Court Opinion

ID: 6686886
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:33:34.711096+00
Date Added: 2024-06-11T08:31:29.161412
License: Public Domain

FULLER, P. J.
This action was to recover a balance of $153.15 alleged to be due on two car loads of sugar purchased by respondents from the appellant corporation, through the agency of its traveling salesman, James C. McCall, during the month of September, 1902. Each car load consisted- of 300 sacks, of xoo pounds each, and upon the face of the account transmitted to respondent September 17, 1902, when the first shipment was made, the sugar was invoiced at $4.93 per hundred, less 1 per cent, discount, and a few days later, when the second car containing beet sugar was forwarded, the same was invoiced and billed to- respondent at $4.91 per hundred pounds. Without any claim that the price stated in the respective invoices received by respondents was incorrect, they made various remittances to appellant at different times, until all was paid but the sum involved in this litigation, and to prevent recovery t-hey were permitted to introduce oral testimony of a purported secret rebate slip signed by James C. McCall, which reduced the price considerably below the market value of the sugar when purchased. Appellant neither authorized nor ratified this rebate given secretly, if at all, by its traveling salesman, and was never informed of its existence until all the partial payments had been made, and respondent was being persistently urged to pay the balance. The invoices which respondents duly received state the price and terms of sale, and expressly provide that all claims must be made, not to the salesman taking the order, but at the office of appellant immediately on receipt of the shipment, and the exact question of law to be determined is whether, under all the facts and circumstances, appellant is bound by the unauthorized rebate, the giving of which will be assumed as found by the jury.
In a recent case,, one William M. Colby, the state agent of an insurance company, obtained the application of a physician for life insurance, and took his notes to the amount of the first year’s premium, but concurrently executed and delivered to such physician a writing, to- the effect that he was to examine applicants for the company to the amount of such premium, and it was held by this court that the company was not bound by such unauthorized act of its agent. In the course of the opinion, it is said: “There is nothing affixed to the signature of Colby to indicate that he was *323acting in a representative capacity for the purpose of creating an obligation on the part of the company to furnish applicants for medical examination, and, were he the defendant.in this action, it would not be competent for him to attempt' to avoid personal liability by testifyinng that he was acting in such capacity.” Dickinson v. National Life & Trust Co., 20 S. D. 437, 107 N. W. 537. The following cases are well considered and conclusive as to the point that a drummer, or traveling salesman, cannot bind his principal, in the absence of special authority by a written rebate agreement signed with his own name, and any other construction of such a transaction would materially hamper, if not virtually destroy, the effectiveness of the customary means of transacting wholesale mercantile business with retail customers. John Matthews Apparatus Co. v. Renz, 61 S. W. 9; Taylor Mfg. Co. v. Brown, 14 S. W. 1071.
Such traveling representatives of wholesale dealers are usually clothed with power to solicit sales and take orders at the market value, so when, as in this case, a reasonable price consistent with current quotations is prescribed by the wholesaler, the representative has no' authority, implied or otherwise, to enter into a secret agreement to sell for less, and the attempt to do so, when considered with the fact that the private memorandum at variance with the order was signed in his individual capacity, and did not purport to bind any one but himself, was sufficient to put a prudent purchaser upon inquiry. Concerning transactions of this character, section 1680 of the Revised Civil Code provides that “an authority expressed in general terms, however broad, does not authorize an agent to act in his own name,” and, to be binding upon the principal, the contract of an agent must generally come within the apparent scope of his authority.
The view we have taken renders further consideration of the assignments of error unnecessary, and the judgment appealed from is íeversed.