Case Name: Oil City Iron Works v. Bradley
Court: Arkansas Supreme Court
Jurisdiction: Arkansas
Decision Date: 1926-05-10
Citations: 171 Ark. 45
Docket Number: 
Parties: Oil City Iron Works v. Bradley.
Judges: 
Reporter: Arkansas Reports
Volume: 171
Pages: 45–51

Head Matter:
Oil City Iron Works v. Bradley.
Opinion delivered May 10, 1926.
G. W. Smith and B. H. Little, for appellant.
D. D. Glover and John L. McClellan, for appellee.

Opinion:
Hart, J.,
(after stating the facts). If the evidence is in conflict as to whether the promise is independent or collateral, the question is for the jury. Davis v. Patrick, 141 U. S. 479.
As was said in Emerson v. Slater, 22 How. (U. S.) 28, "whenever the main purpose and object of the promisor is not to answer for another, but to subserve some pecuniary or business purpose of his own, involving either a benefit to himself or damage to the other contracting 'party, his promise is not within the statute, although it may be in form a promise to pay the debt of another, and although the performance of it may incidentally have the effect of extinguishing that liability. ' '
Our cases on the subject support this rule. Grady v. Dierks Lumber & Coal Co., 154 Ark. 255; Black Brothers Lumber Co. v. Varner, 164 Ark. 103; and Moraz v. Melton, 167 Ark. 629.
According to the testimony of B. B. Bradley, H. V. Miller, the agent of the Oil City Iron Works, told the plaintiffs that, if they would continue on with the work and finish the well, his company would see that they got paid for their labor. This evidence, in the absence of other attending circumstances, would constitute a collateral contract to pay the debts of R. C. Houston, who had originally employed the plaintiffs to drill the well for him. The jury, however, had a right to interpret Miller's promise in the light of the surrounding circumstances and his subsequent admissions, and in that light it cannot be said that the verdict of the jury in favor of the plaintiffs is without legal evidence to support it.
The evidence shows that the Oil City Iron Works had sold to Houston a drilling rig for $12,500. He paid $5,000 in cash and gave three notes for the balance of the purchase money. Houston failed to pay the first note, and Miller gave him further time on it. Houston told Miller that the laborers were about to quit work, and Miller lent him $150 with which to pay their wages. Miller went with Houston and saw him pay this money to the laborers. After the payment was made, Miller gave them the written notice which is incorporated in our statement of facts. He had already told the laborers that, if they would continue the work and finish the well, his company would see that they got paid for their labor. He told them further that Houston owed a balance on the purchase price of the drilling rig, and in substance told them that the payment of the purchase price was to be made out of the profits from drilling the well.
When these facts are to be considered, the jury might have found that the Oil City IronWorks was primarily to be benefited by the work of the plaintiffs in drilling the well, because in that way the debt of Houston 'for the purchase price of the drilling rig would be paid to the Oil City Iron Works. In other words, the jury might have inferred that the payment by Houston of the balance of the purchase price of the drilling rig, which amounted to $7,500, depended upon the continued and successful drilling of the oil well. The jury might have inferred from this that the promise of Miller in behalf of the Oil City Iron Works was not one purely collateral, but was made to advance tbe interest of Ms company.
Houston was apparently destitute of any other' prop-' erty, and the successful performance by the plaintiffs of their drilling'operations would enable the-Oil City Iron Works to obtain the balance of the purchase price of the drilling rig: Hence the' jury might have found that the agreement of Miller in'behalf of his company was not a ', collateral contract to the obligation of Houston, but that it was an original promise for the pecuniary benefit of the Oil City Iron Works.
• It is next insisted that, conceding the • promise of Miller to be an original one, it was not within the real or apparent scope of his authority to make it.
We' cannot agree with counsel in this .contention-. According to'the'testimony of H. V. Miller, the Oil City Iron Works was engaged in the business of manufacturing and selling oil and gas well-drilling rigs', supplies and equipment, and he was' ágenfi for' the company. He sold the drilling rig in question to Houston for $12,500. ' He received $5,000 in cash and took 'three notes for $2,500 each from Houston for the balance of the purchase money. The title to the'drilling'rig was also'retained in the seller' until the notes were fully paid. Miller had full authority to -sell and collect'for the'rigs and machinery'of the kind" sold to R. C.. Houston. He had the exclusive management and control in the State Of Arkansas of fhe'business of the Oil City Iron Works. Under these circumstances 'it was at least within the apparent, if not the real, scop'e Of his authority to have made a contract with the plaintiffs "to continue drilling the oil well in Order that his' company might be paid the balance of the purchase inonéy of the drilling outfit. ' ' ' '
Ah agent may testify as to his ágency'and" the extent of the authority with which he was clothed. Pine Bluff Heading Co. v. Bock, 163 Ark. 237. As we have just seen,' Miller testified that' he had the exclusive management and control in' the State of Arkansas of the business of the Oil City''Iron Works. The general rule is that a principal is bound by all acts of a general agent which are within, the apparent scope of his authority, whether they have been authorized or not. Security Life Ins. Co. v. Bates, 144 Ark. 345; Battle v. Draper, 149 Ark. 55, and Bartlett v. Yochum, 155 Ark. 626.
It follows that the judgment must be affirmed.