Court Opinion

ID: 3889198
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:18:30.997365+00
Date Added: 2024-06-11T09:56:47.631985
License: Public Domain

Agency is the relationship which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act, etc. A.L.I. Restatement Agency, § 1. Ordinarily, such manifestation of consent may *Page 270 
be by written or spoken words or other conduct of the principal which reasonably interpreted causes the agent to believe that the principal desires him so to act on the principal's account, and apparent authority may be created by written or spoken words or any other conduct of the principal which, reasonably interpreted, causes a third person to believe that the principal consents to have the act done. A.L.I. Restatement Agency, §§ 26, 27. With reference to negotiable instruments, however, we have in this state a statute (section 1723, R.C. 1919) which appears to exist in only one other jurisdiction (section 3720b-19, Carroll's Ky. Stat. 1930), providing that "the signature of any party may be made by an agent duly authorized in writing," which has been and continues to be construed by this court (State Bank v. Weeks [1922] 46 S.D. 93, 190 N.W. 806), as requiring authority to endorse to be a written authority. It must therefore follow, so far as concerns an agent's authority (either real or apparent) to indorse his principal's name in blank upon a check, that the principal's consent cannot be manifested (as would be the case but for our statute) "by written or spoken words or other conduct" which, reasonably interpreted, causes either the agent or a third person to believe that the principal desires the act to be done or consents to its being done in his behalf; by virtue of the statute, the consent of the principal must be manifested by an instrument in writing. That our law requires this particular authority to be manifested in this particular fashion must be deemed known to everyone, including respondent in this case. In view of this statute (and since appellant neither received nor retained any benefit whatever from the transaction), it would appear that no estoppel could arise unless appellant, by word or conduct, manifested to respondent that such writing existed and respondent relied and acted thereon. Cf. A.L.I. Restatement Agency, §§ 31, 167. I cannot discover in this record anything which seems to me to amount to any sort of representation by appellant to respondent that any such written authority existed. It seems to me that the majority opinion in this case (so far as concerns a principal) abrogates the statute requiring authority to indorse to be in writing and places indorsement of negotiable instruments right back under the general rule of agency (applicable where a statute does not otherwise provide) that authority may be derived from written or spoken words or conduct. Very possibly *Page 271 
our statute is unwise, but, if it is to be changed, I think it should be done by the Legislature.
It is my belief, therefore, that the judgment and order appealed from should be reversed.