Case Name: Nichols, Shepard & Co. (a corporation) v. Amos Shaffer
Court: Michigan Supreme Court
Jurisdiction: Michigan
Decision Date: 1886-11-11
Citations: 63 Mich. 599
Docket Number: 
Parties: Nichols, Shepard & Co. (a corporation) v. Amos Shaffer.
Judges: The other Justices concurred.
Reporter: Michigan Reports
Volume: 63
Pages: 599–602

Head Matter:
Nichols, Shepard & Co. (a corporation) v. Amos Shaffer.
Principal and agent — Exchange of mortgage security — Ratification..
Plaintiff (a corporation) held a chattel mortgage on a threshing/ engine and other property, and in July, 1884, defendant delivered all of the property, except the engine, to an agent of plaintiff, who took a second mortgage on a portable saw-mill, conditioned the same as the first, which saw-mill was delivered to the agent, and all of the property but the engine sold under the mortgage, and the proceeds appropriated by plaintiff. The engine was replevied by plaintiff, and the main question on the trial was its alleged release in consideration of the mortgaging of the saw-mill. The court instructed the jury that the agent had no authority to make the exchange of securities, and left the question of ratification to the jury.
Held, that plaintiff could not avail itself of the saw-mill mortgage, and repudiate the consideration for which it was made; and that, whatever may have been the authority of the agent to release the engine, what he did and represented in obtaining the saw-mill mortgage bound the plaintiff, if it chose to keep and enforce that instrument, thereby ratifying his agency in taking it.
Error to Gratiot. (Hart, J.)
Argued November 4, 1886.
Decided November 11, 1886.
Replevin. Plaintiff brings error.
Affirmed.
The facts are stated in the opinion..
Wheeler & McKnight, for appellant.
O. W. Giddings, for defendant.

Opinion:
Campbell, C. J.
Plaintiff brought this suit to replevy a 10 horse-power engine, with truck and other appendages, claiming to hold it under a chattel mortgage given in April, 1883, upon this property, and upon a 17 horse-power engine and a separator, to secure $1,390 in several installments.
In July, 1884, one Adams, an agent of plaintiff, went to defendant to get the mortgaged property. Shaffer at that time gave him up all the other property, but desired to keep f.his engine. This was in fact left, and the rest taken away.
At the same time a portable saw-mill was turned over to Adams, and included in a new chattel mortgage of the same conditions as the old one. All the other property, including this saw-mill, was sold under the mortgage security. No extension of time or other legal consideration passed for the .saw-mill mortgage. The whole dispute in the case arises upon whether this was merely an additional security, or whether the saw-mill was put in upon the consideration that the property now replevied should be released from the •.mortgage. The jury found for the defendant.
If defendant and his witnesses told the truth, and the jury evidently believed them, then there was no question but that the saw-mill was intended to be a substitute for the engine, •which was released. Upon this question the verdict is conclusive, if the other difficulties suggested do not stand in the -way.
The principal contest is upon the authority of Mr. Adams. 'The court told the jury he had no authority to make the exchange, unless it was ratified, but left it to the jury to determine whether it was ratified or not. The several assignments •of error all bear upon this question of ratification.
It appears from the record that one Worden, the collecting •agent of plaintiff, went in October, 1884, to Shaffer, and wanted this engine, and did not get it, and that Shaffer claimed it had been released ; and this replevin suit was the sequel to this visit. It also appears that the saw-mill was sold on foreclosure, as well as the other property, and appropriated for the benefit of plaintiff.
There was considerable testimony concerning the value of the various articles, and about the dealings of the parties, which had some bearing on the probabilities. We see no reason why it was not admissible; and we think it was also proper to show the professions and assumptions of authority of the various agents who appeared in the matter. These .alone would not prove agency, and so the court held; but it was of the utmost importance to know on what understanding the saw-mill mortgage was given.
We have no doubt that the court was correct in its various instructions to the effect that plaintiff could not avail itself of the saw-mill mortgage, and repudiate the consideration for which it was made. Whatever may have been the authority of Adams to release the engine from the first mortgage, there can be no doubt that what he did and represented in obtaining the saw-mill mortgage bound the plaintiff, if plaintiff chose to keep and enforce that instrument. It thereby, at least, ratified his agency in taking it, and must be responsible for the manner in which it was obtained. Any other doctrine would lead to strange consequences. It could not demand or recover the property involved in this suit without restoring what was taken by its agent in lieu of it.
Whether the corporate action had become irrevocable or not before Worden's visit in October, 1884, full notice was-given then, and its liability was thereafter fixed. No attempt has been made to restore Shaffer's rights. Plaintiff has put itself upon a denial of them, and the jury has found against its denials. The issue is a very simple one, and does-not call for much discussion.
The judgment must be affirmed.
The other Justices concurred.