Case Title: Pokorny v. Williams

Citation: 199 Or. 17, 260 P.2d 490

Docket Number: 

State: oregon

Court: Oregon Supreme Court

Date: 1953-07-08T00:00:00Z

Document:
Affirmed July 8, 1953.
*19 Marvin Swire, of Portland, argued the cause for appellant. With him on the brief were Rosenberg, Swire & Coan, and Seymour L. Coblens, all of Portland.
Robin D. Day, of Salem, argued the cause and filed a brief for respondents.
Before LATOURETTE, Chief Justice, and WARNER, ROSSMAN, LUSK, BRAND and PERRY, Justices.
AFFIRMED.
BRAND, J.
*20 The plaintiffs brought this action against Ralph E. Williams, Jr., doing business as Williams & Hart, to recover $2,914.24 alleged to have been the "market price" on October 6, 1947, of 3,703 pounds, less tare of 95 pounds, of hops at 78 cents a pound. The action is based on a contract for the sale and purchase of hops. The verdict and judgment were in favor of plaintiffs in the sum of $2,633.84. Defendant appeals.
A contract was made by Frank J. Pokorny and his son Clifton Pokorny with Williams & Hart. It provided in part that "the Seller does hereby sell and agrees to deliver to the Buyer entire salable crop estimated 18,000 pounds, more or less (18,000 lbs.) net weight of his crop of hops of the growth of the year 1947, now being or growing, or to be grown on" eighteen acres therein described. Other provisions were:
Other provisions of the contract are not involved in the controversy and are not set forth here.
Hart died before suit was filed, and defendant Williams answered, representing his partner's estate as well as himself.
The complaint alleges full performance of the contract by plaintiffs, and states that
The complaint alleges that by reason of the facts, the defendant became indebted to plaintiffs in the sum of $2,914.24, with interest from 6 October 1947, and that demand for payment had been made and refused. The answer, in addition to certain admissions and denials, affirmatively alleges
The reply was a general denial.
Defendant makes two assignments of error. By the first he asserts:
Assignment of error No. 1 (b) was waived at the hearing in this court and will not be discussed.
1. When a motion for a nonsuit or directed verdict is denied, the grounds stated therein are conclusive on the moving party, and he may not urge for the first time on appeal additional grounds for the motion. Edvalson v. Swick, 190 Or 473, 227 P2d 183. We therefore set forth the grounds specified by defendant in his motion:
The issues presented relate to the alleged absence of evidence as to (1) price, (2) acceptance, (3) authority of Netter as agent of defendant, (4) present availability of hops for defendant. The fourth point was waived. A motion for judgment n.o.v. raised the same questions by reference.
2. We will first direct our attention to the sufficiency of the evidence on the issue of acceptance of the hops by the defendant. Since the transaction on which plaintiffs rely as evidence of acceptance involved only the conduct of the Pokornys on the one side, and one Netter on the other, it follows that two of the issues presented by the motion for directed verdict constitute, in reality, a single issue. If the acts of Netter did not bind the defendant Williams, then there was no evidence of acceptance of the hops. If the relationship between Netter and the defendant Williams was such that Williams was bound by Netter's acts, then the question will be whether there was an acceptance of the hops by Netter. In considering both the question of agency and of acceptance, we are to consider only *25 whether there was substantial evidence to go to the jury, viewing it in the light most favorable to the plaintiffs. Viewing the evidence in this light, the defendant makes the following concession in his brief:
The tender of the hops by the plaintiffs is sufficiently manifested. The problem relates only to acceptance.
The applicable rule governing acceptance of goods tendered pursuant to contract closely resembles that which relates to the acceptance by an offeree of an offer to a bilateral contract. In the latter case "the acts by which such assent is manifested must be done with the intent to do those acts; but, except as qualified by §§ 55, 71 and 72, neither mental assent to the promises in the contract nor real or apparent intent that the promises shall be legally binding is essential." Restatement of the Law, Contracts, Vol. 1, § 20. "Not mutual assent but a manifestation indicating such assent is what the law requires." Restatement, Contracts, Vol. 1, § 20 a.
Applying this general principle to the matter of acceptance of goods tendered under a contract for sale and purchase, the Uniform Sales Act lays down the specific and controlling rule.
The issue of acceptance vel non may be wholly separate from the question as to whether the goods accepted are in conformity with the requirements of the contract. The section of the Sales Act which immediately follows the one quoted, reads thus:
3. The following excerpts from Williston on Sales are applicable:
Witnesses for plaintiffs testified that plaintiffs "grew the hops, sprayed them, picked and baled them and brought them to the Donald warehouse as usual." They described the process followed in cultivation and testified that they notified defendant that the hops were in the warehouse. Robert Pokorny testified without objection:
Mr. Netter "was talking for Williams and Hart". Before the hops were taken in to the warehouse, Netter came to plaintiffs' ranch and talked to plaintiff Frank J. Pokorny and the three sons. He "said that he was going to go to the warehouse and weigh the hops". Netter "said that we should come over there and we should get the warehouse receipt." Witness Lenners, an experienced hop grower, testified in detail as to the process customarily followed by hop men, including the sampling and testing by buyers. He continued:
*28 Witness Eismann was called by the defendant. He was a representative of S.S. Steiner, Incorporated, hop buyers. On cross-examination he testified:
The record indicates that the parties to the contract had dealt with each other over a long period of time. The contract for the 1947 crop, which is involved in this case, was executed in 1943. With these facts in mind we return to the events of 6 October 1947, which is the date of the alleged weighing, inspecting and acceptance of the hops.
Netter had informed plaintiffs that one of the owners would have to be present at the warehouse. The plaintiff Frank J. Pokorny (the father) went to the warehouse accompanied by his son Dan. Netter was already at work when they arrived. Frank Pokorny testified:
The slip to which plaintiff referred was on a Williams & Hart form and showed the weight of each of 19 bales of hops, totaling 3,703 pounds less tare of 95 pounds, or a net weight of 3,608 pounds. It was received in evidence. Daniel Pokorny testified that his father handed Netter the warehouse receipt "After they completed the business there." Subject to our further consideration of Netter's agency and of an instrument which he induced the plaintiff Frank Pokorny to sign, the testimony which we have reviewed was more than sufficient to take to the jury the question as to the acceptance of the hops by Netter.
The defendant does not question the fact established by his own witness that the weighing and numbering of the bales is the ordinary method by which acceptance is manifested. He relies upon an instrument to which he secured the signature of one of the plaintiffs, on the basis of which he contends that the "undisputed evidence shows that the appellant [defendant] did not intend to accept the hops, and hence title did not pass."
*30 The instrument Exhibit C which was signed by Frank J. Pokorny, reads as follows:
The instrument is not mentioned in the defendant's answer which, though affirmative in form, amounted to a general denial of acceptance of the hops. The plaintiff admitted that the instrument bore his signature. However, the testimony favorable to the plaintiff was, in part as follows:
When Exhibit C was shown to the witness he testified:
Daniel Pokorny testified that Exhibit C was signed after the hops were weighed. His father signed the paper but couldn't read very well. He testified further:
It is inferable from the record that Frank J. Pokorny was a man of foreign ancestry and of modest formal education. He testified, "I'm not a very good reader." His son testified that his father "couldn't read very well," and there is evidence that his hearing was impaired. The testimony quoted tends to prove that he relied upon the representation of Netter that Exhibit C was only a release so that the defendant could take the hops out of the warehouse. If, as the plaintiff testified, Netter represented that Exhibit C was only a release of the hops, then such representation must have been made with knowledge of its falsity, for Netter fully understood the true nature of the instrument.
*33 4. The general rule has been correctly stated by this court as follows:
The situation presented in this case in some respects resembles that which arises when releases from liability for personal injury are secured from the injured party. We quote from Wood v. Young, 127 Or 235, 240, 271 P 734:
In Wood v. Young the plaintiff signed a release from liability for injury to person and property in reliance upon representations that the release applied only to his claim for damage to his car. Plaintiff recovered a verdict for personal injuries, notwithstanding *34 the release, and this court held that the question was one for the jury and the judgment was affirmed.
In Broad v. Kelly's Olympian Co., supra, plaintiff accepted a check on which a plain and complete release was written, and plaintiff made "no claim that the provisions of the check were misrepresented to him" and the only claim of deceit was that the release signed was "only a formality." Plaintiff was not told that the instrument was a receipt, and this court held that there was no substantial evidence that plaintiff was deceived into signing the release. However, the court reviewed the decision in Wood v. Young with apparent approval, and after discussing that and other cases in which a plaintiff had prevailed notwithstanding the fact that he had signed a release, the court added:
5. In the very recent case of Whitehead v. Montgomery Ward & Co., Inc., 194 Or 106, 239 P2d 226, plaintiff, unable to read all of a release without his glasses, but able to read the words "Final Release" which were in large print, signed it in reliance upon representations that it wouldn't be considered a release and that it was necessary that he sign as a receipt for money paid him. This court, by Justice TOOZE, said:
Citing with approval Wood v. Young, supra.
In his brief the defendant very properly concedes that
He continues:
The last-quoted excerpt discloses a serious error of law in suggesting that a unilateral secret intent not to accept is conclusive of nonacceptance. Plaintiffs rely upon language taken from the following cases: Nugent v. Auto Insurance Co., 140 Or 61, 13 P2d 343; Pulkrabek v. Bankers' Mortgage Corp., 115 Or 379, 238 P 347; Naftzger v. Henneman, 94 Or 109, 185 P 233; Wadhams v. Balfour, 32 Or 313, 51 P 642. These cases refer to the materiality of mutual intention to accept and a meeting of minds as essential to proof of acceptance. Our conclusion is not inconsistent with those principles as stated, but it is elementary that intention and meeting of minds are to be acertained from acts manifesting to the other party such intention and meeting of minds. A secret unexpressed intention not to accept is of no avail, as against evidence manifesting to the other party an intention to accept.
*36 Whether Netter or the defendant secretly did not intend to accept the hops is a matter for the psychologist, not for the judge. The judicial question is whether there was substantial evidence that the defendant, through Netter, did any act, in relation to the goods, which was inconsistent with the ownership of the seller. OCLA, § 71-148, supra. Manifestation indicating assent is what the law requires. Restatement of the Law, Contracts, § 20, and comment, supra. The specific terms of OCLA, § 71-148 stating what shall be deemed to constitute acceptance constitute an elucidation and not a contradiction of OCLA, § 71-118 cited by the defendant.
It is unnecessary to decide whether, under all of the circumstances shown by the evidence favorable to their position, the plaintiff was or was not negligent in signing Exhibit C without reading it. The decision may properly be based upon other grounds. It was the contention of the defendant, supported by an offer of proof, that Williams and Hart had instructed Netter "to get that [Exhibit C] signed in the case of Pokorny before the weighing took place." (Italics ours.) In view of the evidence that weighing and numbering is the customary method of acceptance, and of the plaintiffs' evidence that Exhibit C was not presented for signature until after the hops had been weighed and numbered, it was for the jury to say whether the transaction had been completed with a passing of title before Exhibit C was presented for signature.
There is an independent ground for upholding the verdict. Even on the face of Exhibit C the provision is merely to the effect that the weighing and numbering was not to be construed as an acceptance. That instrument did not purport to apply to the conduct *37 of Netter in informing the plaintiffs that they would receive a check and in demanding and receiving the warehouse receipt. There is not a scintilla of evidence that there was anything said or written by Netter which limited the effect of his acceptance of the negotiable warehouse receipt, or of his statement that plaintiffs would be paid for the hops.
6. This court has held that a negotiable warehouse receipt stands for and represents the property, and that a valid transfer of the receipt constitutes a valid transfer of the property. Adamson v. Frazier, 40 Or 273, 66 P 810, 67 P 300. We quote:
Since it does not appear that plaintiff indorsed the warehouse receipts when he delivered them to Netter, the provisions of OCLA, § 60-239 become relevant.
In National Union Bank v. Shearer, 225 Pa 470, 74 A 351, 355, the court said:
If we are to assume that complete title was "transferred but not negotiated," then we must refer to the provisions of OCLA, § 60-242, as follows:
Williston, in his general treatise on sales, discusses documents of title and says:
See OCLA, § 60-243.
As we have said, there is no evidence of any agreement between transferor and transferee concerning the effect of the transfer by delivery of the warehouse receipt. Its delivery and acceptance certainly constituted at least substantial evidence of acceptance of the hops and transfer of title. For the reasons given *39 we conclude that the question of acceptance by Netter was properly submitted to the jury.
Defendant presents the second-ditch argument that Netter was not authorized to accept the hops on behalf of his principal. Netter affixed to Exhibit C the signature "Williams & Hart by Ernest Netter". Defendant in his brief says that "appellant, acting through Mr. Netter" secured the signature on Exhibit C. Netter testified that he had been employed by Williams and Hart for 10 or 11 years as a hop inspector. He said he had explained the purpose of Exhibit C to the plaintiffs, which testimony was flatly contradicted, thus presenting a jury question. He testified that he had no authority to accept or reject the hops.
The testimony of the defendant Williams is more candid and more revealing. We quote:
Netter was asked if he had any instructions from his principal "with reference to the Pokorny bales." In an offer of proof which was made out of the presence of the jury and rejected by the court, Netter testified that Williams and Hart had instructed him "to get that [Exhibit C] signed in the case of Pokorny before the weighing took place." He said he was to weigh the hops only if they were willing that weighing wouldn't constitute delivery. Defendant Williams, on the contrary, testified that he gave no particular *40 instructions to Netter "with reference to the Pokorny crop". He continued:
From the evidence we find that Netter was more than an inspector. He was a field representative of the firm in a district which included the Pokornys and a number of other growers. He was a "buyer."
The complaint alleged that the defendants accepted the hops, and the answer denied the allegation. There was no reference to agency in either pleading, and none was necessary. Proper evidence as to the actual authority of Netter, and opposing evidence as to his real or apparent authority, was received. Defendant makes no contention that such evidence is inadmissible under the pleadings.
7. We have held that circumstantial evidence is ordinarily competent to establish the fact or extent of an agency. Bailey v. Opp, 159 Or 301, 77 P2d 826, 80 P2d 40. The testimony of the defendant Williams is sufficient to show that Netter had actual authority *41 as representative and buyer to accept the hops within the district involved. This is not a case in which authority can be shown only by prior manifestations of the principal as to the transaction. His testimony at the trial establishes a general agency. 1 Restatement, Agency, § 3. We are concerned only with the contention that the agent received special and limiting instructions as to this particular sale as claimed by Netter, or that he received general limiting instructions requiring the use of Exhibit C in all purchases within his district, as claimed by the defendant.
All parties to the transaction knew that weighing and numbering the bales was the customary manner by which acceptance was manifested. If the testimony in behalf of the plaintiffs is to be accepted, as must be done, the plaintiffs had no knowledge of any requirement or purported agreement modifying the legal effect of weighing and numbering.
8. In United States Nat. Bank v. Herron, 73 Or 391, 144 P 661, this court held that special authority, like a general one, confers by implication all powers necessary for or incident to its proper execution.
9. As to third persons, a principal is bound by his agent's acts, not only when executed pursuant to actual authority, but also when within the scope of his apparent authority arising from the manner in which his principal has held him out to the public. Portland v. American Surety Co., 79 Or 38, 153 P 786, 154 P 121. See also Nicholas v. Title & Trust Co., 79 Or 226, 154 P 391; Graef v. Bowles, 119 Or 498, 248 P 1090; Pacific Biscuit Co. v. Dugger, 40 Or 302, 67 P 32. Netter had been held out as a representative and buyer of the defendant for many years.
*42 10. Again, we have held that persons dealing with a known agent have a right to assume, in the absence of information to the contrary, that his agency is general. Rae v. Heilig Theater Co., 94 Or 408, 185 P 909.
11, 12. In White v. Gordon, 130 Or 139, 279 P 289, this court said:
And see Carstens Packing Co. v. Gross, 131 Or 580, 283 P 20; Fine v. Harney County Natl. Bank, 181 Or 411, 170 P2d 365, 182 P2d 379. See also Andrews v. Spencer, 193 Or 615, 238 P2d 729, where the court discussed the binding effect of the exercise of apparent authority even where no agency existed. The court cited with approval 2 Am Jur, Agency, § 104, as follows:
*43 We conclude that the evidence presented a question for the jury as to whether the acts of Netter were binding upon the defendant.
13. In his motion for a directed verdict, the defendant contended that there was no substantial evidence that the hops were worth 78 cents "or any other sum." This point was not presented by the assignments of error in this court and it might properly be disregarded. However, the court has seen fit to give it brief consideration.
14. Clifton Pokorny testified that he had "been in hops" around 20 years and was acquainted with the price of hops each year. He knew what hops were being sold for in the neighborhood by the growers in 1947. He testified:
He stated that the average leaf and stem contents for the year 1947 was 12 per cent; that hops having 12 per cent or less had a value of 83 cents. He testified:
Defendant's witness Eismann, who was manager in Oregon and Idaho for S.S. Steiner, Inc., hop buyers, testified:
*45 Witness Lenners testified for plaintiff as follows:
An interesting calculation will demonstrate with mathematical certainty the basis of the verdict. The weight slip furnished to plaintiffs by Netter showed gross weight 3,703 pounds, less 95 pounds "tare", or a net weight of 3,608 pounds. Clifton Pokorny had testified to a market price of 83 cents with a penny reduction for each percentage of leaf and stem content over 12 per cent. Leaf and stem content was calculated at 17 per cent. Plaintiffs' prayer was for 3,608 pounds at 83 cents less 5 cents per pound because of excessive leaf and stem content, or a total of $2,914.24. The jury must have accepted the evidence that there was 17 per cent leaf and stem content but concluded that 2 cents per pound reduction was proper instead of one cent as testified to by the plaintiff. The leaf and stem content was 5 per cent above the 12 per cent testified to by plaintiff. Eighty-three cents a pound reduced by 2 cents per pound for each percentage *46 over 12 (namely 5) would call for a reduction of 10 cents per pound. The poundage of 3,608, multiplied by 73 cents per pound, is $2,633.84, the exact amount of the verdict. While the plaintiffs' evidence might not convince this court if we were trying the case de novo, we cannot say that there was no substantial evidence to support the verdict on the issue of value.
15-17. Lastly it is contended that the court erred in sustaining the plaintiffs' objection to the testimony of Ernest Netter relating to the limitation of his authority with respect to acceptance of the hops. We have already summarized the testimony of Netter which was given out of the presence of the jury by way of an offer of proof, and which was rejected by the court. The defendant correctly states the general rule to the effect that
Ramsey v. Wellington Co., 114 Or 355, 235 P 297; Du Bois-Matlack Lbr. Co. v. Davis Lbr. Co., 149 Or 571, 42 P2d 152; 3 CJS, Agency, § 322 (b), p 275.
As of the time that the offer of proof was made, the testimony was relevant and should have been admitted. However, counsel for defendant wisely said, concerning this ruling, "Perhaps defendant was not prejudiced."
*47 It is our present duty to consider the effect of the exclusion of this evidence in the light of the verdict. The principal issue in the case was the acceptance or rejection of the hops. This issue was submitted for determination by the jury. The jury could not have returned a verdict for the plaintiffs without finding on the disputed evidence that plaintiffs were not advised of the alleged limitation of Netter's apparent authority, and that plaintiffs did not agree by Exhibit C or otherwise that Netter's acts performed in conformity with customary practice should be construed contrary to the customary conclusion that title passed thereby. The verdict must be construed as determinative of those issues in favor of plaintiffs. In view of this determination, it becomes immaterial, so far as the result is concerned, whether or not Netter received uncommunicated limitations on his apparent authority. The offered testimony of Netter was in fact less favorable to the defendant than the evidence of Williams on the same issue which was received. We hold that the error was not prejudicial and the judgment is affirmed on all points.