Court Opinion

ID: 9776341
Source: CourtListenerOpinion
Date Created: 2023-08-29 19:30:58.135389+00
Date Added: 2024-06-11T07:32:37.530786
License: Public Domain

John B. Robbins, Judge, concurring. The majority of this court is of the opinion that the trial court’s finding that Benny Turner was acting within the scope of his authority was not clearly erroneous. While I concur with the majority in an affirmance, I believe that the trial court was clearly erroneous on this point. The trial court and majority opinion appear to rely heavily on a question which Benny Turner asked Kinko’s sales employee, Tamera Harris, when he placed the $23,000 order for the August in Arkansas brochures. He asked whether there would be any problem in charging the order to “our account.” Even if the trial court found as a matter of fact that Turner’s reference to “our account” was intended to mean Hot Stuff’s account, this is not a basis for imposing liability on Hot Stuff unless Turner was an agent of Hot Stuff and had the actual or apparent authority to incur this debt. The evidence clearly showed that Benny Turner was an agent of Hot Stuff, Inc. The evidence also showed that the scope of Turner’s agency authority was to charge to Hot Stuff’s account printing work which Kinko’s performed for Juanita’s, a restaurant owned by Hot Stuff. There was a total absence of proof, however, that Turner had any actual authority to charge to Hot Stuff’s account at Kinko’s any printing work performed for the August in Arkansas Musical Festival. Consequently, the only possible basis on which the court could find that Turner was authorized to charge the $23,162.53 printing bill to Hot Stuff’s account at Kinko’s for the August in Arkansas brochures bought by Turner was on the basis of apparent authority. Prior to this $23,000 order the average charge Turner made at Kinko’s on Hot Stuff’s account was approximately $20.00, and the largest charge was somewhere between $50.00 and $75.00.1 Kinko’s sales clerk, Tamera Harris, had some doubt as to Turner’s authority to charge such a large order because she called Carroll Lamb, Kinko’s store manager who was at home on vacation, before accepting the order. Mr. Lamb also had reservations about charging this large order to Hot Stuff’s account because he instructed Ms. Harris to verify it with Mark Abernathy, the President of Hot Stuff, Inc. Ms. Harris failed to make this verification. Apparent authority in an agent is such authority as he appears to have by reason of the actual authority which he has and such authority as a reasonably prudent man, using diligence and discretion, in view of the principal’s conduct, would naturally suppose the agent to. possess. Arkansas Poultry Fed'n Ins. Trust v. Lawrence, 34 Ark. App. 45, 805 S.W.2d 653 (1991). A person dealing with a known agent is not authorized under any circumstances to blindly trust the agent’s statements as to the extent of his power; such person must not act negligently but must use reasonable prudence to ascertain whether the agent is acting within the scope of his powers. First Pentecostal Church of Jesus Christ v. Koppers Co., 280 Ark. 101, 655 S.W.2d 403 (1983). Kinko’s was negligent in charging the $23,000 order to Hot Stuff’s account for Turner, even if the trial court could find that Turner actually requested this to be done. Negligence by one dealing with an agent does not substitute for, nor constitute, apparent authority. It is simply unreasonable for Kinko’s to believe that Turner, who had never charged anything to Hot Stuff’s account except printing for Juanita’s Restaurant and the most expensive such order was no more than $50.00 to $75.00, had authority to charge a $23,000 order to Hot Stuff for an August in Arkansas printing job. For these reasons, it is my opinion that the trial court erred in finding that Turner had apparent authority to incur the liability on Hot Stuff’s account. Kinko’s complaint against Hot Stuff also alleged ratification of Turner’s acts by Hot Stuff. This allegation was fully tried before the trial court and both parties addressed this issue on appeal. The parties treat this issue as if the trial court found that Hot Stuff did ratify Turner’s charge to Hot Stuff’s account. Although the trial court’s letter opinion and judgment do not speak to this theory of Kinko’s action, everyone appears to assume that the trial court did, so I will as well. The substance of the doctrine of ratification is the idea of confirmation after conduct; the doctrine is based on evidence of such complex factual elements as knowledge of the facts, acceptance of benefits, change of position, agency, and approval of conduct. Arnold v. All Am. Assurance Co., 255 Ark. 275, 280, 499 S.W.2d 861 (1973). Ratification proceeds upon the assumption that there has been no prior authority and constitutes a substitute therefor; it is in the nature of a cure for authorization and is equivalent to original, prior, or previous authority. Id. It is well settled in Arkansas that, when the principal has knowledge of the unauthorized acts of his agent, and remains silent when he should speak, or accepts the benefit of such acts, he cannot thereafter be heard to deny the agency but will be held to have ratified the unauthorized acts. Id. at 281-82. Ratification may be implied, rather than express, and implied ratification may be inferred from the acts and words of the principal. Id. at 282. Affirmance of an unauthorized transaction may be inferred from a failure to repudiate, or from receipt or retention of benefits of the transaction with knowledge of the facts. Id. Mark Abernathy and Benny Turner admitted they eventually became aware of the $23,000 charge to Hot Stuff’s account; with this knowledge they decided to keep the programs and sell them at the festival anyway; and would notify Kinko’s of the problem later. Based on these facts, I do not believe the trial court was clearly erroneous in finding ratification. Therefore on this basis, I would affirm.  The majority opinion suggests that Kinko’s employee, Tamera Harris, testified that Turner’s largest order was $140.00. Although Harris testified that the largest order for Juanita’s had been $140.00, she did not say that Turner was the one who incurred the $140.00 charge.