Court Opinion

ID: 3879441
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:11:24.953389+00
Date Added: 2024-06-11T07:45:47.827589
License: Public Domain

This is an appeal from a judgment in favor of the respondent, the Texas Company, in an action brought by R. J. Williams, appellant, to recover the sum of $500.00 alleged to be due him by the respondent.
The plaintiff, Williams, sets forth in his complaint that during the month of February, 1937, he was employed by the Texas Company, through its zone representative, J.W. Dowdle, as an agent to purchase for the company a filling station and site owned by one W.P. Clark, in the town of Mullins, South Carolina, for the sum of $3,500.00 with the option to the plaintiff, if he should so desire, to purchase the property for himself. In the latter event, it is alleged that the Texas Company agreed that it would enter into a contract with the plaintiff, leasing the property from him under the company's standard form of lease, at a rental of not less than $90.00 per month, provided plaintiff would remodel at his own expense the filling station building on the premises, in conformity with the plans and specifications furnished by the company.
Pursuant to this agreement, he testified that in February, 1937, he interviewed Mr. Clark, who agreed to sell the filling station site for $3,500.00, and he thereupon paid Mr. Clark the sum of $500.00 as part payment on the purchase price, and promptly notified the agent, Dowdle, that a conveyance *Page 343 
of the property could be obtained at any time. Approximately three months after the negotiations with Clark, the plaintiff says he was notified by Dowdle that the company had decided not to buy any more filling stations, but that the company would lease the station from him for ten years if he would buy it himself. He then elected to buy the property and lease it to the company. However, he never obtained title, nor was any lease with the company consummated; although it appears that if the company had carried through its alleged agreement with him, title could have been obtained. Prior to the bringing of this action, plaintiff demanded of the company that it either take a conveyance of the property or enter into a lease contract, or refund to the plaintiff the sum of $500.00 expended by him in defendant's behalf. None of these demands was complied with.
Defendant denied the material allegations of the complaint, and alleged by way of affirmative defense that if the transaction referred to in the complaint occurred at all, it was entirely between the plaintiff and J.W. Dowdle, who had no authority to enter into any contract with the plaintiff, or with any other person, for the purchase or lease of real estate for its account; and that in any event the Statute of Frauds was a bar to plaintiff's cause of action.
At the conclusion of the testimony, the defendant moved for a directed verdict in its favor, but the motion was overruled, and the case having been submitted to the jury, a verdict for the defendant was returned. A motion for a new trial was overruled, and the case is now before this Court on the plaintiff's appeal.
The alleged contract between the plaintiff and the defendant was not reduced to writing, and during the progress of the trial the Court ruled that the Statute of Frauds was not applicable, assigning as the reason therefor that the plaintiff was not suing for specific performance nor for damages for a breach of the contract, but solely for a restoration of the $500.00 paid out by him upon the faith of the parol contract. *Page 344 
This construction of the complaint I think is correct, as will be seen by reference to the case of White v. McKnight,146 S.C. 59, 143 S.E., 552, 555, 59 A.L.R., 1297, where, quoting from 27 C.J., 359, it was held: "Although part performance by one of the parties to a contract within the statute of frauds will not, at law, entitle such party to recover upon the contract itself, he may nevertheless recover for money paid by him or property delivered, or service rendered in accordance with, and upon the faith of, the contract. The law will raise an implied promise on the part of the other party to pay for what has been done in the way of part performance."
The main issue in the case, and the theory upon which it was tried, was whether or not J.W. Dowdle was an agent of the defendant, and if so, was the alleged contract entered into by him with the plaintiff within the actual or apparent scope of his authority. While it was considered that the plaintiff's action was not based upon the alleged contract, in that no specific performance was demanded, nor damages sought for its breach, yet the burden was upon the plaintiff to prove that a contract existed as a prerequisite to recovery.
It is admitted that Dowdle was the agent and zone representative of the Texas Company, but no reasonable inference may be drawn from the evidence that he had authority, actual or express, to make the alleged contract with the plaintiff, dealing with the purchase or lease of real estate; hence the issue narrows down to whether or not he entered into this alleged contract with the plaintiff within the apparent scope of his authority. This issue was presented to the Court at the conclusion of all the testimony, when the defendant moved for a directed verdict in its favor upon the ground, among others, that the testimony is susceptible of no other reasonable inference than that Mr. Dowdle did not have authority to buy or lease the property, or to make a binding contract to that effect with the plaintiff. The refusal to direct a verdict is now advanced by the defendant as *Page 345 
an additional ground to sustain the judgment. In our opinion, after a full consideration of the evidence, and viewing it in the light most favorable to the plaintiff, this motion should have been granted.
There are certain rules and principles of law governing the apparent authority of an agent which should be stated before we discuss the facts bearing upon this issue:
"The apparent or implied authority of an agent cannot be so extended as to permit him to depart from the usual manner of accomplishing what he is employed to effect. Nor can he enlarge his powers by unauthorized representations and promises. Of course, the principal is not bound where the agent exceeds the scope of his apparent authority and his want of authority is known to the person dealing with him, or if the third person actually knows, or should know, the limitation of the agent's authority. Moreover, the apparent authority for which the principal may be liable must be traceable to him, and cannot be established solely by the acts and conduct of the agent; the principal is only liable for that appearance of authority caused by himself. It must also appear, in order that the person may invoke the doctrine of apparent authority, that he will sustain a loss if the agent's act or contract is not binding on the principal. Furthermore, a party dealing with an agent must prove that the facts giving color to the agency were known to him when he dealt with the agent, and that he believed the agent was acting within his authority; if he has no knowledge of such facts, he does not act in reliance upon them and is in no position to claim anything on account of them." 2 Am. Jur., Section 103, page 85.
"With respect to the derivation of the agent's apparent authority to begin with, the power and authority of an agent may safely be deemed by persons dealing with him in good faith to be at least equal to the scope of the duties ordinarily conferred upon agents or agencies of that character. Apparent authority may also be, and be, and often is, derived from a *Page 346 
course of dealing or from the fact that a number of acts similar to the one in question were assented to, ratified, or not disavowed by the principal. The acquiescence of the principal in an extension of his authority by an agent in the transaction in question may be sufficient to create the appearance of authority in the agent to do such act; the acquiescence in, and consequent scope of, such authority, is to be determined not only by what the principal actually does know of the acts of the agent within the employment, but also as to what he should, in the exercise of ordinary care and prudence, know the agent is doing in the agency transaction." 2 Am Jur., Section 102, page 83.
A person dealing with a known agent is not authorized under any circumstances blindly to trust the agent's statements as to the extent of his powers; such person must not act negligently, but must use reasonable diligence and prudence to ascertain whether the agent acts within the scope of his powers. Colt Company v. Britt, 129 S.C. 226,123 S.E., 845; Sells Lumber  Mfg. Company v. Carr LumberCompany, 179 S.C. 407, 184 S.E., 674. Apparent authority, or ostensible authority, as it is also called, is that which, though not actually granted, the principal knowingly permits the agent to exercise, or which he holds him out as possessing. Derrick v. Sovereign Camp, W.O.W., 115 S.C. 437,106 S.E., 222.
It is said in 2 C.J.S., Agency, § 96, pages 1213, 1214:
"The recognized duties and conceded authority of the agent are of material significance in the determination of what the third person in the exercise of reasonable prudence is justified in believing as to the agent's powers. A course of conduct, a number of acts assented to or not disavowed, may and frequently does serve to create an apparent authority. Where the principal gives verisimilitude to the mandate which the agent appears to possess, by a course of conduct, from which the agent is made to seem to have the powers which he undertakes to exercise, and thereby induces *Page 347 
others to act in a good faith belief in their having been conferred, an ostensible authority arises precluding the denial of the verity of such mandate as to matters falling within that course of dealing.
"Of course, no apparent authority grounded upon a course of conduct is assertable in the absence of even a single precedent act or transaction to manifest the existence of the power claimed; a course of conduct of a particular character does not exist where there is an utter absence of any conduct whatsoever of the character supposed."
The testimony for the plaintiff shows that he had a conference with Mr. Dowdle in the office of the Texas Company at Florence, South Carolina, at which were present Dr. McMillan, who was to become the company's local distributor at Mullins, and Mr. C.P. Hodges, an employee of the company. The plaintiff says that it was on this occasion that Mr. Dowdle told him to buy the Clark property for $3,500.00, and that the Texas Company would either lease it or purchase it from him. Mr. Hodges in his testimony confirms this statement, and he further testified that Mr. Dowdle's duties were those of a salesman in obtaining outlets and in procuring and obtaining the sale of gasoline and other products of the Texas Company through local distributors and filling stations. He said that he went with Mr. Dowdle on several occasions and secured some station sites by way of lease, but not by way of purchase.
However, it does not appear from this evidence that Dowdle had ever executed any lease on behalf of the company, or engaged in anything of this kind except by way of negotiation and recommendation. Even if it could be inferred that Dowdle actually had consummated such a transaction, there is no evidence to show that the plaintiff knew of such facts, or other facts which would give color to the agency.
The plaintiff was district manager for the Jefferson Standard Life Insurance Company, and through him loans *Page 348 
were frequently negotiated and made by this insurance company upon filling stations leased by the Texas Company from the owners. On one occasion it appears that he took Mr. Dowdle with him to Greensboro, North Carolina, the home office of the insurance company, together with one of these prospective borrowers, but there is nothing in the evidence to show that Mr. Dowdle, as the agent of the Texas Company, was interested in the matter other than to further the sale of the company's products through the local distributor, or that he had anything to do with the execution of a lease.
After the plaintiff was told that the defendant would not purchase the Clark filling station site, steps were taken by him to lease the property to the company, dependent upon his obtaining title thereto. With reference to the consummation of this proposed lease, he, time and again, stated that he knew that such lease would have to be approved at the home office of the Texas Company. It is true that he qualified this statement somewhat by using the term "confirmed" in place of "approved", but this is a distinction without a difference.
In the case at bar, there is no feature of ratification, adoption, or estoppel upon which the liability of the Texas Company may be predicated, independent of any supposed apparent authority of the agent. There is no reasonable inference that the Texas Company in any instance ever permitted Dowdle to enter into a contract on its behalf for the lease or purchase of realty for use as a service station; nor is there evidence that the plaintiff knew of such practice.
In the case of Carr v. Moragne, 136 S.C. 218,131 S.E., 424, 425, 43 A.L.R., 1212, the Court quoted with approval:
"An agency may be implied from the recognition or acquiescence of the alleged principal, as to acts done in his behalf by the alleged agent, especially if the agent has repeatedly been permitted to perform acts like the one in question." 2 C.J., 443; 2 C.J.S., Agency, § 23, Subsec. f. *Page 349 
"It has been held that a general agency to do certain acts cannot be implied from the alleged agent having occasionally done acts of a similar nature or from a single isolated transaction. But, on the other hand, it has been held that a single act of an assumed agent and a single recognition of his authority by the principal, if sufficiently unequivocal, positive, and comprehensive in their character, may be sufficient to prove an agency to do other similar acts." 2 C.J., 442; 2 C.J.S., Agency, § 23, Subsec. e.
Under the evidence in the case at bar, however, there is not even a single isolated transaction of a similar nature known to the plaintiff, and acquiesced in or recognized by the respondent, upon which to base the conclusion that Mr. Dowdle was acting with apparent authority. Under any rule other than that stated above, every principal would be at the mercy of his agent, however careful he might be to limit his authority. If we adopt any other rule, the result would be that no one who undertook to deal through an agent could control the extent of his obligations.
Reliance of itself is not sufficient; a mere blind confidence is incapable of giving rise to an ostensible authority. The test is not what the third person with whom the agent deals actually believes to be the authority of the agent, nor by what the appearances might lead someone else, differently circumstanced, to believe, but what, under all the surrounding circumstances, he is justified, acting as a reasonable man, in believing it to be upon the basis of the principal's acts and conduct. 2 C.J.S., Agency, § 96, page 1218.
In view of these well-settled principles, the only conclusion I have been able to reach upon the undisputed facts is that the evidence is not legally sufficient to support the theory of liability upon which the suit depends.
Appellant assigns error because the Court excluded the testimony of the plaintiff relating to a transaction which he had with another person. It is contended that this testimony was offered as a circumstance tending to prove agency or *Page 350 
apparent agency in connection with the transaction involved in this case. The excluded testimony had to do with a proposed loan from the Jefferson Standard Life Insurance Company to one E.T. Rogers in connection with a filling station, and it appears that the plaintiff had discussed this proposed loan with Mr. Dowdle. While it may be inferred that Mr. Rogers, if he secured the loan, would open a filling station under a lease with the Texas Company, it nowhere appears that any contract had been made between him and Mr. Dowdle, or through Mr. Dowdle with the Texas Company. Even though the evidence was cumulative, and might have been admitted upon the theory of some remote relevancy, we do not think the plaintiff suffered any prejudice from its exclusion. The admission of this evidence could in no way have strengthened the plaintiff's case.
The appellant complains that certain remarks of the Circuit Judge addressed to the plaintiff while on the witness stand constituted prejudicial error. It is contended that the trial Judge took issue with the plaintiff as to what he had previously testified to. The precise point of difference between plaintiff and the Circuit Judge was as to whether or not Mr. Clark, the owner of the filling station involved in this case, when approached by the plaintiff, had said that he would not sell the property to the Texas Company. The plaintiff testified that he could not recollect that he had so testified.
The record discloses the following relating to this exception:
"Q. (By Mr. McEachin) I believe you testified on direct examination that Mr. Clark told you when you approached him that he wouldn't sell it to the Texas Company? A. No, sir.
"Q. You deny making that statement? A. I didn't make that statement.
"The Court: I understood somebody didn't want to deal with somebody. *Page 351 
"Witness: It wasn't the Texas Company.
"Q. Who was it you said Mr. Clark wouldn't deal with? A. Dr. McMillan.
"Q. Are you sure of that? A. Certain of it.
"Q. And you deny that you said on your direct examination that Mr. Clark told you that he wouldn't deal with the Texas Company? A. I don't recall saying so.
"The Court: The record shows, but between me and you I think you did say it. You may not have said it. You want to take that back and say you didn't say it?
"Witness: Yes, sir.
"Q. You mean you want to take it back? A. If I said it.
"The Court: I don't mean take it back; I mean correct it.
"Witness: Yes, sir; correct it."
I do not think the statement made by the Circuit Judge was prejudicial. The plaintiff had testified: "Mr. Clark said he would sell it to me straight out; that he didn't want to have any dealings with the Texas Company people or Dr. McMillan, but would sell to me."
It is apparent, I think, that the trial Judge by his interjection did not express or indicate any opinion upon the weight or sufficiency of the evidence, reasonably calculated to influence the jury. The plaintiff in his testimony had seemingly made a contradictory statement which appeared to the trial Judge to have been inadvertently made. His interrogation merely afforded the plaintiff an opportunity to correct his previous testimony.
The case of Lusk v. State Highway Department, 181 S.C. 101,186 S.E., 786, where a reversal was ordered on an entirely different state of facts, is not in point.
Error is assigned because the Court permitted the defendant's witness, Dowdle, to give parol testimony as to the scope of his duties as an agent, when it appeared that circular letters were issued from time to time outlining such duties, which were not introduced in evidence. Aside from the fact that no clear-cut objection was offered to the admission *Page 352 
of this evidence we think the exception is without merit. Respondent's counsel announced that the circular letters were not in their possession, and that no notice to produce had been served. The Court ruled that the witness could testify as to his duties, and he thereupon testified that he had no authority to make a contract for the purchase or lease of realty, and specifically denied entering into such a transaction with the plaintiff. He said that the plaintiff knew that his powers were limited to negotiation and recommendation.
Agency cannot be proved by the unsworn declaration of an alleged agent, standing alone, but agency, as well as its nature and extent, may be proved by the agent's direct testimony.Patterson v. Home Bank of Barnwell, 102 S.C. 434,86 S.E., 815; Kean v. Landrum, 72 S.C. 556,52 S.E., 421; Wigmore on Evidence, Volume 4, Section 1249, *page 478. 
The appellant also assigns as reversible error certain instructions given by the Judge to the jury with reference to the Statute of Frauds. However, the issues raised by these exceptions become academic. In my opinion a verdict should have been directed in favor of the defendant and the judgment should be affirmed.
This opinion was prepared as the leading opinion, but a majority of the Court having dissented, therefore, it becomes a dissenting opinion.