Court Opinion

ID: 6689916
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:36:46.553364+00
Date Added: 2024-06-11T16:01:04.730767
License: Public Domain

POLLEY, J.
(dissenting). I am unable to agree with the •majority opinion in this case. I am aware of the rule of law that, “when an agent contracts in excess of his authority, or acts without authority, or assumes to have authority when he has none, or, for any reason, fails to bind his principal, he is himself bound’’; but to this rule there are many exceptions. Where a party dealing with a reputed agent knows the extent of the agent’s authority, or lack of authority, and knows that he cannot bind the principal unless such principal ratifies the contract, then the agent does not become personally liable. In order to hold the agent liable in such cases, the party dealing with him must have ¡been ignorant of the agent’s want of authority and must have acted upon the faith of the representations, express or implied, that the professed agent had the authority assumed. Newport et al. v. Smith, 61 Minn. 277, 63 N. W. 734. When the person dealing with a supposed agent agrees to look to the proceeds of some particular fund for the satisfaction of an obligation, or where the circumstances are such as to disclose an intention to rely upon the proceeds of such fund for satisfaction of ’an obligation, then such agent will not be held personally liable. Codding v. Munson, 52 Neb. 580, 72 N. W. 846, 66 Am. St. Rep. 512. And there is a distinction between associations formed for pecuniary gain and those formed for a public or charitable purpose. McCabe v. Goodfellow, 133 N. Y. 89, 30 N. E. 728; 17 L. R. A. 204.
“When public agents, in good* faith, contract with parties having full knowledge of the extent of their authority, or who háve equal means of knowledge with themselves, they do not become individually liable, unless the intent to incur personal responsibility is clearly expressed; although it should be found that, through ignorance of the law, they may have exceeded then-authority.” 21 R. C. L. 919.
In order to hold a public official personally liable while- acting within the scope of his apparent authority, the intent to become personally liable must -be expressly stipulated. McCurdy v. Rogers, 21 Wis. 197, 91 Am. Dec. 468; Miller v. Ford, 4 Rich. *142(S. C.) 376, 55 Am. Dec. 687. And where a party dealing with, a supposed agent has knowledge of such agent’s lack of author-: ity to bind the reputed principal, or of facts sufficient to put him upon inquiry, and he fails to avail himself of such knowledge, he cannot hold such agent personally. Thilmany v. Iowa Pape Co., 108 Iowa, 357, 79 N. W. 261, 75 Am. St. Rep. 259.
In the majority opinion, it is said that defendants voluntarily associated themselves together. This statement implies that defendants acted upon their own initiative. But this they did not do. The Governor of this state appointed defendants as -members of a commission known as the Panama-Pacific Exposition Commission of South Dakota. The purpose of creating the commission was to provide ways and means to erect a suitable building and to procure suitable exhibits at the Panama-Pacific Exposition, to be held in the city of San Francisco during the year 1915.' There was no law creating the commission; therefore it had no, legal existence. But, shortly after the appointment, the defendants, acting as such commission,' had certa11 negotiations with the plaintiff company. A meeting’ of the commission was held,at which a representative of plaintiff was present and an order for a considerable number of badges and buttons was placed with plaintiff-^-fhe idea being that the commission should resell said badges and buttons for several times their cost and, in this way,' create a fund from which to pay for such badges and buttons and still leave sufficient funds to procure the building and exhibits at the said exposition. This plan was suggested by plaintiff’s representative. He represented to defendants that the plan had succeeded in one or two other states, which he named, and assured defendants that the “buttons could easily be paid for out of the sale.” -He further told defendants that the difference between the cost price and selling price of the buttons would furnish a fund to procure the exhibit at the Exposition, “and pay for the buttons”; that it would take only a small percentage of the receipts from the sales to take care of the buttons. In fact, he said everything that could be said short of an express agreement- to look solely to the fund to be obtained from sales of the buttons for payment for same. At the trial, this same representative testified that—
“It was my impression while there [at said meeting] that the *143gentlemen whom I met, constituting this commission, were a mere commission representing the state in this matter, and that this brooch and the -buttons, and other things that were mentioned, were for the purpose of enabling the state of South Dakota to be represented at the Panama-Pacific Exposition.”
It is a further fact that, when the goods we're shipped, they were shipped to Charles MoCaffree, in -care of the Panama-Pacific Exposition 'Commission. Mr. McCaffree was the Commissioner of Immigration for the state of South Dakota.
From these undisputed facts, it is plain that defendants were acting solely in a representative capacity as members of the said commission, and with no intention of becoming personally liable; that plaintiff knew this fact; and that there is nothing in the 'circumstances of the transaction to disclose any intention on the part of the plaintiff, or of the defendants, that the latter should become personally liable.
It is said in the majority opinion that—
“There can be no question but that, if defendants had contracted in the name of the state of -South Dakota, purporting to act as agents of such state, the plaintiff, if aware of this lack of authority, could not hold them, personally liable.”
Yet this is exactly what they did do. Plaintiff admitted that it knew that the defendants -were acting solely in their capacity as public agents; and plaintiff also knew, or is charged with knowledge, that the- commission had no legal existence and could not make a contract that would be binding against the state.
• It is clear to me that, when plaintiff shipped these goods, it had such unbounded faith in the success of the enterprise that it relied wholly upon the fuhd that was to be derived from the sale of said goods. It assumed the iisk of the success- of the enterprise, and now, that that venture has proven a failure, it ought not to be allowed to compel the defendants to protect it against loss.
The judgment appealed from should be reversed, and the action dismissed, at plaintiff’s cost.