Court Opinion

ID: 9830710
Source: CourtListenerOpinion
Date Created: 2023-09-01 20:24:25.186242+00
Date Added: 2024-06-11T07:43:25.876156
License: Public Domain

On' Motion for Rehearing.
Before considering the more important question presented in this motion for rehearing, we wish to correct an error appearing in the previous statement of the evidence. The original opinion contains the following: “The erection of the building did not begin till in December, 1923.” Instead of “1923” it should have stated “1924.” The evidence shows that the appellee did not get possession of the lot until about that time.
This suit, as stated in the plaintiffs’ amended original petition, is based upon the authority of an agent, K. W. Brown, appellant’s chief roadman, to modify and annul a material provision of a written sales agreement which had been sent out from appellant’s home office, and which had been accepted and signed by the appellees as the basis of. their dealings with the appellant. In a supplemental petition filed in reply to appellant’s denial of Brown’s authority, the plaintiffs pleaded that, if Brown did not have actual authority to make such modification, he had been clothed with apparent authority to do so, and that the appellant was estopped to repudiate Brown’s acts. The grounds of estoppel alleged will be referred to later. The jury found that Brown did have actual authority to modify the original contract; but, as previously stated, we have concluded that the evidence did not warrant that finding, and the court should have sustained the appellant’s objection to the submission of that issue.
Over the objection of the appellant, the appellees were permitted to prove by both Maddox and Mitchell a parol agreement made with Brown in March, 1923, whereby the Maddox Motor Company was given the right to sell Ford ears and Ford products for a term of six years. That testimony is quoted in full in the original opinion, and need not be here repeated.' There were several objections made to the admission of that testimony, but we shall discuss only one of them. The proof shows that this conversation occurred about the 10th of March, .1923, at the time Maddox and Mitchell applied for the Ford sales agency at Pittsburg. It further appears that a few days thereafter a lengthy written sales agreement was sent from the home office of the appellant bearing the signature of the Ford Motor Company, by F. A. Atcheson, Branch Manager. That writing *918was signed in triplicate for the Maddox Motor Company by E. W. Maddox. It was dated March 14,1923, and contained stipulations directly in conflict with the previous parol , agreement which it is. alleged was made with Brown. Whether the appellees intended to accept that written contract as superseding all previous parol stipulations as to the duration of the contract relations between the parties is of no importance. That result was the legal effect of what was done, whether so intended or not. There is no claim of fraud, accident, or mistake in the execution of the written contract, and, under the well-established rules of law, its terms thereafter controlled the rights of the parties. It is to be inferred from the record that the testimony objected to was offered for the purpose of informing the jury that such a parol agreement had been made, and evidently that fact. did influence the jury in its findings. The testimony was clearly inadmissible, and should have been excluded.
If that parol agreement be excluded,' then the appellees must rely for a contract giving them the right to sell Eord cars and Eord products for a term of six years upon a second parol agreement which they claim was made with Brown in March, 1924. The testimony of Maddox regarding that agreement has been quoted at length in the original opinion. The admission of that testimony was objected to upon the ground that there was no evidence of the authority of Brown to enter into such contract and thus bind the defendant. If there was no evidence of any authority in Brown to so bind the defendant in making such parol agreement, then there must have been an absence of any evidence showing powers conferred upon Brown having the appearance of such authority. Apparent authority is based upon evidence which tends to show the existence of actual authority. Hence, undei\the objection made, if there was not sufficient evidence to show real or apparent authority in Brown to bind his principal in such a transaction, the court should have sustained • the objection to the testimony of Maddox as to the making of the second parol agreement.
We come then to consider the question, Does the record show that Brown had been clothed by his principal with powers which bore the appearance of authority to make such a parol modification of the written sales agreement? If that question should be answered in the negative, then there was no basis for the judgment tendered against the appellant in this suit. The evidence shows that Brown was known as the “chief roadman” of the appellant’s Dallas branch office. He thus testified as to what his duties were:
“I said that my duties as chief roadmen were the supervising of the work of the roadmen in the territory in their working with the dealers with an idea of assisting them in carrying on their business. As to whether or not that was the only power I had, I had numerous other detail duties around the branch, such as correspondence and various things. I had only the authority given me by the management, of that small department, that I had, the roadmen, about twelve or fifteen men, working along the lines I have just'outlined to you.' That is all the power I had, was as to having charge of the roadmen and their co-operation with the dealers, their working with the dealers.”
Both Brown and Proctor, appellant’s branch manager at Dallas, testified that Brown had no authority to make or modify the general written sales agreement with dealers that was sent out from the home office of the appellant. We have failed to find in the record any evidence to the contrary of what these two witnesses stated. We do not understand that it is now contended that Brown did have the actual authority to make such 'a modification of the written contract, but appellees insist that he had been clothed with apparent authority to do so. In response to an elaborate argument in the motion for a rehearing, we have again carefully examined the voluminous record of the evidence with a view of ascertaining if there are any facts which warrant that conclusion. The evidence relied on to show the appearance of authority consists mainly of letters written by Brown to the Maddox Motor Company and a few written to the Nichols Motor Company prior ~ to the time Maddox and Mitchell applied for the Ford contract. The proof shows that the appellant was a large-corporation, with its place of business at Detroit, Mich. Maddox testified as follows:
“I knew that an authorized Eord dealer when he goes into that business he is in a business of handling- Ford products and carrying on the business under the policy of the Ford organization, and I also knew enough about the Ford business and the handling of Eord cars to know that it was an organization that sold the entire-world.”
Maddox had occasion to become familiar with three of appellant’s written sales agreements which had been made with its dealers. One of these was made with the Nichols Motor Company in 1922, and the other two with the Maddox Motor Company through Maddox himself. None of those contracts was signed by Brown. The first was signed by A. J. Langford, the second by F. A. Atcheson, and the third by W. C. Proctor. All of those men were designated as “branch managers.” Each one of the contracts contained the provisions of paragraph 17, which expressly stipulated that the contract was determinable at the option of either party. The inclusion of such a provision in all the written contracts was, we think, sufficient to put Maddox on notice that the retention of the-right of revocation at will was a part of the policy of the Eord corporation in the conduct, of its extensive business. On January 2;. *9191924, a little more than two months before the second parol contract with Brown was made, Maddox' received the following letter from Langford, appellant’s manager at Dallas :
“To All Dealers:
“All statements or agreements contained in this letter are contingent on strikes, accidents, fires or any other causes beyond our control, and all contracts are subject to approval by the signature of a duly authorized executive ofiicer of this company. Clerical errors subject to correction.
“We have revised our Ford sales agreement to include the Lincoln and to provide for the present scale of Ford car, truck, 'tractor and parts discounts, also several minor changes, and the new agreement signed by us is submitted herewith in triplicate for your signature. Please sign all three copies, retaining one copy for your records and returning the other two copies to us.
“The new sales agreement supersedes your present Ford sales agreement which is hereby canceled as of this date.
“This letter is forwarded in duplicate so that you may indicate your understanding and acceptance of the new arrangement and the cancellation of the old agreement by affixing your signature to one copy in the space provided and returning to us for our records. Please do so at once.”
Below the signature of Langford appears that of Maddox Motor Company, by F. W. Maddox, showing that he received the letter and acquiesced in its requirements. ■ It will be noticed that this letter contained a preamble in which it is stated that “all contracts are subject to approval by the signature of a duly authorized executive officer of this company.” That same language is found on other letters received by Maddox from appellant’s Dallas office prior to the time he claims to have made the parol agreement with Brown. In view of the contention that Brown- assumed the authority to cancel contracts, attention is called to the following letter written by him to the Nichols Motor Company- at about the time when Maddox was interested with Nichols as a Ford dealer.
“Dallas, Tex. Feb. 23, 1923.
“Nichols Motor Company, Pittsburg, Tex.— Gentlemen:
“(All statements or agreements contained in this letter are contingent on strikes, accidents, fires or any other causes beyond our control, and all contracts are subject to approval by the signature of a duly authorized executive officer of this company. Clerical errors subject to correction.)
“After reviewing very carefully all reports from roadmen, together with other correspondence on that point, we have decided that for the best interest of the company it will be necessary for us to cancel sales agreement with you, and we are therefore requesting this from the home office to-day.
“You must admit yourself that we have been very lenient with you over quite a lengthly peri-
od, giving you every possible opportunity to get lined up, so you have no one now to blame but yourself.
“Ford Motor Company,
“K. W. Brown, Chief Roadman.”
That letter clearly indicated that the power of canceling contracts was lodged in the “home office.” The record does not contain any evidence that the authority to cancel a Ford sales contract had ever been exercised by Brown or by any man connected with the Dallas branch office.
Maddox admitted thkt he was familiar with paragraph 17 which appeared in all the written contracts. If that be true, he must have known that any assumption of authority by Brown to make a contract fixing a definite term of years during which the sales agreement should run was either unknown to the appellant or had been repudiated by it. After the first alleged parol agreement with Brown, two written contracts were presented to, and signed by, Maddox, both of which were accepted without objection. While it is not made clear who constituted the executive officers of the Ford corporation, the signatures to the three written contracts which came under the immediate observation of Maddox plainly indicated that Brown was not one of those executive officers who had been clothed with authority to make such contracts. If Brown had no power to make such a contract, clearly he had none to materially change it.
Complaint is made that the Ford contract is lengthy and exacting in its terms. When we consider the extensive business of a large dealer in automobiles, and the numerous agents through which its business must necessarily be conducted, it is at once apparent why so many details should be committed to writing, and why appropriate limitations should be placed upon the powers of local representatives of the company. It appears from the evidence that the sales agreements made with dealers were on printed forms sent out from the home office of the appellant, and were designed to be used in many different states and countries. That fact is indicated by the following concluding paragraph of the agreements:
“It is mutually understood this is a Michigan agreement and shall be construed as such. It is further understood by the parties hereto that this is a general selling agreement intended for use by manufacturer wherever its products may be sold, and therefore if any of its provisions shall contravene, or be invalid, under the laws of the particular state, country or jurisdiction where used, then it is agreed that such contravention or invalidity shall not invalidate the whole agreement but it shall be construed as if not containing the particular provision or provisions held to be invalid in the state, country or jurisdiction, and the rights and obligations of the parties shall be construed and enforced accordingly.”
*920Across the head of each contract are these words, in large type: “Ford Sales Agreement.” With all those facts brought to the attention of Maddox, there appears to he no substantial basis for his belief that a chief roadman like Brown had authority to annul an important provision which appeared in every printed form sent out from the appellant’s main office.
The general rule is that the principal has the right to repudiate the unauthorized contract of his agent, except when the contract has subsequently been expressly or impliedly ratified, or when an innocent third party, who has exercised proper diligence to ascertain the authority of the agent, would be injured by permitting the principal to repudiate the acts of the agent. The reason for the rule is thus stated in 2 O. J. p. 573.
“For the acts of his agent within his express authority the principal is liable, because the act of the agent is the act of the principal. For the acts of the agent within the scope of the authority which he holds the agent out as having, or knowingly permits him to assume, the principal is made responsible, because to permit him to dispute the authority of the agent in such case would be to enable him to commit a fraud upon innocent persons.”
The appellees pleaded two distinct agreements with Brown, the agent. One was made in March, 1923, and the other in March, 1924. As has been previously stated, the agreement of 1923 was superseded by the written contract executed a few days later, and for that reason that parol agreement cannot be considered as the basis for the estoppel pleaded. The question then is, Were the appellees induced by the second parol agreement to change their contractual position from what it was prior to that time, or to do anything which they had not previously bound themselves to do? While Brown denies making either of the parol agreements, we shall assume that he did make them. One who pleads an estoppel has the burden of proving the facts which constitute the estoppel. The appellees present only two things as having been induced by the second parol agreement. One is the purchase of the lot, and the other is the erection of the building thereon. We have again examined the evidence, and find no reason for changing our original conclur sion — that the lot was purchased and the building was erected in pursuance of the contract of 1923. That fact is made plain by the testimony of Maddox and the letters written by him to the appellant’s agents at Dallas.
Moreover, there is in the record no evidence that the lot and the building were not worth what they cost, or that they did not prove a profitable investment. Nor is there any evidence that the building was not useful for purposes other than those for which
it was originally designed. The only damages claimed in this suit is the loss of the profits which the appellees expected to make by a continuation of the Ford sales agency.
The motion is overruled.'