Court Opinion

ID: 4006060
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:07:00.585178+00
Date Added: 2024-06-11T07:44:36.778107
License: Public Domain

I concur in the first syllabus point and in the Court's final conclusion because I believe the record discloses a state of fact clearly sustaining the finding of the commissioner and of the trial chancellor to the effect that Indemnity, by authorizing Morgan in its name to execute bonds, by equipping his office with its insignia and letterheads, and by otherwise holding him out as its general agent, had estopped itself to deny his authority so far as his dealings with Bank were concerned. Based upon that view of the proof, Bank and the contractor were led to believe that Morgan was authorized at the inception of his negotiations with them to represent Indemnity and, as I view it, that is the only manner in which Indemnity can be said to have received benefits from Bank.
Naturally, the surety upon a contractor's bond is indirectly benefited by any assistance rendered the contractor in the performance of his undertaking which minimizes possible liability. This, however, is not the sort of benefit the retention of which constitutes ratification of the acts of an alleged agent. Assistance in the performance of the contract can only directly benefit the surety upon the contractor's bond after the surety has taken over performance or has become obligated to do so. There was no formal breach of the obligation of the bond in this case. Save through Morgan, Indemnity was not charged with knowledge that the contractor had "thrown up the sponge" prior to complete performance. The contract was surrendered and taken over by Indemnity by the conduct of Morgan. If that is not so, then the advancements of Bank *Page 352 
to the contractor, not directly to Indemnity, did not redound to the direct benefit of Indemnity, and would not constitute a circumstance on which a ratification of Morgan's conduct could be based. If Morgan was the agent of Indemnity, held out by it as being authorized to act from the inception of the transaction with Bank, then Indemnity directly received benefit from the loans advanced by Bank to the contractor. If Morgan was not then Indemnity's duly constituted agent, his agreement with Sandridge  Sandridge, Inc., did not amount to an assumption by Indemnity of its conditional obligation to complete performance of the contract, the bond had not been breached and any benefit that Indemnity got as a result of Bank's loans to the contractor was entirely too indirect and remote to constitute a basis for ratification.
For the foregoing reasons, I believe that the second syllabus point is based upon a state of facts the existence of which depends upon Morgan's having been held out by Indemnity as its agent. That agency being a condition precedent to Indemnity receiving direct benefits, I do not agree that it may be established by its conduct after their receipt.