Court Opinion

ID: 9827939
Source: CourtListenerOpinion
Date Created: 2023-09-01 17:56:52.12726+00
Date Added: 2024-06-11T07:42:39.639627
License: Public Domain

On Motion for Rehearing. ,
Appellant presents an extended argument with citation of many authorities to show that in the absence of a plea of estoppel plaintiffs were in no position to rely on the apparent scope of authority in Bruce Whitson to bind appellant by the contract made by it with J. Hall Hadley, as found by the jury. The argument is directed chiefly to the language “apparent scope of authority” used in our original opinion. Many of the authorities cited do hold that a plea of estoppel is necessary as a basis for reliance upon apparent scope of authority of an agent when the agent is without authority in fact to bind his principal in certain transactions. But we believe those authorities are distinguishable from the present suit on the facts. We believe they are applicable only when the agent is acting beyond the apparent scope of his authority, and that they were not intended to contravene the rule announced in 2 Tex.Jur. § 39, p. 425, as follows:
“The doctrine of apparent authority embodies a principle of the common law which has been called ‘the foundation of the law of agency.’ This doctrine may be stated as follows: When a principal has placed an agent in such situation that a person of ordinary prudence, conversant with business usages and the nature of the particular business, is led to believe that the agent has authority to perform acts usually done in a business of that kind, one dealing with the agent is justified in presuming such authority to have been given. Having by creation of the agency bestowed upon his representative a certain character, the principal will not be heard to assert, as against third persons dealing upon the faith of that character, that he did not intend to confer so much authority. Such persons have the right to conclude that the principal intended that the agent should have and exercise those powers which properly and legitimately belong to the character in which he holds him out. As the rule has been tersely put: ‘A principal is equally bound by the authority which he actually gives, and by that which by his own act he appears to give’, and an act of the agent within the scope of his apparent authority ‘is as binding on the principal as if the agent was actually possessed of the authority.’
*888“The question in all cases of apparent authority is, not what was the authority actually given ? but, what would a third person dealing with the agent as such be justified in believing his authority to be?”
The expression “apparent authority’\is often used as synonymous with “implied authority,” and such was the meaning intended in ortr original opinion.
We quote the following from 21 R.G.L. § 34, pp. 8S5 and 856:
“The liability of the principal is not limited to such acts of the agent as are expressly authorized or necessarily implied from express authority. All such acts of the agent as are within the apparent scope of the authority conferred on him are also binding upon the principal, apparent authority being that which, though not actually granted, the principal knowingly permits the agent to exercise, or which he holds him out as possessing. By implication the authority of the agent is enlarged when the principal permits him to do acts not expressly authorized, or which are recognized as valid after they have been done. And the actual instructions from principal to agent do not govern the casé, unless the person dealing with him had notice or was put upon inquiry as to his real authority. Apparent authority may be and often is derived from a course of dealing, or from a number of acts assented to or not disavowed. „* * * The apparent authority of an agent to act as the representative of his principal is to be gathered from all the facts and circumstances in evidence, and ordinarily this is a' question of fact for the jury’s determination.”
And the following from 1 Mecham on Agency (2d Ed.) § 720, p. 509:
“It is also frequently said that the principal will be bound to third persons by acts within the ‘apparent authority’ of the agent, even though they would not be within his real authority. The expression ‘apparent authority’, however, though,one of constant use in this connection, seems rtnfortunately to have no fixed meaning. It seems naturally to suggest a distinction between what is real and what.is only apparent; though such a distinction is not essential, since what is apparent may be real and what is real may be apparent.”
And again on page 722, § 510:
“So far as powers depend upon what is usual or necessary in special cases, and so far as they are regarded as incidental to the main authority conferred ■ because that is-the regular and .ordinary way of doing the business, they do not rest upon any doctrine of estoppel, but are inferences of fact tracing their origin to the same source as the main power itself. So far as third persons are concerned, who can know only that which is open to be learned, they constitute part of the actual authority though commonly included under the description of apparent authority. In other words, so far as third persons are concerned, this apparent authority is included in the real authority.”
Reed v. Hester (Tex.Com.App.) 44 S.W.(2d) 1107.
See, also, Thompson v. Keys (Tex.Civ.App.) 162 S.W. 1196, for definition of apparent authority of an agent.
Appellant stresses the recital in the contract in controversy known to appellee at the time that the same would be subject to approval by J. C. McCoy at appellant’s home office in Tulsa, Old. That stipulation necessarily implied authority in Whitson to negotiate sales in the first instance, and it does not imply that a contract of sale made by the agent who was employed for that purpose would not be approved by the home office, even though it should be said that as a matter of precaution a person in the exercise of ordinary diligence would wait for confirmation of the contract of sale before acting under it. And it is to be noted in this connection that no testimony was introduced to show appellant’s disapproval of the contract after it was made until this controversy arose.
If appellees were forced to rely upon the rule of estoppel in order to sustain the defense urged, and if the rule of apparent authority does not obtain, then, even though it were shown that the contract was approved by J. C. McCoy and H. C. Scott, appellant’s representatives in Tulsa, appel-lees would be required to go further and prove that such authority in them arose from some action of appellant’s board of directors or stockholders. The unreasonableness of such a requirement lies at the foundation of the doctrine of apparent authority of the agent.
We have carefully considered authorities cited to support the further contention that since the account sued on showed a prima facie right of recovery without resort to the primary agreement for the sale of items shown in the account, the vice in that agreement was no bar to the suit.
*889For the reasons stated in our original opinion, we do not believe those authorities are controlling in this case.
The motion for rehearing is overruled.