Court Opinion

ID: 6693556
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:43:23.12619+00
Date Added: 2024-06-11T16:01:10.650098
License: Public Domain

HANSON, Judge
(dissenting).
The judgment appealed from is inconsistent and the inequitable result should not be perpetuated by an affirmance. The rule which should be applied in the disposition of this case is expressed in 3 Am.Jur.2d, Agency, § 76, p. 479 as follows:
"Stated in terms of estoppel, the rule is that where a principal has, by his voluntary act, placed an agent in such a situation that a person of ordinary prudence conversant with business usages and the nature of the particular business is justified in assuming that such agent has authority to perform a particular act and deals with the agent upon that assumption, the principle is estopped as against such third person from denying the agent's authority; he will not be permitted to prove that the agent's authority was, in fact, less extensive than that with which he was apparently clothed. This rule has been based upon the principle that where one of two innocent parties must suffer from the wrongful act of another, the loss should fall upon the one who, by his conduct, created the circumstances which enabled *309the third party to perpetrate the wrong and cause the loss." 3 Am.Jur.2d, Agency § 76, p. 479.
The inconsistency of the judgment concerns the relationship between Leo Branscum and the Cascade Construction Company. The trial court necessarily found Branscum to be a general agent in order to hold the Cascade Company liable for rental of a storage building leased by Branscum from the defendant. However, payment by defendant to this general agent is not considered payment to the principal. These conflicting conclusions cannot be reconciled.
The Casade Company authorized Branscum to negotiate contracts and furnished him with forms. These forms provided for a down payment. Obviously the negotiating agent was empowered to collect down payments. No one else could.
Branscum negotiated the contract with defendant and accepted it on behalf of the Cascade Company by signing his name in such a manner he could either be "President" or "Representative". He then supervised the work and rented a storage building from defendant. When the work was completed Branscum offered defendant a 5% reduction if she paid in full. This was not an unusual offer and defendant, in good faith, accepted it. Branscum was the only person she dealt with at any time.
The testimony of Joseph Goott, President of the Cascade Company, is in the form of a deposition. The trial court did not have the benefit of personal observation and findings of fact based on such deposition are no more binding on this court than findings based on an affidavit. The testimony of Mr. Goott is a study in evasive double-talk and self-serving declarations. It is not, in my opinion, worthy of belief.
According to the deposition of Mr. Goott, 10,000 shares of stock were issued by the Cascade Company. He owns 9,997. Although a corporation can only act through officers, agents, or employees, Goott testified the only employees of Cascade are those in the home office. Nevertheless, crews of carpenters and workmen on the various construction projects are assigned to *310jobs by him and paid by the Casade Company. They had authority to collect contract payments. But according to Mr. Goott the carpenters were independent contractors. Similarly, Brans-cum and others like him, are referred to as “Salesmen or Contractors" who are also independent contractors. According to Goott, Branscum had no authority to accept a contract for Cascade. As he stated on page 9 of his deposition Branscum "is not representing us so he couldn't very well accept it. He would be making his own contract." He reiterated this on pages 11, 21 and 28 of his deposition. Only Mr. Goott or the Vice President could accept a contract. An acceptance of the contract by Mr. Gott or the Vice President was never made in this case. According to him the contract, in legal effect, was between Branscum as an independent contractor and defendant. The independent contractor, therefore, should have authority to collect payment for work performed by him. The Cascade Company is bound by the testimony of its President. To hold otherwise overlooks the essential element of mutuality of contract. If, according to the President of Cascade, defendant had made payment to Cascade, she would be liable to Branscum as an independent contractor. This willy-nilly mode of operation is the theme song of Cascades' operation. After the event, contracts are accepted if favorable and not accepted if unfavorable. All its agents, employes, and representatives are independent contractors so the corporation is absolved from responsibility and liability for taxes, workmen's compensation, social security, tort, and contract.
Mr. Goott further deposed that Branscum had worked for Cascade or had business dealings with the company for 12 years as a Salesman-Contractor. Although he charges Brans-cum with fraud in the present case he continues to do business with him. Before commencing this action Goott first tried to collect the money from Branscum and has his promise to pay. In doing so he apparently recognized the authority of Branscum to receive payment.
The warning on the contract to "make all checks payable to Cascade Co." should not be so literally applied it prohibits payment by an innocent debtor to an actual or apparent general *311agent. Contrary to the trial court's finding, the defendant did not testify she read this clause of the contract. She merely testified "she might have read it." The reasoning of the Arkansas court could well be adopted and applied to the facts in this case: "It cannot be said that the clause, 'Pay no money to agents,' printed on the statement of the account sent to defendant, was notice or direction to him not to pay its agent, Scolf. The plaintiff was a corporation, and, as such, could only transact its business through agents. Hence the words could mean no more than to pay no money to agents not authorized to receive it. If Scolf had authority to collect in the first instance, his authority continued at least until he had done all that was required of him in connection with the sale. He promised to come back and show the defendant how to run the recapitulator, and did so. That he had authority to do this is not denied by the plaintiff. We hold that under all the circumstances in evidence in this case that Scolf was clothed with the indicia of authority to receive the purchase price, and that the plaintiff held him out not only as its agent to travel and solicit orders, but also to collect the purchase money." American Sales Book Co. v. Cowdrey, 100 Ark. 325, 140 S.W. 134, 38 L.R.A.,N.S., 700.