Court Opinion

ID: 3886901
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:16:22.919856+00
Date Added: 2024-06-11T14:15:30.168804
License: Public Domain

On the first of October, 1901, the defendant made his sealed note whereby he promised to pay B.S. Ellis the sum of $1,000.00; and to secure the payment thereof, executed a mortgage on certain chattels in favor of said Ellis.
The note and mortgage were executed, for the purpose of enabling Ellis to hypothecate them, in order to raise funds to the amount of $750.00, so as to satisfy a mortgage on other property belonging to the defendant, which was held by a third party.
Ellis transferred the note and mortgage to the plaintiff, in consideration of the sum of $256.82 to be advanced in cash, and the balance in groceries. The cash portion was paid to Ellis on his drafts. The groceries were shipped to Ellis, except those which were shipped directly to the defendant, amounting to $258.00.
While there are questions involved which are dependent upon the law relative to the rights of an assignee, nevertheless the controlling question arises out of the law of agency.
The acts of Ellis were expressly authorized to the extent of assigning the note and mortgage and accepting the advances in money, amounting to $256.82, and while his other acts were not authorized, they, however, were within the scope of his employment. Even conceding that the agreement to accept advances in supplies was a fraud upon the rights of the defendant, he is not in a position to complain of such fact, as Ellis was his agent. *Page 492 
In Story on Agency, Section 452, the rule is thus stated:
"It is a general doctrine of law that, although the principal is not ordinarily liable (for he sometimes is) in a criminal suit for the acts or misdeeds of his agent, unless, indeed, he has authorized or co-operated in them, yet he is held liable to third persons in a civil suit for the frauds, deceits, concealments, misrepresentations, negligences and other malfeasances, misfeasances and omissions of duty of his agent, in the course of his employment, although the principal did not authorize or justify or participate in, or indeed know of such misconduct, or even if he forbade the acts or disapproved of them. In all such cases the rule applies respondeat superior, and it is founded upon public policy and convenience, for in no other way could there be any safety to third persons in their dealings, either directly with the principal or indirectly with him, through the instrumentality of agents. In every such case the principal holds out his agent as competent and fit to be trusted, and thereby, in effect, he warrants his fidelity and good conduct in all matters within the scope of the agency."
This doctrine is sustained by the following authorities:Johnson v. R.R. Bank, 3 Strob. Eq., 263; Reynolds v.Witte, 13 S.C. 5; Rucker v. Smoke, 37 S.C. 377,16 S.E., 40; Hutchison v. Real Estate Co., 65 S.C. 45,43 S.E., 295; Mitchell v. Leach, 69 S.C. 413, 48 S.E., 290; Williams
v. Tolbert, 76 S.C. 211.
For these reasons I concur in the conclusion announced by Mr. Chief Justice Pope. *Page 493