Court Opinion

ID: 5006637
Source: CourtListenerOpinion
Date Created: 2021-10-01 02:09:42.517256+00
Date Added: 2024-06-11T08:17:17.416074
License: Public Domain

On Rehearing.
The earnestness with which appellee presents the question of estoppel in his motion for rehearing has caused us to reconsider that entire question. The essence of the contention is that, by its act in intrusting its agent with its corporate seal, thereby clothing him with the indicia of authority, the appellant placed him in such a position that a person of ordinary prudence, under the circumstances, and in the position of the clerk, dealing with such agent, had the right to assume that the instrument signed by such agent in behalf of the company and impressed with the corporate seal was the act of appellant. The only act of appellant upon which an estoppel could be predicated was the simple act of intrusting its agent with its corporate seal. The rule, that the fact that the corporate seal is impressed on an instrument affords prima facie evidence that the execution thereof was authorized, is a rule of evidence. It does not follow, we think, that a person dealing with an agent has the right to assume his authority simply because he has a seal. So to hold would, in effect, make the prima facie presumption conclusive. The theory insisted upon is in conflict with the holding of our Supreme Court in Fitzhugh v. Eranco-Texas Land Co., 81 Tex. 306, 16 S. W. 1078.
The motion contains this suggestion: “Under the court’s holding in this case a corporation, which has not given its agent authority to execute a particular kind of bond, but has given him authority to execute some kinds of bonds and intrusted him with its corporate seal, is placed in a position, whereby it may accept the benefit of bonds executed by its agent without authority, and on which its, corporate seal is impressed by said agent, where no occasion arises for liability thereon; but, if occasion for liability arises, and the corporation is sued on the bond, then the corporation can go into court and plead that, although it had given its agent authority to execute certain bonds and intrusted him with its corporate seal and placed him in a position where an ordinary prudent person dealing with him would presume from the use of such corporate seal on an instrument, purporting to be executed by the company, that said agent did not have authority to execute such instrument and the corporation is not therefore liable; and this applies generally whether the instrument be a deed, bond or some other sort of instrument.”
Our holding does not go to the extent of denying the existence of estoppel, had the company accepted the benefit of executing this bond. No premium was paid to, or received by, the company or its agent. Let us consider what would be the effect of a holding that a corporation is estopped to question the authority of its agent to sign any character of bond simply because it furnishes to that agent its corporate seal. In order to have an agent it is necessary that he be furnished with a corporate seal so as to execute the bonds which he is authorized to execute. If, by intrusting him with a corporate seal, the corporation thereby estops itself to deny his authority to execute any and all kinds of bonds in any amount which he might choose, no surety company could transact business through an agent The only method by which it could protect itself from liability, and at the same time transact business, was employed in this case. It gave to its agent a written power of attorney, and that agent signed the bond as attorney in fact, thereby giving notice to all persons dealing with him that his powers were limited by a written instrument. With that warning, one dealing with that agent has no right to assume that he has unlimited powers simply because he has a corporate seal necessary to the transaction of any business at all, and on the faith of that assumption hold the surety company liable on bonds which it did not and would not authorize its agent to write. Under appellee’s theory, had this agent written a supersedeas bond for $100,000, on the basis of which execution had been stayed while the case was pending on appeal, the company would have been estopped to deny liability on the bond.. This theory, we think,' should be rejected.
We believe a proper disposition was .made of this case in the original opinion, and the motion for rehearing is overruled.