Case Name: LAND-AIR, INC., a corporation, Appellant, v. J. Norman PARKER and Western Baptist Hospital Association, an Arizona non-profit corporation, Appellee
Court: Arizona Supreme Court
Jurisdiction: Arizona
Decision Date: 1967-12-15
Citations: 103 Ariz. 1
Docket Number: No. 8927-PR
Parties: LAND-AIR, INC., a corporation, Appellant, v. J. Norman PARKER and Western Baptist Hospital Association, an Arizona non-profit corporation, Appellee.
Judges: STRUCKMEYER and LOCKWOOD, JJ., concur.
Reporter: Arizona Reports
Volume: 103
Pages: 1–12

Head Matter:
435 P.2d 838
LAND-AIR, INC., a corporation, Appellant, v. J. Norman PARKER and Western Baptist Hospital Association, an Arizona non-profit corporation, Appellee.
No. 8927-PR.
Supreme Court of Arizona, In Banc.
Dec. 15, 1967.
Rehearing Denied Jan. 23, 1968.
Thayer C. Lindauer, Phoenix, for appellant.
John E. Savoy, Hill, Savoy & Flickinger, Phoenix, for appellee Western Baptist Hospital Association.
James J. Cox, Jr., Cox & Hedberg, Phoenix, for appellee J. Norman Parker.

Opinion:
McFARLAND, Vice Chief Justice:
Petitioners, Dr. J. Norman Parker and Western Baptist Hospital Association, who were appellee-defendants, petitioned for review of the Court of Appeals decision (Land-Air, Inc. v. J. Norman Parker and Western Baptist Hospital Association, 4 Ariz.App. 395, 420 P.2d 967), which reversed a Superior Court of Maricopa County judgment rendered in their favor. We granted the petition for review.
Land-Air, Inc., plaintiff in the trial court and respondent herein, hereinafter referred to as Land-Air, brought this action to replevy equipment under the contracts executed by petitioner-defendant Dr. J. Norman Parker, hereinafter designated as Parker, or, in the alternative, for damages and attorneys' fees. Parker admitted the execution of the contracts, but denied that he was present owner of the equipment and denied liability on the ground that the conditional sales contracts were cancelled, terminated, and novated by a refinancing agreement. At the pre-trial hearing, upon stipulation by the parties, it was agreed that one issue would be tried — i. e., whether the conditional sales contracts between Land-Air as assignee and Parker had been cancelled and novated by reason of a subsequent agreement. The trial court heard the cause without a jury, and granted judgment for Parker and Baptist Hospital. From that judgment Land-Air appealed to the Court of Appeals, which reversed in favor of Land-Air.
Land-Air is a manufacturer and distributor of X-ray equipment. One of its X-ray machines and additional equipment were sold to Parker by Allied Medical Supply, hereinafter designated Allied, a retailer handling some of Land-Air's products. Parker, an osteopathic physician, made a down payment on the purchase and executed two conditional sales contracts covering the balance due. Allied assigned these contracts in turn to Land-Air, assignee, who retained a right of recourse against Allied. Due notice of the assignment was given to Parker,
The principal question in this case is whether Allied was an agent of Land-Air, with authority to cancel the conditional sales contracts between Parker and Land-Air as assignee and enter into novation. This court has set forth four conditions under which agency could be proved.
1. By direct evidence of an express contract of agency between principal and agent.
2. Proof of facts which raise the implication of such a contract — agency does not have to be proved by direct testimony; it may be proved as any other fact and may be established from other circumstances such as relation of the parties to each other and to the subject matter.
3. By ratification.
4. By estoppel.
Bristol v. Moser, 55 Ariz. 185, 99 P.2d 706; Litchfield v. Green, 43 Ariz. 509, 33 P.2d 290; Little v. Brown, 40 Ariz. 206, 11 P.2d 610. The question then in the instant case is whether the facts prove agency under any of these principles of law.
If Parker is to establish agency, it may be shown by the facts and circumstances of the relationship of the parties under No. 2 above. The lower court found from facts and circumstances presented that Allied was the agent of Land-Air with authority to enter into a novation of the contracts. Under established principles of appellate procedure, we must affirm the trial court if "we can on any reasonable view of the evidence deduce therefrom facts which, on any theory of the law, would sustain the judgment." Colvin v. Superior Equipment Co., 96 Ariz. 113, 392 P.2d 778; Babbitt & Cowden Livestock Co. v. Hooker, 28 Ariz. 263, 236 P. 722.
Parker entered into the conditional sales contracts with Allied, a New Mexico corporation, for the purchase of the equipment in question. On September 23, 1959, Allied assigned and transferred the contracts to Land-Air, with recourse. Parker acknowledged notification of the assignment, which acknowledgment was dated September 21, 1959. In May 1961 Parker became delinquent in the payments under the contracts.
Parker failed to make subsequent payments on the contracts despite several letters from Land-Air asking him to do so. As a result, Land-Air then contacted Allied, its dealer, in hopes that something could be done to get Parker to make the overdue payments. The matter came to the attention of James E. Hare at Allied who, in turn, met with Parker.
Because Parker contended that he was unable to make the payments, Hare conceived of an arrangement whereby the equipment in question, without being removed from Parker's office, could be sold to Nationwide Leasing Co., which in turn would lease the equipment back to Parker. Both Parker and Nationwide agreed to this arrangement. Hare, who received $6,344.80 from Nationwide as the "purchase" price, then conveniently disappeared, while Allied became defunct.
Sometime after the sale and lease-with-an-option-to-purchase agreement between Nationwide and Parker, Nationwide, as assignor, assigned its interest to Exchange National Bank. Parker made payments under his agreement with Nationwide until August 1962, when his lease-option-to-pur chase was assumed by the Children's Osteopathic Hospital, with the approval of Exchange National Bank, the assignee of Nationwide, under an assumption agreement wherein the Children's Hospital agreed to pay the obligations under the lease agreement. Thereafter the equipment was moved to the Children's Hospital in Phoenix, Arizona. Subsequent thereto, the Children's Hospital defaulted under its contract, and Exchange National Bank then brought suit against Parker and Children's Hospital to recover the equipment, and also instituted suit against Parker for a deficiency which had been paid in full by Pai-ker at the time of the trial below. The other defendant in the instant case, Western Baptist Hospital Association, then acquired possession of the equipment. No demand was made upon Parker by Land-Air from the completion of these transactions with Allied and Nationwide from June IS, 1961, until a few days before the original complaint was filed in September 1962 — a period of over fourteen months.
Edward H. Jackson, credit manager for Land-Aii-, testified, in part, as follows:
"A There is a differentiation between a follow up of an accounts receivable and a follow up of an assigned contract. After a certain period of time on an assigned contract where a letter or two has not brought any results it is then referred back to the dealer.
"Q And you expect the dealer to make the collection for you?
"A Not for me, he either collects it or settles the account in order to avoid his having to repurchase the equipment or contract.
"Q He collects the account or settles it so that he's not going to have to rebuy it back from you ?
"A That's right.
"Q But he did these things while you were the owner of the account? Let me be specific; in this case you did not reassign this contract to Allied Medical, did you?
"A No, it's not the practice as a rule to immediately reassign it then you'd be going back and forth.
"A [sic.] You went back to the dealer who was Allied Medical and told them that either collect the account or settle the account or you were going to go back on them on this recourse, is that right?
"A That's correct.

"Q So your testimony is that of February 20, 1961, or perhaps prior to that time, you went back to Allied Medical Supply and told Allied Medical Supply either to collect this account or settle it or they were going to have to pay it, isn't that right ?
"A I did not use the term 'collect'. I used—
"Q — didn't you just testify to that?
"A I don't believe I used the word 'collect', no.
"Q That's not your testimony, is that right ?
"A The basis around whether you use the word collect or not, actually what we tell them to do is obtain payment from them and under a contract we ask them to obtain payment from them.
"Q Obtain payment or settlement, wasn't that your testimony a minute ago?
"A That's right, or they have to settle it themselves, because—
"Q —If they have to settle it themselves it becomes an account they owe you, isn't that right?
"A We would not release the papers naturally until we were paid for them, that's why it would not be reassigned unless they did remit to us for it.
"Q But on February 20, 1961, that was the status of this Parker receivable, isn't that so ?
"A That's right, that they were subject to.
"Q February 20 on you ceased any effort whatever to collect it from Dr. Parker, isn't that so?
"A We made no direct contact with Dr. Parker.
"Q How did you make any kind of contact?
"A We would go through Medical Supply, this is a common practice.
"Q They were the ones that were supposed to do the collecting?
"A The ones that were to get the doctor to renew his paying schedule.
"Q After Allied went defunct then you decided to sue Dr. Parker, is that right?
"A We had no choice.
*
"Q It would have been perfectly all right for Allied Medical Supply to receive the money from Dr.. Parker, you wanted them to do it, didn't you ?
"A That's correct, if they received it."
It will be noted that Allied had authority to collect under the original conditional sales agreements between Parker and Allied which were assigned to Land-Air, as was found by the lower court. It will also be noted that he was directed to collect the account or settle it. Parker was evidently involved in employment difficulties during the time of this transaction. At the same time Allied was a corporation, currently engaged in dealings of this magnitude, with which Land-Air was familiar and had dealt.
Under this state of the evidence, the lower court could well have found that Land-Air had abandoned any further attempts to collect from Parker and that whatever negotiations Allied chose to make with Parker would be of little concern to Land-Air, as it could not jeopardize what was already considered a lost cause. While the account had not been reassigned to Allied, it is plain from the evidence that Land-Air was looking to Allied alone for payment; it expected Allied either to get Parker to resume payment or to make some kind of settlement by which Allied could make the payments itself. This is shown by the testimony of Jackson, as set forth above. Also, it is to be noted from the testimony quoted that after Allied went defunct, Land-Air then decided to sue Parker. It had no other choice.
The trial court's conclusion that Allied was given authority to do those acts which it did in fact perform is quite logical in the light of Land-Air's seeming unconcern with any further efforts to enforce Parker's personal obligation. After the account had been "referred back" to Allied, Land-Air made no contact with Parker for over fourteen months, and it was not until after Allied became defunct that counsel for Land-Air even telephoned Dr. Parker.
Facts which further support the lower court's finding of a broad grant of authority by Land-Air to its agent Allied are: (1) Land-Air, by choosing Allied to act in its behalf, chose the very party with whom Parker had previously dealt, and who — during its previous dealings with Parker — had been unfettered by any bonds of agency, and in whose judgment Parker might be expected to rely; (2) Allied was not an ordinary collection agency, but instead was a dealer in this type of equipment and as such was familiar with contractual agreements ranging well beyond the scope of mere collection; (3) The only further contact with Parker was done by Allied without further supervision by Land-Air; and (4) The use of such broad terms as "settle" and "referred back" by the witness for Land-Air's description of the arrangements between Land-Air and Allied.
It is settled that agency may be proved to exist by a showing of facts which raise the implication of such a contract.
" It is susceptible of proof as is any other fact and may be established from the circumstances, such as the relation of the parties to each other and to the subject-matter, their acts and conduct. " Little v. Brown, supra, 40 Ariz. at 214, 11 P.2d at 613
The trial court found on the facts presented that the agency power in question did exist. As we have previously held, the fact that we, as individuals, might have taken a contrary view, does not authorize a reversal of a judgment. Standard Oil Co. of Calif. v. Shields, 58 Ariz. 239, 119 P.2d 116; Richfield Oil Co. v. Estes, 55 Ariz. 81, 98 P.2d 851.
The facts clearly show that Allied had authority to collect. However, the law is well settled that the power to collect does not give an agent authority to compromise or to release any part of a debt. In the instant case, the agent had not only the power to collect, but, according to the testimony, he had the power to settle. The word "settle" could be construed to have different meanings. But there can be little question but what it added something to the power to collect. The question then is whether the evidence which showed that there was an undisputed power to collect and a power to settle with the turning over of the account to Allied who was Land-Air's own licensed representative and who had made the original sale of the equipment to Parker, for collection or settlement — coupled with the testimony of the credit manager Jackson that after the first contacts with Parker, Land-Air had made no other direct contacts for some fourteen months, and that Land-Air looked only to Allied for payment, is sufficient to support a finding of the trial court that Allied was an agent with authority to compromise or novate the contract. We agree with the trial court that the evidence is sufficient. To hold otherwise is to disregard all of the testimony except that Allied had authority to collect.
The decision of the Court of Appeals is vacated; judgment of the Superior Court affirmed.
STRUCKMEYER and LOCKWOOD, JJ., concur.
. Implied agency, as the majority uses the term, has been defined in the following manner: " ' Implied agency is actual agency and the difference between it and express agency is mainly one of method of px-oof.' [T]he word 'implied' simply means that we have no proof of express authorization but think the appearances warx-ant a finding that in some way the agent was authorized to [act] ' " Mechem, Law of Agency, § 56 (4th ed. 1952).