Opinion ID: 1181342
Heading Depth: 1
Heading Rank: 4

Heading: Watkins' Authority

Text: The defendant contends that there is no evidence that Watkins was authorized to execute the agreement of April 1, 1958. In our opinion, even though there was no agency in the beginning, there was evidence sufficient to warrant the jury in finding that the defendant ratified Watkins' act. 6, 7. The rule in this state upon this subject is that, if a principal, when fully notified thereof, neglects promptly to disavow an act or contract of his agent in excess of his authority, such silence will usually be interpreted as an implied ratification, and particularly so if the failure speedily to repudiate such conduct or agreement might impose upon the other party loss or injury. Hansen v. Bellman, 161 Or 373, 387, 88 P2d 295; Depot Realty Syndicate v. Enterprise Brewing Co., 87 Or 560, 575, 170 P 294, 171 P 223, LRA 1918C 1001; Reid v. Alaska Packing Co., 47 Or 215, 220, 83 P 139; Curtze v. Iron Dyke Mining Co., 46 Or 601, 606, 81 P 815. Ratification and equitable estoppel are to be distinguished. Acts and conduct amounting to an estoppel in pais in some instances amount to a ratification, but, on the other hand, ratification may be complete without any element of estoppel. Depot Realty Syndicate v. Enterprise Brewing Co., supra, 87 Or at 576; 1 Mechem on Agency (2d ed) § 454. As further stated in the Depot Realty Syndicate case, 87 Or at 574: When oral declarations are made by a party in the presence and hearing of his adversary who is under no restraint and conscious of the charge thus imputed, asserting against him an obligation which might be enforceable, or his commission of an offense, or limiting his title to property, or affecting him injuriously, it is reasonable to suppose he would promptly deny such positive declarations, if he desire to escape unfavorable inferences which might be deduced from his silence, and hence he is usually required hastily to refute such charges: 16 Cyc. 958. The rule is thus set forth in the Restatement, Agency § 94: An affirmance of an unauthorized transaction may be inferred from a failure to repudiate it. Appended to the foregoing are the following comments: a. Silence under such circumstances that, according to the ordinary experience and habits of men, one would naturally be expected to speak if he did not consent, is evidence from which assent may be inferred. Such inference may be drawn although the purported principal had no knowledge that the third person would rely upon the supposed authority of the agent; his knowledge of such fact, however, coupled with his silence, would ordinarily justify an inference of assent by him. Whether or not such an inference is to be drawn is a question for the jury, unless the case is so clear that reasonable men could come to but one conclusion. c. If a third person, who has had dealings with a purported agent, reports these to the purported principal under circumstances which reasonably justify an inference of consent unless the principal discloses his dissent, the failure of the principal to dissent within a reasonable time is, unless explained sufficient evidence of affirmance. 8. Under these principles, which are well settled, it seems to us that it was for the jury to say whether Shroyer was silent when he should have spoken, and whether his failure to disavow the agency amounted to ratification of Watkins' act. As must have been known to him and the others present, the plaintiff and Mrs. Wolfe were admitted into the conference in Hamilton Read's office for the single purpose of presenting their claim for a commission. There could have been nothing casual about their statements. The subject of their demands had already been a matter of negotiation between Jones and Shroyer. The purchase price of Blue River corporate stock had been reduced $50,000 because Jones was to be relieved from payment of the plaintiff's commission. Watkins, who signed the agreement of April 1, 1954, was present, and, as the record discloses, if he was only a timber scout when he first met Mrs. Wolfe, he had since become a negotiating agent for Shroyer. Not only did he bargain with McIntyre about the deal over the long distance telephone in Shroyer's home, but he went to British Columbia ahead of Shroyer early in May, presumably at the latter's direction, and met with McIntyre and Jones in Victoria to lay the ground work for this contract, as he testified. It is not only Shroyer's silence after the agreement of April 1 was read that is important. It is also of major significance that he heard Johnson read the plaintiff's letter agreeing to pay the former $5,000 out of closing moneys received for professional services rendered, and heard Jones' statement that he had an agreement from Shroyer and Watkins by which they have assumed and agreed to pay this $5,000 direct to me, and heard Watkins say, Yes, that's right. Obviously this payment of $5,000 was to be made out of the plaintiff's commission, and it must have been so understood by Shroyer. The testimony is that Johnson referred to an agreement with Shroyer and Watkins, not an agreement made by the latter on behalf of the former. Shroyer repudiated neither Johnson's statement nor Watkins' confirmation of it. An agreement on Shroyer's part to pay this money directly to Johnson could carry the implication that but for that agreement Shroyer was obligated to pay it to the plaintiff. The legitimate inference from the testimony is that Shroyer had taken over the plaintiff's debt to Johnson as part payment of the commission he owed to the plaintiff. There is no evidence that Shroyer attempted to disaffirm Watkins' agency until several days later when, after consulting counsel, he put his refusal to go through with the agreement signed by Watkins on the ground, not that Watkins was unauthorized, but that his agency was not in writing, thus adding to the strength of the inference to be drawn from his silence at the May 10 meeting. It is argued that the evidence of ratification is not sufficient because it is not shown that Shroyer was aware of all the facts, and, in particular, that he did not know what was the consideration for the agreement of April 1, 1954. Perhaps there is no direct evidence that he had such knowledge. But There is a broad field for legitimate inference by a jury from facts like those shown by the evidence in this case. Reid v. Miller, 205 Mass 80, 85, 91 NE 223. The jury, we think, were not bound to accept the denials of Shroyer and Watkins that the latter never told the former of the agreement with the plaintiff. As stated in 2 Am Jur 360, Agency § 454, in a somewhat different connection:    Moreover, notwithstanding the alleged principal and agent are the only witnesses called, and they both categorically deny the existence of the relation, the jury have the right to weigh and consider the whole of the evidence and the fair and reasonable inferences that might be drawn therefrom, and they may be entirely justified in disregarding the `yes or no' answers and in reaching the conclusion that the evidence as a whole is sufficient to prove the relation of agency to exist. We will briefly review the facts. Before the present transaction Shroyer and Watkins had been associated together in purchases of timber and in one mining venture. On April 1, 1954, Watkins executed the agreement upon which this action was based. On April 13 (a fact not heretofore mentioned) Watkins sent from Corvallis a telegram to the plaintiff reading as follows: WE FLY DIRECT KAMLOOPS THURSDAY SHROYER WILLING TO PUT UP EARNEST MONEY IF NECESSARY BUT WILL MAKE OWN NEGOTIATION WITH OWNER NOT THROUGH AGENT. YOU ARE PROTECTED BY YOUR COMMISSION CONTRACTS EXPLANATION IN LETTER. On April 15 Shroyer and Watkins went to British Columbia for the purpose of inspecting the Blue River timber. On April 22 the plaintiff wrote Jones and McIntyre reminding them that they had theretofore discussed the agreement of Shroyer and Watkins to pay the commission and their offer to you will be a net offer without considering commissions. On May 4 came the telephone conversations in Shroyer's home in Philomath (which is six miles from Corvallis where Watkins lives) between Watkins and McIntyre, and the ensuing telegrams of that date. Two or three days later Watkins went to Vancouver to resume the negotiations, stopping in Portland to see the plaintiff and Mrs. Wolfe and communicate to them Shroyer's suggestion of a change in the terms of payment of the commission and to tell them of the May 10 meeting for the purpose of closing the deal. Finally, a purchase price was agreed on which represents a deduction of $50,000 because of the commission element, and a contract was drawn and executed containing Shroyer's agreement to indemnify Jones against the plaintiff's claim to a commission. The jury were asked to believe that, of all the interested parties, Shroyer was the only one who did not know of the April 1 agreement, and that Watkins, his trusted agent and business associate, either wilfully or carelessly withheld that important piece of information from him. They were asked to believe that, although both Watkins and McIntyre knew of the April 1 agreement at the time they talked over the telephone on May 4, the subject of a commission was never mentioned. They were asked to believe that the contents of a telegram sent to the agent, in response to a telegram sent by the agent at the direction of the principal, were not truthfully reported by the agent. Further, they were asked to believe that, although the commission was a subject of discussion at the meeting in Read's office and Watkins, Jones, McIntyre and Johnson, who were present, knew about the agreement of April 1; and, although Watkins, and probably the others, knew that the plaintiff and Mrs. Wolfe had come to Vancouver and were waiting to present their claim, still the agreement of April 1 was never mentioned. It is almost as though there was a conspiracy of silence organized against the man who, along with Jones, was most concerned. When all these circumstances are considered in the light of the knowledge that Shroyer did in fact negotiate directly with Jones, as Watkins stipulated with the plaintiff that he might, and that he agreed with Jones to take over the latter's obligation to pay the plaintiff's commission, we think that it was competent for the jury, having in mind the normal manner in which men act, to infer that Shroyer knew what his agent knew and with that knowledge ratified the agreement. There is much to be said for the view that the evidence justified a finding that Watkins was authorized in the first instance to enter into the agreement sued upon. That issue was submitted to the jury by the court in its charge without exception on the part of the defendant. But the sufficiency of the evidence of ratification is so clear that we have been content to limit our decision to that phase of the question of agency. We think that none of the reasons urged in support of the motion for a directed verdict are valid, and that the motion was properly denied.