ($3,500.00) for the property and to make conveyance at any time either to the defendant or to the plaintiff, provided the sum of five hundred dollars ($500.00) was immediately paid to him on the purchase price. (Emphasis added.)

“4. Pursuant to the authority granted to him by the defendant, and acting under its instructions, the plaintiff paid the said five hundred dollars ($500.00) to W. P. Clark with his own funds, and gave notice to the defendant to that effect and that the conveyance of the property could be obtained at any time. No action having been taken by defendant within a reasonable time, in response to plaintiff’s notification, the plaintiff thereupon demanded of the defendant that it either take a conveyance of the property and reimburse plaintiff the five hundred dollars ($500.00) spent in defendant’s behalf, or otherwise execute the lease contract with plaintiff, in which event plaintiff would take the property himself and remodel it at his own expense according to plans and specifications to be prepared and furnished by defendant, but the defendant has failed and refused to comply with any or either of plaintiff’s demands.”

“6. It having thus become evident that the defendant has repudiated" and has no intention of carrying out the arrangement above stated in relation to the above-mentioned filling station site, and that such arrangement will not be carried out by the defendant in any respect, plaintiff is entitled to. have refunded to him by the defendant the sum of five hundred dollars ($500.00) .advanced by plaintiff for defendant’s benefit and at its request as above stated, but defendant has refused, and still refuses, to make restitution to plaintiff.” (Emphasis added.)

The answer of respondent to the above allegations of the complaint was a general denial; and further answering, and by way of affirmative defense, the respondent alleged that it did not admit that any contract or agreement was entered into between the plaintiff and defendant, but that such negotiations and conversations as were had in regard to the matters and things set forth in the complaint were between appellant and J. W. Dowdle who had no authority to employ appellant, or any other-person, to purchase real estate for its account or to make any contracts to lease real estate acquired by appellant or any other person, and that respondent was informed and believes that this fact was known to the appellant, or that he was in possession of facts from which he must have known that the said J. W. Dowdle had no such authority; further that if such a contract as was set forth in the complaint was entered into between appellant and an agent of the respondent, said contract was of and concerning an estate or interest in, to or out of lands, and was not evidenced by memorandum, deed or note in writing signed by respondent, or by its agent authorized to sign such an instrument, and the statute law of South Carolina is pled in bar of the right of appellant to maintain the action.

The complaint clearly makes out a case of alleged employment of the appellant by the respondent through Dowdle, an agent of respondent, and the expenditure by the appellant of $500.00 for the purpose of accomplishing the stated object of the agency and employment.

As Mr. Justice Fishburne points out, the Statute of Frauds is not involved in that situation, and in my opinion there is testimony sufficient to go to the jury on the alleged employment of the appellant if the employment was effected by an authorized agent of the respondent.

It may be conceded, in my view of the case, that the agent of the respondent, who handled this matter with the appellant, had no authority to sign the name of the respondent to a lease or to a contract for the purchase of real estate. But the matter of finding suitable locations, and of initiating negotiations with owners for the purchase or lease of such locations was admittedly within the authority of the respondent’s agent, Dowdle, and of his successor, Neeley. These men were not ordinary agents. They .were zone managers, with jurisdiction over a considerable number of counties in the State. An essential part of their business consisted of doing the very thing which the appellant says was done in this case, to wit, selecting locations and doing whatever was necessary to put the respondent in position to act on the purchase or lease of the locations. As a practical matter, in the real estate field it is frequently indispensable to employ brokers or others to find and tie up locations for corporate organizations, pending consideration of the locations through the devious channels of the corporate setup. Certainly the respondent would not want to spend the time of its organization in considering a purchase or lease involving substantial expenditures unless a situation has been created in which the owner of the property has definitely agreed to sell or lease in the event that the corporation finally approves the proposed transaction.

It would be within the contemplation of the respondent that Dowdle would follow the usual course of seeking aid from others in carrying on his duties, and in paying for such aid on any reasonable basis. If his authority extended to employment of others for that purpose, would it not extend to legitimate disbursements made by the persons employed, when such disbursements are made at Dowdle’s specific request ?

In other words, does the case not finally resolve itself into the proposition that the appellant claims that he was employed by Dowdle and directed by Dowdle to advance money within the scope of the employment, and that-Dowdle acted in these connections under an admitted scope of authority so wide as to territory and so highly executive and important in character and extent, that it would be unreasonable to deny to him as a matter of law the implied authority to do what the appellant says was done in this case.

The dictum so often expressed that one deals with an agent at one’s peril, from the standpoint of the agent’s authority, might be all right in dealings between individuals relating to their personal affairs; but in the complex business structure of today, where gigantic corporations operate in thousands of communities through regional and other executives who of necessity deal in their particular areas with the business of their principals, it seems to me that an executive agent of a large corporation should be held to have such authority as may be reasonably deduced from the scope of his activities, and that the protection of the corporation must come not from subjecting the public to the risk of dealing with such men at their peril, but from the employment of agents who have the integrity to notify the people with whom they deal of any actual limitations on their authority.

The general principles I have stated find some support in the case of Barrett v. Texas Co., 174 S. C., 45, 176 S. E., 847, and Swift & Company v. Callaham, 133 S. C., 353, 131 S. E., 146.

In 2 C. J. S., Agency, § 95, pp. 1203, 1204, the rule is thus stated:

“The authority of the agent is to be tested and determined by the character bestowed upon the agent and not by the instructions given him by the principal, so far as innocent third persons are involved, so that acts or transactions may be within the sphere wherein an agent can impose liability on the principal although outside of the agent’s authority as qualified by private instructions.

“ * * * Third persons may deal on the faith of such apparent authority without being bound by such limitations, it being sufficient to render the instructions or limitations nugatory that the agent’s acts in the premises are reasonable and such as would ordinarily be done by a person having the authority apparently exercised by the agent, or, more briefly stated, that they come within the scope of his apparent authority. Knowledge or notice of the limitations upon apparent authority is essential to charge those dealing upon the faith of such authority with the consequence's of the limitations.

“It is probable, however, that in so stating the rule the courts are not necessarily thinking of apparent or ostensible authority in the strict technical sense in which that term is discussed in the succeeding section, for while among the authorities cited to the effect that private instructions do not countervail as against apparent authority there are many which do involve that type of authority, in many others the powers involved seem properly classifiable as implied rather than apparent in nature, so that in speaking of apparent authority the cases evidently use the term as signifying any power which the agent prima facie possesses, without regard to the distinctions between actual, implied, and apparent or ostensible authority. * * * ”

In the same text, § 136, Subsection b, at page 1360, the author says as to the appointment of subagents: “Where the act to be done involves no element of personal trust or confidence, as where it is ministerial or mechanical only, the agent may employ another to do it; and in such case the act is as well performed by the subagent as by the agent, and will be regarded as the act of the agent and accordingly will be binding on the principal. So, where an agent has exercised his discretion and determined upon the propriety of an act, the execution of merely mechanical, clerical, or ministerial acts involving no judgment or discretion may be delegated. * * * ”

In the present situation, Dowdle himself determined upon the acquisition of the station location, and upon the price at which it was to be purchased or leased by the respondent. The task he delegated to appellant involved none of the fundamentals of the exercise of discretion or trust or confidence which were essential to the furtherance of the business committed to Dowdle.

Of course, all of this involves jury issues based on the facts of each particular case.

It does not appear to me just to say to these great organizations with whom the public must of necessity deal through regional representatives acting under undisclosed instructions that their tedious methods of running transactions through their various departments can be used as a sword to obtain free service all over the country, rather than as a shield to protect them against the acts of agents who might try to mulct them through obviously fraudulent transactions.

The Circuit Judge in his charge states the case very much' as I have stated it, but of course he nullifies this aspect of the case by going into the subject of the Statute of Frauds, and he deprived the appellant of the benefit of this view of the case by refusing to permit the appellant to prove the actual scope of Dowdle’s authority by showing the pertinent transactions undertaken by Dowdle in carrying out his duties.

It appears to me that there is reversible error in the exclusion by the Circuit Judge of testimony relating to other similar transactions handled by the agent, Dowdle. • Such transactions would furnish persuasive evidence of Dowdle’s actual authority. And it does not appear to me to be material whether the appellant knew of such transactions or not at the time he dealt with Dowdle.

Further reversible error is found in the refusal of the Circuit Judge to charge the jury as requested by appellant relating to the Statute of Frauds, as follows :

“1. The affirmative defense set up in the defendant’s answer pleading what is therein referred to as the Statute of Frauds are not applicable in this case, and they need not be considered by you, because they constitute no defense to plaintiff’s cause of action.

“2. In order for plaintiff to recover in this case it is not necessary that the contracts referred to in the complaint should be in writing, and the fact, if it is a fact, that such contracts were not in writing is no defense and need not be considered by you.”

This error was accentuated by.charging the jury at length on the applicability of the Statute of Frauds to states of fact which are not within the theory upon which the action was brought and tried.

It is my opinion that the judgment appealed from should be reversed and the case remanded for a new trial.

Mr. Associate Justice Stuices and Circuit Judge L. D. Lide, Acting Associate Justice, concur.