Witcher v. Gibson

15 Colo. App. 163
CourtColorado Court of Appeals
DecidedApril 15, 1900
DocketNo. 1769
StatusPublished

This text of 15 Colo. App. 163 (Witcher v. Gibson) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Witcher v. Gibson, 15 Colo. App. 163 (Colo. Ct. App. 1900).

Opinion

Bissell, P. J.

On this basis of fact the appellant has constructed a virile and persuasive argument to support his contention that where one would hold a principal for the acts of an alleged agent, he must either show an express authority delegated to the representative, or a course of conduct pursued along the lines of the due course of the particular business carried on to the knowledge and with the real or apparent consent of the principal which will estop him to deny an original grant of power. If this case is to be brought within the latter principle, he who thus deals with an agent is as much bound as in the first case to inquire about the agent’s authority, and if he thereby learns or by such investigation might have found out the actual limits of the agent’s power, [169]*169he may not insist that the authority was apparently possessed, and on that theory hold the principal for what the agent has done, when in fact he had no real right to act. I agree in the main with this law and concede that he whose cause of action grows out of an agent’s acts, must either prove an actual power delegated, or one which may be legitimately inferred from what was done, and that the plaintiff may not sit idly by, make no inquiry, and then hold the principal on the theory of an estoppel without proof of a course of dealing with himself so long continued as to beget a legitimate reliance on the apparent possession of authority. To one or the other end must the case be worked out, if the plaintiff is to recover. The trouble with the present case is, the proof does not wholly bring it within the principle of equitable estoppel, nor yet fully establish an actual, original grant of power. Yet taken altogether, the evidence fairly establishes not only a power given when the agency was created, but one subsequently granted, or which may be fairly and legitimately inferred as granted from what the principal afterwards did or knowingly permitted the agent to do in the conduct of the business. The many transactions between the Gibson Lumber Company and the J. K.. Witcher Lumber Company, even without the inquiries ordinarily requisite, permit the application of this principle of estoppel, and permit the plaintiff to insist that Witcher may not deny the agency though the Gibson Company may have been negligent and careless in failing to ascertain whether the agent had authority when they began their dealings. This comes from the culpable negligence of Witcher in the conduct of his business, a negligence so marked that it far exceeds the culpa levissima which may appear, and yet the principal be excused because the plaintiff’s negligence proximately contributed to the loss. On either theory the verdict is supported by the proof as we shall attempt to demonstrate. We do not believe the appellant can insist that the negligence of the Gibson Lumber Company proximately contributed to the loss. It is the absence of this proof which prevents the [170]*170application of the doctrine of the Alabama case on which counsel so much rely. Wheeler v. McGruire et al., 86 Ala. 398.

The theory is right. Under the law of agency, it is, and it has always been true, that a principal who so negligently conducts his affairs as to lead third persons to reasonably suppose the agent has authority may not dispute the possession of the power. As an incidental part of this principle, it is undoubtedly likewise true, as has already been suggested, the person who deals with the agent and would rely on the agent’s apparent authority, must not act negligently and must use reasonable means to ascertain whether the power is possessed. The trouble with the application of that principle or of the modification of it in the present suit, is that although the Gibson Lumber Company may have been negligent in not inquiring in the first instance, the long course of dealing which the parties had, one with the other, extending over a period of months, culminating in the particular sale which is the cause of action, forbids the use of the doctrine. It is quite possible that had the sale been the first and only transaction between the parties, it might well have been said the plaintiffs were negligent in failing to find out before they sold goods on credit to Lefler that he had authority to buy. The trouble is, not only did he buy once, but for months they sold him on credit, with Witcher’s probable actual knowledge. In any event he is charged with knowledge from the appearance of the transaction on the books and his failure to object. Permitting this course of dealing it begot a confidence in the Gibson Lumber Company and they had a right to rely on this apparent authority, and Witcher cannot escape the obligation. It is always incumbent on a principal to conduct his business with care. He is not bound to watch his agent, nor bound to be constantly on the lookout to see that he is not cheated. But he is certainly obligated to keep himself advised of the course of his business, and to know whether his agent is using the specific authority which is granted him, and if he is not, to advise [171]*171the parties with whom he is dealing to no longer transact such business with him. It is a general principle that the principal is bound to know what his agent does when the transactions are entered on his books, open to his inspection, exhibited to him by statements furnished by the agent, especially where the profits go into his pocket. The law of notice is broad and slight evidence under such circumstances is enough to charge him. The L. P. C. Mining Co. v. L. C. C. M. Co., 11 Colo. 236; Heinz v. Bank, 9 Colo. App. 31.

It is equally true, as this court has many times decided, that a principal may not attack the provisions of a contract and reject in part and at his pleasure what the agent has done when he has received an unquestioned benefit. Ordinary business principles and common honesty forbid a principal to keep the product and' refuse to pay, even if the agent had no authority to buy. This is and always has been the law, and there is enough in this case to warrant its application. Drug Co. v. Lyneman, 10 Colo. App. 249; Sartwell v. Frost, 122 Mass. 184; McDowell v. McKenzie, 65 Ga. 630 ; Bice v. Hover, 2 Colo. App. 172; Johnson v. E. Car. L. & R. Co., 116 N. Car. 926. The case seems to us to be brought clearly within this principle which will be taken as a modification of the first or as a part of it and an exception to it, and serves to determine the rights of the parties. In this case the lumber was sold by the Gibson Lumber Company to Witcher, through Lefler, who was carrying on the business as his agent. He got the lumber. It was there when he mortgaged the stock in trade and bills receivable to pay his debts. Bardwell got it as mortgagee; it was used for-Witcher’s benefit, as whatever of the stock was not sold, or whatever bills were not collected and necessary to the liquidation of these consolidated claims, went back to him. He never attempted to alter the Gibsons’ status, return the goods, or in any manner alter their situation, seeming to rely wholly on the theory that the agent had no authority to buy. He put the proceeds in his pocket and relied on the want of power. Under the circumstances we do not deem it right.

[172]*172Regardless, however, of all this discussion and of these principles which we have examined and stated, more to answer the argument of counsel and for their satisfaction, and not because it is vital to the decision, we believe on the record the evidence conclusively shows that Lefler had actual authority from Witcher to buy on credit.

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Related

McDowell v. McKenzie
65 Ga. 630 (Supreme Court of Georgia, 1880)
Sartwell v. Frost
122 Mass. 184 (Massachusetts Supreme Judicial Court, 1877)
Wheeler v. McGuire, Scoggins & Co.
86 Ala. 398 (Supreme Court of Alabama, 1888)
Corning Tunnel, etc., Co. v. Pell
4 Colo. 507 (Supreme Court of Colorado, 1878)
Little Pittsburg Con. Min. Co. v. Little Chief Con. Min. Co.
11 Colo. 223 (Supreme Court of Colorado, 1888)
Bice v. Hover
2 Colo. App. 172 (Colorado Court of Appeals, 1892)

Cite This Page — Counsel Stack

Bluebook (online)
15 Colo. App. 163, Counsel Stack Legal Research, https://law.counselstack.com/opinion/witcher-v-gibson-coloctapp-1900.