Court Opinion

ID: 9719157
Source: CourtListenerOpinion
Date Created: 2023-08-26 07:44:05.619999+00
Date Added: 2024-06-11T12:24:03.926769
License: Public Domain

SUPPLEMENTAL OPINION ON DENIAL OF PETITION FOR REHEARING. Mr. JUSTICE DRUCKER delivered the opinion of the court: On January 18, 1974, this court issued its opinion affirming a judgment of the circuit court in favor of plaintiff for the return of plaintiff’s $50,000 deposit. Defendant had withheld these funds because of losses sustained as a result of certain commodities transactions which defendant claimed plaintiff authorized. Implicit in our opinion was the conclusion that Martin Scanlon, who admitted making the purchases of commodity futures, was defendant’s agent and not the agent of plaintiff. In the instant petition defendant asserts that this court misapprehended the state of the record when it found that the trial court’s determination of agency was not against the manifest weight of the evidence.* More specifically, defendant contends that Scanlon, in placing the March 20th trades, (1) was acting as plaintiff’s agent and not defendant’s agent, and (2) if he was defendant’s agent, he was acting outside the scope of his employment. To support this contention defendant relies on the facts that Scanlon received no salary from defendant and that plaintiff controlled Scanlon’s actions.  We have reviewed the record and find that the evidence overwhelmingly refutes defendant’s instant arguments. There is evidence to demonstrate that for a period of time, including the relevant dates in question, Scanlon was employed by defendant as a broker and manager of its Kansas City office. It is true, as defendant avers, that Scanlon did not receive a salary until April or May. However, he was being paid by defendant for soliciting business. Defendant asserts that Scanlon was controlled by plaintiff. It must be noted that plaintiff had a non-discretionary account with defendant. Defendant could not act without specific orders as to price, quantity and commodity. Defendant, in its opening statement to the court, characterized its business as accepting and executing orders to buy or sell. Therefore, in carrying out defendant’s activities, Scanlon was limited to executing specific buy and sell orders from plaintiff. This evidence concerning the control plaintiff had over Scanlon is not indicative of an agency relationship. It was actually defendant who exercised control over Scanlon, for the evidence demonstrated that Scanlon was limited by defendant’s margin requirements which were communicated to him. The proof presented other factors which refute defendant’s contentions: No evidence was introduced that Scanlon executed orders through any other clearing members, besides defendant; Richard Becker, defendant’s vice-president, initially told plaintiff to put all orders through Scanlon; Becker stated that any refunds must be made directly to plaintiff and could not be given to Scanlon; and with regard to the alleged transaction in March, Scanlon was the person who initiated the first conversation with plaintiff, rather than plaintiff coming to Scanlon. Defendant asserts that Scanlon looked to plaintiff for compensation and that he was only furthering his own interest, thus acting outside the scope of his employment. It bases this argument on the fact that in a prior trade (December) Scanlon received a gratuity from plaintiff. We have already noted that defendant paid Scanlon for soliciting customers. There was no evidence in the record to show that there was any agreement that plaintiff would compensate Scanlon for the alleged March trading. The most that can be said was that if plaintiff made a profit, he might have rewarded Scanlon with a gratuity. Also, any orders executed would directly benefit defendant’s interests. The executing of orders was defendant’s basic function. Defendant presented proof that a commission charge of $2700 would be due from the alleged transaction. This demonstrates that Scanlon was directly advancing defendant’s interests. Finally, we take note of the following colloquy occurring between plaintiffs counsel, defendant’s counsel and the court: “MR. COLLINS [plaintiff’s counsel]: The broker calls in the order on behalf of his own company. Scanlon, by statute, is the agent of Woodstock. THE COURT: That is my understanding. MR. COLLINS: And when Scanlon called Stavros who is also a Woodstock agent, that is two agents of the same principal talking to each other, and that conversation goes back and forth, which is self-serving, within the purview of his client’s business and not within the purview of my client. MR. ROTHBART [defendant’s counsel]: We are not denying that.” We have reviewed the cases cited by defendant and find them to be distinguishable on their facts. There was sufficient evidence in the record to support the finding that Scanlon was not plaintiff’s agent. The petition for rehearing is denied. Petition for rehearing denied. SULLIVAN, P. J., and LORENZ, J., concur.   In the original briefs filed with this court the issue of agency was raised only collaterally. Defendant alleged that Scanlon and plaintiff were acting in concert and so plaintiff should have been bound by Scanlon’s actions. No case authority was originally cited to support the contention that Scanlon was plaintiff’s agent.