Court Opinion

ID: 6639927
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:44:38.18806+00
Date Added: 2024-06-11T15:59:12.229220
License: Public Domain

MR. CHIEF JUSTICE BRANTLY,
after stating the case, delivered the opinion of the Court.
A reversal of the judgment herein is sought upon two grounds: (1) That the trial court erred in admitting in evidence the paper purporting to be a bill of sale executed by P. A. H. Franklin, as manager for the Hope Mining Company; and (2) that it committed error in refusing to give instruction No. 6, as requested by defendant, as follows: “An authority of Franklin to make the sale of the property in controversy, as it is claimed by plaintiffs that he did, cannot be implied from evidence that he did attempt to make the sale in question. ’ ’
1. No principle of law is more clearly settled than that an agent to whom is intrusted by a corporation the management *264of its local affairs, whether such agent be designated as president, general manager, or superintendent, may bind his principal by contracts which are necessary, proper, or usual to be made in the ordinary prosecution of its business. (Thompson on Corporations, Sec. 4850; Victoria Gold Mining Co. v. Fraser, 2 Colo. App. 14, 29 Pac. 667; Sparks v. Dispatch Transfer Co., 104 Mo. 531, 15 S. W. 417, 12 L. R. A. 714; Ceeder v. Lumber Co., 86 Mich. 541, 49 N. W. 575; Stokes v. Jersey Pottery Co., 46 N. J. Law, 237; Georgia Military Academy v. Estill, 77 Ga. 409.) The fact that he occupies, by the consent of the board of directors, the position of such an agent, implies, without further proof, the authority to do anything which the corporation itself may do, so long as the act done pertains to the ordinary business of. the company. (Mathias v. White Sulphur Springs Association, 19 Mont. 359, 48 Pac. 624; Ceeder v. Lumber Co., supra; Adams Mining Co. v. Senter, 26 Mich. 76; Marlatt v. Levee Steam Cotton Press Co., 10 La. 583; Siebe v. J. Hendy Machine Works, 86 Cal. 391, 25 Pac. 14.) Even where the contract in question pertains to matters without the ordinary course of business, but within the power of the corporation, — that is, such as is not prohibited by its charter or by express provision of law, —the authority of the agent may be established by proof of the “course of business between the parties themselves; by the usages and practice which the company may have permitted.to grow up in its business; and by the knowledge which the board, charged with the duty of controlling and conducting the transactions and property of the corporation, had, or must be presumed to have had, of the acts and doings of its subordinates in and about the affairs of the corporation. ’ ’ (Mahoney Mining Co. v. Anglo-Californian Bank, 104 U. S. 192, 26 L. Ed. 707. See, also, Martin v. Webb, 110 U. S. 7, 3 Sup. Ct. 428, 28 L. Ed. 49; Sparks v. Transfer Co., supra.) “There is no reason, and can be no legal principle, which will put the agent of a corporation on any different footing than the agent of an individual in regard to the same business. ’ ’ (Ceeder v. Lumber Co., supra.)
*265Applying these general principles to the facts in this ease, what rights, if any, did L. C. Trent & Co. acquire under the instrument in question? This instrument is denominated in the record a bill of sale. ” It is clear from an inspection of it, however, in the light of the facts surrounding its execution, that it is in fact, and was intended to be, a pledge of the Bryan mills as security for the price of the Chilian mills, which fell due on February 28, 1897. The ground of the objection to its introduction in evidence was, among others, that the proof did not show either an express or implied authority to enter into the arrangement disclosed by it. The proofs presented by the plaintiffs show that Franklin was in fact the superintendent of the mining and milling operations of the company at Basin, and not the general manager. One W. D. Field was the business manager, and had control over the finances of the corporation. Pitner was the president, and in supreme charge of its local affairs. The checks of the company were signed by Field under authority of Pitner, and countersigned by Franklin. Some time before the date of the transaction in question, Franklin had exceeded his authority by depositing the company’s money in his own name and issuing his personal checks; but this had been stopped by Pitner as soon as it came to his knowledge. In one instance, before the purchase of the Chilian mills from plaintiffs, Franklin had contracted for machinery, and signed the contract as manager. There was no proof that he had any authority from the directors to sell or pledge the property of the company, nor that he had ever assumed authority to do so before. Assuming that, by acquiescence by the compauy in his previous conduct, he had the implied authority to purchase machinery for use in the mills, and pledge the credit of the company for it, it does not therefore follow that he was authorized to sell or pledge the property thus purchased. Buying and selling, or pledging, are acts of a different nature. An authority to do the one by no means implies the authority to do the other; and, when it is sought to show an implied authority in the agent to do the act in question by proof of consent or *266acquiescence of the principal, this can be done only by proof of consent to, or acquiescence in, acts of a similar nature, or by proof of such acts as tend to show a general power. (1 Am. & Eng. Ency. Law (2nd Ed.), 1002; McAlpin v. Cassidy, 17 Tex. 449; Rankin v. Mining Co., 4 Nev. 78; Thompson on Corporations, Sec. 4633.) The fact that Franklin, on two occasions, assumed to act as general manager of the business of the company in the purchase of machinery for use in the mill at Basin, does not in any way tend to show such a usage or practice in its affairs as that one dealing with him would be justified in acting upon the presumption that he had authority to execute the instrument in question.
Nor do we think the proof tends in any way to establish a ratification of the transaction on the part of the company. The proof on this point is meager and unsatisfactory at best, for it rests entirely upon a conflict of statement between Pitner and L. C. Trent. At most it shows merely that Pitner had referred Trent to Franklin, and had knowledge of some sort of an arrangement about the matter, made between them at the McDermott hotel in Butte. True, it appeared from defendant’s proof that Pitner was authorized by tbe by-laws of the company to make contracts for the purchase and sale of all property bought or sold by the company; but there was no power given him to delegate this authority to any other person. It is the rule that in the absence of authority, either express or implied, to employ a subagent, the trust committed to the agent is personal, and cannot be delegated to another. (Mechem on Agency, Sec. 185.) This is especially true where the performance of the agency requires the exercise of special skill, judgment or discretion. (Id. Sec. 186.) There was no proof tending to show that the directors ever knew anything of the transaction. Upon the theory, therefore, that the company could confer upon Pitner the authority to sell any or all of its property in Montana, whenever, in his judgment, it might be proper to do so, and that this authority included the power to mortgage or pledge the property at his discretion,' he could not, unless also clothed by the company *267with the power of substitution, delegate this trust to Franklin. If he could not delegate this trust to Franklin, neither could he under the circumstances, ratify Franklin’s act, at least not until he was fully informed of the nature of it, which did not occur until long after the rights of the Eisdon Iron & Locomotive Works had accrued under the attachment in defendant’s hands. It was then out of Pitner’s power to defeat the rights of the attaching creditor by any act of ratification.
The instrument in question not being prima facie binding upon the corporation, because not executed by Franklin within the scope of his authority in the ordinary course of business, and the proof having failed to show that it was authorized by the usage of the business, or ratified by the company, it was clearly not competent evidence in favor of the plaintiffs, and should have been excluded.
2. To comment upon the instruction requested and refused would be to reiterate in large measure what has already been said. The making of the contract was clearly not within the scope of the ordinary authority of the superintendent. It was not prima facie binding upon the company. The fact that Franklin did attempt to enter into it did not tend in any way to show that he had the implied authority to make it. Even proof of previous acts of the same kind on his part would not be sufficient to show an implied authority from the company, unless it be also shown that they were done so frequently, and under such circumstances, as to warrant the inference that it was the custom or usual course of the business. (Bank of Deer Lodge v. Hope Mining Co., 3 Mont. 146; Helena Nat'l Bank v. Rocky Mt. Tel. Co., 20 Mont. 379, 51 Pac. 829.) The jury should therefore have been instructed as defendant requested.
It is ordered that the judgment and order appealed from be reversed, and that a new trial be granted.

Reversed and remanded.

Mr. Justice Word, not having been a member of the Court when this case was argued, took no part in the decision.