Court Opinion

ID: 6876153
Source: CourtListenerOpinion
Date Created: 2022-07-23 21:08:01.358207+00
Date Added: 2024-06-11T16:05:29.943801
License: Public Domain

MATHEWS, Circuit Judge
(dissenting in part).
That Turrish had no express authority to make any of the questioned transfers is conceded. Did he have implied authority? Authority to act for a corporation may be implied from its long continued acquiescence in a course of conduct pursued by an officer or other person assuming to act as its agent. Martin v. Webb, 110 U.S. 7, 14, 3 S.Ct. 428, 28 L.Ed. 49; Calvert v. Idaho Stage Co., 25 Or. 412, 414, 36 P. 24, 25; Neppach v. Oregon & California R. Co., 46 Or. 374, 392, 80 P. 482, 485, 7 Ann.Cas. 1035. Though implied, not express, such authority is actual, not merely apparent. 2 C.J.S., Agency, §§ 91, 99, pp. 1186, 1227.
Here, we have an unchallenged finding1 that, over a long period of years, including the period of the questioned transfers, Nehalem’s business and affairs were handled by Turrish, and that his handling of them was acquiesced in and consented to by Nehalem. There is, however, no finding, nor any evidence which would have warranted a finding, that Nehalem acquiesced in or consented to any act or thing done by Turrish otherwise than in the ordinary course of handling its business and affairs. I conclude, therefore, as did the trial court, that Turrish had implied authority to act for Nehalem, as its agent, and, as such agent, to dispose of its personal property, including its stock in defendant, in the ordinary course of handling its business and affairs, hut not otherwise. Turrish’s implied authority did not, of course, include any authority to appropriate Nehalem’s property to his own use, or to permit others to appropriate it. Wen Kroy Realty Co. v. Public National Bank & Trust Co., 260 N.Y. 84, 183 N.E. 73.
The trial court found that the Turrishes and Keiths did' appropriate to their own use the 3,400 shares of stock here involved. Defendant says there is no evidence that the shares were misappropriated. It is true no witness so testified, but defendant’s counsel, at the hearing before the referee, made an opening statement reading, in part, as follows;
“I agree with [the plaintiff’s counsel] as to the rules of law generally applicable * * * but I think that there is a false premise in its application to the circumstances that will be disclosed by the testimony here. This case, in truth, is not one involving any lack of authority. It is one involving a misuse of authority. There is the essential difference, and I don’t think it requires any very thorough analysis or discussion of the rules of law applicable to make clear that that is the situation that we have before us here, and that, in the case of misuse of authority, not lack of authority, there could be no burden placed upon the third party to ascertain, not merely whether there was authority to do this, but whether that authority was being exercised properly or improperly.
“Now we shall treat these transfers of stock as misappropriations by Turrish and Keith, or one or both, or all three of them, as misappropriations. But the precise question upon which any supposed liability of [defendant] turns is whether or not a person endorsing and surrendering certificates for transfer had authority to endorse and surrender those certificates for transfer, and, if so, that is the end of the matter, regardless of any misappropriations which might be accomplished in the exercise of that authority. * * * Now then, if the owner vests general authority in a person, in an agent, to sign for him,, and that authority is exercised as given, but a misappropriation undertaken by the agent, that does not affect a third party. * * * All the bylaw does is to give general authority in the president to endorse these documents for transfer purposes, and if, with such authority vested by such a bylaw,2 the president goes ahead and has the stock transferred to his wife or to anyone else and effects a misappropriation, the company which put that authority in his hands certainly could not undertake to hold the third person who relied upon that authority. * * *
“ * * * The case is not one of lack of authority, it is one of misuse of authority.”
Thus, it is seen, defendant’s counsel admitted that the questioned transfers, each and all of them, were misappropria*716fion?- of Nehalem’s property. The admission was and is binding on defendant Oscanyan v. Winchester Repeating Arms Co., 103 U.S. 261, 263, 26 L.Ed. 539; Harniska v. Dolph, 9 Cir., 133 F. 158, 159. Since, admittedly, they were misappropriations, the transfers were not in the ordinary course of handling Nehalem’s business and affairs. I conclude that Turkish had no authority to make any of them, and that the trial court should have so found.
Defendant had the power, -and owed Nehalem the' duty, to see that no unauthorized transfer of stock owned by Nehalem ■ was made on defendant’s books. Having breached that duty by permitting unauthorized transfers of 3j400 shares of Nehalem-owned stock, defendant is liable for the value thereof. Western Union Telegraph Co. v. Davenport, 97 U.S. 369, 371, 24 L.Ed. 1047; Moores v. Citizens’ National Bank, 111 U.S. 156, 166, 4 S.Ct. 345, 28 L.Ed. 385; St. Romes v. Levee Steam Cotton Press Co., 127 U.S. 614, 620, 8 S.Ct. 1335, 32 L.Ed. 289; Mackenzie v. Engelhard & Sons Co., 266 U.S. 131, 143, 45 S.Ct, 68, 69 L.Ed. 205, 36 A.L.R. 416.
The judgment, in so far as it awards recovery on account of transfers to the Turrishes and A. J. Keith, should be affirmed. In so far as it denies recovery on account of transfers ;to T, B. Keith, it should be reversed. :

 Fimlings (3), (7) and (9), quoted in tlie main opinion, are not challenged by either party.

 There was, in fact, no such bylaw.